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.'"

Comments

how is it

[nimbius]

every american businessman inevitably refers to business process in terms of war.

Ugh

[COMON$]

I subscribe to the theory that you should not tax just to generate income or punish. You should tax based on liability, if it costs the gov't cash to maintain a service you pay for it. fairtax.org Im so tired of paying extraneous taxes for random stuff. We seem to have this thought that we have a budget shortfall so lets tax something. Or we don't like people behaving like X so lets tax them. Did we forget what taxes are for?

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.

Re:Damn Skippy!

[hedwards]

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.

Re:How do you decide what's offshored labor?

[ducomputergeek]

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.