Carrier played the president-elect by getting tens of millions of dollars in incentives, while still outsourcing 1,100 jobs to Mexico.
The Financial Times reported:
Carrier’s decision to cancel plans to move 1,000 jobs to Mexico was on Wednesday painted as a trade-off for planned tax cuts, as one of Donald Trump’s economic advisers said he hoped other US businesses would see the deal as a “beacon signal” of a climate where they can keep more jobs at home. Donald Trump secured a victory after successfully pressuring Carrier, a unit of United Technologies, to change its plan to move 2,100 jobs to Mexico to cut costs. Carrier said it would keep about 1,000 jobs in Indiana, after negotiations with Trump representatives including vice-president elect Mike Pence who offered unspecified incentives.
When asked whether the deal would set a precedent for companies to demand a tax break in exchange for keeping jobs at home, Anthony Scaramucci, a Trump adviser, said: “Companies should expect a tax break. We have the highest corp tax rates in the industrialised world, we have to get those corporate tax rates down to a competitive position . . . I’m hoping that every CEO in America is getting that beacon signal from the new Trump administration.”
What about the other 1,100 jobs that are still going to Mexico? Oh, those are still leaving.
The troubling aspect of the bad deal that Trump cut for taxpayers is that his adviser said that they expect every company in America to go after the same kind of deal. The idea that the US has the highest corporate tax rate of anywhere in the world is not true. While top US corporate tax rate is high, but Republicans have been exaggerating the damage caused by this fact for years.
The goal of the Trump administration appears to be a nation where corporations pay no taxes. If corporations aren’t paying taxes, and the wealthy are getting tax cuts, the tax burden will fall on the shoulders of those who have the least to pay the most.
If corporations around the country follow Carrier’s lead, state and local economies around will be damaged, if political leaders give in to extortion threats.
The bottom line is that Trump and Pence got played by Carrier. The company is still outsourcing more jobs than are staying, but for giving Trump some good publicity, they are being rewarded with tens of millions of dollars in incentives that Indiana taxpayers are now on the hook for.
Trump got played, and even worse he set a precedent for even worse deals to come.
Mr. Easley is the managing editor. He is also a White House Press Pool and a Congressional correspondent for PoliticusUSA. Jason has a Bachelor’s Degree in Political Science. His graduate work focused on public policy, with a specialization in social reform movements.
Awards and Professional Memberships
Member of the Society of Professional Journalists and The American Political Science Association
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