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To: Action-America
"Yeah, right! Drive the jobs overseas. That's real bright"

They can't give up the US market. How long do you think their US warehouses would remain standing?

48 posted on 08/01/2002 1:05:14 PM PDT by mykej
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To: mykej

They can't give up the US market. How long do you think their US warehouses would remain standing?

Think again.

There are two points that you ignore.

1)  Most of the companies that we are talking about are multinational companies that have intentionally developed significant offshore business, for this very reason.  Sure, they may only get a maximum of 10% of their income from any other single country.  But, 10% from England, another 10% from France, another 10% each from Germany, Japan and Russia, 8% each from Spain, Italy and Australia and another few percent from each of a number of smaller countries and you suddenly see that the amount of US business that many of those companies have is far less than the tax savings that they would recognize by leaving.

Giving up 15-25% of their business for a couple of years, to save 35% in taxes forever is not a bad deal.  In fact, that's a possibility that every company that has chosen expatriation has had to consider and still, they chose expatriation.

I remember one of the officers of a company that expatriated a while back, who said that even if the US government was to make the mistake of attempting to bar expatriating companies entirely from doing business in the US, that the US economy could not handle the negative effects of such legislation for more than a couple of years, while it would be only a temporary setback for established multinational companies and even that would be offset by a significant permanent tax savings.  In fact, the only thing that is keeping most of them here now is the patriotism of their American officers.  But, as oppressive laws put more and more of them into a position where their patriotism puts their company at risk, more and more will choose survival over patriotism.

They may have to give up some US business.  But, the other choice is corporate oblivion.

2)  The other point that you ignore is that the US must have some way of repatriating all massive amount of the US Dollars that are currently offshore.  Without foreign business investment in the US, there is no way to get those dollars back into circulation and "circulation" is the name of the game.  Without enough dollars in circulation, other countries can easily force the value of the dollar to artificial lows.

The fact is, that the US needs those corporations doing business here a whole lot more than those corporations need to do business here.

 

50 posted on 08/01/2002 3:18:42 PM PDT by Action-America
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