Posted on 07/11/2009 10:08:54 AM PDT by SeekAndFind
Are current government policies causing the U.S. to lose competitiveness in the global race for capital, prosperity, and growth?
Fortune magazine recently reported that the number of U.S. companies in the world’s top 500 fell to the lowest level ever, while more Chinese firms than ever before made the list. Thirty-seven Chinese companies now rank in the top 500, including nine new entries. Meanwhile, the number of U.S. firms has fallen to 140, the lowest total since Fortune began the list in 1995. This is not good.
China also surpassed the U.S. as the world’s biggest automaker in the first half of 2009, with June sales soaring 36.5 percent from a year earlier. The Chinese registered 6.1 million car sales for the first half of the year. That way outpaced American sales, which were only 4.8 million.
And China has no capital-gains tax. It only has a 15-to-20 percent corporate tax. The U.S., on the other hand, is raising its cap-gains tax rate to 20 percent. It’s also increasing its top personal tax rates.
In fact, the scheduled income-tax hike, plus the much-discussed health-care surtax, will balloon the top U.S. tax rate all the way to 51 percent. Compare that to the OECD average of only 42 percent. When those tax-hikes kick in, the top U.S. tax rate will rank above that of France, Germany, and Italy. That can’t be good.
Incidentally, our 40 percent corporate tax rate is already almost 15 percentage points higher than the corporate rates in most of Europe.
Washington’s enormous expansion of the government’s spending share of GDP to over 40 percent — including Bailout Nation, TARP, and government takeovers in numerous industries — is eerily reminiscent of Old Europe’s old policies. In a twist of irony, Europe seems to be moving toward a lower-tax-and-spend-and-regulate, Ronald Reagan–type approach, while we in the U.S. are regressing to the failed socialist model of Old Europe. This makes no sense.
Here’s the clincher: Year-to-date, Dow Jones stocks are off 7 percent, while China stocks are up 71 percent. The world index is up 4 percent. Emerging markets are up 25 percent. They’re all beating us. None of this is good.
We’re going the wrong way. That’s why stock markets are not voting for the United States anymore.
China may be prospering economically, but they are about to go into the abyss of a civil war. We are next. Be looking for the balkinizaton of the USA in the next 4 years.
Socialism sucks bookmark.
OK, So the number of FORTUNE 500 Companies from the USA is shrinking. But why is this necessarily a bad thing ? If in their place, thousands of innovative, little entreprenueral companies companies sprout, that should be a good thing.
If Russia or China have increased their number of Fortune 500 companies, it might mean that their government controlled companies are pouring in their country’s resources into making them bigger. I don’t think this is a good thing for them.
I don’t see what the big mystery is. China is finally moving out of the tenth century, into a 21st century industrialized economy. They have over a billion people that are consumers now for the first time. When you’ve got a billion people that don’t own cars, that’s going to be the world’s largest market for cars. Duh?
Moving manufacturing from the U.S. will help everyone.
Giving our technology to China will be very beneficial to both nations.
R&D transfers to nations who manufacture, a real plus...
How’s that looking folks?
You don’t see?
THEY SHOULD BE BUYING OUR CARS !!!
Duh.
You ain’t seen nothin’ yet.
Anytime I try to explain (I'm an economist by trade, specializing in labor economics), the more educated among them always love to parade out the example of Japan, relatively high corporate tax rates and relatively low unemployment, until lately.
Such an example is a non-starter for two reasons:
As you can see, globalism has brought the US unparallelled prosperity. We are all wealthier and enjoy excellent job opportunities. /s
LOL, we’re back doing this shtick again huh.
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