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Jim, these guys seem to miss the point that Trump has said all along that he wants to reduce the FEDERAL corporate tax rate from 35% to about 15%. That is a huge incentive in itself for many companies to stay here. And he has said that he wants to greatly reduce FEDERAL regulations on business, which is another big incentive to keep companies here. And the way he stated it implies those reductions would be across the board, not selective. Obama did not do either of those things. Nor would they be compatible with his progressive agenda.
Whatever Trump promised to Carrier could only be at the FEDERAL level, and it would have to be universal. So it would not be picking winners and losers. The STATE of Indiana is not tied down by obligations not to choose. If the people of Indiana want to choose Carrier and neglect some other company, it is free, at its own peril, or benefit, to do so.
Indiana's portion would have to be granted by Indiana, not Trump--whether Trump bargained for it or not. It would not be Trump's call. And I would guess Indiana would be more than glad to give Carrier a tax incentive to keep it there. And if that incentive, along with Trump's desire to lower taxes and regs, was attractive enough for Carrier to keep part of its work in Indiana, it would mean that Indiana would have a business and employee tax revenue that it wouldn't have if Carrier completely left in which case all tax revenue from that company and its employees would be lost. And the State would be burdened with more unemployment benefits to dole out. And if Indiana also promised companies that don't reside there tax incentives, along with Trumps Federal incentives, the State's tax revenue would grow. As I said to wdmso, why on earth would you refuse the tax incentive that inflows wealth into your State. After all, for the most part, companies pass the cost of taxes along to its customers. So it would be citizens of Indiana who would eventually pay for the taxes it imposed on Carrier. But it would make Carrier just that much less competitive at the sales level.
Divesting companies of taxes allows them to lower prices and be more competitive. Isn't that part of the reason why the corporations move to other countries? Wouldn't reversing that reverse the flow of jobs being shipped elsewhere? And even more so if companies can lower their pension costs.
The left is stuck on the idea that higher business tax rates strictly leads to more tax revenue. That is not empirically true. Many countries that lowered their corporate tax rates actually increased their tax revenue because they attracted business that otherwise would not come.
Of course, there's the problem of doing too well. The more a State's economy grows, the wealthier it gets, and the more ambitious it allows the politicians to promise to give goodies for votes. And the slightest economic downtick sticks them with a bill that they cannot afford to pay. The answer, of course, unless they're facing a bankruptcy, is to squeeze more taxes from the public sector. Which, of course, begins to chase people and business elsewhere.
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