PDA

View Full Version : Do you think it is OK for a US company to move its manufacturing to another country?



genglandoh
12-23-2015, 09:45 AM
What do you think about a US company building a manufacturing plant in another country to supply products for the US market?
Do you think this is stealing jobs from the US?
Do you think this is OK because it will reduce the cost of goods to the US consumer?

CWSmith
12-23-2015, 09:47 AM
Consumers need to try to buy made in the USA. We have the power if we have the discipline.

Paul Pless
12-23-2015, 09:52 AM
Under current policy and the policy of 'free trade' that both Democrats and Republicans have supported for almost five full decades I cannot blame companies for offshoring jobs. That said, I think unrestricted free trade is ridiculous for the United States and I think the policies of both Dems and Reps with regards to free trade that promote companies to move offshore to be both vile and ridiculous on many levels. There is quite a difference between free trade and fair trade. Policies and incentives that promote companies leaving for places that have weaker environmental and labor protections as well as weaker product liability laws is just wrong. Its bad for us, and ultimately usurious to the lower class populations of the countries where the companies choose to relocate.

Rum_Pirate
12-23-2015, 09:55 AM
Is the USA Company going to make more money - would the US IRS get more tax, and would that extra money be reinvested in the US economy?
Depends on whether the US Company could afford to produce and sell the product for a profit if made in the USA v overseas. If it couldn't there would be no jobs there anyway.
The poor (and there will always be poor) usually are driven by price, even if the quality is not as good.

If the product is made of US sourced materials, made in the USA and sold in the USA, then perhaps the economic multiplier effect is at the greatest.

TomZ
12-23-2015, 10:04 AM
Under current policy and the policy of 'free trade' that both Democrats and Republicans have supported for almost five full decades I cannot blame companies for offshoring jobs. That said, I think unrestricted free trade is ridiculous for the United States and I think the policies of both Dems and Reps with regards to free trade that promote companies to move offshore to be both vile and ridiculous on many levels. There is quite a difference between free trade and fair trade. Policies and incentives that promote companies leaving for places that have weaker environmental and labor protections as well as weaker product liability laws is just wrong. Its bad for us, and ultimately usurious to the lower class populations of the countries where the companies choose to relocate.

+1
Once one company moves, and can then wield a lower price, others, with comparable products, must follow or go bankrupt.

Too Little Time
12-23-2015, 10:08 AM
What do you think about a US company building a manufacturing plant in another country to supply products for the US market?
Do you think this is stealing jobs from the US?
Do you think this is OK because it will reduce the cost of goods to the US consumer?

I have been against outsourcing jobs for a long time. On the other hand I have been in favor of improving the lives of those in other parts of the world, in part, by giving them jobs.

Dan McCosh
12-23-2015, 10:12 AM
Since making things overseas to export back to the homeland is pretty much what the Puritans had in mind when they set sail on the Mayflower, the answer to the abstract idea is its OK. The political questions, however, involve many issues including currency valuation, corporate deals with foreign countries, and one-way tariff barriers. The end game is what are you going to trade for the stuff you bring in from overseas?

slug
12-23-2015, 10:13 AM
Sure its OK. Many low value manufactured goods cant be made in the US, too expensive.

Are you suggesting that making cigarette lighters, fly swatters , shoes...... Are good american jobs ?

Low value, high cost manufacturing goods might find a consumer in the US...they sure as hell wont find an export market.

half the reason you manufacture outside of the US is To be closer. To the intended market


also remember Americas punishing corperate tax, onerous legal system and piles of red tape.

osborni
12-23-2015, 10:15 AM
also remember Americas punishing corperate tax,That simple isn't true.

Norman Bernstein
12-23-2015, 10:23 AM
What do you think about a US company building a manufacturing plant in another country to supply products for the US market?
Do you think this is stealing jobs from the US?
Do you think this is OK because it will reduce the cost of goods to the US consumer?

Over the years, many products I have designed, have been manufactured overseas. In some sense, I wish it were not so... but I am a realist, and we live in a globally interconnected economy. Offshore manufacturing is neither an absolute benefit, nor an absolute disadvantage... it's a mix of both.

My first experience with this was with my first employer, dating back to the early 80's. At the time, we were transitioning from building products with what are called 'thru-hole' components, to products manufactured with something called 'surface mount'. Both technologies could be automated, but surface mount was clearly the direction the industry was going in. At the time, our US factory was largely staffed by legal immigrants from the Azores, because there was a large community of Azoreans in a nearby town... the inside joke was that if you called out the name 'Maria' in the factory floor, eleven women would stand up.

The company spent enormous sums of money in updating our manufacturing technology, automating as much as possible to stay competitive. Naturally, automation resulted in some layoffs, but my company was especially good to employees, and they tried to preserve as many jobs as possible, and granted extraordinary severance benefits to those who were laid off.

After a few years, however, the writing was on the wall. Factory costs were based on what is called the 'burdened labor' rate.... it's the hourly cost of a factory employee, after factoring in all wages, benefits, overhead, etc... it's how you would evaluate a product's price and margins. Our burdened labor rate had risen to $47/hour (I don't know what the gross hourly wage rate was, but I'm sure it was competitive with the rest of the industry).

We could NOT remain competitive, at a $47/hour burdened labor rate, since our competitors were all offshoring. What really put the lid on the coffin was realized when we ended up closing the factory, and sending the manufacturing to the Philippines, where the gross labor rate.... INCLUDING the contract assembler's profit margins.... was only $2.50 per hour. The company did a good job in finding alternate jobs for a percentage of the workers who were laid off... but, of course, many were hurt in the transition.

As it turned out, the company eventually reduced its footprint in assembled products, since the company's integrated circuit business was the vast majority of corporate revenues. Amazingly, some of those products... including a couple that I designed, over 25 years ago... are still being manufactured in the Philippines.

Of course, we can't deny the benefits of offshoring, since there indeed are some. That 50" 4K HDTV that you may have bought for a mere $799 this Christmas would not have been possible, assembled in the US. The same is true for a very wide variety of products made in China and elsewhere.... clothing, especially, made in Vietnam or Cambodia. Yes, sometimes, the labor standards are horrible, in third world countries... suicides at Foxcon, who is Apple's main contract assembler, were so bad, they needed to erect anti-suicide nets in their dormitories... but this is less true these days, than it was.

Automation acts, to a degree, as a counter to the low labor rates... highly automated factories are less expensive to run, and have 'trickle-down' benefits, as more people are employed in making the robots and control systems required for automation.

I don't believe there is anything that can be done about the way in which third world countries compete, in terms of labor costs... it's a natural evolution of a global economy.

HOWEVER, I think the bigger problem relates to the tax code. Sending products offshore for manufacturing is less damaging to the country, than sending IP (intellectual property) offshore. This is a tax dodge which Congress SHOULD end, if it were not for the congressmen (mostly Republican, but there are a few Democrats as well) who protect this loophole.

The scam is simple: a US company assigns it's patents to their offshore subsidiary. The offshore subsidiary charges the US company a large fee for the use of the IP, resulting in a big profit booked offshore (and sheltered from taxes), while the profit margins booked in the US are paper thin, owing to the large 'fee' paid to the subsidiary... and the result is minimal taxation.

This is an abuse of both the patent system, and the tax system.... and it should be stopped. I consider it to be the #2 tax abuse, right behind the 'carried interest' loophole, a scam designed with the intention of letting a very small handful of very wealthy people pay a low tax on other people's profits. Both of these disgust me.

RonW
12-23-2015, 10:24 AM
Corporations move abroad and outsource for the simple reason of reducing costs and taxation and there by increasing profit margins. Period.

At the same time it reduces the volume of jobs in america, therefore it creates more competition among workers for fewer jobs, which drive down the wages.

Here is a function and duty of a federal government, not to control exports, but to and when needed use tariffs to balance unfair competition from low wage countries.

Obama a couple years ago was forced to put a tariff and as I remember it was 30% on korean tires or they would have literally put goodrich,, goodyear and so forth out of business. Tariffs date back to the 1700's........JFK said tariffs are necessary to protect the american workers..

Andrew Craig-Bennett
12-23-2015, 10:25 AM
I am not a US citizen so maybe I should not comment but the point is of general application.

We know that the tariffs imposed in response to the Wall Street Crash triggered the Great Depression... and we know that Ricardo's theory of comparative advantage is as well proven as anything in economics.

Rolls-Royce, a British company, manufacture in the UK because they can be sure of the quality of what they sell, but Dyson, a British company, moved their manufacturing overseas, because a defective vacuum cleaner is unlikely to have the same consequences as a defective aero engine.

But in today's world is there any way in which a national government can tell a corporation where to make its widgets?

If I look at my Iphone I see a widget assembled in China round a chip made in Taiwan and designed in the UK for an American corporation which avoids tax in the UK by registering its business in Ireland...

Paul Pless
12-23-2015, 10:27 AM
Btw geng, I don't trust Obama's nor Hillary's motivation or loyalties with regards to negotiating and administering trade policies. Obama's just not very good at it, and Hillary is down right deceitful.

Ted Hoppe
12-23-2015, 10:28 AM
also remember Americas punishing corperate tax, onerous legal system and piles of red tape.

It is more likely the companies receive the full protections under US law, function as if they did operated here, create artificial headquarters outside the US and create large volumes of income which is laundered for their principals.

David G
12-23-2015, 10:29 AM
Under current policy and the policy of 'free trade' that both Democrats and Republicans have supported for almost five full decades I cannot blame companies for offshoring jobs. That said, I think unrestricted free trade is ridiculous for the United States and I think the policies of both Dems and Reps with regards to free trade that promote companies to move offshore to be both vile and ridiculous on many levels. There is quite a difference between free trade and fair trade. Policies and incentives that promote companies leaving for places that have weaker environmental and labor protections as well as weaker product liability laws is just wrong. Its bad for us, and ultimately usurious to the lower class populations of the countries where the companies choose to relocate.

Yes... this is a reasonable summary. Trade is a complex topic, and the balance is delicate. Nonetheless... trade policy has long leaned toward the profits of large firms, even at the expense of the longer term overall good. For a peek at the kind of manipulation that characterizes this read 'Confessions of an Economic Hit Man'.

Ted Hoppe
12-23-2015, 10:32 AM
Btw geng, I don't trust Obama's nor Hillary's motivation or loyalties with regards to negotiating and administering trade policies. Obama's just not very good at it, and Hillary is down right deceitful.

We always need to remember Clintons delivered telecommunications act of 1995 and NAFTA - the two largest corporate giveaways in US history all in the name of trade.

RonW
12-23-2015, 10:42 AM
Andrew Craig- Bennett
We know that the tariffs imposed in response to the Wall Street Crash triggered the Great Depression..

No it did not , wrong....massive excessive tariffs were applied to stop competition from outside sources in an effort to keep unemployment at a lower rate.

The stock market crash was caused by the federal reserve in creating massive amount of cash and bloating the credit markets in the previous 15 years and then retracting the money supply in an effort to correct their sin. As well as at the same time the stock market was grossly over sold due to margin selling which required only 10% down on the price of a stock...as things slowed down, no one could meet their margin calls and the tumble of the crash went full swing....

The glass-steagal act was to prevent mixing of financials and stopped the 10% margin selling and changed it to 50% which is still the rule today...

C. Ross
12-23-2015, 10:43 AM
Of course.

Commodity manufacturing is on the trailing edge of wealth not the leading edge. Why should we cling to below-value activities?

Any company that moves high value manufacturing or engineering or product design or distribution or other intellectual property development to a country with low manufacturing wages would be foolish. I don't see that happening. Do you?

From another thread:

http://blogs-images.forbes.com/timworstall/files/2011/12/iphone.jpg

http://www.forbes.com/sites/timworstall/2011/12/24/china-makes-almost-nothing-out-of-apples-ipads-and-i/

David G
12-23-2015, 10:54 AM
Of course.

Commodity manufacturing is on the trailing edge of wealth not the leading edge. Why should we cling to below-value activities?

Any company that moves high value manufacturing or engineering or product design or distribution or other intellectual property development to a country with low manufacturing wages would be foolish. I don't see that happening. Do you?

From another thread:

http://blogs-images.forbes.com/timworstall/files/2011/12/iphone.jpg

http://www.forbes.com/sites/timworstall/2011/12/24/china-makes-almost-nothing-out-of-apples-ipads-and-i/

Just so. As an example I'm personally familiar with... the plywood manufacturing industry in the Pacific NW.

My folks were part owners of such a mill on the Oregon coast. It was a vibrant industry with many small - medium sized mills, and they were quite profitable. When conditions changed (a variety of factors came into play) and industry profitability sagged, only a few were left.

I watched the equipment sold at auction to small firms from developing countries. Equipment that was antiquated by our standards was a big step forward for them. And they had market conditions to use it well, and sell the finished product back to us at a price below our own manufacturing costs. In fact, some of the folks from OUR mill went on to become importers for such firms.

If you'd like a simple overview of the process - in macro terms - read 'The Stages of Economic Growth'. It's simplistic in a broad-brush sort of way, and dated - being written by a brilliant but very young Walt Rostow a lot of years ago. But it's an easy read, and good for an overview.

SullivanB
12-23-2015, 10:58 AM
Btw geng, I don't trust Obama's nor Hillary's motivation or loyalties with regards to negotiating and administering trade policies. Obama's just not very good at it, and Hillary is down right deceitful.

Obama's deceitful in his own right, his handling of the TPP, the perfect example.

Ted Hoppe
12-23-2015, 11:04 AM
Of course.

Commodity manufacturing is on the trailing edge of wealth not the leading edge. Why should we cling to below-value activities?

Any company that moves high value manufacturing or engineering or product design or distribution or other intellectual property development to a country with low manufacturing wages would be foolish. I don't see that happening. Do you?

From another thread:

http://blogs-images.forbes.com/timworstall/files/2011/12/iphone.jpg

http://www.forbes.com/sites/timworstall/2011/12/24/china-makes-almost-nothing-out-of-apples-ipads-and-i/

interesting you point to Apple who holds a direct and intentional monopoly on smart phones and pads. They control the manufacturing process of the largest plants and need Samsung to stay in the game of production to offset goverment regulation. Apple has 40 billion (and growing) in war chest to protect the monopoly.

SullivanB
12-23-2015, 11:11 AM
Yes, so called U.S. corporations ought to be able to build a plant or otherwise produce goods in another nation, if it chooses. But doing so ought not be enabled or encouraged by U.S. policy. Relevant policy ought to encourage and even enable, within reason, the building of plants and the making of other investments in the U.S., and discourage and even penalize corporations making such investments elsewhere. Carrots and sticks (big sticks with nails in them).

C. Ross
12-23-2015, 11:13 AM
interesting you point to Apple who holds a direct and intentional monopoly on smart phones and pads.

Eh? Android represents 80% of the market, iOS 20%.

http://www.idc.com/prodserv/smartphone-ms-img/chart-ww-smartphone-os-market-share.png

JimD
12-23-2015, 11:18 AM
Of course its OK. You live in America, not North Korea. You have no obligation to other Americans who are too stupid, lazy, and unenterprising to find ways of improving their own lot. You can't have both free for yourself and fair to the other guy. Somebody needs to look up the words to your anthem and sing along with Mitch.

Andrew Craig-Bennett
12-23-2015, 11:18 AM
I'd particularly like to thank Norman for his excellent post no 10.

Ted Hoppe
12-23-2015, 11:51 AM
For the record - Norm - I have been to the Samsung hdtv plant (most of all brands are assembled in three main factories). By and large the units are nearly assembled by robots. The workers are paid a decent wage - comparable to US factory workers. Minimum wage in South Korea is approximately 5.30 an hour US. The competative factor that dogged the us in the 80s and 90s where wages hurt the domestic manufacturing has narrowed to be almost on pair. The real issue is tax implications on profits on corporate earnings, management unwillingness to commit to facilities here and a committed labor segment to embrace the skills needed to produce here.

Frankly our own media and culture has made working and running in a domestic manufacturing plant look undesirable and not worth the effort - save for some automobile and defense related operations.

Vince Brennan
12-23-2015, 11:53 AM
I can't believe that you people are still being sucked in by this despicable troll.


DO----NOT----FEED ----THE ---- TROLLS!!!!

Andrew Craig-Bennett
12-23-2015, 11:54 AM
For the record - Norm - I have been to the Samsung hd tv plant. The units are nearly assembled by robots. The workers are paid a decent wage - comparable to US factory workers. Minimum wage in South Korea is approximately 5.30 an hour US. The competative factor that dogged the us in the 80s and 90s where wages hurt the domestic manufacturing has narrowed to be almost on pair. The real issue is tax implications on profits on corporate earnings, management unwillingness to commit to facilities here and a committed labor to embrace the skills needed to produce here.

Frankly our own media and culture has made working and running in a plant look undesirable and not worth the effort.

And another good post.

Low wage manufacturing is moving - fast - out of China now.

I agree that the elephant it today's room is the taxation of multinationals. My own little branch in the UK of a Chinese corporation has paid more corporation tax than Starbucks...

RonW
12-23-2015, 12:00 PM
I can't believe that you people are still being sucked in by this despicable troll.


DO----NOT----FEED ----THE ---- TROLLS!!!!

Now what is the reasoning behind your post ? As usual you along with a few more never have anything of value to add....so who is the real troll ?

slug
12-23-2015, 12:49 PM
Of course.

Commodity manufacturing is on the trailing edge of wealth not the leading edge. Why should we cling to below-value activities?

Any company that moves high value manufacturing or engineering or product design or distribution or other intellectual property development to a country with low manufacturing wages would be foolish. I don't see that happening. Do you?

From another thread:

http://blogs-images.forbes.com/timworstall/files/2011/12/iphone.jpg

http://www.forbes.com/sites/timworstall/2011/12/24/china-makes-almost-nothing-out-of-apples-ipads-and-i/


Spot On. I have a client in Manufacturing. Precision steel, surgical rubber, Custom communication cables, and tool making.

huge company.

if you drive a diesel car he probably made the precision steel in the fuel injection system.

when you are in the hospital that machine keeping you alive is built with his pump components.

he manufactures in high wage countries, Switzerland, Germany, Italy and the US because his clients are in high wage countries ,the labour force is highly skilled , intellectual property is guarded and the backround infrastructure is first class.




he has a Chinese factory but they are not able to produce to high quality and the chinese domestic market doesnt require high specification components. His chinese factory exports very little product.

if I ask him about US manufacturing he says that the US must concentrate on improving workforce skills and infrastructure. tax is a fact of life. The US legal system is dense, expensive and dangerous

No trade protectionism needed

oznabrag
12-23-2015, 12:59 PM
That simple isn't true.





http://cdn.billmoyers.com/wp-content/uploads/2014/05/BOA_logo.gif
Bank of America runs its business through more than 300 offshore tax-haven subsidiaries. It reported $17.2 billion in accumulated offshore profits in 2012. It would owe $4.3 billion in US taxes if these funds were brought back to the US.



http://cdn.billmoyers.com/wp-content/uploads/2014/05/Citi-logo.jpg
Citigroup had $42.6 billion in foreign profits parked offshore in 2012 on which it paid no US taxes. It reported that it would owe $11.5 billion if it brings these funds back to the US. A significant chunk is being held in tax-haven countries.



http://cdn.billmoyers.com/wp-content/uploads/2014/05/Exxonmobil-logo.jpg
ExxonMobil had a three-year federal income tax rate of just 15 percent. This gave the company a tax subsidy worth $6.2 billion from 2010-2012. It had $43 billion in offshore profits at the end of 2012, on which it paid no US taxes.



http://cdn.billmoyers.com/wp-content/uploads/2014/05/Fedex-logo.jpg
FedEx made $6 billion over the last three years and didn’t pay a dime in federal income taxes, in part because the tax code subsidized its purchase of new planes. This gave FedEx a huge tax subsidy worth $2.1 billion.



http://cdn.billmoyers.com/wp-content/uploads/2014/05/GE-logo-sm.jpg
General Electric received a tax subsidy of nearly $29 billion over the last 11 years. While dodging paying its fair share of federal income taxes, GE pocketed $21.8 billion in taxpayer-funded contracts from Uncle Sam between 2006 and 2012.



http://cdn.billmoyers.com/wp-content/uploads/2014/05/Honeywell-logo.jpg
Honeywell had profits of $5 billion from 2009 to 2012. Yet it paid only $50 million in federal income taxes for the period. Its tax rate was just 1 percent over the last four years. This gave it a huge tax subsidy worth $1.7 billion.

oznabrag
12-23-2015, 12:59 PM
http://cdn.billmoyers.com/wp-content/uploads/2014/05/Merck-logo.jpg

Merck had profits of $13.6 billion and paid $2.5 billion in federal income taxes from 2009 to 2012. While dodging its fair share of federal income taxes, it pocketed $8.7 billion in taxpayer-funded contracts from Uncle Sam between 2006 and 2012.



http://cdn.billmoyers.com/wp-content/uploads/2014/05/Microsoft-logo1.jpg
Microsoft saved $4.5 billion in federal income taxes from 2009 to 2011 by transferring profits to a subsidiary in the tax haven of Puerto Rico. It had $60.8 billion in profits stashed offshore in 2012 on which it paid no US taxes.



http://cdn.billmoyers.com/wp-content/uploads/2014/05/pfizer-inc-logo.jpg
Pfizer paid no US income taxes from 2010 to 2012 while earning $43 billion worldwide. It did this in part by performing accounting acrobatics to shift its US profits offshore. It received $2.2 billion in federal tax refunds.



http://cdn.billmoyers.com/wp-content/uploads/2014/05/Verizon-logo.jpg
Verizon made $19.3 billion in US pretax profits from 2008 to 2012, yet didn’t pay any federal income taxes during the period. Instead, it got $535 million in tax rebates. Verizon’s effective federal income tax rate was negative 2.8 percent from 2008 to 2012.

Norman Bernstein
12-23-2015, 01:01 PM
For the record - Norm - I have been to the Samsung hdtv plant (most of all brands are assembled in three main factories). By and large the units are nearly assembled by robots. The workers are paid a decent wage - comparable to US factory workers. Minimum wage in South Korea is approximately 5.30 an hour US. The competative factor that dogged the us in the 80s and 90s where wages hurt the domestic manufacturing has narrowed to be almost on pair. The real issue is tax implications on profits on corporate earnings, management unwillingness to commit to facilities here and a committed labor segment to embrace the skills needed to produce here.

I agree, in general, but high tech manufacturing is just part of the equation. I suspect that high tech manufacturing ends up getting somewhat equalized over time, in terms of wages, living conditions, working conditions, etc., since high tech manufacturing jobs, even at low levels, requires more education than many third world countries can supply.

However, things like clothing manufacturing are nothing like that, with third world sweatshops, long hours, very low wages, etc., predominate.

There's a big difference between making 4K HDTV's, versus sewing Gap jeans.

Rum_Pirate
12-23-2015, 01:02 PM
http://cdn.billmoyers.com/wp-content/uploads/2014/05/Merck-logo.jpg
Merck had profits of $13.6 billion and paid $2.5 billion in federal income taxes from 2009 to 2012. While dodging its fair share of federal income taxes, it pocketed $8.7 billion in taxpayer-funded contracts from Uncle Sam between 2006 and 2012.


http://cdn.billmoyers.com/wp-content/uploads/2014/05/Microsoft-logo1.jpg
Microsoft saved $4.5 billion in federal income taxes from 2009 to 2011 by transferring profits to a subsidiary in the tax haven of Puerto Rico. It had $60.8 billion in profits stashed offshore in 2012 on which it paid no US taxes.


http://cdn.billmoyers.com/wp-content/uploads/2014/05/pfizer-inc-logo.jpg
Pfizer paid no US income taxes from 2010 to 2012 while earning $43 billion worldwide. It did this in part by performing accounting acrobatics to shift its US profits offshore. It received $2.2 billion in federal tax refunds.


http://cdn.billmoyers.com/wp-content/uploads/2014/05/Verizon-logo.jpg
Verizon made $19.3 billion in US pretax profits from 2008 to 2012, yet didn’t pay any federal income taxes during the period. Instead, it got $535 million in tax rebates. Verizon’s effective federal income tax rate was negative 2.8 percent from 2008 to 2012.





Since they are apparently not breaking the law, perhaps it is time to change the US Tax laws and regulations. :rolleyes:

Norman Bernstein
12-23-2015, 01:04 PM
Since they are apparently not breaking the law, perhaps it is time to change the US Tax laws and regulations.

Bingo.

bamamick
12-23-2015, 01:05 PM
Do you mean for a tax dodge? Or do you just mean in-general?

I have worked for a German company most of my adult life (33 years at this site, and about 28 of that has been under German ownership). We have an Australian shipbuilder, a Franco-German aircraft company, and Finnish and Japanese steel mills as the largest employers in Mobile County (along with my company). The vast majority of decent paying jobs in my state come from foreign investment. By a long shot. So while I understand the question, somewhat, I can not say that I am very worried about it so as not to appear a hypocrite.

We live in a global economy, and as far as I know American companies are a part of that.

Mickey Lake

slug
12-23-2015, 01:07 PM
http://cdn.billmoyers.com/wp-content/uploads/2014/05/Merck-logo.jpg
Merck had profits of $13.6 billion and paid $2.5 billion in federal income taxes from 2009 to 2012. While dodging its fair share of federal income taxes, it pocketed $8.7 billion in taxpayer-funded contracts from Uncle Sam between 2006 and 2012.


http://cdn.billmoyers.com/wp-content/uploads/2014/05/Microsoft-logo1.jpg
Microsoft saved $4.5 billion in federal income taxes from 2009 to 2011 by transferring profits to a subsidiary in the tax haven of Puerto Rico. It had $60.8 billion in profits stashed offshore in 2012 on which it paid no US taxes.


http://cdn.billmoyers.com/wp-content/uploads/2014/05/pfizer-inc-logo.jpg
Pfizer paid no US income taxes from 2010 to 2012 while earning $43 billion worldwide. It did this in part by performing accounting acrobatics to shift its US profits offshore. It received $2.2 billion in federal tax refunds.


http://cdn.billmoyers.com/wp-content/uploads/2014/05/Verizon-logo.jpg
Verizon made $19.3 billion in US pretax profits from 2008 to 2012, yet didn’t pay any federal income taxes during the period. Instead, it got $535 million in tax rebates. Verizon’s effective federal income tax rate was negative 2.8 percent from 2008 to 2012.






Everyone but obama and the liberal crowd realizes the the rules of trade are not working in the age of global trade.

instead of posting what everyone knows why not post the liberal solution to global trade...a solution were each country recieves its fair share of tax revenue .

oznabrag
12-23-2015, 01:29 PM
Since they are apparently not breaking the law, perhaps it is time to change the US Tax laws and regulations. :rolleyes:

Sorry, I don't own enough Congresspersons.

RonW
12-23-2015, 01:37 PM
Since they are apparently not breaking the law, perhaps it is time to change the US Tax laws and regulations. :rolleyes:


Verizon made $19.3 billion in US pretax profits from 2008 to 2012, yet didn’t pay any federal income taxes during the period. Instead, it got $535 million in tax rebates. Verizon’s effective federal income tax rate was negative 2.8 percent from 2008 to 2012.

Yep.......eliminate all subsidizes, tax credits and go to a flat corporate tax rate, which can still be 2 or 3 tiers in rates......don't hear dems saying anything about this .

wardd
12-23-2015, 01:44 PM
we need to go back to the original concept of a corporation

hokiefan
12-23-2015, 01:55 PM
Do you mean for a tax dodge? Or do you just mean in-general?

I have worked for a German company most of my adult life (33 years at this site, and about 28 of that has been under German ownership). We have an Australian shipbuilder, a Franco-German aircraft company, and Finnish and Japanese steel mills as the largest employers in Mobile County (along with my company). The vast majority of decent paying jobs in my state come from foreign investment. By a long shot. So while I understand the question, somewhat, I can not say that I am very worried about it so as not to appear a hypocrite.

We live in a global economy, and as far as I know American companies are a part of that.

Mickey Lake

To add to Mickey's comments I work for a Dutch company that is owned by a Malaysian conglomerate. We are one of the largest players in our particular market supplying oils and fats to the US food industry. My last employer was a Swiss company, our location was a major supplier of biocides in the US market. It really is a global economy, fighting that is a fool's game. Trade needs to be fair, and we shouldn't have tax laws that effectively encourage off-shoring.

All that said, the industries I've worked in aren't driven by wages the same way as things like clothes manufacturing. Wages matter, but location is more driven by raw material supply, or logistics in terms of delivering to the customer. In my first two jobs, location fell out of raw material supply. The last two it is primarily driven by customer logistics. From the Midwest a big chunk of the country can be covered with a one day truck drive, two gets almost all of it.

Cheers,

Bobby

pipefitter
12-23-2015, 05:54 PM
I'd rather see an overhaul of the domestic patent process for starters. Also attached to that, as far as R&D and trying to bring new products out, a complete change with the network it takes to get simple products to market. It's the multiple levels of parasites one needs to deal with just to get a simple product on the shelves, is what drives the prices up hundreds of percent higher than what it fairly ought to be.

By the time one gets past all of the parasites, such as, that whole distributorship monopoly, there simply is not enough left for fair wages.

Hugh Conway
12-23-2015, 06:28 PM
I agree, in general, but high tech manufacturing is just part of the equation. I suspect that high tech manufacturing ends up getting somewhat equalized over time, in terms of wages, living conditions, working conditions, etc., since high tech manufacturing jobs, even at low levels, requires more education than many third world countries can supply.

High tech companies are perceived as valuable and countries are willing to invest to level that playing field (see Singapore attracting Rolls-Royce and many others). Many are more than willing to distort the mythical "free" market to obtain desired policy goals. A broader example of this would be China's national investment in varying constituent material markets - not just oil, iron ore and coal but such things as Ebony and Pernambuco are clearly affected as well. You can buy a Pernambuco (CITES restricted wood) violin bow from China for $30. You can't buy the wood alone in the US for that. Regarding workers education is one of the largest US exports; whatever nebulous definition is the "3rd world" these days some bits of it have increasingly competitive sectors.

As for the $799 big screen. We wouldn't have them if B+M retailers didn't need them to get people in the door. I'd suspect going forward we won't have them and this will be looked back as "the Christmas things really changed". Ancedotally many retailers didn't do as well with those "door busters" as they'd liked.


Really what people are looking for is reforming the economic system so that a GE that makes things is as sexy to the financial markets as the GE that was a finance company that pretended to make things (the late Welch era) was. Redeploying capital - financial, human and political - away from the financial sector of the economy towards problems everybit as difficult. In some ways the fetish for Silicon Valley tech companies is a distraction, so many of them have very little there there and are mostly marketing/management machines.

Reynard38
12-23-2015, 06:49 PM
Do you mean for a tax dodge? Or do you just mean in-general?

I have worked for a German company most of my adult life (33 years at this site, and about 28 of that has been under German ownership). We have an Australian shipbuilder, a Franco-German aircraft company, and Finnish and Japanese steel mills as the largest employers in Mobile County (along with my company). The vast majority of decent paying jobs in my state come from foreign investment. By a long shot. So while I understand the question, somewhat, I can not say that I am very worried about it so as not to appear a hypocrite.

We live in a global economy, and as far as I know American companies are a part of that.

Mickey Lake

You beat me to it. Also Hyundai and Mercedes in other parts of your state. Kia in GA, BMW, and soon Volvo in SC.

My company starts taking delivery of some of those Mobile built airplanes next year.

Dan McCosh
12-23-2015, 06:53 PM
Corporations move abroad and outsource for the simple reason of reducing costs and taxation and there by increasing profit margins. Period.

At the same time it reduces the volume of jobs in america, therefore it creates more competition among workers for fewer jobs, which drive down the wages.

Here is a function and duty of a federal government, not to control exports, but to and when needed use tariffs to balance unfair competition from low wage countries.

Obama a couple years ago was forced to put a tariff and as I remember it was 30% on korean tires or they would have literally put goodrich,, goodyear and so forth out of business. Tariffs date back to the 1700's........JFK said tariffs are necessary to protect the american workers.. It's worth noting that Goodrich was acquired by a string of foreign owners in the late 1980s, and hasn't made tires for about 20 years.

Too Little Time
12-23-2015, 07:41 PM
Commodity manufacturing is on the trailing edge of wealth not the leading edge. Why should we cling to below-value activities?

That type of thinking is part of the problem.

We should keep the low value activities here so people without skills have jobs. If we pay those people enough, the activities become high value.


You might consider how we would survive if we did not have access to cheap off shore labor. I think we would find a source of labor in this country. I think that pay rates for unskilled labor would rise. I think there would be a slowing of the economic inequality in this country. I think we would do OK.

But such is life.

Chris Smith porter maine
12-23-2015, 07:51 PM
Of course they should be allowed to offshore there factories, we just need to insure working conditions are human, a fair wage is paid, no government subsidies to the factory, no lead or other crap toxic crap is used (dog food) and that the factories are environmentally responsible. We now ensure none of these things now, fires in sweat shops, factory employees jumping from windows, kidnapped fishing boat labour, industrial waste mudslides, all come to mind. As far as the intellectual property you move offshore, fair would seem to be we enforce your companies patents with the same enthusiasm the Indians do with drugs and the Chinese do for movies and electronics, taxes have benefits! Why should my tax dollars protect your foreign investment, take your drug or cell phone, or what ever patent offshore, and if a generic pops up, we might get to that in a few years, you want the protection of our laws, pay your fair share of taxes.

Bob Adams
12-23-2015, 08:21 PM
Absolutely! No pesky OSHA or EPA....

http://cdn.earthporm.com/wp-content/uploads/2015/01/china-bad-pollution-climate-change-7__880.jpg

Boater14
12-23-2015, 08:29 PM
I think it's fine. Unless they get a tax incentive to move. Unless they move where people work for a bowl of rice a day and dump crap into their rivers. Otherwise why not? TOO LITTLE.....that frontal lobe procedure worked out just fine. You the liberal man.

PeterSibley
12-23-2015, 10:38 PM
also remember Americas punishing corperate tax, onerous legal system and piles of red tape.

https://betweenthebalancesheets.files.wordpress.com/2011/10/effective-corporate-tax-rate.png

Peter Malcolm Jardine
12-23-2015, 10:53 PM
We sold out a long time ago. In the last hundred years, western countries have determined that employment standards regarding the environment, minimum wage, safety, and a whole host of other things are important human rights issues.

Then we decided that we would get all of our stuff made in countries that pay their workers 10 cents an hour while the building they work in collapses on them. Sad.

Norman Bernstein
12-24-2015, 06:40 AM
Yep.......eliminate all subsidizes, tax credits and go to a flat corporate tax rate, which can still be 2 or 3 tiers in rates......don't hear dems saying anything about this .

Probably because a 'flat rate' with '2 or 3 tiers' is an oxymoron.

Ian McColgin
12-24-2015, 08:15 AM
The varying incarnations of single taxers are proposed by people with either a particular profit agenda or with amazing ignorance of how people and businesses work. Define any tax and anyone making money will to some extent restructure the definitions of what they are doing to minimize that tax. Just pay a moment's attention to the personal mega yachts of the Gilded Era and the corporate mega yachts of today. It's about tax placement.

Wealth comes in many forms and is deviously transferrable. A fair tax system looks at those forms and evolves to meet changing ways that people find to shift wealth away from a taxable form. Nutshell, at the personal level income, property and sales taxes all have their places, in measure. At business levels, besides property taxes, it's likely that some sort of VAT is as close to fair and evasion proof as you'll get in the real world.

David G
12-24-2015, 02:14 PM
https://betweenthebalancesheets.files.wordpress.com/2011/10/effective-corporate-tax-rate.png

Thanks for the graphic reminder.

Some folks consistently seem to prefer to substitute right-wing talking points for actual facts.

JimD
12-24-2015, 03:10 PM
We sold out a long time ago. In the last hundred years, western countries have determined that employment standards regarding the environment, minimum wage, safety, and a whole host of other things are important human rights issues.

Then we decided that we would get all of our stuff made in countries that pay their workers 10 cents an hour while the building they work in collapses on them. Sad.We are doing our best to make sure globalization remains a neo-colonial economic system.

oznabrag
12-24-2015, 04:10 PM
We are doing our best to make sure globalization remains a neo-colonial economic system.

The results are as predictable as the sunrise.

The natives get tired of it, and begin to chafe and are then organized either by one of their own or by an agent provocateur.

Every time.

There's no need for any sort of 'Prophecy' to understand that if you screw enough people out of enough dignity for long enough, someone will rise to unite them against you.

Too Little Time
12-24-2015, 06:24 PM
The varying incarnations of single taxers are proposed by people with either a particular profit agenda or with amazing ignorance of how people and businesses work. Define any tax and anyone making money will to some extent restructure the definitions of what they are doing to minimize that tax. Just pay a moment's attention to the personal mega yachts of the Gilded Era and the corporate mega yachts of today. It's about tax placement.

Wealth comes in many forms and is deviously transferrable. A fair tax system looks at those forms and evolves to meet changing ways that people find to shift wealth away from a taxable form. Nutshell, at the personal level income, property and sales taxes all have their places, in measure. At business levels, besides property taxes, it's likely that some sort of VAT is as close to fair and evasion proof as you'll get in the real world.

Unlike most people you realize that people know how to structure their lives to avoid taxes.

I would suggest that one needs to consider the size of what is being taxed. Income of various definitions, consumption, and wealth are different sizes.

Tom Montgomery
12-24-2015, 06:56 PM
Merry Christmas, everyone!