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LostInParadise's avatar

What do you think of Trump's Carrier deal?

Asked by LostInParadise (29150points) December 5th, 2016

1300 of 2100 jobs were shipped to Mexico. Indiana tax payers will have to pony up 7 million dollars to keep the remaining 800 workers. It looks to me like Carrier got the best of it. We will see if other companies can do a similar extortion by threatening to move jobs abroad.

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49 Answers

cinnamonk's avatar

An unlikely source had these reasonable words to say about it: “When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent.”

-Sarah Palin

zenvelo's avatar

The Carrier deal was only possible because Pence is currently Governor of Indiana. Can’t pull that card after January 20.

filmfann's avatar

Trump just got schooled by Carrier. This deal damages his administration’s credibility. Sad!

cinnamonk's avatar

Out of all the things Trump has ever done I think the Carrier deal damages his credibility the least.

elbanditoroso's avatar

He blackmailed Carrier for political purposes. See the Krugman column in today’s NYT.

And it won’t work. Carrier isn’t going to keep employees in the US if they don’t make a profit. My guess is that Carrier dumps those jobs by the end of 2017 anyway.

Call_Me_Jay's avatar

Trump gave Carrier taxpayer money for sending jobs to Mexico.

stanleybmanly's avatar

The episode is merely a continuation of Trump’s lifelong practice of financing boondoggles at taxpayer expense. With all that huffing and puffing before the election, you would think Trump might simply threaten Carrier with exclusion from future Federal comtracts. THAT would be the sort of signal corporations understand.

Cruiser's avatar

I think it was a rank amature political stunt that only low information voters would get excited over. We are in for a long 4 years if even Sarah Palin is ripping Trump for this “deal”.

gorillapaws's avatar

I can see why he’s filed for bankruptcy 6 times (or whatever it is). I really like Bernie Sanders’ analysis.

rojo's avatar

Well, it cost 7 million in taxes over 7 years or just a million per year. For seven hundred jobs that works out to about $1450.00 per job per year so fairly cheap in the overall scheme of things. Cheaper than buying medical insurance for the year.

Carrier let us off easy.

kritiper's avatar

Totally bogus, in a way. If all businesses stayed in the US and high wages were paid to all workers, prices of goods produced would be out of range for any buyers. Plus any workers making minimum wage (even at $15 per hour) would have to make even more to afford those goods.

rojo's avatar

I am planning a trip overseas next spring.

However, if I can talk Trump into providing me with gas money and covering my hotel costs I am willing to stay here and vacation in the United States. I promise to spend my own money buying cheap Chinese merchandise from American stores.

gorillapaws's avatar

@rojo I’d love it if Trump paid our practice $1450 per job per year over the next 7 years. Something tells me that corporate welfare is only for big companies though. Because obviously big companies need all the help they can get competing with small ones…

Cruiser's avatar

Remember Obama’s 666 billion dollar stimulus bill that created maybe 2.4 million jobs at a cost of $278,000 per job. The Carrier deal was a bargin bin deal compared to that.

gorillapaws's avatar

@Cruiser That’s a very different scenario. It was a stopgap to prevent the economy from going off the cliff (which it did successfully). Had that not occurred, it could have ended up costing taxpayers a hell-of-a-lot more. Also, let’s not forget what caused that crash in the first place…

Darth_Algar's avatar

To paraphrase Trump: worst deal ever.

CWOTUS's avatar

I won’t pretend to know all of the details which everyone else here seems to already be pretending full knowledge of and I’m certainly no Trump supporter or apologist, but these words from Forbes might pretty well express what I think about the little bit that I know:

The Carrier deal has a high ratio of media attention to actually-doing-anything, which makes it a pretty good way to distract Trump. Maybe Congress should give him $1 billion a year to fly around the country showering on companies who promise to do things he wants them to do so he can bask in the applause and media attention without affecting 99.999% of firms, markets, and workers. This would be kind of like giving a destructive child a ball to play with so that he leaves the fine China alone.

Overall, the Carrier deal is terrible policy. But given that the labor market is healing and the economy is heading in the right direction, the best we can hope from four years of Donald Trump is that he does nothing. Zero. Zilch. The Carrier deal is as close to this as we can reasonably hope for.

I don’t like his announced policy of wanting to punish American firms who relocate overseas with an intent to produce products there for sale into American markets, but that might be one of the least of things that I don’t like about his announcements so far. It’s doubtful whether he could move such a proposal through Congress in any case.

elbanditoroso's avatar

@CWOTUS – that’s distinctly un-Forbesian. If Forbes doesn’t like what Trump is doing, there may yet be hope….

Darth_Algar's avatar

@elbanditoroso “And it won’t work. Carrier isn’t going to keep employees in the US if they don’t make a profit. My guess is that Carrier dumps those jobs by the end of 2017 anyway.”

Same thing happened some years back in my hometown in rural Illinois. The state basically provided Laidlaw (a plastics manufacturer, not to be confused with the bus manufacturer/parent company of Greyhound) a brand spanking new factory on the taxpayer dime to keep jobs in this small town of a few thousand. It worked for a couple of years, then Laidlaw sent all the jobs over to China anyway.

Tropical_Willie's avatar

Ask, what stocks Trump has in his portfolio?

He is a businessman, his every move is to better his business position.

Jaxk's avatar

I really don’t understand all the whining and complaining about the Carrier deal. States have been offering tax incentives for companies to move their plant to their state for years now. Nothing new here. The average salary for these jobs at Carrier is $70,700. The average tax rate for this income is about 15% or $10,605 for each job. For 800 jobs that works out to $8.5 million per year in just income taxes. The government gets the taxes and the folks keep their jobs. What’s not to like about this deal?

We have been forcing companies to move overseas for years. Higher taxes (the highest in the world), extremely high regulatory costs, and higher wages. Basically we are taxing domestic companies at an extremely high rate while allowing overseas companies to import duty free. Talk about stupid. Trump has already said he will reduce the tax burden and the regulatory burden. He has also promised to increase the import tax for companies that move overseas. That effectively gives us a level playing field. I like it!!!!!!!!!!!!

LostInParadise's avatar

The majority of the jobs are going to Mexico. I would guess that it is the lower paying jobs that are staying stateside, jobs most likely to be replaced by automation. It is the state of Indiana, not the federal government, that will be paying Carrier. Carrier will not incur a tariff penalty. Expect other companies to be extorting the government by threatening to leave.

elbanditoroso's avatar

@Jaxk – “we” whoever “we” is – is not forcing companies to move. These are business decisions that they make, often guided by greed and financial choices, rather than by patriotism or citizenship.

Jaxk's avatar

@LostInParadise – OK, I didn’t figure the State Income Tax but it is (according to their website) 3.3%. That works out to $2333 per year in state income taxes. for the 800 jobs that works out to $1.86 million per year. Not bad for an investment of only about $800K in tax relief. Even the state is making a good investment. If I could invest $800K to double my money in a year I would do it every time, even if I had to borrow the money to do it. That’s exactly why states have been doing this for years. It’s good business.

@elbanditoroso – ‘We’ is the country as a whole. I know you all think the only consideration is wages but it’s not. The totality of expenses are the driving factor and domestically here in the US we are taxing the shit out of domestic corporations, while allowing foreign corporations to operate at a much lower cost basis and import for free. Free Trade, bah, humbug.

Call_Me_Jay's avatar

Higher taxes (the highest in the world)

If you restrict the scope to one specific tax, sure. If you want to be honest, no. US taxes are among the lowest in the world and by far the lowest among large developed countries.

Here’s a list of developed countries, the Organisation for Economic Co-operation and Development (OECD), with taxes at all levels of government as a percent of GDP,

The average is 34%. US is 3rd from the bottom. Only Chile and Mexico are lower.

stanleybmanly's avatar

@ That taxing the shit out of U.S corporations is a myth. NOBODY in fact pays the ballyhooed 35%, and the scandal is that such icons as General Electric can (much as the President elect) skate by for decades without paying a dime in corporate taxes.

Jaxk's avatar

@Call_Me_Jay – If you want to talk about keeping corporations in the US, you need to talk about the taxes that would affect that decision. Corp. tax rates, property taxes, and maybe payroll taxes are the bulk of it. Individual tax rates don’t apply to that decision nor do sales tax or taxes like that. Your link merely confuses the issue rather than clarifying it. Maybe that was your intent.

@stanleybmanly – whether GE pays the top rate or not has no impact on Carrier. Another nice try at confuscating the issue.

Cruiser's avatar

@stanleybmanly Taxing the shit out of corporations is not a myth. Yes the 35% tax rate or evern the 39.6% highest tier for Fed taxes is only on income over $233,475. For me add on the rediculous Illinois state tax of 5.25 percent and combined 40.25%. (Yes….my effective rate is lower actually this year around 29.75%) Lets leave withholding tax and the personal property replacement tax our state has out of the discussion. Soooo to illustrate this tax scenario let’s say I make $1,000,000 in profits…this means $766,525 of my profits will be taxed at this $40.25% will then mean I will owe the Government $323,856.82. That figure does not include what taxes I owe on the first $233,000. THAT is what is meant by taxing the shit out of a small business.

Trump riding into town with a flat 15% tax could mean I only owe $150,000 in taxes and that I consider an easier pill to swallow as I can imagine all the great trips I will be able to take and nice luxry car house I can buy. Just joking, I will be able to use that money to hire more people and grow my business and ultimately pay better wages and yes….more taxes.

Call_Me_Jay's avatar

@Cruiser So what will you cut out of the federal budget to make up for the loss of revenue?

And no, in the parameters we are talking, lower taxes don’t increase tax revenue and balance the budget.

That was proved by Reagan and his record deficits. And then Bush Jr. took a federal yearly surplus and turned it into even bigger record deficits.

Cruiser's avatar

@stanleybmanly What is missing in my presentation above is Rich people and small business owners is we at least I do not pay anywhere near the taxes on that million in profits is because we do “stuff” with those profits to avoid paying taxes to the Feds. In comes that dreaed word loopholes. There are all sorts of maneuvers one can do with profits….max out 401 K contributions, profit sharing for the owners and employees, buy equipment and make improvements. Company cars, nice hotel rooms and nice dinners taking out customers. So instead of banking those profits, I can spend it and invest it to put those taxes I might otherwise pay to the Gov. If I ran the numbers would probably approach the mid to low 20’s. So it may seem like Trump will be doing a HUGE favor by cutting taxes when in reality it is a much smaller favor because he will be taking away many of the loopholes corporations are taking advantage of.

@Call_Me_Jay If you read my answer….at face value it seems like a big break for corporations, but when you take away the loopholes corporatains enjoy allowing some corporations to file 0 in income taxes, Trump’s tax policies could very well expose profits to this 15% tax rate that previously was sheltered. I am not expert in this area/discussion but I anticipate the tax relief and regluation relief will enable me to invest/spend more of these new untaxed profits as I anticipate other business owners will do and the economy will grow at a pretty good clip and more income means more taxes. And IMHO to truly make up the difference in lost tax revenue from the tax breaks is to do what is long overdue and cut Federal spending. Deficit spending is what got us 20 trillion in debt and has to come to a halt once and for all.

Cruiser's avatar

@Call_Me_Jay I have a real problem when people take cheap shots at a President for the state of our debt. It was 9/11 and the bloodlust that started an out of sight military spending that has continued to this day with this crazy ass war on terror and the US expected to be the worlds security force. Yes 9 trillion of our debt has Bushes name on it and near 11 Trillion has Obama’s name on it that is not all due to military spending. Stimulus, bailouts, record entitlement and welfare spending and of course Obamacare have built up our staggering 20 trillion dollars of debt. I expect some serious changes in attitudes in Congress as the voters sent a clear message that time to clean up your act and start working for the people and not the corporatoracy that has controlled our countries policies and direction or you will be voted out.

rojo's avatar

@Darth_Algar seen it happen again and again. I know of a company that threatened to leave several years ago. City and county provided tax breaks (no taxes for 5 years), bought a multi-building site that someone else had left from the owner, allowed said company 5 years rent free, provided a substantial sum for the modernization and renovation of the office buildings and warehouse spaces. In return the company was to stay and double their workforce in the 5 year period. They never did double their workforce, only adding a couple of jobs. When the tax breaks were up and they would have to start paying rent and the city was beginning to think they would not get this influx of workforce before the end of the agreement, the company up and moved. Renovated site sat vacant for a few more years before being sold on the cheap as an incentive (along with additional tax breaks) to a developer who tore it all down and built a small business strip center. To this day ¾ of the building is empty.

Call_Me_Jay's avatar

I have a real problem when people take cheap shots at a President for the state of our debt. It was 9/11

The Iraq War had nothing to do with 9/11.

The Bush administration was planning it before 9/11 and used the attacks to ram their plan through.

They are entirely responsible for the disaster, the trillion dollar cost, and the hundred thousand+ deaths.

The Bush administration had a stupid idea and they carried it out in the worst possible way.

You can’t deflect blame from them.

zenvelo's avatar

@Cruiser Be aware that the Wall Street Journal’s analysis of the incoming administration’s tax proposal will add 4 Trillion in debt above and beyond projections at current levels.

Cruiser's avatar

@zenvelo I would be aware if you provided a link and also be aware all but 3 people have been dead wrong about outcomes surrounding Mr. Trump especially major think tanks like WSJ. Plus even IF it did add 4 trillion as WSJ apparently suggests, it would be at a snails pace compared to Obama’s whirlwind spending spree.

zenvelo's avatar

@Cruiser This is from the WSJ a year ago. I was wrong, it is actually $9.5 Trillion.

And you kind of pulled the near 11 Trillion has Obama’s name on it… out of a hat, because the total deficit dating back to 2007 is only $7.897 Trillion, a significant amount of which was to keep the economy collapsing after the 2007/2008 disaster.

By the way, to the original question, United Technologies is going to invest the tax break in Indiana to automate the plant. So the plant will stay in the US, but the jobs will evaporate.

Cruiser's avatar

@zenvelo Thanks for the link but this is all I can read as I am not a subscriber….Donald Trump’s tax plan would cut federal revenue by $9.5 trillion over a decade and boost the after-tax incomes of the wealthiest households by an average of more than $1.3 million a year, according to an analysis released Tuesday.

The devil is in the details and the article is over a year old before the deal actually was executed and I would expect a change in the number today. Sorry but I am more aligned with @Jaxk analysis of the Carrier deal and the ‘actual’ tax impact and consequence. I lost faith in WSJ’s narrative over a decade ago.

Jaxk's avatar

I see more talk about ‘Critical Thinking’ on this site than I’ve seen anywhere else. Unfortunately I don’t think anyone knows what it means. You see an article you like and regurgitate it as if it was fact. For instance, the national debt on Jan. 29, 2009 was $10,626,877,048,913.08 and as of 12/5/2016 it was $19,885,572,935,868.37. That looks like over $9 Trillion to me. That’s how much debt Obama rang up in just under 8 years. And you may want to revisit the Obama stimulus package because it didn’t do anything to stop the recession. In fact the economy had bottomed out before Obama got anything passed. The only legislation that could have had any impact on stopping the recession is the Bush bailouts. While I’m at it let me bust another popular liberal myth, Clinton never created a surplus. The debt continued to climb throughout his presidency.

As for the Carrier deal, remember that if they moved to Mexico the tax revenues would have disappeared anyway. So the $700K they gave to carrier was money they never would have gotten anyway. They gave up nothing to retain the 800 jobs and a $billion in income tax revenue. Just as a side note, if Carrier was going to eliminate those jobs with automation, they certainly didn’t need to move to Mexico for cheaper labor. Come on guys, think this through.

Call_Me_Jay's avatar


Bush went into office with a budget surplus and a strong economy.

He handed Obama the worst – not bad, THE worst – economy in 70 years and a trillion-dollar unwinnable war that weakened American power and influence.

Obama is handing Trump a solid economy with low unemployment. It’s not the best but an honest person will acknowledge it’s a huge improvement over 2009.

Conservative policies are disastrous, and you blame Democrats for not cleaning up the mess fast enough.

LostInParadise's avatar

@Jaxk , I am having trouble following your logic. We lose Carrier’s tax payments and in addition we are giving them 7 million dollars. Carrier, for its part, ships to Mexico those jobs most economically replaced by foreign labor and keeps in the U.S. those jobs that can most feasibly be eliminated through automation.

zenvelo's avatar

@Jaxk That looks like over $9 Trillion to me. That’s how much debt Obama rang up in just under 8 years.

Not all of it. Close to 4 trillion was debt and service on debt incurred before Obama took office.

Jaxk's avatar

@Call_Me_Jay – This is getting just a bit off topic but your portrayal of what Obama has done is way off track. First you seem to forget that Bush inherited a recession from Clinton. Remember the recession of 2008, not to mention 9/11. Reagan also inherited a recession and by all measures was just as bad as the recession of 2009 (unemployment, Inflation, stock market, etc.) I know the crys of ‘worst recession ever’ are the only way Obama can justify his poor performance but not real. Frankly, the Middle East was stable when Obama took office and proceeded to destablize Iraq, Syria, Libya, and Egypt.

@LostInParadise – The 7 million/yr that Trump gave to carrier were tax incentives for taxes they would have paid if they stayed in the US. If they moved to Mexico, those taxes would not be owed anyway. So Indiana gave up taxes they wouldn’t get anyway to retain the $billion in income taxes and 800 saved jobs. If Carrier eliminates those jobs the the tax incentives get eliminated as well. Hell is Carrier only stays here for 1 year it’s a good deal.

@zenvelo – Doing a little creative accounting I see. The $10,626,877,048,913.08 includes the debt from previous president (including the $1.5 triilion that Clinton added to it) and the $19,885,572,935,868.37 includes previous debt. The $9 trillion however, only counts the debt that Obama rang up in his 8 year spending spree. No amount of creative accounting can change that.

Call_Me_Jay's avatar

@Jaxk the Middle East was stable when Obama took office and proceeded to destablize Iraq

Wow. Even for you that’s a whopper.

Iraq, 2008 October to December
October 2: Suicide bombers struck Shi’a worshippers as they gathered for prayers at two mosques in Baghdad to celebrate the Muslim Eid al-Fitr feast, killing 16 people and wounding nearly 60.

October 8: A woman suicide bomber blew herself up at an entrance of an Iraqi court in the city of Baquba, killing 6 and wounding 18.

October 9: A suicide bomber killed three policeman and wounded eight more at a station in Habbaniya.

October 12: At least nine people were killed and 13 wounded in a car bombing at a market in Baghdad.

October 13: Suicide car bombers struck twice yesterday in the northern city of Mosul, killing at least six people and wounding dozens of others. In Balad a suicide bomber wounded 3 policemen.

October 17: Iraqi officials say bomb near north Baghdad mosque kills 3 Shiite worshippers.

October 22: A car bombing by al-Qaeda killed four people and wounded three in Mosul.

October 23: 9 people were killed and 20 injured when a suicide bombing targeted a convoy carrying Iraqi minister Mahmoud Jawad al-Radi, in Baghdad. al-Radi himself remained unharmed.[98] Later the death toll rose to 11 killed and 22 injured.

November 5: 4 Iraqis were killed and 10 injured in a suicide car-bombing at a checkpoint near Baghdad Airport.

November 8: In West of Baghdad, a suicide bomber killed eight people and wounded 17 more at a police checkpoint near the former Sunni insurgent stronghold of Ramadi in Anbar province.

November 10: 25 people were killed and 48 injured during a suicide bombing and a car-bombing in Baghdad.

November 15: A suicide car bombing near a car dealership killed 11 Iraqis and wounded 36 in the northern city of Tal Afar.

November 16: A suicide car bombing killed 14 people and wounded 20 others Sunday in the town of Jalawla.

November 24: A female suicide bomber killed 5 people outside Baghdad’s Green Zone compound.

November 28: A suicide bombing attack killed at least 8 people and wounded 15 at a Shiite mosque in Baghdad.

December 1: A car bombing and suicide vest bombing targeting a police academy in eastern Baghdad Monday killed at least 16 people and wounded 46 others.

December 2: 5 people (including a policeman) were killed and 30 (including 4 Security Forces) were injured in a suicide bombing in Tal Afar.

December 3: A double suicide car bomb attacks struck two police stations in the city of Fallujah, in Anbar province, killing 15 and wounding 147.[109] The death toll later rise to 17.

December 4: 2 U.S. soldiers were killed and 9 Iraqis wounded when a suicide car bomb exploded in the northern city of Mosul.

December 6: A suicide bomber blew himself up at a crowd of police recruits outside a police academy in Iraq’s northern oil-rich city of Kirkuk, killing a police recruit and wounding 15 others.

December 11: A suicide bombing in a Kirkuk restaurant killed at least 61 people, wounding 75.

December 14: A woman suicide bomber on Monday killed an Awakening Council group leader at the front door of his house in a town north of Baghdad.

December 15: At least 9 policemen were killed and up to 31 others wounded in a suicide car bomb attack on an Iraqi security checkpoint in a town west of Baghdad.

December 25: A car bomb outside a restaurant in Baghdad killed four persons and wounded 25 others.

December 27: A car bomb killed at least 22 people and wounded 54 more when it exploded at a Baghdad bus station.

December 28: A suicide bomber on a bicycle blew himself up amid a crowd of demonstrators in northern Iraq who were protesting Israel’s airstrikes on Gaza, killing 1 demonstrator and wounding 16.

Call_Me_Jay's avatar

__you seem to forget that Bush inherited a recession from Clinton. Remember the recession of 2008, not to mention 9/11_

You seem to think Bill Clinton was President in 2008 and on 9/11/2001.

Lecture me again about critical thinking.

Jaxk's avatar

@Call_Me_Jay – Good catch. That was a typo. Should have been the recession of 2000. Sorry.

flutherother's avatar

During his campaigning Trump said repeatedly he would support Carrier. Later he denied making these promises until they replayed the tapes. He then accepted he had made the comments but as he explained they were a ‘euphemism’. Only a Trump supporter could think any of this makes sense.

LostInParadise's avatar

To make sense of what Trump says you have to read strictly between the lines. The only reason why anything he says is ever true is that if you spout enough things at random, by chance some of it will turn out to be the truth.

elbanditoroso's avatar

With the benefit of 4+ years hindsight, it turned to be a big lie.

stanleybmanly's avatar

Anyone surprised?

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