Tax experts say Trump bill likely to send jobs overseas

DAVID J. LYNCH

On the Friday before Thanksgiving, Kenny Johnson left the Nelson Global Products plant in Clinton, Tenn., for the last time.

Having devoted nearly 13 years to making tractor-trailer exhaust pipes, Johnson, 41, spent some of his final weeks at the plant watching Mexican workers train to take his job.

“They brought three or four groups at different times,” he said. “To learn the jobs that are going to Mexico.”

This was the kind of economic dislocation that President Donald Trump vowed to prevent with his “America First” policies.

Over the past year, he threatened to impose a new tax on companies eyeing offshore locales and repeatedly proclaimed the imminent return from overseas of millions of lost American jobs.

But presidential jawboning has been no match for the market.

To cut costs in a competitive global environment, Nelson Global executives in May announced the closure of the Clinton facility and a sister plant in Minnesota.

Clinton’s 149 jobs and equipment were distributed among company facilities in North Carolina and Monterrey, Mexico, workers said, even as the president trumpeted his agenda of economic nationalism in Washington.

“He hollered that he was gonna put a stop to that,” Johnson said. “And he obviously did not.”

Trump, in fact, might actually make things worse.

What happened to the workers in Clinton, tax experts say, will probably happen to more Americans if the Republican tax overhaul that is nearing completion becomes law.

The legislation fails to eliminate long-standing incentives for companies to move overseas and, in some cases, may even increase them, they say.

“This bill is potentially more dangerous than our current system,” said Stephen Shay, a senior lecturer at Harvard Law School and former Treasury Department international tax expert in the Obama administration.

“It creates a real incentive to shift real activity offshore.”

As a candidate, Trump vowed to stop companies from moving offshore by imposing a 35 percent border tax on those that sought to ship products back home from their new foreign plants.

“A Trump administration will stop the jobs from leaving America,” he told a cheering crowd in Hershey, Pa., the weekend before Election Day.

“The theft of American prosperity will end.”