Slashdot Mirror
India Outsourcers Find Back Door in Canada
securitas writes "Metro International newspapers Toronto edition reports that more Indian companies are opening back doors into the United States by setting up shop in Canada. The issue of outsourcing, offshoring and nearshoring has become a hot issue, with the 2004 presidential election less than a week away. Candidate John Kerry has said he will close the tax loophole that makes it advantageous to outsource call centers."
Could *have*, or "Could've". Not "could of".
Basically, the current tax laws for American companies operating overseas is a mess, and does have loopholes. The way I understand it,
* Companies do not have to pay US taxes on foriegn operations, until (unless) they bring it back to the US.
* If you pay taxes in another country and the US you can get deductions on your US taxes to account for this double taxation.
These two individually are not that bad, but thanks to the complexity of the tax code and fancy book-work a company can take advantage of both simultaneously. Ie they pay taxes only in the foreign country on their foreign operations, but at the same time, they get deductions in their US taxes, even though there is no double taxation. So essentially the US tax payer is paying part of their foreign taxes for them. This is what Kerry means when he says he want to close loop holes that force you to subsidize the outsourcing that is taking your job.
He plans to simplify the tax code, which as you said would bring in some revenue, and use that to decrease the overall corporate tax rate. It would also illiminate the relative penalty on bringing money back into the country, verses keeping it (and thus investing it) abroad. I can't find the document I read that explained this plan well - both the bullet point, and detail plans currently on the John Kerry site are fairly vague.
Kerry's record for introducing and passing bills.
At least try to find out if your claim is true before you try to reason based on it.
What?
If?
I guess thats one reason, but let me maybe present another one. The company I work for recently did some outsourcing to India, even though we mostly went through Chicago when the RFP negotiations were going on when it came to the nitty gritty (i.e. the "real" work) communication was a huuuuge problem. Even after we worked that out the quality of the code we got back was, let us say lacking (this might have just been this one company, but I'm just saying...). Anyway, by the time the project was done it cost us more and took us longer than if we had just hired local contractors to do it. Edmonton is kind of a weird place, there are at least four post-secondary institutions pumping out IT grads three times a year, putting it bluntly we have a lot of skilled IT people flipping burgers around town. Getting those people who are still keen on the IT industry (but don't want to move away) into low paying but IT-related jobs isn't exactly hard to do.
Edmonton has always been an IT hub because of the Provincial Government (and the IT jobs it attracts), but in the last decade big IT firms have moved in and paled that aspect of Edmonton's IT community, firms like IBM, Microsoft, Fujitsu, BioWare, Intuit (etc, etc...).
P.S. It's good to see NAFTA finally doing what it was designed to do, form an even stronger economic partnership between the Americas.
P.P.S. If these Indian companies have indeed found a back door to profit in the good ole USA, you can be sure that the Canadian Revenue Agency will be sucking the life-blood from them if they are profitable. If there's one thing our Government knows how to do, it's tax the bejesus out of any pocketbook...
crazy dynamite monkey
"I don't understand how that is ideologically consistent."
That's because you don't understand the ideology. You have simply reduced it to the simplest form possible presumably because you are not capable of understanding more complex thought patterns.
"Because you are born in America, you are worthy of help, but if you are born in India, you are not?"
Once again your inability to think beyond black and white has painted yourself into a corner.
I am not really going to go into it but here are the salient points.
1) We should help people all over the world if they need it to the best of our ability.
2) It's impossible to help everybody in the world because there is so much poverty and we really don't have enough money or willpower. Even if we really wanted to give a 100% effort to help the destitute of the world we would be fought tooth and nail by the republicans.
3) Charity begins at home. We really ought to tace care of our own problems first. We should devote MOST of our resources to making sure our own citizens are taken care of first.
You see, it's not that hard. Just compassion mixed with a little bit of realism. We still favor giving money to poor countries and helping them as much as we can but not at the expense of denying our own citizens.
BTW I noticed that you said "A tenet of the democrats is to help the disadvantaged.". Doesn't it bother you that republicans don't even have that tenant. That they don't believe in helping the disadvantaged?
evil is as evil does
I'd like to point out that the story as posted edited out the attribution.
Editors: Please don't remove quotation marks where they are necessary because that effectively results in plagiarism. The words in quotes are not mine. They belong to the reporter.
Also, the reference to the interview with the Chairman of Satyam - an Indian outsourcer that has set up shop in Toronto - was removed. Knowing that Slashdotters often don't read the source articles, I included that detail as an incentive for people to read what the leader of a large outsourcing company has to say about this politicized business practice.
Original post follows:
..what you say is correct, but there are other aspects to consider. A US company competes in a global marketplace, they're competing against products made all over the world. If for example an Indian company makes a piece of software similar to your entirely "made in the USA" product, their costs will have been much lower, they'll be able to sell it for less and nobody will buy your software - you're completely screwed. Outsourcing allows you to lower your costs, which isn't just trying managements evil attempt to fire you. Outsourcing also allows other advantages, you can exist as a small startup company in the US with a core R&D team and a great idea. When you've designed the product you can suddenly have a team of 100 in Bangalore coding like banshees for 6 months to make it a reality - and when you've got your product you can wave them goodbye. Without outsourcing you'd either be trapped as a small company, have taken years to code the same yourself - and miss your window of opportunity, have been bankrupted taking on US contractors or have taken on employees and either kept them on afterwards (bankruptcy) or laid them off. Because of outsourcing you're now a small company, with a great product you're selling around the world, making a tonne of money and paying a lot of tax into the US system. Point I was trying to make is that outsourcing isn't right or wrong, good or bad, it's another tool and if you refuse to accept it exists or use it if available you'll be screwed.