Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Whatyousay is correct; not only did Canada escape the worldwide recession because of extremely sound banking practices without governemnt meddling, but they do not subsidize housing in the name of 'social justice' or anything else, yet the percentage of citizens who owns their homes has been very steady for decades.
It was the meteoric rise in the percentage of home ownership rise in this USA which told everybody that a financial calamity of megacolossal proportions was a 100% certainty, but nobody in DC was willing to listen or to put a stop to it.
They've certainly never mandated quotas for home ownership based on race and income, and ordered financial institutions to lower their underwriting standards as politicians in this country have.
Is this a joke? Where do you think our manufacturing base has gone? What about IT and CSR's? Why do you think when you call up your "local" _______ company for customer service, the CSR has an Indian accent?
What makes you think they've outsourced those jobs because of our corporate tax rates? It's all about cheap labor, not corporate tax rates.
Again, if you can name a specific company that has left the U.S. because of our corporate tax rates, I'd like to know about it.
What makes you think they've outsourced those jobs because of our corporate tax rates? It's all about cheap labor, not corporate tax rates.
Again, if you can name a specific company that has left the U.S. because of our corporate tax rates, I'd like to know about it.
I must say, I'm really shocked that you're even questioning this as if it is some far-fetched idea. It's happening whether you want to believe it or not. Corporate interest rates have a HUGE effect on a company's bottom line. Why on Earth would you think otherwise?
Transocean Chief Executive Bob Long said in a statement in October, when it announced its move. "As a result, the redomestication (to Switzerland) will improve our ability to maintain a competitive worldwide effective corporate tax rate." Swiss cantons are free to set their own tax rates. For example in Zug, corporate tax is about 16 percent but can fall as low as 9.5 percent for companies that do most of their business outside Switzerland. That compares with an average global corporate tax rate of 25.9 percent, according to consultancy KPMG.
There are many more examples. Soon, Japan plans to lower their CITR by 5 percentage points leaving the US at the very top. Just 20 years ago, we were slightly below the average for all industrialized countries, but they (unlike us) realized that to spur economic growth in the global marketplace, a low CITR is vital.
Quote:
... it (the CITR) is a large determinant when businesses decide where to locate their next venture—and where they will hire new employees. The high rate in the U.S. is driving businesses and jobs to other countries. Those jobs will continue to flow to other countries if the U.S. insists on levying its self-defeating corporate income tax rate. It is long past time for Congress to lower the rate so it is equal or below the 25 percent average of our competitors. If it does not, businesses and jobs will continue their exodus to more friendly locales.
Look how we compare. Note the trend of the other countries in comparison to the US from 1990 to 2010. We were the ONLY country to RAISE our CITR over the past 20 years. Some countries have dropped theirs by double digit percentage points in the past twenty years. It has become extremely costly to do business in the US, and corporations have a choice. They can vote with their feet... and are.
Great!
Transocean Chief Executive Bob Long said in a statement in October, when it announced its move. "As a result, the redomestication (to Switzerland) will improve our ability to maintain a competitive worldwide effective corporate tax rate." Swiss cantons are free to set their own tax rates. For example in Zug, corporate tax is about 16 percent but can fall as low as 9.5 percent for companies that do most of their business outside Switzerland. That compares with an average global corporate tax rate of 25.9 percent, according to consultancy KPMG."
Sounds to me that they're looking for a free ride all the way. Do they plan to even HIRE anyone in Switzerland? Doesn't sound like it.
Whatyousay is correct; not only did Canada escape the worldwide recession because of extremely sound banking practices without governemnt meddling, but they do not subsidize housing in the name of 'social justice' or anything else, yet the percentage of citizens who owns their homes has been very steady for decades.
It was the meteoric rise in the percentage of home ownership rise in this USA which told everybody that a financial calamity of megacolossal proportions was a 100% certainty, but nobody in DC was willing to listen or to put a stop to it.
They've certainly never mandated quotas for home ownership based on race and income, and ordered financial institutions to lower their underwriting standards as politicians in this country have.
1. Canadian banks are regulated by the Office of the Superintendent of Financial Institutions, which set stricter capital standards (now made more uniform through Basel III)
2. The U.S. government never mandated "quotas" for home ownership, nor did it order banks to relax underwriting standards (And please don't try to quote the Community Reinvestment Act). The GSEs, however, did relax theirs.
Sounds to me that they're looking for a free ride all the way. Do they plan to even HIRE anyone in Switzerland? Doesn't sound like it.
Doesn't really matter, now does it? This is but one aspect of the effects of our tax code (corporate inversions). There is also the matter of foreign business buying/acquiring US companies which equate to corporate expatriations and essentially accomplish the same end result of tax revenue going to foreign countries as opposed to the US. This was the case with Daimler Benz AG-Chrysler and Amoco-British Petroleum. Then lastly there is the issue of new start up ventures. Intel's VP of Taxation made the following statement regarding this:
"If I had known at Intel's founding what I know today about international tax rules, I would have advised that the parent company be established outside the U.S. This reflects the reality that our tax code disadvantages multinationals simply because the parent is a U.S. corporation".
Essentially, any new business ventures would be stupid to headquarter their operations in the US given that our tax code punishes the corporation and they could receive a much more friendly tax status in just about every single country than in the US. It's high time our congressional leaders enact real tax reform to allow our corporations to compete on a level playing field. The risk is too high if we don't.
Here's a mini-list of some businesses that have engaged in corporate inversion taken from this presentation (also has a great overview of the problem - good read):
Doesn't really matter, now does it? This is but one aspect of the effects of our tax code (corporate inversions). There is also the matter of foreign business buying/acquiring US companies which equate to corporate expatriations and essentially accomplish the same end result of tax revenue going to foreign countries as opposed to the US. This was the case with Daimler Benz AG-Chrysler and Amoco-British Petroleum. Then lastly there is the issue of new start up ventures. Intel's VP of Taxation made the following statement regarding this:
"If I had known at Intel's founding what I know today about international tax rules, I would have advised that the parent company be established outside the U.S. This reflects the reality that our tax code disadvantages multinationals simply because the parent is a U.S. corporation".
Essentially, any new business ventures would be stupid to headquarter their operations in the US given that our tax code punishes the corporation and they could receive a much more friendly tax status in just about every single country than in the US. It's high time our congressional leaders enact real tax reform to allow our corporations to compete on a level playing field. The risk is too high if we don't.
Here's a mini-list of some businesses that have engaged in corporate inversion taken from this presentation (also has a great overview of the problem - good read):
Coopers Industries
Everest Re Group
Foster Wheeler
Fruit of the Loom
Global Crossing Ldt
Ingersoll Rand
Leucadia National Corp
McDermott Inc
Nabors Industries
Noble Drilling
Sante Fe International
Seagate Technologies
Trenwick Group
Triton Energy Corp
Tyco International
Veritas DGC
Weatherford International
Stanley Works
Of COURSE it matters! The premise of this thread is that low corporate tax rates bring jobs. OK..fine. Then you give me an example of a U.S. corporation that redomesticates in Switzerland that is doing so apparently for lower Corp tax rates....so the assumption is that they'll hire and produce there, right?
No, instead, they'll just set up corporate headquarters there and hire in some third world country for their production....at least that's what i get out of it when i read this (and YOU posted this): "For example in Zug, corporate tax is about 16 percent but can fall as low as 9.5 percent for companies that do most of their business outside Switzerland."
So some canton in Switzerland is gonna get as low as 9.5% in corporate tax revenue from Transocean, but isn't actually going to get anything more than a few office jobs? It doesn't escape me that Transocean is an oil exploration company, and Switzerland is landlocked. LOL...
Frankly, i don't care if American corps set up HQ's in other nations instead of domesticating here, as long as their jobs are here, which might surprise you. But you want them to get a free ride all the way. Again, they may have high corporate tax rates here, but it's EASILY offset by very low employee costs that they can't find in another first world nation. If they want to set up production in the Congo, then no matter how low our tax rates are, we can't beat that! That's obvious. And even if Transocean set up production in Switzerland with Swiss workers, even with a 9.5% Corp tax rate, the cost of Swiss workers would completely undermine that low rate to the point that there would be no tax benefit at all once it's all said and done.
That's my case for my opinion that American corps are getting an incredible deal here...even with our high tax rate.
Of COURSE it matters! The premise of this thread is that low corporate tax rates bring jobs. OK..fine. Then you give me an example of a U.S. corporation that redomesticates in Switzerland that is doing so apparently for lower Corp tax rates....so the assumption is that they'll hire and produce there, right?
No, instead, they'll just set up corporate headquarters there and hire in some third world country for their production....at least that's what i get out of it when i read this (and YOU posted this): "For example in Zug, corporate tax is about 16 percent but can fall as low as 9.5 percent for companies that do most of their business outside Switzerland."
So some canton in Switzerland is gonna get as low as 9.5% in corporate tax revenue from Transocean, but isn't actually going to get anything more than a few office jobs? It doesn't escape me that Transocean is an oil exploration company, and Switzerland is landlocked. LOL...
Frankly, i don't care if American corps set up HQ's in other nations instead of domesticating here, as long as their jobs are here, which might surprise you. But you want them to get a free ride all the way. Again, they may have high corporate tax rates here, but it's EASILY offset by very low employee costs that they can't find in another first world nation. If they want to set up production in the Congo, then no matter how low our tax rates are, we can't beat that! That's obvious. And even if Transocean set up production in Switzerland with Swiss workers, even with a 9.5% Corp tax rate, the cost of Swiss workers would completely undermine that low rate to the point that there would be no tax benefit at all once it's all said and done.
That's my case for my opinion that American corps are getting an incredible deal here...even with our high tax rate.
You're looking at this from a micro level and it's far too complex and multi-pronged to do so. There are many factors each with different effects on our economy. The only purpose for my posting companies that are moving out of the country was to show that it is happening since some posters (AUM) didn't believe this to be the case.
First of all, there is the issue of corporate tax revenues to the government. US based corps pay corporate income tax and foreign based ones do not pay CIT. Obviously, the more US based corporations paying tax revenue to the US (as opposed to the revenue going to other countries), the better. Established businesses that engage in corporate inversion by moving their headquarters overseas do so to avoid our very high corporate income tax rate. They may or may not move significant numbers of jobs with them, or they may continue to have the bulk of their operations in the US and keep jobs here. Foreign companies that purchased US companies will ultimately have the same result... no more corporate income taxes to the US government (which can be quite substantial). These corporations may or may not move their base of operations (and jobs) as well. Lastly, there is the issue of new, start up ventures. This is probably the most important as companies looking to establish themselves will likely seek out the most tax friendly countries in which to base their operations and it behooves them to keep their base of operations within the same country as their headquarters. End result... no new jobs for US employees. We should be seeking ways to entice new corporations into setting up shop in our country, not only for the corporate tax revenue, but also for the jobs they will bring. As it stands, the US is not a likely destination because of our complicated and disadvantageous tax code in comparison to other countries.
The two main issues are corporate tax revenues to the government paid by businesses headquartered in the US and also where the jobs will be located. The more jobs located here, the more taxpayers paying personal income taxes to the government. Two separate sources of revenue for the government that are not necessarily exclusive of one another for the reasons listed above.
Also, our unit labor costs are not out of line with other first world countries as you claim. Unit labor costs are the cost of labor input (all costs to the employer including salary, benefits, PTO, etc.) required to produce one unit of output. There is a wide variance between countries but it may surprise you to see that we do not have the lowest labor costs (or even close to it) among first world nations. You can read more about it here.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
