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To: jaydubya2

This is fairly typical. Large companies can constantly threaten to leave (even to another state) and try to get tax breaks - sort of like NFL teams that threaten to leave unless the public builds a new stadium.

On paper, the city/state still benefit, when the payroll taxes and future property taxes are all penciled out. However, often the company does not fulfill its obligations with job creation or retention, and the city/state are left with the messy business of ‘calling the note’, so to speak...or just losing out if they don’t have the stomach for that.

I have actually seen a magazine geared towards which states have the most breaks.

I think its overall a bad idea to have states and cities compete with each other with tax breaks (and by default treating the rest of us unequally under the tax law). But I think it makes sense at a national level, to keep companies from leaving the entire country. Now the companies would still want an incentive to stay, and one of the only things that can be done at the federal level is a ‘stick’ approach with tariffs.


12 posted on 12/01/2016 9:58:28 AM PST by lacrew
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To: lacrew
Ultimately, you're right. Absent tariffs, the actual constitutional method of funding the government, all of these deals are merely band-aids until the next company threatens to pull up stakes.

If Carrier knew that Mexican made units would cost them an extra 20%, they'd stay put and expand their factories.

Of course, for other companies, such as Apple, who have a worldwide market to consider, a tariff for their phones coming into the country likely would just increase the sticker price rather than be actual encouragement to build the phones here.

The only really effective move in that case would be having customers stop buying iPhones until they're made in the US.

81 posted on 12/01/2016 10:29:58 AM PST by kingu (Everything starts with slashing the size and scope of the federal government.)
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