Should American companies that operate abroad pay foreigners the American minimum pay - Page 6

theunbubba · #51 (**permalink**) 05-03-2009, 07:52 PM

Quote:

Originally Posted by AzzY

I don't believe in that theory. The average tax burden on US companies amounts to 13.4%, lower than OECD average. The average income margin of US companies is something around 10% That means in other words, that out of the total revenues of a company, barely 1% goes to paying taxes.

I say you gotta be joking if you'r honestly telling me that a company would go through all the troubles of moving to another country in order to pay 0.9% in taxes instead 1.1% in taxes.

There are plenty of reasons why a company can decide to move abroad - cheaper labor, lower environmental standards, etc. Taxes surely play only a minor role.

In any case, if through the many loopholes in our systems we make it extremely easy for companies to move taxable income to tax havens, that are thank God being closed down anyway, than that is another thing - that has nothing to do with outsourcing per se. Taxes might be part of the equasion, but a company outsorcing solely to reduce tax burden because of the supposedly "high" corporate taxes in the US is a fairy tale.

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.

freakonature · #52 (**permalink**) 05-03-2009, 08:43 PM

Quote:

Originally Posted by AzzY

I don't believe in that theory. The average tax burden on US companies amounts to 13.4%, lower than OECD average. The average income margin of US companies is something around 10% That means in other words, that out of the total revenues of a company, barely 1% goes to paying taxes.

I say you gotta be joking if you'r honestly telling me that a company would go through all the troubles of moving to another country in order to pay 0.9% in taxes instead 1.1% in taxes.

There are plenty of reasons why a company can decide to move abroad - cheaper labor, lower environmental standards, etc. Taxes surely play only a minor role.

In any case, if through the many loopholes in our systems we make it extremely easy for companies to move taxable income to tax havens, that are thank God being closed down anyway, than that is another thing - that has nothing to do with outsourcing per se. Taxes might be part of the equasion, but a company outsorcing solely to reduce tax burden because of the supposedly "high" corporate taxes in the US is a fairy tale.

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.

Quote:

Or, and this is one of my priority recommendations, is that people in the unskilled and low-skilled labor markets modify their lifestyle in order to exist on a lot less money and this includes relocation if necessary, selling property and renting, driving a 10-year old car, whatever it takes.

A high standard is not a bad thing, but there is a distinct line between intelligent financial decisions and living beyond ones means. I agree with your statement. Spending every dime that you intend to earn for the next 15 years today is presuming quite a lot especially when your labor compensation demands are unreasonable.

I believe that a company has a right to pay whatever the local market is willing to accept. Those that disagree do not understand that labor is the ultimate trading power. Compensation in currency is merely a means to making trade less arduous than barter. Protectionist economics does not work leading to a stagnant progression of business. However, I disagree with the workings of NAFTA. I believe an agreement of more equality would be an improvement.

Of course the OP made a disqualification clause for people like me, I do not believe in minimum wage at all. I have read all of the monopsony Card-Krueger findings and found them lacking, so please do not reference it.

Skinny. · #53 (**permalink**) 05-04-2009, 12:57 AM

Quote:

Originally Posted by Butercupp

Have you been hiding in a hole? If they are outsourcing, they are not the major source of Jobs in the US.

No, you fail. They really are:

Youtube - Myth: Outsourcing Bad for America

Quote:

We have outsourced alot of manufacturing jobs, which is why our country is a "services" nation and having so many problems.

What is wrong with being a services nation? Service sector jobs > manufactoring jobs.

Reiver · #54 (**permalink**) 05-04-2009, 01:12 AM

Quote:

Originally Posted by Skinny.

What is wrong with being a services nation? Service sector jobs > manufactoring jobs.

Depends on why they have been created. For the UK, with the Tories slavishly following the teachings of Friedman and Hayek, we experienced a form of negative deindustrialisation. That shouldn't be a feature for the US, given the product cycle within a free trade context should induce technical progress (and therefore a positive deindustrialisation generated by productivity and income growth)

AzzY · #55 (**permalink**) 05-04-2009, 02:26 AM

Quote:

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.

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.

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.

nathan nice · #56 (**permalink**) 05-07-2009, 09:30 AM

Quote:

Originally Posted by OldManOnFire

I guess I can somewhat understand your angst NN...but it's not as simple as you state.

Let's say in the USA we have approximately 150-175 million people willing to work. Now obviously all of them cannot make the same amount of wages because we are differentiated by our skills, education, job position, etc.--right? I believe one problem in the USA is that we have too many unskilled and low-skilled workers. For example I'll state that I believe most workers at GM are low-skilled (and this comes from me who is a farmer). If they are low-skilled as I believe, and if we have too many workers in this category, and if you believe in supply and demand, then the wages are going to remain low. Now it is also forecasted that in the next 40 years the population of the USA will increase by about 100 million. Guess what...most of this increase will be people who are unskilled or low-skilled and this will exacerbate the current problems.

What is the answer? Well, someone can deport or kill 1/2 of the unskilled and low-skilled workers...and stop further immigration. The USA can be a protectionist society but if prices of everything increases, and consumers cannot afford the new economy, then there won't be any new jobs. Workers can obtain more training and education and hope they find a new career that has more demand than supply of labor. We can hope that US business goes into boom-mode and creates 10 or 20 million new jobs...all higher paying of course. Or, and this is one of my priority recommendations, is that people in the unskilled and low-skilled labor markets modify their lifestyle in order to exist on a lot less money and this includes relocation if necessary, selling property and renting, driving a 10-year old car, whatever it takes.

I simply do not believe it is possible for Obama & Co to have any positive effect in this area which will benefit millions of Americans who are experiencing difficult times. Therefore it is wise to take control of one's path and not depend on government to solve problems...

--I live in southeast Idaho kind sir, there is no cheaper place to live, and at this point, we or living 4 to 5 grown men of could be busting ass age per trailer scraping by on top ramen and frozen vegetable. The few places we have left to gain even a couple of dollars are disappearing. Let me put it in plain English, you are leaving us no options but to fight. Not protests, war.

colourislast · #57 (**permalink**) 05-07-2009, 09:36 AM

Quote:

Originally Posted by nathan nice

--I live in southeast Idaho kind sir, there is no cheaper place to live, and at this point, we or living 4 to 5 grown men of could be busting ass age per trailer scraping by on top ramen and frozen vegetable. The few places we have left to gain even a couple of dollars are disappearing. Let me put it in plain English, you are leaving us no options but to fight. Not protests, war.

Sounds like you're living like I did when I was in the Army.

Skinny. · #58 (**permalink**) 05-08-2009, 04:34 AM

Quote:

Originally Posted by nathan nice

--I live in southeast Idaho kind sir, there is no cheaper place to live, and at this point, we or living 4 to 5 grown men of could be busting ass age per trailer scraping by on top ramen and frozen vegetable.

And you would be paying a lot more in an autarky!

Quote:

The few places we have left to gain even a couple of dollars are disappearing.

Back this statement up with facts, or retract it.

Quote:

Let me put it in plain English, you are leaving us no options but to fight. Not protests, war.

Pardon my language... but why does the speech end here; what's the (*)(*)(*)(*)ing plan? Sounds like the rancoring rhetoric of a man with no clue about the political scene, and merely looking for a skapegoat for his poor lifestyle.

Anikdote · #59 (**permalink**) 05-08-2009, 05:53 AM

Quote:

Originally Posted by Reiver

Unfortunately fears over outsourcing tend to encourage an unholy alliance between the left and right where basic economic sense is ignored

The pot of economic nationalism is very easy to stir.

nathan nice · #60 (**permalink**) 05-08-2009, 08:38 AM

Quote:

Originally Posted by Anikdote

I'm sick of people who know nothing talking.

Glad to see you've decended into the childish name calling, won't be long before the banhammer falls....

In either case, you know your allowed to move right? Or are you chained to your home?

Stay classy Idaho!

--I like how anyone can say what they want to me, but if I say something back , it's personal. I can move? That's your response, allow me to destroy the economics of where you live through shady globalist deals and then give you the same option. Where should I move to hoping are fake don't screw up that place to appease their puppet masters? Do you all get cut checks from the fed? And tell me Anikdote, what childish name did I call him?

View Poll Results: Should American companies that operate abroad pay foreigners the American minimum pay
Yes	15	42.86%
No	20	57.14%
Voters: 35. You may not vote on this poll

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