Re: [ee_shoppahs] Andy Grove on outsourcing jobs
- From: John Laverdier <john.laverdier@xxxxxxxxx>
- To: ee_shoppahs@xxxxxxxxxxxxx
- Date: Tue, 6 Jul 2010 08:50:49 -0700 (PDT)
When I read this thread I was most impressed with the fact that
it is being done in a civil and non partisan manner. I don't think
this discussion would have been possible 10 years ago, it would
have devolved into a flame war. I've long believed that some of the
best thinking comes from really good group consensus. When people allow
others to influence their own thinking in ways that provoke them to
create better ideas. That only happens when the influence of ego is
reduced in favor of civility.
As for what just came out of this, I do think that the idea of changing
our tax laws could indeed be the key to making America more
competitive globally. I like Cog's idea of only taxing sales, and increasing
the sales tax to compensate for removal of the other taxes.
Did I get that right ? Are there other trade offs that we are missing ?
Good stuff. Thanks guys,
John
--- On Tue, 7/6/10, J Fields <j.email.fields@xxxxxxxxx> wrote:
> From: J Fields <j.email.fields@xxxxxxxxx>
> Subject: Re: [ee_shoppahs] Andy Grove on outsourcing jobs
> To: ee_shoppahs@xxxxxxxxxxxxx
> Date: Tuesday, July 6, 2010, 5:02 AM
> Of course, if income tax is
> eliminated, the youth will
> have tremendous income with no tax and the old people
>
> If income tax is eliminated, to assure the older people
> can afford the 15% sales tax or European style VAT tax
> and so the older people caught in the transition didn't
> get income tax while they were working and VAT taxed
> when they spend money (double taxation),
> a partial rebate of the income taxes a person already paid
> during his or her lifetime would have to be done.
> This would probably be converted to an annuity so that you
> get
> a rebate monthly to "null out" the sales tax for
> as long as the older person lived.
>
> Of course, if income taxes were rebated, no wall street
> bailouts would
> be needed and the US economy would be booming.
>
> On Mon, Jul 5, 2010 at 9:05 PM, J Fields <j.email.fields@xxxxxxxxx>
> wrote:
> > 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.
> >>>>>> >
> >>>>>>
> >>>>>>
> >>>>>
> >>>>>
> >>>>
> >>>
> >>
> >>
> >
>
>
Other related posts:
