Ford first and now Carrier

[homersapien 11,393]

On 12/1/2016 at 5:59 PM, japantiger said:

I agree in principle with your point on Corp Income tax...but I don't think anyone is really advocating fully eliminating it...in general, just cutting it to be in line with avg overseas rates which run in the 22% range vs top US rates @39%...http://taxfoundation.org/article/corporate-income-tax-rates-around-world-2015.    Your other point on tax rate vs labor rates.  My experience is generally, not exclusively, the opposite.  For menial, very, very, low skills jobs; labor rates win.  For anything requiring much in the way of technical skills, training, critical thinking, adaptibility and language skills, the labor savings you get for moving jobs overseas normalizes out pretty quickly due to lower worker productivity and wage inflation in CH, IN, etc.    The majority of decisions I have made to both keep and move jobs has hinged on tax implications....not labor rates (I even went thru one of these on here last year related to movements between BRZ and ARG).  Tax rates differences drive far more of these decisions than labor arbitrage.   See tax rates above...also, the $$ are not coming back into the US; that is why Trump and others are calling for a one time repatriation....there are ~$2.0T in cash setting overseas because no company wants to pay the difference between the much lower foreign rates and the 3rd or 4th highest rate in the world in the US. https://www.bloomberg.com/news/articles/2015-03-04/u-s-companies-are-stashing-2-1-trillion-overseas-to-avoid-taxes.  A few things like this; along with other carrots and sticks to ensure the $$ are used here can make a meaningful difference.

 

I'm not saying corporations should pay no tax, they should pay some tax - there's a lot of taxpayer funded benefits provided to them.  

But I would call it something else, even if it's a function of income. As a matter of principle, "income" tax should be applied to people only.  A corporation's income should either be reinvested - in a productive way - or paid to the stockholders of the company. It shouldn't be allowed to simply accumulate as cash reserves.  That only leads to unproductive mischief by upper management, who profit regardless.

 

[homersapien 11,393]

8 hours ago, icanthearyou said:

I understand.  However, it does, at the very least, show a willingness to recognize and address problems.  We can not trade jobs for cheap consumer goods indefinitely.  We can not run huge trade deficits forever.  We can not continue to narrow our economy.  We can not promote capitalism that is exploits labor.  Functional capitalism creates a strong consumer base.

Again, this is not some heroic measure.  Neither is it some horrible failure.  It's a micro level bandaid.

It's a "reality TV' approach, is what it is. 

[homersapien 11,393]

On 12/1/2016 at 6:00 PM, Elephant Tipper said:

Here's my bottom line homer, I believe that the government shouldn't be involved in any programs, whether for business or social concerns or whatever.  These should be privately funded.  In both instances I'm being taxed to fund what I disapprove.  Just have the government collect taxes to maintain our freedom and let us use those remaining monies as citizens best see fit.  Both parties have their pet projects and these days it makes Americans turn on Americans.  I say, I've had enough of it.  Just have government do the basics and leave the rest to the citizens.

"Frankly, I don't think companies are sending jobs overseas because of corporate income taxes.  They are doing it for the cheaper labor."  I agree but would twist it a bit and instead say that companies are sending money overseas, not jobs.  I make this distinction because the jobs are no longer under American jurisdiction in another country.  And yes, it is for the cheaper labor annnnnd it is also because those monies may be more efficiently utilized if the tax rates are lower in those countries. 

I'm +++ on your idea to eliminate corporate taxation.  It would further streamline our economy.  I wouldn't think our income taxes would have to increase because of the freeing up of cash.  But what do I know ?  I'm not a numbers guy, at least on the tax issue. 

The federal government is the only tool we have for acting at the national level.  

It seems to me that many of our problems are national.  And even the ones that aren't can be better addressed from a national perspective. Without the federal government we become an archipelago of poor states bounded on both coasts by wealthy states.  Or in other words, a bunch of poor Republican dominated states with wealthier liberal states on the coasts.     

[icanthearyou 4,463]

10 hours ago, homersapien said:

It's a "reality TV' approach, is what it is. 

True but, that does not mean it is the totality of his approach.  And again, he at least recognizes the problem of trading jobs for cheap consumer goods and, that our trade deficit is unsustainable.  

[RunInRed 16,438]

Quote

Carrier, the company President Trump pledged to keep on American soil, informed the state of Indiana this week that it will soon begin cutting 632 workers from an Indianapolis factory. The manufacturing jobs will move to Monterrey, Mexico, where the minimum wage is $3.90 per day.

That was never supposed to happen, according to Trump's campaign promises. He told Indiana residents at a rally last year there was a "100 percent chance” he would save the jobs at the heating and air-conditioning manufacturer.

About 1,400 positions were on the chopping block, per company estimates. Over the past year, Trump has claimed he could maintain at least 1,100 of those jobs in the United States. But on Monday, the company gave official notice to Indiana officials that it would start laying off workers at the factory on July 20 and keep slashing staff until approximately 800 factory employees remain.

“This action follows a thorough evaluation of our manufacturing operations,” wrote Steven Morris, a Carrier manager in Indianapolis, in a memo Indiana’s Department of Workforce Development received Monday,“and is intended to address the challenges the business faces in a rapidly changing industry.”

The dismissals, he added, are “expected to be permanent.”

https://www.washingtonpost.com/news/wonk/wp/2017/05/24/here-is-the-number-of-jobs-carrier-is-moving-to-mexico-after-trump-said-hed-save-them/

 

[RunInRed 16,438]

Quote

Ford announced this week that production for its next-generation Focus is being moved out of Kentucky, and will be going to one of Ford's existing plants in China.

Trump took credit when Ford announced earlier this year that a factory planned for Mexico to build the car was being canceled.

http://www.cnbc.com/2017/06/22/trumps-carrier-jobs-deal-is-just-not-living-up-to-the-hype.html