They were going to shut down some of their operations in the state. Now they’re shutting down a substantially smaller percentage of their operations. Therefore, even after deducting the $7,000,000 in tax breaks, they’re paying more in taxes than they would in the alternative situation.
They’re not going to have less money. For one, they’ll be paying out fewer benefits. That’s a plus for Indiana’s unemployment insurance program. Two, there are now more workers in the state paying into the system. That’s also a plus for Indiana’s unemployment insurance.
Many would have found jobs, but not immediately. Some, quite possible all, of the people who were scheduled to lose their jobs would have drawn benefits for some period of time.
Trump has claimed (Lord knows if he follows through) that he’s going to reduce tax rates and lower regulatory burdens across the economy. If he keeps his word, then Carrier won’t be a special case.
This I agree with 100%. But I see no reason to criticize this intervention in the economy if you’re political philosophy encourages a strong interventionist role for the government in the economy.
In other words, if you’re a liberal and you don’t like this deal, you’re nitpicking because you don’t like who gets good press from the headline.
Maybe, maybe not (particularly given that we STILL don’t know exactly what the entirety of the deal really is). Moreover, Carrier will be receiving tax benefits for jobs they never planned to move. We are paying them not to do something that they never planned to do anyway; for those 300 jobs, we are giving Carrier a gift for which we get nothing in return that we would not have gotten anyway.
You are still making a lot of assumptions about how all of this ties into Indiana’s economy generally. For example, if the competitive advantages given to Carrier cause some other company (and there are other plants in Indiana that make furnaces and furnace parts) to fold up shop in the state, then there might not be more employers paying into the system.
The deal, as presently explained, is that Carrier will be paying less than the mandated rate. That means if Indiana tax rates fall, Carrier will be paying less than the new mandated rate, meaning they are going to be a special case for the entire term of the deal.
That’s quite aside from the fact that Trump, as president, will have basically no ability to reduce Indiana state tax rates. If he succeeds in reducing federal taxes, then Carrier and Amana and Trane will all be paying lower federal taxes, but only Carrier will be paying lower state taxes. (This assumes, of course, that Amana and Trane and the other leading manufacturers don’t just extort their own concessions, with further follow-on effects.)
This deal isn’t a strong interventionist role for the government IN THE ECONOMY; it’s a strong interventionist role for the government IN ONE PARTICULAR BUSINESS, with adverse consequences to competitors. That’s a big, big difference. This is the government picking winners (Carrier) and losers (Lennox, Amana, etc.). Now, why are the Nordyne workers in Tennessee, or the Lennox workers in Iowa, less important or less deserving than the Carrier workers in Indiana?
If Trump intervenes in THE ECONOMY, his policies would apply equally to Carrier and Nordyne and Lennox; a tariff on Mexican-built furnaces (although problematic on other grounds) would apply to any company. The tax deal, though, applies only to one company. Do you not grasp the distinction?
Sorry, no dice. The ship has sailed; Carrier is a special case. If Trump had waited until he was President and then passed a tax reform bill that helped Carrier, they wouldn’t be. But now they are.
And the special cases are lining up. Now that one big company has gotten special treatment, the ones that have the ear of Trump and his closer advisors will want it, too. Moral hazard is called a “hazard,” after all.
This makes no sense at all.
EVERYONE who isn’t actually an anarchist supports some kind of “intervention” in the economy, liberal and conservative both.
Some interventions enhance the general welfare of the citizenry, and some don’t. As one general rule, the government interfering in areas of market failure (requiring you have car insurance, for example) works, and the government playing favourites in areas where there is no market failure (like, say, HVAC products) does not. It’s not nitpicking or hypocritical to point out what’s good policy and what isn’t.
I have no idea what your point is here, if you actually have one. Does this in any way address the points of my post? I think not. Try again.
How about actually attempting to address the points of my post, rather than whatever non-sequitur that was.
I’ll explain how it works for you, as you seem rather confused.
An employee makes money from their job. (With me so far?)
Then they pay taxes on their wages, this tax is withheld from their paychecks by their employer. (This is not difficult to follow yet, is it?)
Depending on the size of the company, these taxes are remitted to the relevant tax authorities on a schedule, between on every payroll to quarterly. Carrier’s size, I would think they would pay on every payroll or at least monthly. (I know this is getting a touch complicated, but stay with me.)
Now, by the terms of the deal that Carrier has, they do not need to send in the total amount of money to the state that would normally be owed. They get to keep part of the withholding. About a third of the state taxes in fact. (This is from your cite, which I am sure you actually read and understood, otherwise, you wouldn’t have posted it, right?)
Do you understand this yet? If not, let me know what specific questions you have. I have tried to address the basics for you, but I know this gets a bit complicated, and sometimes there’s some math involved, so I am happy to help you to wrap your head around this concept.
So, with that out of the way, do you understand the hazard involved if everyone wants this deal? Can you imagine anyone being happy about the situation if they don’t get this deal? Do you get the part where Carrier’s competition is now subsidizing Carrier’s profits? If I were a competitor, and I couldn’t get that deal, I’d be moving out of the state as quickly as I was able.
So the question is, do you give that deal to every employer, or do you watch as all the businesses leave the state for one who does not require them to subsidize their competition? If Carrier stays, but all the other HVAC manufacturing business leaves, do you think that is going to be a net positive? What do you think will be needed to keep those other employers there?
When the money comes from the government - yes, that’s kinda his job. And AFAIU, the original cost estimate was $1.6B. So if the final cost is $4B, that is a huge cost overrun, and definitely something that may concern a President.
I rather doubt he spent one second researching why it’s so high or why it’s so far over the original estimate.
Besides, the current AF1 is the only plane of it’s model still flying and it’s becoming more difficult to maintain and get parts.
26 years old and it still has to fly another 8.
Sorry, you are right, I misread where it said “The Air Force has previously said that it planned $1.65 billion for two replacement jets, Reuters reported.” and took that meaning each.
Still, the budget for the planes is listed as 2.8 bill for the two, not 4 like trump tweeted.
We do accept that Air Force one is and should be the most advanced plane in the world right? I mean, even if Trump is on it, he would still be our president, and we can’t have anything happening to him.
It’s a custom job, and is often advancing technology in avionics, communications systems, and countermeasures. Considering at least half of the specs and manifest of the plane are classified, how could you put a price on it?
In 2009, President Obama canceled the order for the new Marine One helicopters from Lockheed, citing balooning costs. Those were also custom jobs and advanced technology. How could he possibly put a price on that?
Trump pulled the “over 4 billion” from the same place he pulls all his “facts”.
I would like to see why the cost has gone up so much, maybe the original contract specified a different model plane.
Maybe Trump is pissed the planes will be worth more than he is.
I wasn’t saying “how can you put a price on it.” like it’s wonderful and priceless, just “how do you put a price on that” when you don’t know what that is.
We don’t know the security and avionics and other technologies that go into AF1, so if we look at it and say, wow, that’s alot of money, then we do not actually know what that money is being spent on.
There is also the fact that Marine One has a different use than Air Force One. Marine One is basically just the shuttle from the white house to the airport, where the president gets on Air Force One. I don’t see Marine One making any cross continental or oceanic trips, do you?
