A government of, by and for corporate America

A government of, by and for corporate America

WASHINGTON — President-elect Donald Trump promised to punish U.S. companies that ship manufacturing jobs out of the country. Instead, judging from the way he has handled Carrier, he plans to reward them. Quite handsomely, in fact.

As should be standard practice with Trump, pay attention to the substance, not the theater. United Technologies, the parent company of air-conditioner maker Carrier, has been threatening to move more than 2,000 jobs from Indiana to Mexico. Trump addressed this specifically during his campaign, vowing to hit the company with a punitive tariff.

“If they’re going to fire all their people, move their plant to Mexico, build air conditioners, and think they’re going to sell those air conditioners to the United States — there’s going to be a tax,” Trump said on “Meet the Press” in the summer. “It could be 25 percent, it could be 35 percent, it could be 15 percent, I haven’t determined.”

As it turns out, how about zero percent?

In fact, how about giving United Technologies state tax breaks worth about $7 million during the next decade, in exchange for moving only 1,300 jobs to Mexico? That’s basically the deal offered by Trump and Vice President-elect Mike Pence, who happens to be governor of Indiana (and thus in a position to offer the tax relief).

Happy for workers

For the roughly 850 workers who thought they were losing their jobs to Mexico but now will keep them, this is great news. I am happy for them and their families, and I understand why they would feel grateful to Trump. But I don’t understand why anyone else would consider this a good deal — except, of course, the leadership team at United Technologies, which must have sore knuckles from all the fist-bumping.

The company still gets to lay off most of the targeted Indiana workers and replace them with much cheaper Mexican labor. It gets partial compensation from the state government. And instead of worrying about a potential tariff, United Technologies can anticipate a major reduction in the federal corporate tax rate. That’s something Trump promised on the campaign trail — and also, reportedly, in a recent phone call with United Technologies CEO Greg Hayes.

Writing in a Washington Post op-ed, Sen. Bernie Sanders, of Vermont, put it this way: “Just a short few months ago, Trump was pledging to force United Technologies to ‘pay a (expletive) tax.’ … Instead of a (expletive) tax, the company will be rewarded with a (expletive) tax cut. Wow! How’s that for standing up to corporate greed? How’s that for punishing corporations that shut down in the United States and move abroad?”

The Carrier deal is just the latest piece of evidence suggesting Trump’s populist rhetoric about championing the working stiff and cracking down on greedy globalist corporations was all a bunch of hooey. His administration is shaping up to be a government of, by and for corporate America.

Published at Fri, 02 Dec 2016 06:09:37 +0000

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