Posted on 09/29/2010 12:51:00 PM PDT by ex-snook
Bill to tax companies exporting jobs fails
WASHINGTON — The Senate on Tuesday blocked tax legislation that would have punished U.S. firms that export jobs. But the political symbolism of trying to save American jobs, not passing a bill, was the Democrats’ closing argument on the economy in the waning weeks of the congressional elections.
Republicans complained that the vote used a serious subject — economic recovery — to score points with voters five weeks before the balloting in which all 435 House seats, 37 Senate seats and the Democratic majority are on the line. The bill in question, Republicans said, would make U.S. companies less competitive.
“The liberal Senate leadership has brought forward a politically motivated bill that will never become law,” said Sen. Orrin Hatch, R-Utah.
But majority Democrats, now without their original plan to close the campaign with a middle class tax cut, sought to convince voters that the bill showed off their commitment to supporting the nation’s economic recovery.
“This is part of the continuing focus on jobs,” Sen. Debbie Stabenow, D-Mich., told reporters.
The bill failed, 53-45, to attract the 60 votes required to advance. Four Democrats and one Independent joined Republicans to block its progress.
But debating it and forcing senators on the record was the Democrats’ point.
“We’re just a few weeks away from an election,” said Sen. Dick Durbin, D-Ill. “I wish this election would be a simple referendum on the debate we’re having on the floor of the Senate right now.”
The bill at issue in the Senate would exempt companies that import jobs from paying the 6.2 percent Social Security payroll tax for new U.S. employees who replace overseas workers who had been doing similar work.
The two-year exemption would be available for workers hired over the next three years. The tax cut — estimated to cost about $1 billion — would be partially offset by tax increases on companies that move jobs overseas.
The bill would prohibit firms from taking deductions for business expenses associated with expanding operations in other countries. It would increase taxes on U.S. firms that close domestic operations and expand foreign ones to import products to the U.S.
Republicans argued the tax cuts would be difficult to administer and the tax increases would hurt international corporations that employ U.S. workers.
It's a subtle concept but what it means is there is NO social safety net in China outside of your place of work.
I remember in the 80s the Unions and Dems were up in arms about the roboticization and computerization of jobs. They actually tried to halt technical progress instead of evolve with it. I remember a big movement to ban robots from being used in factories out of fear of costing jobs.
The other big complaint at the time were businesses bringing in Japanese quality and efficiency standards like Kaizen- which required workers to be more efficient. Again, the Unions were up in arms about these new standards because one worker would end up being more productive than two or three. Heck, Hollyweird even put out movies about how bad it was.
When you are working inside a large organization it's easy to figure out where to go next but still we had about 750,000 people average over those years and increased our productivity ten-fold. If we'd not done that, we'd had to hire another 6 million or so workers.
No, we didn't export any jobs, but business growth did nothing whatsoever to create additional jobs ~ new jobs for sure, but not additional jobs.
Off Topic.
Thread updated.
http://www.freerepublic.com/focus/chat/2584817/posts
Are You Looking For A Job? (Autumn/Early Winter Edition)
Various ^ | September 7, 2010 | n/a
Posted on September 7, 2010 3:46:11 PM PDT by Cindy
Are you unemployed?
Are you employed, but looking around for another job?
Are you looking for an extra job, part-time job, work from home job, starting your own business, or finding a good turn-key business?
Are you looking for a job for yourself, a family member or a friend?
Are you looking for career tips?
If any of these apply, this is the thread to bookmark.
PRECISELY. These protectionists don't realize they are supporting a system that is MORE communist/socialist than China! The reality is China is less socialist/Communist than the US, and erecting protectionist barricades will only further that.
We are guaranteed the rights to Life, Liberty, and the PURSUIT OF HAPPINESS. We're not guaranteed to be happy, but to pursue it. Since when did my pursuit of happiness mean I MUST give money and restrict my activities so that someone else can work less and just have happiness given to them?
Protectionism is, at its very core, communist.
Check out Hong Kong. Foreign owned businesses pay ZERO taxes on income earned outside the territory of HK. Set up your corporate HQ in HK, do your business everywhere but HK, and pay zero corporate taxes.
Singapore does the same thing.
And taxation in HK is simple - the ENTIRE tax code - personal and corporate - is 170 pages, and each of those pages is in English AND Mandarin, making it about 85 pages of English. An afternoon of reading and you can cover the tax laws of HK.
Compare that to 72,000 pages and counting for the US.
There's a reason those countries top the US in terms of economic freedom... They let you actually KEEP what you make, and it's trivially easy to determine what you actually do have to pay tax on. Did you earn that dollar in their territory? Yes: pay a flat tax rate on it. No: pay nothing.
Other countries "get it" - make it easy for businesses to operate and they will grow your economy by paying local workers (who are the ultimate source of taxation - businesses just pass it through as a cost of doing business). Unfortunately, the leaders in DC don't get it at all...
If you don’t like that people vote in our form of government, why don’t you move to China?
Corporations have to make it in the global economy and they WILL migrate to growth, wherever it is. And so they should. Their obligation to their shareholders is to make money.
This will often mean that jobs will go overseas. That is the reality that must be dealt with.
It means that small business, that is not apt to migrate to growth overseas, is more important than ever. Yet this is the very segment of the private sector that Obambi seems most set on destroying.
Excuse me, how did you draw from my statement that I am opposed to voting? Please enlighten me!
Exactly.
All the “good” earnings reports in the last couple of quarters, for example, were because of profits earned overseas, not in the U.S. Made the U.S. stock exchange go up, though.
Our tax policies have to encourage these corporations to bring profits back in to the U.S. And our tax policies need to unleash small business activity because it, by definition, is less likely to be able to migrate to growth overseas, but instead will develop jobs and profits here in the U.S.
That sounds like you don't like our form of government because our government restricts what you do and collects taxes to do what it wilt. How well or how badly it does this is determined on election day.
But in addition do they have any obligation to this country as citizens do? Or is a citizen's obligation only to make money. If corporations do not have any obligations to this country, they should not be allowed to contribute to campaigns.
I said nothing about our form of Government; rather, it is the apparent willingness of a majority of the populace right now (and that includes a LOT of FReepers) who prefer socialism and communist approaches over the Rights we received from our Creator.
You want to have your neighbors dictate what you can do with your life, and what you must do with the fruits of your labor?
If you’re suggesting that it’s a corporation duty to create jobs in the U.S., I don’t agree. Furthermore, that would simply be an impractical standard, and one that would lead to the loss of the private sector and the free market.
I'm suggesting that, as an American corporation, they should not be exporting any jobs that could be done here. We had the private sector and the free market when those jobs were done here. Now we have a no job recession.
I don't see how that's different from saying corporations have some kind of duty to create jobs here. The standard is not "can" a job be done here.
The standard is where can the job be done in a cost-efficient way. If that is China, India or Mexico, that is where the jobs will go.
The only way to stop that migration to cost-efficient labor markets is (1) reduce our tax and regulation burden so that our labor market can compete, or (2) essentially "force" corporations to employ Americans, which equals some kind of Socialism.
We should not try to force a corporation to do something that does not make economic/financial sense. That's insane. If America offered the best deal for, say, manufacturing widgets, there'd be no trouble getting corporations to manufacture widgets here.
This is the way it happens for all countries. Japan and Korea, for example, outsource a lot of their auto manufacturing to the U.S. Why? Because it is migrating to growth. Its growth in auto sales is in the U.S. At some point, then, it becomes cost-effective to go ahead and manufacture the autos here. Same, to some extent, with BMW.
If these auto companies could make more money building their cars in their own countries, then shipping them here for sale, they would continue to do that. But the more cars they sell here, the more cost-effective it becomes to manufacture the cars here.
No doubt there are Japanese and Koreans wailing that their auto companies have a duty to give them, not the Americans, those manufacturing jobs.
Our economy is going to have to adjust to the reality of the global economy -- the fact that all the big companies now can go wherever they want in the world to do business, so long as those countries allow. And they will. Used to be, for example, call centers all went to India. Now, as always happens, wages there have continued to rise to the point that it is becoming just as cheap to have call centers in the U.S. So more will be here. This will constantly shift.
We have to focus on attracting corporations from all over the world to our labor force (through tax policy and less burdensome regulation), and on taking the brakes off the creation of businesses that will inherently operate and create jobs in the U.S.
The jobs WERE done here, they were already created. American corporations exported these jobs. Do corporations have an obligation to this country or not? Should corporations contribute in elections?
That is the globalist BS too many freepers fall for. If we had reduced regs and taxes, many still would leave the US because if I can get a Chinese engineer, IT worker, factory worker willing to build the US device for 75 cents and hour, the US corporations will still export the jobs. Problem is what do you do with all the unemployed workers left behind after they shouldered the tax breaks to the US corporations to entice them to stay (and they took the tax breaks and used it to build/train the Chinese to do the jobs any way). If the Chinese and the world reciprocated to US products and industries, then free trade works, but they do not. The only people who benefit from this scheme is the CEO, bankers and the few on top, while the middle class and working poor are feed this nonsense and starves. Reduction of taxes and regs will buy us some time for keeping jobs in the US, but once the Third World is trained by US corporations to do the job, the jobs will leave in a heartbeat.
If cost is your the bottom line, then let us let the Chinese build our tanks, F-22, aircraft carriers, missiles and etc. Let them own our oil fields, rare earth mines and etc. I think the Japanese are learning the folly of such policies first hand.
If we are to survive and dominate the 21st Century, stop thinking like Wall Street and start thinking like the Chinese when they invented silk. That is the real world and not the BS sold to Main Street. By the way if free trade worked so well, how come the US is broke, our gov and corporations are deep in debt, have high unemployment and lack strategic resources if war should hit us, while China has secured their resources, sitting on loads of cash and her factories are humming. Judge business models by results and not by ideology. Make the theory fit the facts and not the facts fit the theory. That is the problem with proponents of free trade, they do not recognize the destruction it has wrought on this country.
The Chinese operate capitalism tempered by authoritarian government that makes sure her people are employed because they know as long as the Chinese have a job they are less likely to riot. Employment is a form of national security for China’s Communist government. Not all Chinese business decisions are made based on bottom line only. China has a strategic approach to capitalism that safeguards China’s strategic and social stability needs. Their CEO’s are Chinese first, second and third. Not like the US CEO’s. Ever ask a business exec where they would draw the line if they are trading with a potential enemy like China??? He is not comfortable with answering the question. Worst he thinks it is not for corporations or businesses to deal with such issues except make money. His loyalty is no firmer then an American Communist or fundamentalist American Muslim.
A banker once said that when they see a problem they never report it, their first instinct is to determine how they can take advantage of the problem and make money from it. It is government’s job to detect the problem and correct it. Our country does not need people like that no matter how talented they are. In the end they will screw the country. I rather see our country stagnate for 20 years so a new generation of business men are cultivated to replace the idiots we currently have.
The horse has long been out of the barn. And yes, it is Bush’s fault. The jobs have long gone to India, China and to the H1Bs here. Americans over 40, go eff yourselves, said the corporations and their lackeys in Congress, R and D after their names. As for this bill, the WSJ editorial a few days ago explained how it would have the unintended effect to exporting even more jobs, which is, I hope, why the R’s killed it.
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