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Software Tariffs and US IT Outsourcing?
HeelToe asks: "A while back I worked with someone who thought the US should simply impose tariffs on imported products to adjust their price to equalize foreign labor rates to the US minimum wage. I was laid off and my position moved to Canada last year. Since then, I've thought a lot about his ideas, as well as one of our topics of conversation a while back: Why doesn't the US tax the import of software? It seems to me like they should. It's not a "tangible" product (same reason used to deny my co-workers and me NAFTA and Trade Act benefits), but when someone outsources to another country with cheap labor for any other industry, there are usually import tariffs. Why is software different, and how would this change the climate of US IT jobs leaving for other parts of the world if we did tax software imports? I've done some looking on the web, but can find nothing in the Harmonized Tariff Schedule of the United States. I did find this thread from a few months back on informationweek.com's Career Development Forum, but not much else. What does Slashdot think?"
"People need to understand that when Corporations are taxed they never loose money; they just charge us more. The only thing that may work is a tax incentive to companies that use American Software."
From economics, we know that both the supplier and consumer bear the costs of a tarriff. The elasticity of the demand curve determine the distribution of these costs.
That being said, im not sure i completely buy into all this economic mumbo-jumbo, especially as I am out of work and am happy to lay the blame on everyone but myself
Tax Software like that, and you will trigger a deep recession. Software shoud compete on it's merits, not on marketing, and it shouldn't matter where it comes from...common, does this person really think that us North Americans (Canadians and USAians) couldn't compete against anywhere else without artificial barriers? Good software will eventually rise to the top especially as Open Source becomes the major paradign for software creation.
ttyl
Farrell
CAN-CON 2019 - Ottawa's only book oriented Science Fiction Convention! October 18-20, Sheraton Hotel, Ottawa, Canada h
Why is software different
Because it's bits and bytes, and can be replicated infinitely. So a programmer makes a program in 40 hours, and it's taxed forever, even if the programmer isn't continuing to work on it.
and how would this change...if we did tax software imports?
It would legitimize software as a 'thing', which has the same copyright, property, IP, patent, etc protections as things that exist physically and can't be duplicated for free.
If software is ever to be free, programmers need to be free. For programmers to be free, we must invent real jobs that pay well that a real programmer can do for only a few hours a day. Then it won't matter if your job is shipped out, since your job simply won't exist anymore.
Oh, wait, software will never be free. Sorry, guess you're screwed...
-Adam
What's the deal? You spent 4 years in an expensive College that gave you a Bachelor degree and all you care about is your bumper stickers? Darn. ... but I was so wrong.
I thought the American IT guys were mostly people from MIT, Stanford, Berkeley, [INSERT_BIG_NAME_HERE], etc
During the last 2 years, I interviewed close to 30 people for a couple of Software Architect position sin Atlanta. Most people who were remotely qualified were H1 guys from India. The few Americans that were actually good enough on paper went back home wondering what the hell happened during the interview. Shit, I ended up sending them the questions beforehand and they still got surprised by what hit them.
But then, when I look at what is actually taught in some of those overhyped colleges, maybe the only value is in that bumper sticker... It is definitely time to "move up" to more advanced qualifications.
This comment is utterly preposterous on the face of it. The US has the lowest unemployment rates and highest per capita income of any developed country.
You make the mistake to think that the stats you are reading are actually the same.
The way they are gathered between the US and Europe for example is completly different.
Unofficial it is said the US has an unemployment rate of 10% and that is roughly the same ballpark the EU has.
If you want to e-mail me, use my PGP Key.
Tariffs are best used to protect an 'infant' industry. When it is able to compete in the world market, then lift the protective tariff. There are other mechanisms to assist the adolescent industry that effectively support a competitive world price.
Tariffs are tools, and they should not be used in a mature marketplace.
One of the jobs of a government is to develop their economy with the hopes of a healthy export economy. That is best done when that economy produces a good that is comparatively cheaper than the good being traded. A healthy export economy makes for a good chance of a positive trade balance.
I do not support these software tarrifs.
And for years, US politicians have made fun of Europeans because their labor costs were "too high".
And how, exactly, is this terribly ironic? The jobs aren't going to Europe; they're going to India, Taiwan, China, and other places that lack the benefits (costs) of the US, and particularly Europe.
If anything, this is proof that the politicians were right: our high labor costs are driving labor demand to other places. Whether the benefits (better standard of living) are worth the costs (more and more outsourcing) is another question entirely; regardless of your decision on that, though, it would appear that the politicians were right.
(God, I never thought I'd say that with a straight face....)
Moderate drunk! It's more fun that way!
This comment is utterly preposterous on the face of it. The US has the lowest unemployment rates and highest per capita income of any developed country.
Of course, unemployment only counts those still on unemployment. It neglects those who've been unemployed too long and those who don't qualify for unemployment.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
Taxes/Tariffs won't help. What we need to do is form a Profession, with:
- a significant educational requirement (degree)
- licensing
- ethics body
- core standard for practice
- discipline for malpractice
Face it, high-tech failed as a commodity-based industry and has become a service industry.
Without being Professionals, practice in our industry will get worse. Look at what happened to the food and manufacturing industries. If we don't -do- something we will follow.
Look at how doctors/dentists, accountants, lawyers, realtors have protected their businesses as a good example.
Actually, you cant just assemble it here and say "Made in America". Some years ago I worked for a domestic electronics maufacturer. Their label read "Assembled in America from foriegn and domestic parts". When I asked the marketing folks why it wasn't "Made in America", they said it was because we did not have enough domestic components to qualify. All our IC's and discrete components were imported. Only about 10% of the parts were actually made here in the USA.
But all of this is just hearsay.
Remember, You are unique...just like everyone else.
You need to study how the economy works. Then you will realize that tariffs, like embargoes and any other restraint that is inflicted on the free flow of goods and services, always ends up hurting people rather than helping.
f
The road to hel is paved with good intentions, and in the same manner, opportunism and political actions always have unintended, opposite consequences.
For a start, read http://www.mises.org/power&market/power&market.pd
Then read "The theory of money and credit" and wou will understand how government intervention is never the solution.
And don't say "well capitalism has failed and is evil therefore we need the government to correct those wrongs" because neither I, nor you or anybody on this board has ever got to try real capitalism. We live in a bastardized socialistic controlled half baked shadow of capitalism, that is capitalism in name only.
I think the #1 reason United States hands out visas to foreign programmers is that it lacks enough of its own competent programmers. Same goes for Computer Scientists, who are by a big majority foreign when it comes to Ph.D. levels.
This is not gibberish -- these are well-researched facts, check them out yourself by picking any random well-known college and checking out their stats in CS departments.
I say, do not impose import tarriffs (and thus cripple your IT sector).
I do not believe that everyone is replacable in IT industry. Programmers are the workforce and the work-capital (thinking-coding machines, if you will) of all of the IT companies. Some foreign countries make better thinking-coding machines or make more of at least as good thinking-coding machines as US of A --- the salary they require is a secondary concern.
The reason United States hands out green-cards or work permits to highly-educated foreigners is the same reason it outsources some of it IT work -- the companies at home are not competent enough.
This is the same reason other countries do the same.
U.S. IT companies outsource their work because they need people who will do it better for less money. These people are very well educated, capable of grabbing mucho $$$ contracts; the reason they offer their solutions cheaper is because they know they will build them with less people in less time than your average United States IT companies that rely on soulless code-droids.
Another interesting fact is that the car industry managed to get import limitations (in imposed per-country quantity-limitations rather than tarriffs) and it resulted in thriving domestic market of inferior cars that would be swiftly overrun by Euroasian manufacturers if it weren't for these import-limitations. The reason for the superiority of the average foreign automotive products is not (only) that Euroasian cars might cost less (which they really don't), it is that they have in many cases more advanced production and/or car technology and smarter people in their engineering departments.
Many US programmers grew up in high-school angst, being singled out as 'geeks' and further bullied into accepting that view of themselves and perpetuating it further. Most of Slashdot qualifies.
This not only makes them susceptible to glorifying their skill-set that is really not that good; it's only good compared to their middle-of-nowhere college/high-school average, but also compels them to guard their sacr3d sk1LLs by attacking anyone who doesn't fit their favorite no-life-dork role-model. Thus, faced with people who are not only MORE COMPETENT and BETTER EDUCATED, but in fact DO HAVE A LIFE, some of these US "IT professionals" [read: soulless code-droids] feel pitted against the wall and lash out in pre-1990s xenophobic propaganda.
You can not easily get someone to program well for you for $1/hour -- if you do, then the government has invested much more than that into education and other things for that person.
I really wish something would be done to this effect. As a senior graduating in May with my undergrad in MIS, many of us are looking at a Catch-22 job market where entry level programming positions are being moved off-shore, and other available corporate positions require that work experience as a prerequisite.
It's definitely not fair IMNSHO that minimum wage laws that aim to maintain a quality of living in this country make beggers out of degreed job-seekers and shift lost wages to other countries.
Be very, very careful what you put into that head, because you will never, ever get it out. -Thomas Cardinal Wolsey
Well, the USA is supposed to be in favour of the free market, competition, a level international playing field, and so on. Tariffs go against that. On the other hand, US farm subsidies also go against that, and put efficient farmers in other countries, like Australia, at a disadvantage. The US doesn't practise what it preaches.
Regards.
Wondering where the hell I have been.
There is this orginazation called The World Trade Orginazation (WTO) The United States Congress Passed laws binding the US and all the people and the corporations in it to this World Wide Trade group. If any country feels that the US is not playing nice they take us to court. The judges are all from countries chosen by the group. Basically the ability to enduce tarriffs on foreign goods and services is null and void. Just to note some of the countries who signed the WTO agreement: China (they really love the US) Iraq, Russia, Euro countries, India (very soon to be the next Taiwan) etc. Everybody gets ONE vote. So if you make too many freindly countries angry at you, they win the law suit! Chalk one up to all the attorneys that you helped elect to office in the US. Congress.
Humourous or otherwise, it demonstrates one of the reasons the US cannot handle this - source code is speech so protected.
The entire western economic system is going to implode, just as Japan has done (partly saved by its wildly different culture and huge farming protection rules). The same process - the innovators dilemma - works for countries too. We are inefficient, we are expensive, we lose the layers of industry just as the model says. Soon all that will be viable is lawyers and finance houses, then the whole pile collapses.
Ironically the USA and EU had the power to stop this - they could have imposed taxes on incoming goods. They could have ringfenced that money to go back to workers in those countries, creating ecomic growth,. driving up demand for luxury goods and creating markets, instead they signed GATT and NAFTA and other treaties that drive work to the poorest without rewarding them. When there is no work left in the EU/USA who will buy the cars, the tv sets, the dvd players ?