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Intel Co-Founder Calls For Tax On Offshored Labor
theodp writes "Intel co-founder and ex-CEO Andy Grove calls BS on the truism that moving production offshore to locations with much lower wages is a sound idea. 'Not only did we lose an untold number of jobs,' says Grove, 'we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today's "commodity" manufacturing can lock you out of tomorrow's emerging industry.' To rebuild its industrial commons, Grove says the US should develop a system of financial incentives, including an extra tax on the product of offshored labor. 'If the result is a trade war,' Grove advises, 'treat it like other wars — fight to win.'"
I am completely sick of being screwed over by the corporatist plutocrats.
Make sure everyone's vote counts: Verified Voting
Ask the companies who are being audited by the IRS for their existing Cayman tax dodging practices how much fun that is.
This is one thing Obama should be lauded for (and I'm not a huge fan).
Mod me down, my New Earth Global Warmingist friends!
every american businessman inevitably refers to business process in terms of war.
Good people go to bed earlier.
Of course this ever happening in the US this is a pipe dream, but I like to visit these dreams every once in a while and yes it makes me feel better.
CS: It is all sink or swim...oh and did I mention there are sharks in that water?
I wonder where the good Mr. Groves stands on Intel's large R&D base in Israel... Should we be taxing that, or is this only a tax for his dirty competitors who are fabbing with TSMC?
Sigh, I wish this line of reasoning would die the swift death it deserves. Taxes are probably the least controlling way of making these sorts of adjustments. You're not realistically going to vote with your money because there's few if any products which aren't at some stage created in that fashion. A tax is a simple way of shifting the cost curve up in areas which aren't desirable so that the new equilibrium is a bit more responsible. And it works wonders. There's a reason why Seattle beats the crap out of pretty much any other major US city in terms of fuel efficiency. The state legislature instituted high taxes on gas and when combined with the oil industries tendency to screw us over at the pump more than other parts of the state you end up with people making sensible decisions over all.
By taxing them you put people on a more even footing to make informed decisions, it's not telling companies that you can't do it, it's telling them that if they want to do it they'll have to compete on a more even playing field.
Isn't that the same thing? Effectively removing tax breaks that have been in place for 5, 10, 15, or 20+ years is just like creating a new tax, at least in the minds of people who will have to oversee its payment, potentially for the first time in their careers.
No CFO in the world will say, "Thank goodness we've been saving so much over the years with those tax breaks! All that money is right here in a piggy bank, so we're ready to start paying those taxes again." Those same CFOs already received huge bonuses based on those breaks, and that money's long spent.
The CB App. What's your 20?
How is it that China, and Japan before them, are able to peg their currencies? This is a question rarely discussed. The easiest and most effective way to accomplish this is by purchasing U.S. bonds, which we sell in abundance to cover our enormous debts. In effect, the politicians railing about how unfair the Chinese currency policy is actually contribute more to the problem than anyone else.
'Outsourcing' allows smaller firms to take on projects that they otherwise could not afford to do. I own a small business and at least two of my products I could never hope to bring to market if my only option was to use domestic resources. Those products make money and allow me to expand. This is not a burden on the U.S. economy; it is a positive contribution.
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
From the stand point of double taxation of foreign profits in the US, you are much better creating your corporate HQ somewhere like the Isle of Man or the Caymens, et. al. and then creating a separate US entity. Then your profits made in other countries are taxed in those countries, but if you send the profits to the Caymens you aren't taxed again on those profits.
As it works now, if you are HQed in the US and have different operating units in other countries, you pay the taxes in those countries. Then any remaining profits sent back to the US are taxed again by the IRS. So the US company is being taxed for the profits made in the UK, Germany, Russia, or wherever.
In most countries, if their company makes profits in the US, they aren't taxed again back home when they bring the profit back.
"The problem with socialism is eventually you run out of other people's money" - Thatcher.
Wait, what?
Which part whooshed past you?
He basically says that being able to move products and goods without taxation caused this scenario where labour can be sent over-seas to a country with lower wages. This generally means that either that country has all the jobs or other countries have to lower their wages to stay competitive. This also reflects the quality of products and services, since you are paying substandard wages and basically taking people who need money to survive and not people who work because they enjoy it. On the flip side, the middle class in the more prosperous nations are left without the jobs they'd need to get by, or they'd take sub-standard (for their country) wages and scrape along the bottom.
I don't know if this is accurate to what happens but it basically works like this:
China and the US make deals to let companies operate in each others borders. Computer Technician jobs from the States get offshored to China because China offers the lowest wages for that kind of work, so Company A can save money on support thus increasing profits. Because of this, the existing Americans that work in Tech support must either move to and work in China (Almost making them more Chinese citizens than American), or find another job. Tech Support in India was also at a low cost but since China and the US made this deal, and China is offering lower wages, India must lower their wages to stay competitive.
Had "Free" trade not been enacted, meaning, labour, products, services, etc, getting taxed appropriately, none of this would have happened.
So ironic that we're considering implementing the financial equivalent of the Iron Curtain. This has come up for individuals, also. It's just unconscionable. Just exactly what sort of country do you want to live in? Next you'll be proposing we snipe the richies as they attempt to flee the border. That people are considering such extremes just tells me that the current system is broken. Income taxes just aren't the right vehicle for gathering revenue.
Hate to break it to you champ, but when Eisenhower was President, Corporations and the top tax bracket were 87%. In those days, fiscal conservation actually happened. The wealthy who reaped the benefits off of labors backs paid back and the nation built highways, dams [Eisenhower screwed up by not making rails first and highways second, but that's a separate issue], power grid expansions, etc.
Corporations weren't drowning and being incapable of innovating. They invested heavily to grow innovations. This only happened after strict regulations were put into place post Depression. Political scumbags are complaining the tax burden on corporations is devastating today and they can't create jobs.
B.S. on all the falsehoods. These same corporations love the billions pouring into the Military complex. Cut the defense budget in half and redirect half of those cuts back into US infrastructure and you'll see them quickly fighting for that cash, but still bitching about drowning in tax burden.
The US needs a clean slate on high, strict regulations that are fair across board, drive tax incentives to innovate and not to maintain the status quo. This will force the big conglomerates to either innovate and spin off some of their assets or die for refusing to change. Too bad. It's We The People, not We The United Corporations Against The People.