Coming through on campaign promises can be difficult for any President-elect, but Donald Trump changed that when he announced “companies are not going to leave this country anymore without consequences” in front of press and workers at Indiana’s Carrier plant, where select jobs were saved from outsourcing in exchange for massive corporate tax breaks. Even before taking the oath of office, it is being written up by the Trump transition team as a major victory and a sign of things to come. Per the deal, one thousand jobs will stay in Indiana instead of being moved to Mexico. So what does this say about the way Donald Trump is going to govern the country?
For one, it is another in a long line of huckster-ish half-promises, or whole lies. He promised to keep jobs in America, and he did just that. But what he isn’t admitting is the ruinous terms of the deal. In order to save one thousand jobs, United Technologies, Carrier’s parent company, will still be sending most of those manufacturing jobs across our southern border while receiving millions of dollars in tax benefits from the State of Indiana. This is one thousand good paying jobs in a recovering economy, and one thousand fewer taxpayers in Indiana; and until they can find another job, one thousand more people in the unemployment line. According to the New York Times, Trump not only had to renege on the promise of a 35% tariff on companies that send jobs across borders, but will be providing unnamed benefits to UT that the Times Editorial Board believes will “ come in the form of corporate tax cuts (and, inevitably, tax loopholes for specific industries) along with regulatory rollbacks.”
It’s hard to say what’s actually going to happen, as with anything in the Trump Administration, but these terms spell disaster for Indiana in particular, and the country in general, if he continues to deal with companies in this manner. The problem isn’t so much the jobs leaving the country, but the fact that other large corporations in America will now be looking for their own handout. And the reasoning is obvious—Trump only wants the chance to say that he saved x amount of jobs while ignoring the x amount of jobs leaving. What company wouldn’t line up for that? Bernie Sanders, in an op-ed for The Washington Post wrote that “even corporations that weren’t thinking of offshoring jobs will most probably be re-evaluating their stance this morning.” Robert Reich described it in a talking head interview on MSNBC as a “24/7 job” for President Trump.
One need only look to GE to see that companies will hold the government hostage at every turn. In early 2016, the decision was made final to move a substantial portion of the company from Fairfield, CT to Boston, leaving a hole in Connecticut’s budget large enough to question whether it will ever be filled. The reason it left? Taxes. GE’s contributions in actual taxes were minimal to begin with for a business that rakes in over ten billion global dollars annually. And that left Connecticut Governor Dannel Malloy in the position of needing to come up with revenue, and one of the ways of doing that is by getting companies to pay their fair share. GE’s CEO Jeff Immelt took Malloy’s plan for government solvency and decided that it was backwards thinking, saying at a benefit dinner: “We need an ecosystem that’s forward-looking, that’s future-looking; that’s willing to fight hard to be competitive and enduring for the future.”
Immelt started that brief statement by saying “we’re a company that… doesn’t look for special deals.” But the opposite was shown to be true: In deciding to leave, they made it known that they would go where a deal could be made. It’s a kind of blackmail that we will see under a Trump administration that doesn’t care who loses a job where, as long as the optics can be spun in his favor. Connecticut’s dedication to its citizens and to a solvent budget was a bridge too far for GE. And in that case, and Indiana’s case with Carrier, those tax breaks will now be a burden on the state’s resident—likely leading to major cutbacks in every possible area, as we are seeing in Kansas right now.
That state, under Sam Brownback, is conducting the largest scale cutbacks on taxes and spending since Reagan promised that wealth would “trickle down.” Other than cutting back on income taxes, Brownback created what was thought to be a business haven of low-to-zero taxes and few regulations. And with everything going according to Brownback’s plan, Kansas is falling apart. He’s had to cut funding from nearly everything in the state, from education to the highway programs, and he’s seen the state’s economy dwindle. In an oft-cited irony, it has gotten so bad for Kansas that the quarterly reports that were once meant to show how well his program was doing have stopped being published because they showed the great trickle-down experiment was failing. Kansas is quickly catapulting toward ruin, and no economist with his head on straight would point to anything but tax cuts and deregulation as the culprit.
The problem isn’t a Red State problem, or even a Blue State problem. The problem is Corporate Welfare, and for many on both sides of the political spectrum, the idea that companies like GE and United Technologies need these tax breaks, write-offs, and loopholes is appalling in theory, and something far worse in practice. It allows corporations to take from the United States government, the governments of the states, and from the very citizens of this Country, all while using their rights of Corporate Personhood granted by the reviled Citizens United case to prop up politicians that fight tooth and nail for safety-net welfare programs like unemployment and Obamacare. And what kind of role model will the no-tax paying President Trump be? Will he call upon his cronies to pay their fair share in a crisis? They’d laugh in his face and roll the tape of him saying that not paying taxes makes him smart.
Two previous Presidents, Ronald Reagan and George W. Bush, cut taxes and kowtowed to business interests. Both Presidents promised that wealth would spread around, and in both cases income inequality grew, and recessions were sparked that hurt the working classes even more. It is still the lingering effects of Bush’s recession that some economists feel helped Trump win the presidency in the first place. And this should be a lesson to President Trump that there will be consequences if he continues to bend over backwards for companies so he can smile in front of a camera. If he truly wants to make America great again, he needs to help the factory workers, not the factory owners. And he needs to help all of them, not just one plant in Indiana.