How to bring back jobs to USA (wages, interest, 300k)
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.
California is nice don't get me wrong but the high cost of production generally becomes a deterrence. Prop 13 did not help and frankly there is only so far SF and LA can go. I'm near Boston and frankly there is no real reason for a company to locate there. I worked in the past for the largest environmental service company in the country. It's based in Mass but the HQ moved from a town close to Boston to one much further out (a half hour). Why? The space for starters and also the traffic.
How does adding predictably to property taxes a problem?
One of the big complaints is Prop 13 is too generous to business since business property tends not to change ownership as frequently as residential property.
That is if the company wants to. The profitable business today mostly sit on their cash, not spend it to hire more like they use to.
If you know how to grow a business without incurring additional labor cost (ie expanding the workforce), every manager on Earth would pay you quite handsomely to share that knowledge.
And as far as "sitting on their cash," I'm sure the shareholders would be just fine with not receiving dividends so that the company can "sit on its cash."
How does adding predictably to property taxes a problem?
One of the big complaints is Prop 13 is too generous to business since business property tends not to change ownership as frequently as residential property.
Prop 13 inspired prop 2 1/2 in Mass.
Prop 13 was largely created to satisfy older generations that saw their property taxes rise. Naturally with age property taxes and regressive taxes (sales, meals, fuel) have a greater pain above all others.
Predictability to property taxes can be a problem because frankly local governments provide the greatest broad base of services to the public. Schools, police, fire, dpw, libraries etc.
The lack of income due to prop 13 led to some local governments in California to enact sales taxes and income taxes on both the local and county level. These add up and make matters even worse because one can opt out of a property tax by performing upkeep and selling the property thus it acts as an incentive.
New Hampshire is an example of a state property tax working. There is no income or sales tax. You don't like it? Fine do some upkeep and put it on the market and sell it.
In prop 2 1/2 in Mass taxes can go up 2.5% at most...unless there is an override. Sometimes it passes, sometimes it doesn't. Regardless though needs of local governments can often increase once a new project comes about. Let's say a new building needs to be made. Well increasing taxes can only go up so much. If it can go up further it can help because $1 today is worth more then tomorrow. Factor in interest rates and frankly it makes sense at this point to raise property taxes.
Property taxes can be pretty efficient whereas sales and income taxes not nearly as much. Sales taxes can be avoided by simply shopping by other venues. Going online, yard sales, flea markets etc. The underground economy is quite large on this. Income taxes have various exemption and discounts and frankly if someone is affluent then they don't have to pay it as most of their income is derived from capital gains and if someone is poor they do not either. Property taxes are simply. You own the property so therefore you pay the tax. Here is the assessed rate and the value of the property.
If someone cannot pay ultimately you can have tax taking and the local government can take the property. In terms of business sense it makes sense to tax something that can have value and be resold.
some of the issues I see in Mass are in gateway cities where frankly they do not have much of a tax base. Non profits come in which do help those in lower incomes but might not pay much even in pilot programs. It then gets to the point where the base gets smaller and gradually the state takes more control.
It is generally expected that towns and cities grow so unless construction adds to the number of properties taxes the only other way to expand the revenue is to raise the tax itself. Where I am we had to raise taxes and cut some spending to repair several school roofs. If we did not raise them we would not get the matching funds from the state.
Some of the answers we are going though here are regionalization which is odd because we abolished county government more then a decade ago. Certainly of course towns and cities themselves must work with each other but the loss of control but debasing funding forces services to be performed from county and state governments which are not as closer to the people they serve.
The reasons for Prop 13 overwhelming support 35 years ago were double digit tax increase, the Serrano Decision sending local tax dollars to Sacramento and several high profile cases of Assessment Fraud in the Assessor's office ending in convictions and suicides...
Prop 13 only sets the minimum Statewide Property rate and many cities have rates 50 or 60% higher than that with voter approval.
Prop 13 forces government to bring the voters on board...
The biggest negative always in the news is Prop 13 is a gift to business... it lets business enjoy low property taxes and over the years the bulk of property tax burden has shifted away from business to residential property...
I would be all for a higher property tax in California if we eliminated Income or maybe even a Sales Tax...
Just don't see this happening...
I live in SF Bay Area and the economy is booming... major companies are investing... Apple is seeking approval for it's mother ship world headquarters, Tesla is expanding, Startups are popping up everywhere all hoping to be the next Google...
If you know how to grow a business without incurring additional labor cost (ie expanding the workforce), every manager on Earth would pay you quite handsomely to share that knowledge.
And as far as "sitting on their cash," I'm sure the shareholders would be just fine with not receiving dividends so that the company can "sit on its cash."
They are sitting on it in the sense that they rather not create jobs or pay more because it will increase costs and possibly cause quarterly losses hurting their stock price.
I hardly think at this point that wages even with benefits included are enough to hurt a stock price. Class actions maybe but not labor costs.
Many companies are not creating jobs and rather just pile on work onto their existing workforce and if they do hire they pay pennies on the dollar because of the fact they think there is a larger supply and that is IF the job actually gets filled. I don't blame them for trying to pay less but they use the skills gap for why they can pay basement pay for the jobs.
They are sitting on it in the sense that they rather not create jobs or pay more because it will increase costs and possibly cause quarterly losses hurting their stock price.
You must understand that labor is an expense, just like materials, rents payable, etc. Like all other expenses, it must be kept to a reasonable level so as not to hurt profitability. If expenses (labor included) become disproportionate to revenues, cost-cutting measures must be enacted, or the business will fail - and all of the workers will be unemployed. For a real-life example of this, look no further than Detroit, MI. If the cost of labor is unnecessarily having a negative effect on profitability, it is the job of management to bring labor cost into line with the rest of the budget. If they don't, they will be fired, just as a front line employee would be fired for failure to do his/her job in a satisfactory manner.
Businesses will create jobs when expanding the workforce is necessary for the business to grow.
Businesses will raise wages/salary/commissions when doing so is necessary to recruit and retain talented employees.
Businesses are not obligated to do either, except when and to the extent that doing so benefits the bottom line. The company is in business for one reason: to turn a profit. The wise employee benefits from his employer's success by purchasing company stock, which gives him "skin in the game," and a quarterly dividend check.
I think the hard pill to swallow is when the company is cutting back, letting people go and then the CEO gets a 10 million bonus for making it profitable.
Still remember when Lee Iacocca took over Chrysler... he agreed to work for $1 and bet his fortune in stock... said we sink or swim together...
If you know how to grow a business without incurring additional labor cost (ie expanding the workforce), every manager on Earth would pay you quite handsomely to share that knowledge.
This has been happening all the time.....Increasing business and lowering labor costs.....It is called automation. As an example the average GM or Ford vehicle uses about half or less the amount of labor it cost 20 years ago.
Tesla is a good example of how automation is lowering companies labor costs, and to increase business (production) at the same time. This in turn increases profits, or allow companies to lower prices to increase business and thus increase profits.
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.
