Trump Lamented Loss of Oreo Jobs to Mexico. His Tax Bill Could Make More Jobs Go South.
The historic ten-story Nabisco plant in Southwest Chicago had long been a point of pride—and a source of good-paying union jobs—in the Windy City, thanks to its production of one of America’s favorite cookies: Oreos. The good feelings went both ways. In 1993, Nabisco received $90 million in tax subsidies from Chicago and Illinois to invest in upgrading and expanding its production capabilities for snacks like Oreos, Ritz crackers, and Fig Newtons.
More than 20 years later, in the spring of 2015, rumors were circulating at the 1,200-employee plant that Nabisco’s parent company, Mondélez International, might once again invest more than $100 million to modernize the Chicago plant and add new production lines. That July, however, management announced that the company would instead be investing that money to expand operations at a new $500 million plant it had opened Salinas, Mexico—a move that the company said would save it about $46 million a year. Nabisco would end the production of Oreo cookies at its Chicago plant, where they had been made for decades. That meant pink slips for about 600 employees.
Managers had demanded that the unionized workers would need to swallow $46 million in cuts to their annual pay and benefits for the company even to consider keeping Oreo production in Chicago. The offer, Anthony Jackson, one of the Chicago bakers who lost his job, says in a new report on Mondelez’s outsourcing, “was so egregious the company knew it could never be accepted. After they had invested $500 million in a new facility, they had no intention of letting it go unused.”
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Meanwhile, the Republican tax plan that Trump has sold as a tremendous deal for the middle class might actually encourage companies to move their domestic operations—and jobs—abroad. One provision in the tax plan would establish a “territorial” system for taxing foreign profits, which would make it much easier for corporations to avoid international taxation and could actually spur companies to move operations abroad.
Kimberly Clausing, an economics professor at Reed College, writes: “Unlike the present system, which taxes companies on their foreign income once it is repatriated to the United States, a territorial tax system exempts foreign income from U.S. taxation. This tilts the playing field even further toward doing business abroad rather than at home, since there will always be countries with lower rates. A territorial system makes explicit, and permanent, the preference for foreign income over domestic income. It also accelerates the profit shifting behind our corporate tax base erosion problem. That is hardly an ‘America first’ policy.”
http://prospect.org/article/trump-lamented-loss-oreo-jobs-mexico-his-tax-bill-could-make-more-jobs-go-south
This is just totally fucked up, "territorial system"
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