Usually my Facebook policy is “no response to comments,” as responding is pretty much a complete waste of time. I’ve relaxed that policy a little since the election, but I respond very rarely. Sometimes I will delete a comment and I’ve blocked exactly one person. (I wish now I’d kept up his final-straw post as a reminder of how obnoxious some people were about the Trump victory: it was a meme—I guess that’s what you call it—with a picture of a frat-boy-looking man yelling, “Say it! Say it! Trump won!” Woa. Or, maybe, Woe.)
Here’s the commenter’s post about the genius of the Carrier deal:
1000 jobs at $30/hour x 2080 working hours per year) = $62,400,000/year.
$62,400,000/year * 30% tax rate = 18,720,000.
Minus 700,000/year = 18,020,000.
X 10 years (length of incentive payment) = $180,200,000.
Trump just saved the state of Indianafed government 180 million dollars for the cost of 7 million dollars!!
This is how Trump beat Hillary with 1/10th the money and 1/4 the staff!!
Much RESPECT for TRUMP!
Let’s break it down, shall we?
First, according to at least some sources I’ve consulted, including the one I quote below, the deal is for Carrier to get $16M, not $7M. (I think it may be a combination of the two, with tax incentives and investment.)
Second, the Carrier deal saved at most 800 jobs, with 730 actual factory jobs..
So those 800 people (we’ll round up), if they are indeed making $30 an hour, would be making a total of about $50M a year, not $62.4M.
Are they really paying out a total of 30% in taxes? Don’t know. It depends on a whole host of factors, including dependents and deductions. But we’ll leave it as is. It doesn’t really matter, since . . . these numbers are meaningless.
Why?
Because this analysis of the deal is based on a complete misunderstanding of economics. It assumes that everything is going to stay exactly the same for the next 10 years and that there will be no other effects, that it’s a self-contained deal. So those 800 people will keep those jobs and keep paying the same amount of taxes. Carrier will just sit there and pay out those salaries. But that’s not what’s going to happen. For one thing, Carrier is going to use that money for something. And guess what that’s going to be?
Here’s the answer in a quotation about the deal from The Blaze, Glenn Beck’s website:
Last week, Trump and Carrier both announced that they had reached an agreement that would keep thousands of jobs in the United States. But it appears the deal, which involved a $16 million investment in the Indiana facility itself, will also fund an automation overhaul for the facility.
CEO of Carrier’s parent company United Technologies, Greg Hayes, confirmed to CNBC this week that it would ultimately mean fewer jobs available at the facility.
Huh. Who’d a thunk it?
So there’s absolutely no guarantee of how long these jobs are going to last. Certainly not ten years!
Plus, as outlined in this RedState article I posted earlier, now businesses are less motivated to open factories in the US if they think their business decisions are going to attract the malevolent attention of the US government, and more motivated, if they already have factories here, to threaten to move jobs out of the country and try to get their own juicy deals. What’s sauce for the goose and all that.
It’s a pretty bad deal all around. It’s been roasted by conservative economists.
But hey—what do you expect from someone who’s gone bankrupt four times?
Just asking.