Millionaires sending jobs overseas?

[Loren Booda]

Is it so that the more jobs a U.S. business owner sends overseas, the less his tax deductions?

 

[russ_watters]

That was gibberish, but in any case:

The primary reason jobs go overseas is because the workers get paid less than they do in the US.

 

[Ivan Seeking]

What does seem to be true is that there is a tax advantage in sending jobs overseas.

Many analysts say it's true. "The U.S. tax system does provide an incentive to locate production offshore," says Martin Sullivan, a contributing editor to Tax Notes, a non-profit publication that tracks tax issues.

At issue is the U.S. tax code's treatment of profits earned by foreign subsidiaries of American corporations. Profits earned in the United States are subject to the 35% corporate tax. But multinational corporations can defer paying U.S. taxes on their overseas profits until they return them to the USA — transfers that often don't happen for years. General Electric, for example, has $62 billion in "undistributed earnings" parked offshore, according to recent Securities and Exchange Commission filings. Drug giant Pfizer boasts $60 billion. ExxonMobil has $56 billion.

"If you had two companies in Pittsburgh that both were going to expand capacity and create 100 jobs, our tax code puts the company who chooses to put the plant in Pittsburgh at a competitive disadvantage over the company that chooses to move to a tax haven," says former White House economist Gene Sperling, a Clinton adviser...

The U.S. has one of the highest corporate tax rates in the world, and its corporate tax code has a well-earned reputation for complexity. But despite the high rate, the U.S. takes in less annual revenue from corporate taxes, measured as a percentage of economic output, than almost all other major economies. Part of the explanation for that shortfall is the allowance for corporations to postpone taxes on foreign income...

http://www.usatoday.com/money/perfi/taxes/2008-03-20-corporate-tax-offshoring_N.htm

 

[wuliheron]

You need to put international business into perspective. Of all the billionaires in the world today 1/5 to 1/4 are drug cartels and half the cargo ships are carrying counterfeit items. Monetary systems fluctuate so wildly that companies usually barter trade one cargo ship of goods for another rather then deal in cash. In other words, its the wild west out there but the profits can be enormous.

It can be cheaper to ship the exact same item halfway around the world rather then make it at home. For other items and services the US now has 13 million illegal aliens and the government conveniently tends to look the other way while companies hire them. After 30 years of this less then half the US now has a full time job and the government and entitlements are larger then ever.

Historically speaking this is similar to what occurred in the first modern welfare state, the Roman Empire. The Romans would draft soldiers, conquer their neighbors, take the 99.99% of the wealth owned by 1% of the population, reinvest some of it in the local infrastructure raising the average standard of living, and send the rest back home. That way they could collect the rent in perpetuity and make sure the locals were working efficiently. When the Roman soldiers came home they usually found their property had been confiscated by some wealthy senator, so Rome set up the first dole. They were guaranted one meal a day, could do a little work on the side for cash, and were given access to the public baths and games.

Eventually most of the people in Rome were slaves sent back to Rome including some slaves who ran businesses for their masters and were highly educated professionals. Of the Roman citizens themselves half of them were on the dole. All roads didn't just lead to Rome, they were filled with cargo and slaves from foreign countries in the largest trade deficit imaginable.

 

[Loren Booda]

What role do U.S. consumer choices have in jobs lost to other countries?

 

[klimatos]

Is it so that the more jobs a U.S. business owner sends overseas, the less his tax deductions?

The main reason businesses send jobs overseas is because it is more profitable to do so than to keep them here. Businesses have a fiduciary responsibility to maximize the profits of their shareholders. They have no responsibility to work for the common good of the nation.

 

[wuliheron]

What role do U.S. consumer choices have in jobs lost to other countries?

Very little. Consumers don't really have much a choice these days. Even Walmart's "Made In America" brand of clothing is made in foreign countries. People have tried to encourage buying locally, but all such attempts have failed miserably to stem the tide. Not because people are unpatriotic or whatever, but you'd need a computer just keep up with where all this stuff is coming from and so much comes from outside the country it is all but impossible to avoid supporting the trend.

What it really comes down to is the voting booth and to quote Warren Buffet, the richest man in American, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” The banks alone now contribute 40% of the campaign reelection funding for all of congress. The American people sold their government to the highest bidder, spent the money, and have now gone horribly into debt. Despite crippling debt taxes on the wealthy and corporations are at record lows and 400 people now own as much as half the people combined. Consumers have little choice over what they buy, no idea where it is made, and less money to pick and choose. Worldwide the only companies thriving are the multinationals at the expense of everyone else including not least of all the small businesses that are the backbone of the American economy.

 

[Loren Booda]

You give great feedback, Wuli.

Please consider that:

The democratization of information creates competition worldwide yet may induce a class divide for jobs in the U.S.

Ours is a mostly unchecked national electronic marketplace based significantly on gambling with potentially chaotic equations and diminishing timescales.

The material/virtual cost ratio may manifest undervaluing the exchange of material goods.

Do understand that I have never taken a class in economics.

 

[wuliheron]

You give great feedback, Wuli.

Please consider that:

The democratization of information creates competition worldwide yet may induce a class divide for jobs in the U.S.

Ours is a mostly unchecked national electronic marketplace based significantly on gambling with potentially chaotic equations and diminishing timescales.

The material/virtual cost ratio may manifest undervaluing the exchange of material goods.

Do understand that I have never taken a class in economics.

I've only taken one class in economics myself, however, I'd say the current jobs situation doesn't require a genius. Between globalization and automation the jobs simply have not been forthcoming for the last 30 years. The US is still the largest economy in the world, still the largest exporter in the world, but the jobs are being replaced by robots, computers, and foreign competition. The international markets are largely unregulated and marginally taxed which is advantageous for encouraging new markets, but counter productive once they are established.

If I had to guess we're in for a bumpy ride for the next half century. Even if we manage to regulate the international markets better the pace of automation is increasing. Within ten years IBM hopes to create a fuzzy logic memristor chip with the equivalent neurons and synapses of a human brain. Among other things such advances will allow for relatively inexpensive robots and computers that can easily be taught how to chew gum and walk at the same time rather then requiring Herculean programming efforts.

 

[Loren Booda]

What might be (or might have been) the effect of our government equalizing investment (i.e., spending) between private and public sectors?

 

[edward]

The main reason businesses send jobs overseas is because it is more profitable to do so than to keep them here. Businesses have a fiduciary responsibility to maximize the profits of their shareholders. They have no responsibility to work for the common good of the nation.

IMHO

That last sentence is quite apparent.

And what happens to the outsourcers when the people of this nation can no longer afford to buy their foreign made goods?

It would follow Those who made the goods at lower pay can not afford to buy them either.

That is when those busineses come limping home looking for a government handout.

Ironically many have died and sacrificed for those who have no responsibility to work for the common good. Apparently we never realized that this country could be destroyed from the inside out by those who lack a responsibilty for their own nation.

 

[wuliheron]

What might be (or might have been) the effect of our government equalizing investment (i.e., spending) between private and public sectors?

People have been attempting to create simple mechanical models of economics since Karl Marx was inspired by the steam engine. Its a great idea and you have to start somewhere, but all the evidence to date suggests we need more complex models and we just don't have the math, empirical evidence, or theories to create them. You might as well ask what is the meaning of life, the universe, and everything.

 

[KingNothing]

Within ten years IBM hopes to create a fuzzy logic memristor chip with the equivalent neurons and synapses of a human brain. Among other things such advances will allow for relatively inexpensive robots and computers that can easily be taught how to chew gum and walk at the same time rather then requiring Herculean programming efforts.

Yeah, of course they 'hope to'. I seriously doubt they will, even in the next 30 years. A lot of major IC producers have been trying to do this for decades.

 

[wuliheron]

Ironically many have died and sacrificed for those who have no responsibility to work for the common good. Apparently we never realized that this country could be destroyed from the inside out by those who lack a responsibilty for their own nation.

********. The American people sold their government to the highest bidder, spent the money, and then went into debt. There ain't nobody home but us chickens and there ain't nobody going to save our asses but ourselves. Pointing fingers and attempting to assign blame for something the people have done to themselves and allowed to be done to themselves is a gross insult to democracy and humanity alike. Democracy ain't perfect, but at least it is progressive.

 

[wuliheron]

Yeah, of course they 'hope to'. I seriously doubt they will, even in the next 30 years. A lot of major IC producers have been trying to do this for decades.

Memristors are a new technology, but just in the last few years they've made significant advances. IBM has already produced the first prototypes and they appear to be successful. The only question remaining is how many parts they can cram onto a single chip and it seems pretty obvious they can cram a lot more.

 

[edward]

********. The American people sold their government to the highest bidder, spent the money, and then went into debt. There ain't nobody home but us chickens and there ain't nobody going to save our asses but ourselves. Pointing fingers and attempting to assign blame for something the people have done to themselves and allowed to be done to themselves is a gross insult to democracy and humanity alike. Democracy ain't perfect, but at least it is progressive.

IMHO

I disagree the American government was bought by the highest bidder, spent the money then went into debt without the full knowledge of the American people. The people had little to do with it. The people can't make an informed decision considering the blatant lies and trash talk given to them 24/7.

That blame the voters bit is getting old. Good god I have relatives who still believe that the financial crisis was brought on by Jimmy Carter. I can't even get them to watch a three minute video showing a Bush speech pushing no down housing in 02.

I have heard everything from; "The video might be altered" to "It might be satanic." They get information from stupid viral e-mails and believe it. After all, Uncle Harry, would never lie to them. These people are upper middle class college grads and I can't believe that they are an isolated group.

To a great extent Voters make decisions using information that was drilled into their heads by talk radio hosts and TV commercials paid for by big money at election time.

Our economy is so nearly empty it is starting to swirl at the drain yet the billionaires continue to suck out what little bit remains. I don't see this as the capitalism that our founding fathers intended.

To a great extent Voters make decisions using information that was drilled into their heads by talk radio hosts and TV commercials paid for by big money.

 

[wuliheron]

IMHO

I disagree the American government was bought by the highest bidder, spent the money then went into debt without the full knowledge of the American people. The people had little to do with it. The people can't make an informed decision considering the blatant lies and trash talk given to them 24/7.

I just told you, 40% of the reelection campaign financing for all of congress comes from the banks alone. This isn't some state secret that nobody is aware of and anyone can check the figures anytime they like. Nobody is hiding anything. If the public has been brain washed then we have a much bigger problem then corrupt government on our hands, we have a population that can't be trusted to chew gum and walk at the same time.

That blame the voters bit is getting old. Good god I have relatives who still believe that the financial crisis was brought on by Jimmy Carter. I can't even get them to watch a three minute video showing a Bush speech pushing no down housing in 02.

I have heard everything from; "The video might be altered" to "It might be satanic." They get information from stupid viral e-mails and believe it. After all, Uncle Harry, would never lie to them. These people are upper middle class college grads and I can't believe that they are an isolated group.

Or, in your case, its merely a conspiracy by corrupt politicians and the public is simply too stupid and easily led by the nose to recognize the problem. I fail to see how it any more useful and productive a view then assuming Satan is responsible.

To a great extent Voters make decisions using information that was drilled into their heads by talk radio hosts and TV commercials paid for by big money at election time.

Our economy is so nearly empty it is starting to swirl at the drain yet the billionaires continue to suck out what little bit remains. I don't see this as the capitalism that our founding fathers intended.

To a great extent Voters make decisions using information that was drilled into their heads by talk radio hosts and TV commercials paid for by big money.

The American people drove themselves into financial ruin and insisted their government follow suit. Nobody forced them to take out credit cards and buy all those cars, houses, and junk. Nobody forced them to keep voting for politicians who insisted on record low tax rates, trillion dollar wars, and expanding entitlements. Nobody forced them to vote for politicians who would liberalize the whole financial system and play high stakes poker. This isn't just some brainwashing by some stupid radio show either. Its the same American tradition that was responsible for the great depression. Its a very human mistake to make and the question isn't whether we should expect people to be perfect, but how can we deal with the situation.

 

[edward]

This thread was about millionaires sending jobs overseas but I see, and with some help from me, that we are hopelessly off track trying to place blame for the financial crisis somewhere. Putting all of the blame on the common people is just wrong. There were a number of entities playing the game.

Spend and spend we did. Yet it isn't possible to get that credit card without someone with a profit motive willing to give it to you. I used to get about 3 credit card offers per week along with at least one offer to refi my home for 110% of its appraised value.

http://www.youtube.com/watch?v=Xumh_xz60-U&feature=results_video&playnext=1&list=PL9CD92C75C99BC891

Ironically had there been no spending there would have been no economy to fail.

The pitch MAN: