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Originally Posted by theunbubba
I guess you never heard of the straw that broke the camels back.
It's called piling on.
Why would a company move to a place where they get a tax incentive that only makes up about .05% of the lifetime costs of a plant? It happens all the time. It's called maximizing proffit and shareholder return.
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As I clearly stated in my post, taxes might be a part of the equasion, but to cut the problem of outsourcing down to a single input criteria, namela corporate taxes in this cases, is missing a vast part of the story. Sure, if on top of cheaper labor and overall lower costs a company gets a cheap corporate tax rate, obviously it's not gonna say no. But as long as the more important factors such as overall productivity, for instance, do not make outsourcing viable, they will not outsource, because the tax burden is only a minor part of the equation.
Quote:
Originally Posted by freakonature
Low Corporate taxes do nothing for an economy, huh.
Describing taxes paid as a percentage of revenues is a statistic disguise which is misleading. It is one of my duties to find these loopholes for taxable income shelters. With a simpler tax code and a lower corporate rate, I bet the affect on the US tax revenue would be surprising. We should go ahead and decrease capital gains while we are at it.
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You can't even remotely compare the impressive growth of Ireland with some other typical countries companies would outsource to. Ireland was not only basically being inundated with EU money until recently, allowing them to ramp up infrastructure and other assetts that play a vital role in investment decisions, they have also experienced a remarkable growth in productivity over the past decade and a half or so. Obviously all the advantages that the EU provides - free trade with one of the largest "domestic" markets of the world, financial stability even in the face of the current crisis, legal safety, etc. also play a major role.
Ireland is a success story, but again, boiling all that down to their low corporate tax rate is missing the point. You can find that even in T.L. Friedmans statement at the end of that link.
Again: I never denied that tax corporate tax custs can provide an incentive for investment, but as long as a country does not have the rest of its game together, they'r worthless. Same goes the other way - if a country has all other variables going for it, a "high" tax rate will not make companies move away.