Re: [ee_shoppahs] Andy Grove on outsourcing jobs
- From: andrew lindenburgh <andrew.lindenburgh@xxxxxxxxx>
- To: ee_shoppahs@xxxxxxxxxxxxx
- Date: Mon, 5 Jul 2010 20:29:53 -0700
Gentlemen
Be careful what you wish for ... in principle you are correct ... a fair use
tax is a fine idea ...
but I just returned from UK where income taxes are worse than here and
getting more severe ... and VAT is going up
from November (17.5 -> 20%) ... once a tax is in place it is rarely
rescinded or reduced because the tax collectors jobs would be
lost!!!
I have been musing on taxes ... where and how they are spent ... can they be
"saved" in a special account for a rainy day ...
certainly not in CA ... we need some legal changes.
My tuppence worth would be an increase in gasoline tax perhaps +$3 to
$5/gallon ... but only when we figure out how to spend/allocate the
additional revenue. We do need to drive smaller cars ... I rented a 1.2L
5-door Vauxhall Corsa in UK this time and although I had to use the gears to
get the acceleration I needed at times, avg 40 mpg @ ~$9/gallon was very
desirable. Note .. not a diesel tax 'though.
Such a tax would have us all in low cc cars in ~3 years ... less driving ...
more emphasis on performance/efficiency than largesse/luxury.
Might also affect our urban planning ... a local store nearby for milk, etc
... green belts ... telecommuting :), etc.
andrew
On Mon, Jul 5, 2010 at 7:40 PM, don phillips <hdphillips@xxxxxxxxx> wrote:
> James,
>
> That is an excellent illustration of what's wrong with our tax system. Both
> the direct and indirect taxes contribute to produce a non-competitive
> environment for US manufacturing industries on the world market. I agree
> that removing all the present direct and indirect taxes and replacing them
> with a single broad tax is desperately needed to produce a competitive world
> market for us products.
>
> I agree that a VAT tax is not the way to go. A better way is a consumption
> tax, such as the Fair Tax that has been proposed for many years. Important
> aspects of the Fair Tax are:
>
> 1. As a consumption tax, it would not discriminate by source of the
> product being purchased - domestic and foreign products would fair the same.
> Since imports may have foreign taxes builtin, US products will have improved
> competitive position in the domestic market. Removal of all direct and
> indirect production taxes allow for a lower offering prices on products.
>
> 2. US exports would not be taxed domestically (all direct and indirect
> production taxes no longer exist) - thus exported products achieve a much
> improved competitive environment on the world market compared with the
> present environment.
>
> 3. Government operating costs could be significantly reduced - IRS could
> be abolished.
>
> 4. Business operating costs could be reduced. No longer a need to keep 2
> sets of accounting books. Investment risk analysis would not need to
> consider income tax implications.
>
> 5. Individual tax payer record keeping could be reduced along with no
> more concerns about IRS interference in personal decisions.
>
> Just dreaming, I guess!!!!!
>
> Don
>
>
> On Mon, Jul 5, 2010 at 7:13 PM, James Coghlan <jcoghlan@xxxxxxxxx> wrote:
>
>> OK, time for another one of my soliloquies . . .
>>
>> Ages ago I was impressed by a paper that came out of Japan entitled "A
>> Japan that can say No". I just finished reviewing the topic in Wikipedia and
>> realized I must be referring to a totally different paper or I my
>> interpretation was totally different.
>>
>> My primary thoughts at the time was as follows:
>>
>> (1) After the end of WWII the US was the sole manufacturing super power.
>> Everybody else had much of their homeland in shambles. The rise of US
>> manufacturing after the war was partially due to everybody else having their
>> factories reduced to rubble - this included all of Germany, much of France,
>> Italy, Russia and England. Anything rebuilt before the end of the war was
>> manufacturing war-specific items.
>>
>> (2) With respect to trade and trade-wars. The US decided what was
>> considered fair. Basically, with the exception of a few items considered of
>> high importance to a country, it was fair if one taxed everything (imports
>> and exports) and unfair if one only taxed imports.
>>
>> (3) Much of the federal, state and local tax systems in the US is either
>> indirect or after the fact. This makes money appear to be easier to earn.
>> However it ends up putting US manufacturing at a disadvantage.
>>
>> The biggest example would be automobile manufacturing. If some politician
>> decided we would placed a 7.65% tax on every hour of labor associated with
>> imported automobiles (or imported parts and/or sub-assemblies). Everybody
>> knows that other countries would cry foul. This would be in violation of
>> treaties we signed in good faith.
>>
>> Now consider we modify the FICA laws slightly . . . place a tax of 7.65%
>> on every hour of labor associated with all automobiles sold in the US and
>> use this tax in lieu of domestic manufacturers matching FICA contributions.
>> What would be the result? For US manufacturers, the net result would be a
>> wash. Non-US manufacturers would end up paying the tax. Off-shoring
>> manufacturers would end up supplementing social security. Under the rules of
>> "what is fair and what is not" since we are taxing everybody, then it is
>> fair.
>>
>> I am being specific to the automobile industry although the concept
>> applies to all forms of manufacturing. Just go one step further. Calculate
>> all the indirect taxes applied to US manufacturing. The real estate taxes,
>> the school taxes, the electric taxes, the water taxes, the sewer taxes, the
>> gasoline/diesel, and whatever other taxes. Heck even add on the income
>> taxes. If one calculated all those taxes and divided it into the cost of the
>> end product we could in theory have a system in which all the hidden taxes
>> are removed and replaced by a special sales tax. For the portion of the
>> vehicle manufactured in the US, the net result would be nada ... nothing ...
>> no change. For foreign goods, they would get to pay a share of water, sewer,
>> electric, school and whatever taxes. Actually, if one did change to that
>> type of system for manufactured products then we would approach the Japanese
>> system. In Europe this tax is referred to as VAT.
>>
>> The realization that dawned on me when I read that paper was much of our
>> problem is due to way we collect taxes. We want to earn as much as possible
>> - cheap money. Therefore there are all these indirect taxes on corporations.
>> Taxing corporations used to be easy. They didn't vote, they invested to much
>> in their physical plants to relocate, and it was easy for politicians to
>> pick on them. Nowadays, corporations vote with their feet. If you tax it too
>> much on the local level, they move to the next state. If you tax too much on
>> the federal level, they move to the next country.
>>
>> I am not proposing we move to a VAT type system. Our deficits are caused
>> by too much spending, not too much taxing. Unlike a sales tax in which one
>> knows exactly how much you are giving the government, the VAT ends up being
>> increased and hidden within the cost of whatever you are buying. In the long
>> run, however, decreasing the indirect taxes and replacing them with a sales
>> tax will decrease the advantage of overseas manufacturing
>>
>> James
>> ------------------------------
>> *From:* don phillips <hdphillips@xxxxxxxxx>
>> *To:* ee_shoppahs@xxxxxxxxxxxxx
>> *Cc:* J Fields <j.email.fields@xxxxxxxxx>
>> *Sent:* Mon, July 5, 2010 6:27:55 PM
>> *Subject:* Re: [ee_shoppahs] Andy Grove on outsourcing jobs
>>
>> Here is a followup on the semiconductor economy. It references Andy
>> Grove's comments.
>>
>> http://danielnenni.com/2010/07/04/the-new-semiconductor-economy/
>>
>> <http://danielnenni.com/2010/07/04/the-new-semiconductor-economy/>Don
>>
>>
>> On Sun, Jul 4, 2010 at 7:55 PM, <jheaven@xxxxxxxxx> wrote:
>>
>>> Interesting article although I wonder if the reason for it is that
>>> Andy realizes the same forces that have been eating everybody elses
>>> lunch are going after his too. Has Intel not benefited from offshored
>>> labor? The data under paragraph "The 10X Factor" is disappointing
>>> for the most of the US but probably not possible without a lot of US
>>> corporate help. Andys remark that US manufacturing is undervalued is
>>> obvious; the real question is why that is happening. The answer is
>>> probably in our economic policy; there is no incentive to manufacture
>>> in the US now except patriotism. Some theorize this will all end in a
>>> US dollar devaluation. While this may be beyond the scope of this BB,
>>> most contractors have prided themselves in understanding their market
>>> better than most everyone else and profited from it. Things are
>>> different
>>> now and it is dangerous to think that things will come back because they
>>> always did before(although I am hoping they will). So let the ideas
>>> flow.
>>>
>>> John Heaven
>>>
>>> for those with time: "Bad Samaritans" (H J Chang)
>>>
>>>
>>> ---- J Fields <j.email.fields@xxxxxxxxx> wrote:
>>> >
>>> http://www.businessweek.com/magazine/content/10_28/b4186048358596_page_4.htm
>>> >
>>> > "The first task is to rebuild our industrial commons. We should
>>> > develop a system of financial incentives: Levy an extra tax on the
>>> > product of offshored labor. (If the result is a trade war, treat it
>>> > like other wars—fight to win.) Keep that money separate. Deposit it in
>>> > the coffers of what we might call the Scaling Bank of the U.S. and
>>> > make these sums available to companies that will scale their American
>>> > operations. "
>>> >
>>> > Kind of a long winded article, but says we need companies in
>>> > USA. We tax US labor with income tax, property tax, etc.
>>> > Goods manufactured outside USA, get not US income tax, property tax
>>> > on the manufacturing plant, etc.
>>> >
>>>
>>>
>>>
>>
>>
>
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