Re: [ee_shoppahs] Andy Grove on outsourcing jobs
- From: J Fields <j.email.fields@xxxxxxxxx>
- To: ee_shoppahs@xxxxxxxxxxxxx
- Date: Mon, 5 Jul 2010 21:05:24 -0700
I think Andy was proposing the import duty money goes to a bank
that a company can borrow from to scale their manufacturing up in the US.
If it goes to the government, it just gets spent on something.
All taxes increase the cost to the consumer.
If you go to buy something, and it is prices at $130, but cost
$100 to make, you as the consumer don't care if that extra
$30 is due to $30 sales tax, $30 VAT tax, or $30 income tax. The consumer
is mostly concerned that is costs $100 + $30 = $130.
The worker really would rather have an import duty so his job
is safer from foreign competition. China and India, etc have enough
billions of unemployed people in villages to replace all the US workforce 10
or so times. Japan was a threat to jobs in the 1980s, but after
every person in Japan had a job, they could take no more jobs
away from the USA.
US income tax = expensive US goods, fewer US jobs
sales tax, use tax = same tax on US and foreign goods
import duty = expensive foreign goods and fewer jobs leaving USA
The US already has import tax on protected
industries.
Cars and Trucks for example:
http://www.foreignborn.com/visas_imm/entering_us/7importingyourcar.htm
"Dutiable Entry
Foreign-made vehicles imported into the U.S., whether new or used,
either for personal use or for sale, are generally dutiable at the
following rates:
Autos. . . . . . . . . . . . . . . 2.5%
Trucks . . . . . . . . . . . . . . 25%
...
Duty rates are based on price paid or payable. Most Canadian-made
vehicles are duty-free."
On Mon, Jul 5, 2010 at 8:43 PM, don phillips <hdphillips@xxxxxxxxx> wrote:
> You are right about multiple taxes. The only way that Fair Tax makes sense
> is as a replacement for all the other direct and indirect taxes - not easily
> achieved. Repeal of the 16th amendment and replacement of most of the
> present big spenders in Congress - that's most of our senators and
> representatives - would be necessary. And I repeat "not easily achieved".
> The people would have to reclaim their government and pay attention to what
> government is doing, eternal vigilance anyone!
> Don
>
> On Mon, Jul 5, 2010 at 10:29 PM, andrew lindenburgh
> <andrew.lindenburgh@xxxxxxxxx> wrote:
>>
>> 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/
>>>> 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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