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Proposing or enacting tax cuts and/or incentives *again* as a way of "spurring" things always reminds me of these classic skits on military strategy...
My Daddy was a smart, but 8th grade educated man. He was actually good at math when he had to do something within his 8th grade education. But, he also deferred to people he thought knew more than he did. The local people at his job told him that he didn't want a raise because his take home would be much less when he entered a higher tax bracket. He hated taxes and the government because he couldn't get a fair shake for a little hard work. He could have done the calculations. Yes, but he didn't because the bosses knew how taxes work; why should he question that? It's easy to get people to buy into something that fits their preconceived notions. This tax cut game will never end. Once he took me riding along the road next to the river. He pointed at a set of concrete buildings all covered with weeds. He ranted about how the local government had built the buildings (and still paying for them) and offered free (or low) rent with a few years of no taxes to attract some businesses. He said that as soon as the period of no taxes ended they start moving to other towns willing to give them the same, but new, deal. I looked at the buildings and this was not business that would have made major investments in the community during their free ride years. It was easy to move on. The only one that remained was one that built a grain elevator that would have been hard to move. Note, all this occurred prior to 1985, the year he died. Nothing has changed. We still want to believe paying for a richer man's lunch will give us a full belly. Maybe it will work at the pearly gates; for my Daddy's sake, I hope it did.
Proposing or enacting tax cuts and/or incentives *again* as a way of "spurring" things always reminds me of these classic skits on military strategy...
My Daddy was a smart, but 8th grade educated man. He was actually good at math when he had to do something within his 8th grade education. But, he also deferred to people he thought knew more than he did. The local people at his job told him that he didn't want a raise because his take home would be much less when he entered a higher tax bracket. He hated taxes and the government because he couldn't get a fair shake for a little hard work. He could have done the calculations. Yes, but he didn't because the bosses knew how taxes work; why should he question that? It's easy to get people to buy into something that fits their preconceived notions. This tax cut game will never end. Once he took me riding along the road next to the river. He pointed at a set of concrete buildings all covered with weeds. He ranted about how the local government had built the buildings (and still paying for them) and offered free (or low) rent with a few years of no taxes to attract some businesses. He said that as soon as the period of no taxes ended they start moving to other towns willing to give them the same, but new, deal. I looked at the buildings and this was not business that would have made major investments in the community during their free ride years. It was easy to move on. The only one that remained was one that built a grain elevator that would have been hard to move. Note, all this occurred prior to 1985, the year he died. Nothing has changed. We still want to believe paying for a richer man's lunch will give us a full belly. Maybe it will work at the pearly gates; for my Daddy's sake, I hope it did.
Thanks for that. You make it all perfectly clear. Why do elected officials become utterly stupid, once they do get elected, I wonder?
Sweetheart tax deals for businesses ought to be totally outlawed. Such an arrangement only means that individual taxpayers end up SUBSIDIZING those outfits. Why don't we see any arrangements that require businesses to subsidize the local tax base for the privilege of locating in Community X. ? Of course, it's not a "privilege" to do business anywhere. I'm just saying that when specific communities and/or States make these deals, it amounts to a flawed decision from the start, because you pit one locality against another. It's predation, and they attack and eat each other. It stinks. I don't want to hear anything about the wonderful "job creators." Since when is their money more green than my own?
Alabama has been trying on the nickname “New Detroit.” Its burgeoning auto parts industry employs 26,000 workers, who last year earned $1.3 billion in wages. Georgia and Mississippi have similar, though smaller, auto parts sectors. This factory growth, after the long, painful demise of the region’s textile industry, would seem to be just the kind of manufacturing renaissance President Donald Trump and his supporters are looking for.
Except that it also epitomizes the global economy’s race to the bottom. Parts suppliers in the American South compete for low-margin orders against suppliers in Mexico and Asia. They promise delivery schedules they can’t possibly meet and face ruinous penalties if they fall short. Employees work ungodly hours, six or seven days a week, for months on end. Pay is low, turnover is high, training is scant, and safety is an afterthought, usually after someone is badly hurt. Many of the same woes that typify work conditions at contract manufacturers across Asia now bedevil parts plants in the South.
“The supply chain isn’t going just to Bangladesh. It’s going to Alabama and Georgia,” says David Michaels, who ran OSHA for the last seven years of the Obama administration. Safety at the Southern car factories themselves is generally good, he says. The situation is much worse at parts suppliers, where workers earn about 70¢ for every dollar earned by auto parts workers in Michigan, according to the Bureau of Labor Statistics. (Many plants in the North are unionized; only a few are in the South.)
Cordney Crutcher has known both environments. In 2013 he lost his left pinkie while operating a metal press at Matsu Alabama, a parts maker in Huntsville owned by Matcor-Matsu Group Inc. of Brampton, Ont. Crutcher was leaving work for the day when a supervisor summoned him to replace a slower worker on the line, because the plant had fallen 40 parts behind schedule for a shipment to Honda Motor Co. He’d already worked 12 hours, Crutcher says, and wanted to go home, “but he said they really needed me.” He was put on a press that had been acting up all day. It worked fine until he was 10 parts away from finishing, and then a cast-iron hole puncher failed to deploy. Crutcher didn’t realize it. Suddenly the puncher fired and snapped on his finger. “I saw my meat sticking out of the bottom of my glove,” he says.
Comments
Excellent !
Derf
https://bloomberg.com/news/features/2017-03-23/inside-alabama-s-auto-jobs-boom-cheap-wages-little-training-crushed-limbs
http://prospect.org/article/why-tax-act-will-not-boost-investment
https://fredblog.stlouisfed.org/2018/06/movement-of-the-federal-tax-receipt-front/