Donald Trump's threat against companies who leave U.S. is statism at its worst

Donald Trump is staying true to his campaign promise, by enacting another threat towards companies which leave the U.S. The president-elect went on a Twitter rant Sunday morning, telling companies to get in line or else.

Trump’s rhetoric is actually pretty similar to comments made by President Barack Obama during a 2010 speech in DC (emphasis mine).

We need to decide whether we’re willing to do what’s necessary to keep this economy moving in the right direction. Whether we’re willing to rise above the election-time games and come together, all of us — Democrats and Republicans and independents — all of us coming together not just to pass a jobs bill that is going to help small businesses like this one hire and grow, but also to secure a clean energy future, and accelerate our recovery, and rebuild our economy around three simple words — Made in America. That is what I’m committed to doing, and that’s what I hope members of both parties will join me in doing in the days ahead and beyond.

This is the government picking winners and losers, and far from the free markets conservatives claim to love. Just look at Trump and Vice President-elect Mike Pence’s “deal” with Carrier to keep some jobs in Indiana. Ed has written about some of the concerns there may be regarding the Trump/Carrier deal, and he’s absolutely right. This is not the way a so-called conservative (which Trump and his supporters promised he was) is supposed to act.

But Trump and Pence’s decision to use tax breaks as a way to help out companies is nothing new, and in no way goes into his campaign pledge of #draintheswamp. The Wall Street Journal reported in 2014 how targeted tax breaks don’t do anything to help the economy.

With Congress poised to extend a raft of tax breaks, consider this: One such break has helped AT&T Inc. and Verizon Communications Inc. slash their recent tax bills by billions of dollars without leading to the intended increase in investment or jobs.

The measure, known as “bonus depreciation,” lets companies offset their income with investments they have made more quickly. It was enacted in 2008 as part of the economic stimulus package with the goal of giving companies an incentive to build more factories or upgrade more equipment, creating jobs and giving a boost to sluggish economic growth in the process…

Meanwhile, the companies have kept their capital spending relatively flat since the stimulus was adopted, and their employee count has dropped by more than 100,000 people, a fifth of their combined work forces.

The outcome isn’t a matter of gaming the tax system. AT&T and Verizon appear to be using the benefit as intended, and both are plowing tens of billions of dollars into their networks. It is possible their spending would have been lower if they hadn’t had the extra tax incentive. But the results do raise questions about whether extending bonus depreciation is an effective way to spur growth.

This is one of the major dangers of cronyism, because there’s never a guarantee the company which gets the tax breaks will actually spend money the way they promise. The other danger is government going back to the business and saying, “We did this for ya, now do this for us.” See last year’s “partnership” between AT&T/Verizon and the NSA. It’s doubtful Indiana or the U.S. government would tell Carrier to let them install cameras into AC units, heaters, or refrigerators (as CTOS does in watch_dogs and watch_dogs 2), but put the wrong kind of “leader” in power and you never know what could happen. I always thought Deux Ex: Mankind Divided was being a little too conspiracy theorist regarding the government reading emails. Turns out…the writers were right.

The right needs to be careful before praising Trump, Pence, et. al for “reaching a deal” to keep a certain business in the U.S., especially when they threaten reprisals against those who decide to leave. Trump’s promise to reduce regulations and taxes is great, as long as he goes through with it through the legislative process. What will be even more interesting is what happens if/when he doesn’t get his way. Will he accept defeat, or decide to use executive orders to bypass Congress? Here’s hoping the right will be angry if he ignores the Constitution (even if it furthers their agenda).


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