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The rule of unintended consequences is something the Obama administration has never studied or perhaps has never even heard of. Business leaders are beginning to speak out against many of the new proposed ways in which the President will essentially incentive companies to move more jobs overseas due to his tax increases.
Bloomberg reports:
June 3 (Bloomberg) — Microsoft Corp. Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.
“It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”
Obama on May 4 proposed outlawing or restricting about $190 billion in tax breaks for offshore companies over the next decade. Such business groups as the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable have denounced the proposed overhaul.
U.S. tax rules let companies defer paying corporate rates as high as 35 percent on most types of foreign profits as long as that money remains invested overseas. Obama says he wants to end such incentives to keep foreign profits tax-deferred so that companies would invest them in the U.S.
The unintended consequence, of course, is that companies now have greater incentive to move jobs overseas to avoid the costly labor and tax burden from President Obama.
It isn’t just Microsoft:
Ballmer is one of 10 U.S. software company executives pushing back against the tax proposals in meetings today with White House officials including Jason Furman, deputy director of the National Economic Council, and the heads of congressional committees such as House Ways and Means Committee Chairman Charles Rangel, a New York Democrat.
Amazingly Charlie Rangel, of all people, actually opposes this change along with other business leaders and organizations.
In a roundtable discussion today, Ballmer, Symantec Corp. Chairman John Thompson and the heads of smaller companies such as privately held Bentley Systems, an Exton, Pennsylvania-based maker of engineering software, said such policies would hurt domestic investment, reduce shareholder value and increase the cost of employing U.S. workers.
Ballmer said that, while the Obama proposals would preserve expense deductions related to research and experimentation costs, the overall deduction limits for companies that defer tax on foreign profits would raise the cost of employing U.S. workers. Fiduciary responsibility to shareholders would require Microsoft to cut costs, he said, meaning many jobs would be moved out of the country.
Here’s an insane plan, lets just cut corporate taxes to incentive companies to create jobs here! I know, that’s crazy and it would work too well and we’d have more jobs that workers, but we could have worse problems.
This is a perfect illustration of Obama’s “tax everything that moves” policy and the affect it would have on the corporations who create jobs for Americans. Obama would continue to make labor more costly in this country, thus giving these companies no incentive to retain American jobs. This is basic economics and something the administration should take note of.
If they truly want to keep companies investing in America, they need to cut taxes here which would spur major economic development. Drop the corporate tax rate by 10 points or more, it would be better than any wasteful stimulus package without putting us more in debt. The spurred economic growth would create more tax revenue than we’re currently seeing.
More change we can believe in if we live where these jobs will be heading to escape Obama’s tax policies.
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America’s ep·i·taph
OBAMA MADE THE WORLD GREAT__ HERE LIES AMERICA
“The United States has the second highest corporate tax rate in the civilized, westernized, industrialized world.”
Rush Limbaugh_Obama’s Corporate Tax Increase May 6, 2009
……….
“Escaping the Tax Hikes: When Businesses Go Overseas”
Posted by Charles M Cooper on Thursday, March 12, 2009
“Back when he was the Democratic vice-presidential candidate, Joe Biden got on the air and told the American people that paying taxes was patriotic”
If Biden is correct, make me less patriotic
“According to Reuters, “over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.” For the canton (state) of Zug, some 30 miles from Zurich, the moves have been called a “virtual energy boom.”
NO DRILL OBAMA__SEND MONEY OVERSEAS__WE DON’ WANT OIL JOBS
“The reason? “Switzerland has a stable and developed tax regime and a network of tax treaties with most countries where we operate,” Transocean Chief Executive Bob Long said”
“They need to be able to make profits that make their investments worthwhile. They need to be somewhere other than the United States.”
“The Effects of Redomestication”
“The new home for your business would benefit, but in the place you left there would be an economic hole in the ground. When companies like these go overseas, they don’t leave holes. They leave craters.”
“Not only do Americans lose jobs when the company itself leaves, the businesses that service the departed company also lose out…the tax revenues sought by the Administration will be lost for good. After all, the IRS has no power overseas. On top of that, people who are out of work, companies that have lowered revenues, also don’t pay the sort of taxes that Washington is expecting from America. We have seen what happens when this is taken to its logical conclusion.”
“Back in the good old days, the Studebaker company, the famed automobile manufacturer, faced a similar economic crisis. It wasn’t taxes. South Bend, Indiana, had welcomed the plant and the company was one of the pillars of the community. Studebaker’s issue was over labor costs. The autoworkers union wanted the same pay as their brethren in Detroit. The company said they could not match the wage and so the union called a strike. Negotiations failed several times over and then Studebaker closed the plant for good and moved to a more business-friendly place—Canada. The closing of the plant, the redomestication of the company, left hundreds unemployed and resulted in the small businesses that serviced the company and were supported by the now out-of-work workers laying off many of their own workers or shutting down completely.”
“Should the Studebaker company have remained and given in to the union for the good of the town? Should these companies that are on their way to the mountains and trim little alpine villages stick around and be “patriotic”? What would you do?”
DOES THIS SOULD LIKE GENERAL MOTORS ???
“The Bottom Line”
“High taxation or low, the fact is that either way, someone prospers. In the case of Transocean and these other companies, the folks in Switzerland will benefit from President Obama’s tax policies, which is kind of ironic given all the talk about stimulating the American economy.”
“High taxes and high energy costs (cap and trade) are a 1-2 punch to American business at the best of times. They are doubly so during the kind of recession we are suffering through now. As for businesses fighting back: Some will keep swinging, others will escape the ring altogether, and the rest will simply go down after they take one hit too many.”
System will not accept link. Title, date, and author is in comment..
John F. Kennedy cut taxes. “Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation).”
August 13, 2003
“The Historical Lessons of Lower Tax Rates”
by Daniel J. Mitchell, Ph.D.
“There is a distinct pattern throughout American history: When tax rates are reduced, the economy’s growth rate improves and living standards increase. Good tax policy has a number of interesting side effects. For instance, history tells us that tax revenues grow and “rich” taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden – a consequence that should lead class-warfare politicians to support lower tax rates.”
“Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to “soak the rich,” the rest of us take a bath. Examining the three major United States episodes of tax rate reductions can prove useful lessons.”
1) “Lower tax rates do not mean less tax revenue.”
“The tax cuts of the 1920s”
“Tax rates were slashed dramatically during the 1920s, dropping from over 70 percent to less than 25 percent. What happened? Personal income tax revenues increased substantially during the 1920s, despite the reduction in rates. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent.”
“According to then-Treasury Secretary Andrew Mellon:”
“The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.”
“The Kennedy tax cuts”
“President Hoover dramatically increased tax rates in the 1930s and President Roosevelt compounded the damage by pushing marginal tax rates to more than 90 percent. Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation).”
“According to President John F. Kennedy”:
“Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.”
“The Reagan tax cuts”
“Thanks to “bracket creep,” the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation)”.
“According to then-U.S. Representative Jack Kemp (R-NY), one of the chief architects of the Reagan tax cuts:”
“At some point, additional taxes so discourage the activity being taxed, such as working or investing, that they yield less revenue rather than more. There are, after all, two rates that yield the same amount of revenue: high tax rates on low production, or low rates on high production.”
2) “The rich pay more when incentives to hide income are reduced.”
“The tax cuts of the 1920s”
“The share of the tax burden paid by the rich rose dramatically as tax rates were reduced. The share of the tax burden borne by the rich (those making $50,000 and up in those days) climbed from 44.2 percent in 1921 to 78.4 percent in 1928.”
“The Kennedy tax cuts”
“Just as happened in the 1920s, the share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent.”
“The Reagan tax cuts”
“The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.”
“Harmful Spending & Complexity”
“Lower tax rates are important, but they are not the only critical issue. Both the level of government spending and where that money goes are very important. And even when looking only at tax policy, tax rates are just one piece of the puzzle. If certain types of income are subject to multiple layers of tax, as occurs in the current system, that problem cannot be solved by low rates. Similarly, a tax system with needless levels of complexity will impose heavy costs on the productive sector of the economy.”
“This WebMemo is excerpted from the author’s, Daniel J. Mitchell’s, Backgrounder, The Historical Lessons of Lower Tax Rates, published July 19, 1996. The original publication, found here, contains footnotes and numerous charts.”
O.K. Liberals..Bring your hard evidence that you base your liberal ideas upon…Destroy this link with your links…If you can. Show John F. Kennedy was wrong.
With all the different tax increases coming and increases in government size and spending. Colossal debt the World may have never seen before. Refusal to allow drilling offshore and government land for American oil sending dollars overseas. Businesses heading overseas for better tax situation. Obama better be the real deal. The Messiah.
http://www.heritage.org/r...../wm327.cfm
“a vote against stimulus spending and corporate bailouts”
EU_”People don’t want a return to socialism and that’s why the majority here will be a center-right majority,” said Graham Watson, leader of the EU’s center-right Liberal Democrat grouping.”
“Conservatives score wins in EU parliament voting”
By CONSTANT BRAND, Associated Press Writers Constant Brand, Associated Press Writers
BRUSSELS –
“Right-leaning parties hailed European Parliament victories as a vote against stimulus spending and corporate bailouts, pledging Monday to forge ahead with conservative approaches to the economic crisis.”
“Socialists said they would rethink their platforms in the wake of heavy defeats.”
“A record low voter turnout — 43.4 percent — in voting that ended Sunday pointed to enduring voter apathy about the European Union. It was a discouraging sign for EU officials hoping Irish voters will approve stronger powers for the EU in a fall referendum.”
“Ireland is the only one of the 27 EU nations that must still ratify the reforms.”
“The European Union said center-right parties were expected to take the most seats — 267 — in the 736-member parliament. Center-left parties were headed for 159 seats. The remainder were expected to go to smaller groupings.”
“You would have expected a protest vote against those governments and for the Socialists to do well. But it didn’t,” said Jackie Davis, an analyst at the European Policy Center, a Brussels think tank.”
“Greece was a notable exception, where the governing conservatives were headed for defeat in the wake of corruption scandals and economic woes.”
“Where people did feel a center-right government had let them down … they turned elsewhere,” Davis said.”
“Germans handed a lackluster victory to Chancellor Angela Merkel’s conservatives and a historic defeat to their center-left rivals in the European Parliament vote months before a national election.”
“The Social Democrats got an unexpectedly dismal 20.8 percent — the party’s worst showing since World War II in any nationwide election.”
“French President Nicolas Sarkozy’s governing conservatives trounced the Socialists, while an ecology-minded party vaulted to a surprisingly strong third place, according to official results.”
“The Socialists, who dominated the last vote in 2004, suffered a stinging defeat, barely clinging to the No. 2 spot.”
“Tonight is a very difficult evening for Socialists in many nations in Europe,” said Martin Schulz, the leader of the Socialists in the European Parliament. “(We will) continue to fight for social democracy in Europe.”
“Far-right groups and other fringe parties gained in record low turnout estimated at 43.5 percent of 375 million eligible, reflecting widespread disenchantment with the continentwide legislature.”
“Britain elected its first extreme-right politician to the European Parliament, with the British National Party winning a seat in northern England’s Yorkshire and the Humber district.”
“Lawmakers with Britain’s major political parties said the far right’s advance was a reflection of anger over immigration issues and the recession that is causing unemployment to soar.”
http://news.yahoo.com/s/a....._elections
It looks to me that Obama wants to tax rich people but doesn’t know how to do it without having those rich people, who provide jobs to Americans, eliminate those jobs.
It’s likely impossible to prevent greed in the world. Greedy people find ways to get filthy rich while they pay people such a small sum of money that the profit going into their pockets climb. Obama looks to think that he could tax those greedy people and use the money for good, but what happens is those greedy people react by eliminating jobs to balance the new taxes rather then giving up their greed.
Seems simple enough to understand the intentions of Obama, his short-coming in his good idea, which is destroyed by the greed of rich people.
I agree this is why people come to America. They can get filthy rich on the backs of hard working people whom they pay very little too. We are a nation where greed can be feed very well.
Perhaps this is why people say we are not a Christian Nation we are more like the ancient city of Babylon spoken about by Rastafarians or Sodom and Gomorrah.
We are a nation where it is O.K. to be gay. It is O.K. to have pre-marital sex. It is O.K. to be half naked in public places. It is O.K. for television networks to have violent and sexual themes for children to see.
If we were a Christian Nation and our laws were developed from The Bible this nation would be DRASTICALLY different.
“t looks to me that Obama wants to tax rich people but doesn’t know how to do it without having those rich people, who provide jobs to Americans, eliminate those jobs.”
Our great Democrat President John F. Kennedy knew that lowering taxes increase revenues. His tax cuts grew revenue 33 % in real dollars from 1961-1968. Which has held throughout our history when government size was also considered.
Your class envy is very apparent.
Your liberal views are shinning though.
You’re wrong once again. Obama has class envy. I do not pretend to know economics, I was giving my opinion on Obama’s actions. I honestly don’t care who has what. I am a middle class citizen making around $60K per year. I am a pre-medical student and will afterward be making around $120-150K each year and be upper middle class. Again, I don’t care who has what because I donate plenty of my time and money. My idea of fun is spending money on others. I don’t require much. So I don’t envy anyone. Nor am I working hard to get rich either. I am not rich based on how much money I make, I am rich based on people I can help.
Label me liberal all you want. I am a man for the people. I want good fortune for all. If I die working my behind off just so I can make a better life for others then I will die with the satisfaction of a life worth having lived.
You think you know everything so you spend your time labeling people and telling them who they are and what they are and haven’t a clue as to the hearts of anyone but yourself. You’re entitled to your opinion but I call it name calling and slander. I come here to read the news and give my opinion on the news not on the people commenting. Yet whenever I post any opinion here you attack me consistently. You’re a sad person.
I remember your first night on here cussing up a storm. I have read your remarks and judge you by that. I respond to your remarks because that is reason for this site.
You could do your job. Sign you care for your patients.
” I come here to read the news and give my opinion on the news not on the people commenting. Yet whenever I post any opinion here you attack me consistently. You’re a sad person”
Well I make $500.000 a year…
Now you are an innocent ?? Professional ??
“looks to me that Obama wants to tax rich people but doesn’t know how to do it without having those rich people, who provide jobs to Americans, eliminate those jobs.”
“It’s likely impossible to prevent greed in the world. Greedy people find ways to get filthy rich while they pay people such a small sum of money that the profit going into their pockets climb. Obama looks to think that he could tax those greedy people and use the money for good, but what happens is those greedy people react by eliminating jobs to balance the new taxes rather then giving up their greed.”
“Seems simple enough to understand the intentions of Obama, his short-coming in his good idea, which is destroyed by the greed of rich people.”
“I agree this is why people come to America. They can get filthy rich on the backs of hard working people whom they pay very little too. We are a nation where greed can be feed very well.”
You are a sweetheart. Why would I call you a liberal ???
I am a human.
“Label me liberal all you want. I am a man for the people. I want good fortune for all. If I die working my behind off just so I can make a better life for others then I will die with the satisfaction of a life worth having lived”
Same guy said
“looks to me that Obama wants to tax rich people but doesn’t know how to do it without having those rich people, who provide jobs to Americans, eliminate those jobs.”
“It’s likely impossible to prevent greed in the world. Greedy people find ways to get filthy rich while they pay people such a small sum of money that the profit going into their pockets climb. Obama looks to think that he could tax those greedy people and use the money for good, but what happens is those greedy people react by eliminating jobs to balance the new taxes rather then giving up their greed.”
“Seems simple enough to understand the intentions of Obama, his short-coming in his good idea, which is destroyed by the greed of rich people.”
“I agree this is why people come to America. They can get filthy rich on the backs of hard working people whom they pay very little too. We are a nation where greed can be feed very well.”
I can feel your LOVE towards greedy people. God bless you oh sainted Kendale…
I’m not a saint, but it doesn’t take a saint to understand that greed is a bad thing and that it is corrupting. That is common sense. If you think greed is ok, than there’s no reason for us to discuss it with each other.
“I want good fortune for all. If I die working my behind off just so I can make a better life for others then I will die with the satisfaction of a life worth having lived”
God bless you…