--and increased the demand for people to build cotton pickers.
Being my age you probably remember old farmers bemoaning the loss of 'our agricultural base' and scoffing at the manufacturing that made mechanized farming so much more productive. Now we get the same bs from old mechanics that bemoan the loss of factory jobs and scoff at the info service people make productivity soar.
People left the farm, worked at factories, and now run services. What's not to like?
Services??? lol What kind of LSD are you taking. What a joke. Make sure more coconuts don’t drop on your head.
A services economy is a consumer driven economy which means a debt driven economy which means a loser economy. This kind of nation gets eaten alive by those who actually grow, mine and make things. Such as the Chinese. Even the Brazilians have a more “reality based” economy. They drill offshore with a vengeance despite being leftist ruled. They mine grow and make things with a minimum of faggy paper shufflers (Wall Street/banksters) getting a skim. Compared to us at least.
People left the farm, worked at factories, and now run services. What’s not to like?
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Nothing...if the damned goobermint would get the hell out of the way and let the market work. There is never a shortage of work to be done so the only reason some people cannot find work has to be that something is interfering with the market process. That something is government (I prefer to call it goobermint). They are trying now to pass a bill that would make it impossible for anyone to participate in agriculture except for a few huge corporations like Monsanto. When I was a kid we used to take buckets of eggs to the store to trade for other things, they would probably find some excuse to lock you up now if you tried to do that. My mother used to tell a story about giving a whole country cured ham as a payment on her first refrigerator because she didn’t have five dollars to make the monthly payment. Things sure used to be different, didn’t they?
The following table produced by the Tax Foundation ranks nations according to corporate tax burden. As we see, the U.S. has the highest combined corporate tax rate behind Japan. (As we learned in last month’s ProfitScore IQ, companies in New York City have the dubious distinction of paying the highest corporate taxes in the world at a combined rate of 46.2%.)
U.S. corporations currently pay a tax rate that is 50% higher than the average for the OECD thirty most industrialized nations. But that isn’t the whole story.
Of even greater concern is the fact that of that elite group of 30 nations, the U.S. is the only country that taxes its companies (and citizens) based on citizenship, not residency. That has created a unique problem for US companies with operations abroad and one that has required some rather imaginative solutions to keep them competitive globally.
Back in 1984, the Foreign Sales Corporation program was Congress’s way of leveling the playing field for U.S. multinationals due to the fact that the U.S. is the only major industrialized nation (and one of only three countries in the world, namely the Philippines and Eritrea) that taxes based on citizenship. This puts American companies operating in foreign territories at a competitive disadvantage visa vie companies from other countries.
Subsequently, the World Trade Organization in 2000 ruled that the FSC rules were an illegal subsidy and allowed the EU to levy $4 billion in tariffs against U.S. exporters and multinationals unless the rules were replaced. In response, Congress adopted the Extraterritorial Income Exclusion (ETI) Act of 2000, but that was also successfully challenged by the EU.
In response, the ETI was replaced by the American Jobs Creation Act of 2004 signed by President Bush. It provided $140 billion of tax relief to domestic manufacturers and other producers, including several sectors that in the past, never qualified for tax relief. The corporate tax rate for domestic manufacturers dropped from 35% to 32%.
For a one-year period, U.S. multinationals were able to repatriate foreign profits at a 5.25% tax rate. This rate also applied to deemed dividends accumulated by affiliates of controlled foreign corporations that are exempt from current taxation under the Internal Revenue Code Kennedy Amendments of 1962, according to economist and international trade expert Walter Diamond.
Instead of the tax losses predicted by Democrats and even some of the Bush Administration economic advisors, the move caused a flood of overseas cash to be repatriated to the U.S. from more than 800 companies - approximately $362 billion was repatriated from foreign operations, according to the July 1, 2008 Wall Street Journal article “Corporate Tax Cut Windfall.”
After the one-year period expired, companies would be taxed at the new corporate rate of 32% on repatriated income. Before the law was enacted, companies had to pay 85%, so this was an improvement. The Act also greatly reduced the double taxation of U.S. exporters and overseas manufacturers. Was it any wonder that more than $600 billion in corporate profits sat overseas?
If overseas corporate earnings had been repatriated under the tax rules Obama has proposed, as much as $510 billion would have gone to taxes. But the reality is that corporations would have permanently kept the income abroad.
Phase two of Obama’s plan was made public before the election in his Patriot Employer Act, in which he promised to address these corporate “tax breaks.” Promises in a presidential campaign are not unusual and often forgotten once the candidate wins.
Unfortunately, this one wasn’t. Even more unfortunate, it is these so called tax breaks for which Congress has fought so hard keep so that U.S. multinationals could remain competitive with their global counterparts. An end to these breaks would force companies with overseas operations to pay the U.S. domestic tax rate (currently a minimum of 35%) on all income-no matter where it is earned-unlike the companies of every other industrialized nation against which American companies compete.
Taxes vs. GDP Growth from 1960 to 1996:
MORE HERE http://www.investorsinsight.com/blogs/profitscore_iq/archive/2009/06/19/are-you-in-the-top-5-or-do-you-invest-like-everyone-else.aspx