U.S. Tax Code Provisions Encourage Offshore Jobs

The Wall Street Journal ^ | 03/12/2004 | STEVE LIESMAN

[neutrino]

As if U.S. workers didn't have enough going against them. Turns out there really are provisions in the tax code that seem to encourage sending jobs offshore.

I have to admit not believing the claim when I first heard Democratic presidential candidate John Kerry shout about it. So I thought either Mr. Kerry has trumped this thing up -- in which case there's a good story -- or there's one very wacky part to the tax code -- in which case, there's a better story.

[lewislynn]

From another angle. Where is the proof that a tax free, low wage paying American corporation also reduces prices to consumers accordingly?

[neutrino]

I wouldn't dispute the point, but the article gives no indication...

[citizen]

BTTT

[Attention Surplus Disorder]

"Just a wild guess: was it Carnegie or Rockefeller who inserted this provision?"

I sure couldn't tell you. Back then, in the 19-teens, it's perhaps more likely that someone from Dole (Bananas) who had extensive plantations in S. America lobbied for such a provision; if indeed the provision was lobbied for in the first place. As far as I recall, both Carnegie and Rockefeller & their conglomerates (steel & oil) were pretty much domestically-based.

Such provisions IMO actually make a fair amount of sense. It's just that when internet-enabled corporate America runs amok with them, we have the results we have now.

[neutrino]

You're right, prices don't decline. But I'll tell you something that disturbs me more than that...supposedly, all of this global shifting helps earnings somewhere, somehow, right? But if so, where are they? I don't see many companies that are making really big gains in profits, despite offshoring.

[ninenot]

Nike is a great example of low-labor-cost/no-tax-cost companies which charge as little as possible...</sarcasm>

[ninenot]

Ahhhh...WHY do such provisions make sense?

[GOP_1900AD]

Eliminate domestic corporate income tax; VAT on all imports. Ban union membership by government employees (thereby opening the door to true performance and productivity management not to mention increased automation and RIF). Put the knife to every government program except for defense and the interstate highway system. Problem solved.

[harpseal]

Ping

[Euro-American Scum]

OPIC and other types of foreign aid WE already knew about. THIS tax incentive, THE GOP and CEOs have ALWAYS known about, but declined to share that information with US. Now WE know TOO.

And little good it will do. Notice how the pace of offshoring has slowed down to a trickle? As have the layoffs? New unemployment claims have dropped. Bush hailing the boomer economy.

Just wait until GWB is back in the White House come January. You'll see an offshoring stampede that will expose everything that's gone up to now as just a warm up.

[ninenot]

There will also be a run on ammo if that happens.

Hint: lay low. It won't be pretty out there.

[Poohbah]

Notice that the tax code encourages taking away American jobs. Can we at least agree to end this insanity?

Absolutely. But instead, what I hear from your side of the aisle is "raise taxes some more."

[SittinYonder]

Yes, we can agree. Thank God for John Linder.

www.fairtax.org

Call your senators and your rep, tell them it's time for a national consumption tax. End the income tax, end withholdings shut down the IRS and SET US FREE.

[Euro-American Scum]

There will also be a run on ammo if that happens. Hint: lay low. It won't be pretty out there.

I'm way ahead of you on this. -:)

[SittinYonder]

The fix to this problem already exists. U.S. Rep. John Linder, R-Ga., is proposing a national sales tax that would end all "corporate loopholes" all income tax and all of it.

I'm only supporting candidates (like Herman Cain who's running for Zell Miller's senate seat in Georgia) who support Linder.

http://www.fairtax.org

[Attention Surplus Disorder]

Like anything else, it's a matter of whether you are the "victim" or the beneficiary, just like if we go to a baseball game and if you like the Yanks and I like the Red Sox and the Sox lose, for me it was a cruddy game and for you it was a good game.

For companies able to offshore their labor, their labor and tax costs decline, the pursuit of which is their right under capitalism. For them it makes sense. The folks who put these ideas together are typically members of an elite class interesting in preserving both their positions and the appearance of their usefulness. They are not very interested in the welfare of the average worker. For them it makes sense.

I may have posted it earlier, but there is bill being talked about in Congress which would allow a one-time tax amnesty for repatriating foreign-earned profits. That would be a 1K point DJIA popper.

[ninenot]

It may be a "right" under capitalism, but that fact alone demonstrates why the USA has some restrictions on 'capitalism.' The moral rectitude is another question entirely.

Of course, these folks also expect that the US's civil and military apparatus will defend their property rights...

[Ed_in_NJ]

Would you like FRies with that?

[sixmil]

As the biggest and best economy in the world, the U.S. is a price maker. We set the standard. A U.S. tax cut might only ignite an international game of tax chicken where all the Lowtaxistans cut their rates below our new, lower rate.

Sounds like a plan, let's do it.

[Ciexyz]

btt