It's Not Regulation or Taxes, it's Cheap Labor Stupid! | Bud Meyers
It's Not Regulation or Taxes, it's Cheap Labor Stupid!
and/or higher taxes is not why American companies send jobs offshore, it for
lower wages. The United States is a far friendlier place to do business than are
emerging markets like India and mainland China, this according to international
analyses of regulatory climates.
American companies like doing business in politically stable environments (we
always hear Senator John Boehner saying, "Business
needs certainty in the marketplace"). Large corporations would not necessarily invest in a
poor country with no infrastructure and an on-going civil war if it were just
for cheap labor, because they wouldn't want any disruptions in their business,
and would want their assets protected, both physically and by law.
The United States may have stricter environmental laws, but then again, we
wouldn't want to have to live and work in a country with contaminated water and air.
But when American corporations pollute the water
and air elsewhere, they don't seem to concern themselves so much with the overall global
environment. And we've witnessed some of the disastrous results here in America
when industry is left unregulated as to the environment. We're all familiar with Love Canal and saw the movie
Erin Brockovich. The Exxon-Valdez
and BP oil spills were well publicized. The W.R.
Grace plant in Libby, Montana continually spewed asbestos over the small
town for decades, even though we already had environmental regulations in place.
China on the other hand, often overlooks environmental pollution, worker safety, and public health
problems -- and American CEOs can take advantage of this. Pollution has made cancer the leading cause of
death in China. Lead poisoning is one of the most common pediatric health problems in
China, with existing data suggesting that one-third of Chinese children suffer from elevated blood lead levels.
Do we want that in America?
And our labor laws are morally superior as well. We wouldn't want our workers
to have to endure the horrific conditions that they have to endure in
sweat shops; and we wouldn't condone child slave labor in America either, we've
been down that road before. But American CEOs can turn a blind eye to those
abuses and take no culpability by claiming they had no knowledge, as in "plausible
deniability." This is easy for them to do when China is thousands of miles away on
the opposite side of the globe with minimum access by our media.
Many companies are now compromising by cutting hours to cut benefits and
wages in a labor-saturated market in the U.S., thereby increasing their
corporate profits. By the
very nature of their existence corporations are primarily profit-driven, their
only reason for being, despite the human condition (environment, working
conditions, wages, etc.) A corporation, as a collective on-going concern (almost
like a machine) doesn't have a conscience or any moral values per se, so the
government needs to regulate them -- and because corporations lack governance and
can't control their principal–agent
problem to properly police themselves (like the fox guarding the hen house).
The China Daily News is reporting that authorities have ordered local bureaus to plug loopholes in the country's
collection of personal income taxes from high-income citizens. The Chinese corporate
tax rate is 25%, but there they pay those taxes. Here the corporate tax rate may be higher at 35%,
but large corporations have an army of tax lawyers that find every conceivable
loophole in our very complicated tax code to avoid paying their taxes.
One of the greatest detriments to job creation in the U.S. is the overseas income deferral
law. This unbelievable gift to multi-national corporations is at the heart of free trade, globalization,
off-shoring and outsourcing. Presently these corporations are sitting on $2.2 trillion in untaxed profits, which is costing the American taxpayer almost $800 billion in lost tax revenue.
The latest Citizens for Tax Justice corporate
tax report (released last week) shows America’s top corporations are now
getting what essentially amounts to a 50 percent discount off their tax bills.
Over the last three years the top U.S. corporations have actually been paying
only 18.5 percent of their profits to Uncle Sam.
For the last nine years, the World Bank has been grading
countries on 10 measures of business regulation: getting electricity,
enforcing contracts, protecting investors, dealing with construction permits,
trading across borders, registering property, resolving insolvency, paying
taxes, and getting credit. Based on these criteria, the U.S. ranks 4th in the
world with the best business climate.
So in America, multi-national corporations actually have a very good business
climate. Although our infrastructure needs repaired, we're not on the verge of
civil war or nationalizing their companies. And they only have to deal
with morally sound environmental and labor laws, not overly burdensome ones. But
by being only profit-driven, it makes sense that they would prefer no laws at
all. And large U.S. corporations pay very little in corporate taxes in proportion
to their net profits (especially when compared to 40 years ago).
It's cheaper labor that drives jobs overseas. PERIOD. Every consulting
website catering to businesses emphasizes the same exact thing, and gives tips
on how best to accomplish this. (I would link to a few, but why give them the
So it's misleading for CEOs to say that America lacks skilled labor, although going foreword, I
would think that corporate America should generate an "official wish list" as to
what skills they will need in the future -- so young people won't be graduating
from college buried in debt and holding a worthless piece of paper.
Congress has to pass laws to rescind the tax incentives we give large corporations
to outsource domestic jobs. We also need to eliminate all the tax loopholes that
only the largest and most profitable corporations can best take advantage of. Maybe if we could collect their
fair share of tax revenues, we actually could lower the corporate
tax rate. But for now,
we have to put Americans back to work, restore our infrastructure, get government
services funded, and put teachers back to work. We don't have just
so much as we have a revenue problem.
For Senator John Boehner to say "we don’t have a revenue problem" is like the
Iranian president saying the Holocaust was a myth. Today we have the lowest
capital gains tax in the history of our tax code, and corporate taxes are
lower now than they've been since their highest rate in 1969 (but now
corporations have far more loopholes, thanks to the lobbyists and members of congress who
are beholden to their biggest campaign contributors). But even then, and after
the Bush tax cuts, we've still lost 50,000 factories and millions of jobs
But yet Republicans, instead of raising taxes, they want to lower the corporate
tax rate even more and/or to completely eliminate capital gains taxes all together (such as with the
Herman Cain's 9-9-9 Plan or the flat tax). Incredible!
Why don't we just pass a law saying only people earning less than $25,000 a
year should have to pay taxes, and let large corporations, banks, CEOS, and
hedge-fund mangers off the hook completely...and don't tax them at all. Isn't
that what they really want? And aren't they also asking us to trust and believe
in them when they say that by not taxing at all would be so much better
for the economy -- and will put everybody back to work? During the Great
Recession large corporations and CEOs have been doing just fine; it's everybody
that's had to suffer.
Should we believe the CEO of a corporation, that's only a profit-driven entity
(without a heart, conscience, or soul), when they tell us all these things? In a
perfect world, a corporation would only exist, not to enrich a very few, but to
work strictly for the benefit of humanity. There would be no profits, just a
direct stream of revenues to the U.S. Treasury for use in our education system,
the funding of Social Security and Medicare, and for maintaining and improving
our infrastructure -- for the interests of the common good for all
Americans (rather than just enriching the board-of-directors). We
could also eliminate class warfare between the uber-rich and abject poor.
The CEOs could still be paid a good salary, and offered bonuses based on real
performance; they just couldn't vote to give themselves a $100 million annual
salary while paying their workers $1 an hour in a sweatshop in China...and then
use the excuses that stiff regulations and high taxes prevents him from hiring
for a CEO to claim that excessive regulation and/ or over-taxation is driving jobs
overseas. It's neither of those things. It's only done for cheap exploited labor
to satisfy common human greed.
And that's just one reason why today they're protesting on Wall Street and all over the world.
Bud MeyersNovember 8, 2011 at 1:48 PMHow outsourcing American jobs also affects our national defense: American corporations with government contracts in our defense industry have profited from outsourcing to Chinese suppliers and getting bogus parts in return. How is it even remotely sane for us to buy anything, much less in defense and security, from a committed military and commercial adversary? So far it's cost taxpayers $7.5 billion. Why are American corporations building iPods in China with slave labor, knowing that the Chinese government hacks our computers in the defense department, commits industrial espionage, are involved with counterfeiting (both products and currency), has devalued their currency against ours, and continually engages in unfair trade practices against us? Not to mention that China backed two wars against that led to the deaths of over 100,000 American soldiers? Why are American corporations building factories in China and hiring Chinese workers at all?http://www.reuters.com/article/2011/11/08/us-china-weapons-idUSTRE7A70FF20111108ReplyDeleteAdd commentLoad more...
It's Not Regulation or Taxes, it's Cheap Labor Stupid! | Bud Meyers
It's Not Regulation or Taxes, it's Cheap Labor Stupid!
and/or higher taxes is not why American companies send jobs offshore, it for
lower wages. The United States is a far friendlier place to do business than are
emerging markets like India and mainland China, this according to international
analyses of regulatory climates.
American companies like doing business in politically stable environments (we
always hear Senator John Boehner saying, "Business
needs certainty in the marketplace"). Large corporations would not necessarily invest in a
poor country with no infrastructure and an on-going civil war if it were just
for cheap labor, because they wouldn't want any disruptions in their business,
and would want their assets protected, both physically and by law.
The United States may have stricter environmental laws, but then again, we
wouldn't want to have to live and work in a country with contaminated water and air.
But when American corporations pollute the water
and air elsewhere, they don't seem to concern themselves so much with the overall global
environment. And we've witnessed some of the disastrous results here in America
when industry is left unregulated as to the environment. We're all familiar with Love Canal and saw the movie
Erin Brockovich. The Exxon-Valdez
and BP oil spills were well publicized. The W.R.
Grace plant in Libby, Montana continually spewed asbestos over the small
town for decades, even though we already had environmental regulations in place.
China on the other hand, often overlooks environmental pollution, worker safety, and public health
problems -- and American CEOs can take advantage of this. Pollution has made cancer the leading cause of
death in China. Lead poisoning is one of the most common pediatric health problems in
China, with existing data suggesting that one-third of Chinese children suffer from elevated blood lead levels.
Do we want that in America?
And our labor laws are morally superior as well. We wouldn't want our workers
to have to endure the horrific conditions that they have to endure in
sweat shops; and we wouldn't condone child slave labor in America either, we've
been down that road before. But American CEOs can turn a blind eye to those
abuses and take no culpability by claiming they had no knowledge, as in "plausible
deniability." This is easy for them to do when China is thousands of miles away on
the opposite side of the globe with minimum access by our media.
Many companies are now compromising by cutting hours to cut benefits and
wages in a labor-saturated market in the U.S., thereby increasing their
corporate profits. By the
very nature of their existence corporations are primarily profit-driven, their
only reason for being, despite the human condition (environment, working
conditions, wages, etc.) A corporation, as a collective on-going concern (almost
like a machine) doesn't have a conscience or any moral values per se, so the
government needs to regulate them -- and because corporations lack governance and
can't control their principal–agent
problem to properly police themselves (like the fox guarding the hen house).
The China Daily News is reporting that authorities have ordered local bureaus to plug loopholes in the country's
collection of personal income taxes from high-income citizens. The Chinese corporate
tax rate is 25%, but there they pay those taxes. Here the corporate tax rate may be higher at 35%,
but large corporations have an army of tax lawyers that find every conceivable
loophole in our very complicated tax code to avoid paying their taxes.
One of the greatest detriments to job creation in the U.S. is the overseas income deferral
law. This unbelievable gift to multi-national corporations is at the heart of free trade, globalization,
off-shoring and outsourcing. Presently these corporations are sitting on $2.2 trillion in untaxed profits, which is costing the American taxpayer almost $800 billion in lost tax revenue.
The latest Citizens for Tax Justice corporate
tax report (released last week) shows America’s top corporations are now
getting what essentially amounts to a 50 percent discount off their tax bills.
Over the last three years the top U.S. corporations have actually been paying
only 18.5 percent of their profits to Uncle Sam.
For the last nine years, the World Bank has been grading
countries on 10 measures of business regulation: getting electricity,
enforcing contracts, protecting investors, dealing with construction permits,
trading across borders, registering property, resolving insolvency, paying
taxes, and getting credit. Based on these criteria, the U.S. ranks 4th in the
world with the best business climate.
So in America, multi-national corporations actually have a very good business
climate. Although our infrastructure needs repaired, we're not on the verge of
civil war or nationalizing their companies. And they only have to deal
with morally sound environmental and labor laws, not overly burdensome ones. B
ut
by being only profit-driven, it makes sense that they would prefer no laws at
all. And large U.S. corporations pay very little in corporate taxes in proportion
to their net profits (especially when compared to 40 years ago).
It's cheaper labor that drives jobs overseas. PERIOD. Every consulting
website catering to businesses emphasizes the same exact thing, and gives tips
on how best to accomplish this. (I would link to a few, but why give them the
So it's misleading for CEOs to say that America lacks skilled labor, although going foreword, I
would think that corporate America should generate an "official wish list" as to
what skills they will need in the future -- so young people won't be graduating
from college buried in debt and holding a worthless piece of paper.
Congress has to pass laws to rescind the tax incentives we give large corporations
to outsource domestic jobs. We also need to eliminate all the tax loopholes that
only the largest and most profitable corporations can best take advantage of. Maybe if we could collect their
fair share of tax revenues, we actually could lower the corporate
tax rate. But for now,
we have to put Americans back to work, restore our infrastructure, get government
services funded, and put teachers back to work. We don't have just
so much as we have a revenue problem.
For Senator John Boehner to say "we don’t have a revenue problem" is like the
Iranian president saying the Holocaust was a myth. Today we have the lowest
capital gains tax in the history of our tax code, and corporate taxes are
lower now than they've been since their highest rate in 1969 (but now
corporations have far more loopholes, thanks to the lobbyists and members of congress who
are beholden to their biggest campaign contributors). But even then, and after
the Bush tax cuts, we've still lost 50,000 factories and millions of jobs
But yet Republicans, instead of raising taxes, they want to lower the corporate
tax rate even more and/or to completely eliminate capital gains taxes all together (such as with the
Herman Cain's 9-9-9 Plan or the flat tax). Incredible!
Why don't we just pass a law saying only people earning less than $25,000 a
year should have to pay taxes, and let large corporations, banks, CEOS, and
hedge-fund mangers off the hook completely...and don't tax them at all. Isn't
that what they really want? And aren't they also asking us to trust and believe
in them when they say that by not taxing at all would be so much better
for the economy -- and will put everybody back to work? During the Great
Recession large corporations and CEOs have been doing just fine; it's everybody
that's had to suffer.
Should we believe the CEO of a corporation, that's only a profit-driven entity
(without a heart, conscience, or soul), when they tell us all these things? In a
perfect world, a corporation would only exist, not to enrich a very few, but to
work strictly for the benefit of humanity. There would be no profits, just a
direct stream of revenues to the U.S. Treasury for use in our education system,
the funding of Social Security and Medicare, and for maintaining and improving
our infrastructure -- for the interests of the common good for all
Americans (rather than just enriching the board-of-directors). We
could also eliminate class warfare between the uber-rich and abject poor.
The CEOs could still be paid a good salary, and offered bonuses based on real
performance; they just couldn't vote to give themselves a $100 million annual
salary while paying their workers $1 an hour in a sweatshop in China...and then
use the excuses that stiff regulations and high taxes prevents him from hiring
for a CEO to claim that excessive regulation and/ or over-taxation is driving jobs
overseas. It's neither of those things. It's only done for cheap exploited labor
to satisfy common human greed.
And that's just one reason why today they're protesting on Wall Street and all over the world.
Bud MeyersNovember 8, 2011 at 1:48 PMHow outsourcing American jobs also affects our national defense: American corporations with government contracts in our defense industry have profited from outsourcing to Chinese suppliers and getting bogus parts in return. How is it even remotely sane for us to buy anything, much less in defense and security, from a committed military and commercial adversary? So far it's cost taxpayers $7.5 billion. Why are American corporations building iPods in China with slave labor, knowing that the Chinese government hacks our computers in the defense department, commits industrial espionage, are involved with counterfeiting (both products and currency), has devalued their currency against ours, and continually engages in unfair trade practices against us? Not to mention that China backed two wars against that led to the deaths of over 100,000 American soldiers? Why are American corporations building factories in China and hiring Chinese workers at all?http://www.reuters.com/article/2011/11/08/us-china-weapons-idUSTRE7A70FF20111108ReplyDeleteAdd commentLoad more...