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How government creates jobs by raising taxes (Page 3)
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Athens
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Sep 8, 2011, 03:04 PM
 
We will be able to see if high taxes have a effect on the movie industry here as well because the HST has been successfully appealed and this province is going back to the PST/GST system which means the movie industry is going to be paying more taxes again.

Film industry lobbying hard to keep HST

They claim we will lose 20% of the jobs in it. I suspect we wont see any real change. Its just fear mongering.
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turtle777  (op)
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Sep 8, 2011, 03:14 PM
 
Originally Posted by Athens View Post
Raising and lower taxes do not have a effect on employment. Targeted Tax cuts and incentives can introduce new industries to a market, especially mobile ones like the Film Industry.

Lower the taxes on Walmart, McDonalds, Cheveron, 7-11, Nike, Sony, Norco, is not going to create jobs
Targeted Tax cuts on a specific industry like Movie Production, something that is high risk, low gains where every dollar counts and your competing against other cities like Toronto and Los Angeles who are also playing the targeted tax cut game shows that targeted tax cuts work. So the statement about lowering and raising taxes is true. So is the statement of using targeted tax cuts on some industries is true. Does this clear up your confusion or should I draw it out with crayons to make it easier to understand?
What a load of bullshit.

This is a lowcheckit quality post.

You are completely contradicting yourself, trying to create an artificial difference between tax cuts and targeted tax cuts.

Here is the thing: looking at a limited geographical market (one city vs. another, one state vs. another), tax cuts or raises ABSOLUTELY affect employment within that limited geographical market.

Yes, there might be moves between markets, and NET among ALL markets, there might not be a change, but that's NOT what we're discussing here.
There is ALWAYS some place that doesn't raise taxes, and that place will benefit from whatever place that DOES raise taxes.
All your ULTRA-macroeconomic blah blah is completely theoretical, and has no bearing whatsoever on cities, states or the whole US.

-t
     
Athens
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Sep 8, 2011, 03:16 PM
 
Oh I just LOVE THIS!!!

According to the B.C. Film Commission, productions spent $1.022 billion in the province last year--$778 million of which was derived from foreign productions, primarily from the U.S. That was a drop from the $1.3 billion spent in 2009, which could be attributed to the fact that during the first quarter of 2010 Vancouver locations were off limits to film crews because of the Olympic Games. The Olympics delayed when features could start filming in Vancouver, and during the second half of the year, the industry picked up considerably with some studios turning away productions.

British Columbia has the third-largest film industry in North America, after Los Angeles and New York. The Lower Mainland has more than one-million-square feet of studio space, more than New York, and yet a lack of stage availability can still result in losing productions. Some Lower Mainland studios are planning to add more stages, assuming the demand continues.

"Going back to having the GST and PST will affect price-sensitive series such as Geek Charming and Rags... 30 to 35,000 jobs are supported by the film industry.

Those jobs are at risk if we get rid of the HST."
Now from a Producer himself

The Canadian dollar has fluctuated vastly since the film industry first came to B.C. four decades ago. However, during many of the years when the film industry was building in the Lower Mainland, a favourable Canada-U.S. exchange rate helped make the industry cost competitive to U.S. productions.

In those days, early commitments from television writer/creator Stephen J. Cannell helped put Vancouver on the map for TV series, starting in 1987 with Stingray, Wiseguy and 21 Jump Street. During that same period (1985-1992) MacGyver drew a lot of attention to Vancouver, followed by The X-Files (1993-2002), which filmed all but its last season in Vancouver.

"The lower Canadian dollar helped to attract films north of the border, and definitely a lower Canadian dollar helps us with our competitive advantage, but we live up to our promise in providing professional services and being the best value for a production's dollar," says Croome. "People aren't always going to go with the least expensive option."

Several elements factor into why productions choose B.C. These include tax credits, locations, studio availability, crews, and close proximity to L.A. (sharing the same time zone for conducting business).

"We have amazing geography in B.C., ranging from glaciers up north to the spectacular Rockies to the east, and a cosmopolitan city surrounded by forests," Croome says. "Besides locations, people in B.C. know how to work hard, and people know they'll have an excellent production experience here."

Independent producer Ralph Winter couldn't agree more. He's based in California, but has brought several blockbuster films to Vancouver, including three films in the X-Men franchise and two in the Fantastic Four series. Reached over the phone, one of the first things he says is that he's trying to get a Warner Bros Picture up to Vancouver.

"I am a real fan of filming up in Vancouver," Winter says. "You have good crews and it's always a good experience."

For the types of productions that Winter does, he appreciates the variety of locations, and especially likes Vancouver's downtown, saying it's a good match for New York, but not as difficult to film in as New York. The foreign tax rebates are another bonus he likes in B.C.--both on the production and post-production ends. "In this reduced economy, everyone is looking for nickels in the couch," he says. "Everyone is looking to get the most for their dollar."

That said, the three things that top his list when selecting a production centre are locations, crew and studios--all things he says Vancouver excels at. "It can't just be about tax rebates," Winter says. "Your infrastructure and crew base helps to minimize any issues with the currency."

Winter wasn't familiar with the HST and wasn't sure how much it would affect the large blockbusters he usually brings to Vancouver, but acknowledged that with some U.S. states aggressively trying to get a piece of the film industry and building new sound stages to attract productions, competition is intensifying.
Didn't even know about the HST which saved productions 7% and his first concerns where locations and crews... Very interesting.
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Athens
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Sep 8, 2011, 03:18 PM
 
Originally Posted by turtle777 View Post
What a load of bullshit.

This is a lowcheckit quality post.

You are completely contradicting yourself, trying to create an artificial difference between tax cuts and targeted tax cuts.

Here is the thing: looking at a limited geographical market (one city vs. another, one state vs. another), tax cuts or raises ABSOLUTELY affect employment within that limited geographical market.

Yes, there might be moves between markets, and NET among ALL markets, there might not be a change, but that's NOT what we're discussing here.
There is ALWAYS some place that doesn't raise taxes, and that place will benefit from whatever place that DOES raise taxes.
All your ULTRA-macroeconomic blah blah is completely theoretical, and has no bearing whatsoever on cities, states or the whole US.

-t
Show me where McDonalds and Walmart and a bunch of other service and resource based businesses HIRED people over tax savings vs passing the SAVINGS to SHARE HOLDERS. Come on show me... Im waiting. BUSINESSES HIRE TO SUPPLY DEMAND. Employment is based on product and service demand, PERIOD.
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Athens
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Sep 8, 2011, 03:28 PM
 
Targeted Tax cuts to bring in a refinery, Smelter and the sort of very specialized business does help. But logging companies don't need it. They go where the logs are regardless. Mining companies don't need it. They go where the ore is regardless of tax cuts. Retail does not need it. They go where the customers are and customer demand controls how retail expands and contracts. Energy companies don't need it. Heavy manufacturing is a industry that targeted tax cuts can be used to attract business but considering the labor costs in China are so much better, its doubtful tax cuts are going to stimulate any growth in this.

Its incredible to think that because of taxes that companies would stop cutting trees down. Stop selling logs. Stop mining ore. Close up retail shops or fire people hurting its own business. That Walmarts would close up and move away... If taxes had such a effect on business then North America and Europe would have NO jobs and Africa and Asia would be booming with a TON of employment. There is SOOO much more to consider for a business that is much more important then taxes yet you think Taxes play the most important consideration. Just blows my mind how your thinking process works. Its like your brain washed into some right wing Bible on how things should be totally ignoring the reality of how things are.
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Athens
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Sep 8, 2011, 03:31 PM
 
Tax rates affects prices, thats it. Lowering taxes = more profits to share holders. Raising taxes means price increases to customers. Thats how it works. Its as simple as that.
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Sep 8, 2011, 05:09 PM
 
Originally Posted by ebuddy View Post
I disagree with this breakdown for the reasons mentioned by Kerrigan et al. Demand indeed drives the economy. Demand is the product of consumer confidence and consumer confidence is the product of income stability and income stability is the product of stable employment.
Ok. I'm waiting for you to say something that "disagrees" with what I said.

Originally Posted by ebuddy View Post
When you create an environment (taxes/regulatory) more favorable to business, businesses will respond by attempting to grow because that's what they do. If you're not growing, you're dying. For example, I've not once worked for a company where "grow the business" wasn't the mantra. There are times however, when the environment causes enough concern that the mantra becomes "sustain the business". When the mantra moves from "grow" to "sustain", jobs are cut or new jobs halted (which equates to a cut because the available workforce continues to grow regardless of hiring), employment is unstable, incomes are unstable, and demand decreases.
Ahhhh ... now I see where you are going with this. Well let's take a step back and delve into whether or not the environment in the US is favorable to business? Consider this my friend ....

1. US Corporations are making record profits and sitting on trillions in cash.

On Friday the federal government released the latest chapter of a year-old economic mystery: If you're a corporation, the economy is great. If you're a worker, the economy is still pretty horrible. According to the Bureau of Economic Analysis, real corporate profits neared an all-time high in the last three months of 2010, with companies raking in an annualized $1.68 trillion in pre-tax operating profits. (After tax, that comes to $1.25 trillion, about equal to the GDP of India.) The Federal Reserve estimates that companies are sitting on about $1.9 trillion. At the same time, unemployment remains at 8.9 percent, and job growth is still anemic.
More Profits, Fewer Jobs - Slate

2. The US has one of the lowest effective tax rates in the developed world.

Historically, the term “tax rate” has meant the average or effective tax rate — that is, taxes as a share of income. The broadest measure of the tax rate is total federal revenues divided by the gross domestic product.

By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950, according to the Office of Management and Budget.

....

Yet if one listens to Republicans, one would think that taxes have never been higher, that an excessive tax burden is the most important constraint holding back economic growth and that a big tax cut is exactly what the economy needs to get growing again.

Just last week, House Republicans released a new plan to reduce unemployment. Its principal provision would reduce the top statutory income tax rate on businesses and individuals to 25 percent from 35 percent. No evidence was offered for the Republican argument that cutting taxes for the well-to-do and big corporations would reduce unemployment; it was simply asserted as self-evident.
Bruce Bartlett: Are Taxes in the U.S. High or Low? - NYTimes.com

Do the standard GOP talking points with regard to taxes intentionally mislead the Fox News crowd in particular and the larger public in general by failing to differentiate between the statutory tax rate (which is one of the highest in the world) and the effective tax rate? Well of course they do! The GOP is absolutely banking on the average Fox News viewer or Rush Limbaugh listener not understanding the difference. How else could they make the argument that US companies are over-taxed and maintain a straight face in the light of these facts?



3. Some of the largest, most profitable US companies pay no federal taxes at all.

General Electric, the nation’s largest corporation, had a very good year in 2010. The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.
G.E.’s Strategies Let It Avoid Taxes Altogether

4. 25 of the top 100 highest paid CEOs earned more than their companies paid in federal income taxes.

Top 25 CEOs earn more than their company's tax bills - chicagotribune.com

5. US companies are not investing in new workers in the US at a pace fast enough to lower the unemployment rate.

Companies that are looking for a good deal aren’t seeing one in new workers.

Workers are getting more expensive while equipment is getting cheaper, and the combination is encouraging companies to spend on machines rather than people.

“I want to have as few people touching our products as possible,” said Dan Mishek, managing director of Vista Technologies in Vadnais Heights, Minn. “Everything should be as automated as it can be. We just can’t afford to compete with countries like China on labor costs, especially when workers are getting even more expensive.”
Companies Spend on Equipment, Not Workers

6. US multinationals would rather not disclose where they are actually creating jobs (Hint: not in the US).

Some of the country’s best-known multi­national corporations closely guard a number they don’t want anyone to know: the breakdown between their jobs here and abroad.

So secretive are these companies that they hand the figure over to government statisticians on the condition that officials will release only an aggregate number. The latest data show that multinationals cut 2.9 million jobs in the United States and added 2.4 million overseas between 2000 and 2009.

Some of the same companies that do not report their jobs breakdown, including Apple and Pfizer, are pushing lawmakers to cut their tax bills in the name of job creation in the United States.
Corporations pushing for job-creation tax breaks shield U.S.-vs.-abroad hiring data - The Washington Post

So DESPITE the Bush Tax Cuts these companies steadily outsourced US jobs overseas .... even though the US presents a business environment WRT taxes that is one of the most favorable in the world.

Given #1 - 6 I truly don't see how one can credibly argue that yet another tax cut is the answer to the high unemployment rate. Not with the massive disparity between the wage structure in the US and Asia (e.g. China). I stand by what I said earlier ...

Originally Posted by OAW
My argument from the very beginning is that an economy as large and complex as the USA's … especially in the context of a global economy … doesn't lend itself to simplistic notions about the impact of tax policy on the unemployment rate one way or the other.
Again ... my position here is not that tax rates have no impact whatsoever on the unemployment rate. What I'm saying is that the hiring decision is based on a number of factors. And factors like demand, labor costs, skill set matches between available positions and the available labor pool, etc. play a much larger role than tax rates.

Originally Posted by ebuddy View Post
Modern Drop Forge leaves Illinois and moves operations to Indiana employing 240 new people. CME "eyeing an exit" claims the Chicago Tribune. Sears, Motorola, Caterpillar, Navistar, Mitsubishi, US Cellular, Jimmy Johns, Continental Tire... all expressing a desire to leave Illinois specifically because of the tax environment. I'm sure some pretty sweet deals have been made to keep them, but that's just an additional, unnecessary give-away on the backs of taxpayers when the culprit was a naive tax environment to begin with. This is going to get worse for Illinois before it gets better and the surrounding States know it. They're wooing businesses out of Illinois and it's paying off for them.

This is failed ideology manifest in a failing economy.
What you are describing here is the classic "race to the bottom" when it comes to tax policy. What often gets lost in the shuffle when such points are made is that most often such moves don't result in net job creation. The jobs are just shifted from one place to another. Much like most of the private sector jobs created under Gov. Perry in Texas. A "race to the bottom" among US states and municipalities when it comes to taxes. A "race to the bottom" among the US and developing nations when it comes to wages. Cities forking over all sorts of tax incentives and in some cases direct taxpayer funding to build new stadiums for billionaire owners of sports teams ... either as an attempt to lure a team to relocate or as a blackmail payment to prevent a team from leaving. All in anticipation of a net job creation or positive economic impact that typically doesn't materialize to the degree necessary to cover the cost. And it's the school systems that suffer for years due to the loss of revenue. Municipalities poaching big box retailers from each other by offering TIF money ... resulting in no net job creation FOR THE REGION ... just continued sprawl and crumbling roads and bridges. I'm not sure what can be done about this if naive state and local politicians insist upon playing this game. Illinois is trying to close a huge budget deficit brought on by the Great Recession. Apparently the government has decided that additional tax revenue would be less of a burden than draconian cuts to government services and the safety net impact of massive layoffs. We'll see how it all pans out.

OAW
( Last edited by OAW; Sep 8, 2011 at 06:28 PM. )
     
Athens
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Sep 8, 2011, 06:10 PM
 
Well Said!
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Sep 8, 2011, 06:10 PM
 
That was epic, OAW.
     
turtle777  (op)
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Sep 8, 2011, 06:27 PM
 
Originally Posted by Athens View Post
Show me where McDonalds and Walmart and a bunch of other service and resource based businesses HIRED people over tax savings vs passing the SAVINGS to SHARE HOLDERS. Come on show me... Im waiting. BUSINESSES HIRE TO SUPPLY DEMAND. Employment is based on product and service demand, PERIOD.
Face-2-Face retail/services is an EXCEPTION. This has already been mentioned.

Taxes effecting new hires have definitely an effect on manufacturing industries and most services that involve intangible goods.

Can we now get past Walmart and McDonalds ?

-t
     
Athens
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Sep 8, 2011, 07:26 PM
 
Again your wrong. Cost of labor, red tape, regulations, demand for service or material affect hires. I work in manufacturing and I can promise you the largest thing to affect Jobs where I work is demand for products and how many people it takes to man the equipment to produce the product. Shipping costs and fuel costs have a larger effect on the business then taxes. Increase costs in shipping, fuel and even taxes just gets rolled into the products price. The ONLY thing that affects man power here is when we are running at half capacity or full capacity.

You forget the drive for business is to make as much profit as possible. If that means centralizing positions to reduce labor costs, and adding machines that require less people to operate them this will result in less jobs, lost jobs for ever. Absolutely NOTHING in the tax system will change this or the number of people working here. If taxes went up by 8% tomorrow the price of product would just raise to compensate for it. No one would be let go. If taxes dropped by 8% it would mean nothing for hiring some one. Prices wouldn't go down, the extra savings would be given to share holders or retooling equipment to reduce the labor force by some more. If customers stop needing us and equipment is idle, people get let go. If we get a lot of demand and need to run the equipment to full capability people get hired. Its Supply and Demand that affects jobs. NOT Taxes.
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Athens
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Sep 8, 2011, 07:39 PM
 
Another case in point. Alberta

Alberta Finance and Enterprise - Taxes & Rebates - Alberta's Tax Advantage

Alberta has a single rate tax system, the highest basic exemptions in Canada, no health care premium at all, no sales tax, the lowest gasoline tax rate and low property taxes. Meanwhile its business have a low corporate income tax rate, no capital tax, no sales tax, no payroll tax and lowest gasoline costs in Canada.

Yet BC which has way more in taxes has more economic activity then Alberta (excluding oil GDP), more people too. Ontario which is pretty high on taxes is the economic center of the entire nation with Toronto representing 1 entire quarter of GDP. If tax rates was such a important factor the entire country, people and business would have moved to Alberta now.

I personally don't care enough about saving on 7% sales tax, $700 in medical premiums each year, the 30-40 cents per L of higher gas or the basic exemptions enough to move to Alberta. Neither do 31 Million other Canadians who live in higher taxed provinces.

What would I save if I lived in Alberta
$1300 from PST sales tax in BC
$700 on Medical premiums
$800 on Gasoline costs
$600 on income tax

So I would save at least $3400.00 a year living in Alberta. I just don't care enough to live there. A lot of other things matter to me then just money. Explain to me why 31 Million Canadians are happy paying more in taxes when they have the option to move to just a low tax place....
( Last edited by Athens; Sep 8, 2011 at 07:49 PM. )
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turtle777  (op)
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Sep 8, 2011, 07:59 PM
 
Originally Posted by Athens View Post
Again your wrong. Cost of labor, red tape, regulations, demand for service or material affect hires. I work in manufacturing and I can promise you the largest thing to affect Jobs where I work is demand for products and how many people it takes to man the equipment to produce the product. Shipping costs and fuel costs have a larger effect on the business then taxes. Increase costs in shipping, fuel and even taxes just gets rolled into the products price. The ONLY thing that affects man power here is when we are running at half capacity or full capacity.

You forget the drive for business is to make as much profit as possible. If that means centralizing positions to reduce labor costs, and adding machines that require less people to operate them this will result in less jobs, lost jobs for ever. Absolutely NOTHING in the tax system will change this or the number of people working here. If taxes went up by 8% tomorrow the price of product would just raise to compensate for it. No one would be let go. If taxes dropped by 8% it would mean nothing for hiring some one. Prices wouldn't go down, the extra savings would be given to share holders or retooling equipment to reduce the labor force by some more. If customers stop needing us and equipment is idle, people get let go. If we get a lot of demand and need to run the equipment to full capability people get hired. Its Supply and Demand that affects jobs. NOT Taxes.
Bla bla bla. You always throw in your limited economic knowledge and the kitchen sink, until everything becomes blurred and confusing.

Taxes going down by 8% means 8% more profit. It's simple as that.
Companies take advantage of that, therefore, it affects employment in one geographical region. Period.

Again, STOP looking at the über-macro picture.
It's one city vs. another: lower taxes win, attract business, create employment.
The other city loses. So the city with the lower taxes wins.

-t
     
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Sep 8, 2011, 11:18 PM
 
Originally Posted by ebuddy View Post
You failed the sanity test.
It's amazing you failed the sanity test and reading comprehension test.

You didn't even answer the question.
Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
     
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Sep 8, 2011, 11:19 PM
 
Originally Posted by turtle777 View Post
eBuddy, how much more drivel from lowteckit until you put him on ignore ?

Just wondering...

-t
Hey TURDle. I'll engage in TURDle's childish games.
Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
     
hyteckit
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Sep 8, 2011, 11:33 PM
 
Originally Posted by turtle777 View Post
Bla bla bla. You always throw in your limited economic knowledge and the kitchen sink, until everything becomes blurred and confusing.

Taxes going down by 8% means 8% more profit. It's simple as that.
Companies take advantage of that, therefore, it affects employment in one geographical region. Period.

Again, STOP looking at the über-macro picture.
It's one city vs. another: lower taxes win, attract business, create employment.
The other city loses. So the city with the lower taxes wins.

-t
TURDle logic.

A 8% tax cuts for companies losing money in a down economy doesn't mean 8% more profit. Haha..

What those companies want are more consumer spending and more consumer demand. Not tax cuts.
More demand for their products/services mean cheaper cost of doing business because of economies of scale.

Companies invest in more employee because of a need or demand for more employees. This is driven by a demand for their products/services.

Companies maximize profits. Even if taxes is lower by 8%, companies will still layoff employees because the demand for the products/services have gone down.

I don't open up a store at a location just because of lower taxes. Would I open up a store at a location just because rent is cheaper? Why would any company pay extra to open up a store at a prime location? Because of demand for their product/service at that location.


TURDle logic always fail.
Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
     
hyteckit
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Sep 9, 2011, 12:13 AM
 
Originally Posted by turtle777 View Post
I'm sorry, but what you said doesn't make sense: cost of employees (labor) is also in COGS.

The rest is too convoluted.

-t
Well, everything is too convoluted or complicated for TURDle's brain.

TURDle needs to go back and take accounting 101.

Cost of labor is only included in COGS if the labor was use to produce or assemble the goods. This generally applies to manufacturing and mining operations. Small merchandisers (wholesalers, retailers, etc.) usually do not have labor costs that can properly be charged to cost of goods sold. Indirect labor costs such as management, administrative, sales, etc. are typically reported in SG&A.

Cost of Goods Sold and the Tax Gap
Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
     
hyteckit
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Sep 9, 2011, 12:44 AM
 
Originally Posted by turtle777 View Post
What a load of bullshit.

This is a lowcheckit quality post.

You are completely contradicting yourself, trying to create an artificial difference between tax cuts and targeted tax cuts.

Here is the thing: looking at a limited geographical market (one city vs. another, one state vs. another), tax cuts or raises ABSOLUTELY affect employment within that limited geographical market.

Yes, there might be moves between markets, and NET among ALL markets, there might not be a change, but that's NOT what we're discussing here.
There is ALWAYS some place that doesn't raise taxes, and that place will benefit from whatever place that DOES raise taxes.
All your ULTRA-macroeconomic blah blah is completely theoretical, and has no bearing whatsoever on cities, states or the whole US.

-t
Another TURDle quality post. Macroenomics too complicated for TURDle.

TURDle just admit he knows nothing about creating jobs. So TURDle thinks his thread is not about creating jobs, but about shifting jobs from one city to another city, or state to another state.

Who's contradicting themselves now? The title is about creating jobs right?

TURDle wants a race to the bottom plan that doesn't create jobs, just city and states competing for the same jobs by lowering employee salary and lowering tax revenues for governments.
Bush Tax Cuts == Job Killer
June 2001: 132,047,000 employed
June 2003: 129,839,000 employed
2.21 million jobs were LOST after 2 years of Bush Tax Cuts.
     
Athens
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Sep 9, 2011, 01:22 AM
 
Originally Posted by turtle777 View Post
Bla bla bla. You always throw in your limited economic knowledge and the kitchen sink, until everything becomes blurred and confusing.

Taxes going down by 8% means 8% more profit. It's simple as that.
Companies take advantage of that, therefore, it affects employment in one geographical region. Period.

Again, STOP looking at the über-macro picture.
It's one city vs. another: lower taxes win, attract business, create employment.
The other city loses. So the city with the lower taxes wins.

-t
Again your wrong, your limited knowledge on reality is astonishing. Either your a business owner who wants tax cuts to pocket pretending to be this obtuse to serve your own interests or are really clueless at how business works. Having owned my own business and work with senior management for a major international American corporation and have seen first hand the decision making related to hires, terminations and investment I can tell you first hand your wrong wrong wrong wrong.

It taxes go down 8% one of 2 things happen. Either the new profits go into share holders hands or debt payments OR investment in machinery that helps reduce the labor needed saving the business a lot of money. Labor is the most costly part of business. They don't seek out ways to increase the head count they seek out ways to reduce it. If taxes go up 8% profit is not hurt because the added cost from the taxes are worked into the price of goods and services. The consumer and customer picks up the cost of a tax increase.

If a business is looking at 2 different cities, while taxes are a consideration, location, services, political environment, economic environment are much larger considerations. Case in point lets compare Edmonton and Vancouver. Hands down Edmonton in Alberta wins on the tax front. Its a much lower tax environment and a much more friendly business environment. Its why most Canadians can't stand Alberta because its more American then many American states. Yet for a Trucking business location matters and Vancouver is a much better location to operate out of because of back hauls. Especially in the Winter time trucking companies absolutely hate sending loads to other locations from Edmonton because they don't have enough back hauls for return trips. Trucks go to back to Edmonton empty. Running out of Vancouver is a much more viable option even with the higher taxes because trips from Vancouver almost always results in return loads. I know this first hand because my high school friend made the mistake of opening his Trucking company originally in Edmonton because it was cheaper. He had to move his business back to Vancouver a few years later because it was costing him triple to operate out there due to location not taxes.

Deal with the US, again Vancouver is a more viable location due to the fact its on the US border. So the more expensive city wins out many times due to other reasons. Just like that previous post above about the Film Industry. Even with the cheaper tax the producer was not even aware of it, the one that was just repealed. From his own mouth location, crews and studios are the first things he looks at.

Your living in a fantasy. Taxes are not enough of a burden to decide where a business setups shop. And considering all the loop holes related to taxes, look at GE which paid almost nothing in taxes because the 1000 accountants it has finds every loop hole possible to avoid taxes, its not a big issue for a business. Resource based industry goes where the resources are. Retail will open up in both cities the cheaper one and the more expensive one as long as customer demand allows it to operate. Large manufacturing businesses will go where it makes sense. It makes more sense to open up a manufacturing business on the East coast if the products are in the most demand on the east coast due to population vs a tax cheaper west coast location.

Something like a Data Center will go where the land is cheapest and the labor is cheapest.

If the world worked like your Fantasy, every business in Canada and every person in Canada would working and living in Alberta. Same goes for which ever US state is the cheapest and friendliest. Since that does not happen you are wrong.

Microsoft which operates out of Washington State finds ways to claim taxes from another state through loop holes. Its operations are out of Washington though. Companies are creative on dealing with Taxes, it does not factor in nearly as much as location, resources, politics, customers.
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Sep 9, 2011, 10:56 AM
 
You're running and arguing in circles.

Since you have nothing new to add, and fail to convince anyone except lowteckit and OAW, I'm not going to go back and forth on it with you.

-t
     
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Sep 9, 2011, 11:27 AM
 
Originally Posted by Athens View Post
Again your wrong... Again your wrong...
Am I the only one who finds this funny?
     
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Sep 9, 2011, 11:29 AM
 
Well, I didn't want to mention it, but his spelling and grammar is on par with the power of his arguments.

-t
     
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Sep 9, 2011, 01:29 PM
 
So it would appear that the "quality" of an argument is predicated upon its ability to "convince" he who has demonstrated more of a penchant for dismissal than rebuttal? Interesting ...

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Sep 9, 2011, 03:01 PM
 
Originally Posted by turtle777 View Post
And don't tell my about how finances, cost structures and P&L calculations work.
I've been working in finance and controlling for 15 years.
Worldcom? Enron?

Sorry Turtle, just a joke.
     
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Sep 9, 2011, 03:42 PM
 
Well it is a argument on hypothetical. You have 2 positions. One from Turtle and ebuddy that Tax levels play a major factor in conducting business, larger then supply and demand, location and resources. And you have our position which Tax levels play a much smaller factor in conducting business.

Then you have the reality which one side seems to totally ignore, that supply and demand is what decides on job numbers not taxes.

I don't dismiss everything Turtle and ebuddy says. Tax levels do affect "SOME" kinds of industry. The im-pass I have with them is the difference between targeted tax cuts vs across the board tax cuts. They have a position that every business deserves a tax cut. Going back to my previous point, falsely thinking it will create jobs ignoring the supply and demand fact.
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Sep 9, 2011, 05:42 PM
 
Originally Posted by Athens View Post
I don't dismiss everything Turtle and ebuddy says. Tax levels do affect "SOME" kinds of industry. The im-pass I have with them is the difference between targeted tax cuts vs across the board tax cuts. They have a position that every business deserves a tax cut. Going back to my previous point, falsely thinking it will create jobs ignoring the supply and demand fact.
Well, thanks. Now we're on the same page.

And I NEVER said that "every business deserves a tax cut". I also never said that ALL tax cuts will result in more hiring.

My position is that tax cuts have the propensity to effect unemployment in a limited geographic region due to companies taking advantage of arbitrage opportunities.

You originally said that lower taxes would NEVER result in more employment.
That position is wrong, albeit, mostly because you chose to make an absolute statement.

-t
     
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Sep 9, 2011, 10:21 PM
 
Originally Posted by OAW View Post
Ahhhh ... now I see where you are going with this. Well let's take a step back and delve into whether or not the environment in the US is favorable to business? Consider this my friend ....
1. US Corporations are making record profits and sitting on trillions in cash.
Actually, this isn't quite true. We've been over this. Neither rich people nor companies "sit" on cash. Don't buy the nonsense.

Who Says Companies aren't spending? ~ New York Times
  • The third quarter is on track to be the busiest period for mergers and acquisitions since the spring of 2007. About halfway in, some $194 billion in M.& A. deals have been announced, versus $269.8 billion in the full second quarter.
  • For example, Google announced a planned $12.5 billion acquisition of the mobile phone maker Motorola Mobility.
  • Domestic companies are on track to post their first year of $1 trillion or more in deal activity since 2006.
  • In June, manufacturing and trade sales rose more than 12 percent from June 2010, according to the most recent Census Bureau data. Stripping out petroleum products, whose value was recently inflated by high oil prices, this is still the highest level for business sales in more than five years.
The problem is an Administration bent more on ideology and forcing dependency than empowering individuals in a free market society. Not only has the (strings attached) massive infusion of funds failed, there is more in the offing promising a plummeting dollar in the face of an Obamacare boondoggle these businesses are attempting to hedge against. I'm watching this firsthand with my employer and reading numerous accounts from the business community, they're all saying the same things. They have zero confidence in this Administration's domestic agenda and the prospect of having to pay more per employee fuels the need to keep less employees on the books. The ideology constitutes an expensive agenda that requires the government to repeatedly dip from one of two wells when the cup runs low; borrowing or taking. Actually, both although very complex in nature.

2. The US has one of the lowest effective tax rates in the developed world.
Bruce Bartlett: Are Taxes in the U.S. High or Low? - NYTimes.com

Do the standard GOP talking points with regard to taxes intentionally mislead the Fox News crowd in particular and the larger public in general by failing to differentiate between the statutory tax rate (which is one of the highest in the world) and the effective tax rate? Well of course they do! The GOP is absolutely banking on the average Fox News viewer or Rush Limbaugh listener not understanding the difference. How else could they make the argument that US companies are over-taxed and maintain a straight face in the light of these facts?
Unfortunately, many who watch Fox News and listen to Rush Limbaugh also know about repatriation, simplifying the code, lowering the rate for all instead of picking winners and losers, a government focused on fundamentals... and a wealth of facts around each using a little snark to exploit the hypocrisy of the left; a dangerous package that simply must be invoked in the left's daily, silo'd vernacular because of a pathological fear of contrarian thought. If I didn't know you or had less in common, I'd say your little tirade was beneath you.

Then, in the left's firm grip on the US economy we find:
- Some of the largest, most profitable US companies...
- G.E.’s...
- 25 of the top 100 highest paid CEOs...
- Top 25 CEOs...

Was it Krugman or your preferred economists (policy-makers) that neglected to tell you that small businesses represent more than 99% of all firms and create 60-80% percent of the net new jobs? Perhaps you've been taken by the words of Warren Buffet while his little mom and pop - Berkshire Hathaway negotiates $1 billion in back-taxes from 2002 with the IRS or maybe it was someone with less integrity like Timothy Geithner?

Your statutory vs effective rates are essentially meaningless in the large scheme of things anyway. One car lot gives you a 35% cumulative discount over 180 days by completing a 55,000 page rebate form (sometimes more than once) and the other just gives you a 29% discount OAW; which one are you going to buy from? You may want to lawyer-up if you're shopping at the former. Winners!

3. Some of the largest, most profitable US companies pay no federal taxes at all.
G.E.’s Strategies Let It Avoid Taxes Altogether
Winners! This is why you'll hear GE's Jeffrey Immelt say; the actions of the Obama administration have been "powerful and helpful" to General Electric. After all, he's now the head of Obama's economic advisory panel, major recipient of TARP, allowed to raise money at artificially low rates, and avoid bailout restrictions other TARP recipients couldn't. I wonder how many green jobs and union giveaways we'll find in Obama's latest gem. Bolstering the absolute least sustainable segments of the economy.

4. 25 of the top 100 highest paid CEOs earned more than their companies paid in federal income taxes.

Top 25 CEOs earn more than their company's tax bills - chicagotribune.com
And that matters to... Are you donating your surplus after living expenses?

5. US companies are not investing in new workers in the US at a pace fast enough to lower the unemployment rate.

Companies Spend on Equipment, Not Workers
Blame-shifting for bad, unsustainable monetary policy.

Government Spends on Shrimp Treadmills and Jell-O wrestling in Antarctica, Not Small Businesses

6. US multinationals would rather not disclose where they are actually creating jobs (Hint: not in the US).

Corporations pushing for job-creation tax breaks shield U.S.-vs.-abroad hiring data - The Washington Post
From your article - Corporations pushing for job-creation tax breaks shield U.S.-vs.-abroad hiring data - The Washington Post: Some of the same companies that do not report their jobs breakdown, including Apple and Pfizer, are pushing lawmakers to cut their tax bills in the name of job creation in the United States.

Gee it's such a friendly environment in the US, I wonder why not? I know... it's Fox News and Rush Limbaugh's fault.

So DESPITE the Bush Tax Cuts these companies steadily outsourced US jobs overseas .... even though the US presents a business environment WRT taxes that is one of the most favorable in the world.
Right, that's why one leftist neglects $1 billion in back-taxes and the other is reluctant to disclose their hiring abroad. Could it be perhaps, just for a second, that the US does NOT represent one of the most favorable business environments in the world WRT taxes and a host of other bad Fed policies?

Given #1 - 6 I truly don't see how one can credibly argue that yet another tax cut is the answer to the high unemployment rate. Not with the massive disparity between the wage structure in the US and Asia (e.g. China). I stand by what I said earlier ...
Because this Administration has chosen the wrong winners, that's all. We've been trying to tell you all along, Obama's a sucky President. You didn't like it when Bush was in there either so whose side are you on anyway?

Again ... my position here is not that tax rates have no impact whatsoever on the unemployment rate. What I'm saying is that the hiring decision is based on a number of factors. And factors like demand, labor costs, skill set matches between available positions and the available labor pool, etc. play a much larger role than tax rates.
... and just when you were on a roll with the links.
  • Demand; consumer confidence. Have you seen the polling numbers on Obama's approval rating WRT the economy?
  • Labor costs; ummm, what we've been talking about.
  • Skill set matches for the benefit of the labor pool; immigration reform. Lest we forget the multinationals of another kind.

What you are describing here is the classic "race to the bottom" when it comes to tax policy. What often gets lost in the shuffle when such points are made is that most often such moves don't result in net job creation. The jobs are just shifted from one place to another. Much like most of the private sector jobs created under Gov. Perry in Texas. A "race to the bottom" among US states and municipalities when it comes to taxes. A "race to the bottom" among the US and developing nations when it comes to wages. Cities forking over all sorts of tax incentives and in some cases direct taxpayer funding to build new stadiums for billionaire owners of sports teams ... either as an attempt to lure a team to relocate or as a blackmail payment to prevent a team from leaving. All in anticipation of a net job creation or positive economic impact that typically doesn't materialize to the degree necessary to cover the cost.
Hmm. Jobs shifted from one place to another; you mean from a 2-year building project to gainful, tenured involvement in a private firm. Jobs can shift any way they want as long as they're shifting from less jobs to more jobs. There's a measurement for this sort of thing and I can see why the blame-shifting machine is in full throttle.

it's shifting All in anticipation of a net job creation or positive economic impact that typically doesn't materialize to the degree necessary to cover the cost. Do you have a link for this? Otherwise, it's the same picture of croneyism you see at the Federal level, only on a less grand, more transparent scale.

Granted, while I'm not a huge fan of State and City spending either; if given the choice between State taxing and spending or Federal taxing and spending, I choose State. As if a race to the bottom is any worse than a race to knock the top, down.

And it's the school systems that suffer for years due to the loss of revenue.
FUD. How much is enough? $15k per student? $20k per student? What have we been telling you about these failed institutions? The revenue hasn't been lost in the giver, it has been lost in the system at great loss to the giver on many levels.

Municipalities poaching big box retailers from each other by offering TIF money ... resulting in no net job creation FOR THE REGION ... just continued sprawl and crumbling roads and bridges. I'm not sure what can be done about this if naive state and local politicians insist upon playing this game. Illinois is trying to close a huge budget deficit brought on by the Great Recession. Apparently the government has decided that additional tax revenue would be less of a burden than draconian cuts to government services and the safety net impact of massive layoffs. We'll see how it all pans out.
TIF is a public financing method which has been used as a subsidy for redevelopment and community improvement projects. As if we haven't been watching it pan out in real time. $250,000.00 for two years of employment at $60k a year. I wonder which party invented the ideal and in which States/Cities it is most used, do you know OAW? *Illinois seems to be the poster child of it.

Big fans of Fox News and Rush Limbaugh there no doubt, every last one of 'em.
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Sep 10, 2011, 01:52 AM
 
Originally Posted by turtle777 View Post
Well, thanks. Now we're on the same page.

And I NEVER said that "every business deserves a tax cut". I also never said that ALL tax cuts will result in more hiring.

My position is that tax cuts have the propensity to effect unemployment in a limited geographic region due to companies taking advantage of arbitrage opportunities.

You originally said that lower taxes would NEVER result in more employment.
That position is wrong, albeit, mostly because you chose to make an absolute statement.

-t
Ok I lumped your position in with ebuddy, for that I am sorry. Whats your position on general tax cuts for all businesses vs targeted ones at those that would benefit the economy?
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Sep 10, 2011, 02:02 AM
 
FUD. How much is enough? $15k per student? $20k per student? What have we been telling you about these failed institutions? The revenue hasn't been lost in the giver, it has been lost in the system at great loss to the giver on many levels.
Wow something we agree on, the sky is falling...
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Sep 10, 2011, 10:08 AM
 
Originally Posted by Athens View Post
Ok I lumped your position in with ebuddy, for that I am sorry. Whats your position on general tax cuts for all businesses vs targeted ones at those that would benefit the economy?
I'm generally against targeted tax cuts because they are nothing more than politicians picking winners and losers.

In theory, I would be for it in some select cases, but in real life, the motivations behind it are neither rational nor economically beneficial. In most cases, targeted tax cuts are nothing but politicians buying favors and trying to protect their own asses. Those tax cuts are a waste of money, let alone, unfair.

Therefore, I'm more for general tax cuts. Let the businesses win and prosper on their own merits.

-t
     
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Sep 10, 2011, 11:05 AM
 
Originally Posted by turtle777 View Post
eBuddy, how much more drivel from lowteckit until you put him on ignore ?

Just wondering...

-t
It's a good question turtle.

I used ignore on a chunk of members that seemed to be gunning for my bannination over a year ago. I had never placed anyone on ignore prior to that and only had this cluster on ignore for about a week. No matter how painful or embarrassed I may have become for them, I decided I needed to see what they had to say along with the rest of the forum. This would fuel my passion to cultivate their ignorance and naiveté so the elders of their ilk would see that the ideology is founded less on the optimistic sages of progressive academia as that can too easily be proven dubious, but on the youthful angst of perceived disenfranchisement and boredom.

i.e. it's a labor of love; fathering those in need unto proper adulthood and common sense.
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Sep 12, 2011, 01:19 PM
 
@ebuddy

Let's get to the crux of the matter. I posted the following ....



To which you responded ....

Originally Posted by ebuddy
Unfortunately, many who watch Fox News and listen to Rush Limbaugh also know about repatriation, simplifying the code, lowering the rate for all instead of picking winners and losers, a government focused on fundamentals... and a wealth of facts around each using a little snark to exploit the hypocrisy of the left; a dangerous package that simply must be invoked in the left's daily, silo'd vernacular because of a pathological fear of contrarian thought. If I didn't know you or had less in common, I'd say your little tirade was beneath you.
You make some valid points WRT to repatriation and the complexity of the tax code. However, the only position I was taking is that in the context of a global economy .... especially considering the massive disparity in wage structure between the US and Asia (i.e. China) along with the trade deficit resulting from Chinese currency manipulation .... there are a variety of factors that impact net job creation in the US. And many of them play a much larger role than tax policy ... as evidenced by the distinct lack of net job creation in an economic environment that already has the second lowest tax burden in the developed world. Therefore I take issue with this simplistic notion being bandied about on the right that "Tax Cuts = New Jobs. Always and forever." I trust that you can understand where I'm coming from and why I'm taking a position that, quite frankly, I think is a lot more balanced and nuanced than the bumper sticker mentality we so often see on the left and the right. But if you disagree, then please explain why you think a tax cut in the existing system* will automatically result in net job creation in the US in an economic environment that is not showing any signs of significant increase in private sector demand?

OAW

* While you and I are likely in agreement that abandoning the existing tax code and replacing it with something that is simpler, more efficient, broadens the tax base while lowering rates, and gets out of the business of picking winners and losers in the private sector ... that's a different issue IMO.
( Last edited by OAW; Sep 12, 2011 at 01:34 PM. )
     
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Sep 12, 2011, 03:00 PM
 
Originally Posted by OAW View Post
Therefore I take issue with this simplistic notion being bandied about on the right that "Tax Cuts = New Jobs. Always and forever."
Surely you mean "Tax Cuts = New Jobs. All other things being equal."
     
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Sep 12, 2011, 03:16 PM
 
Tax cuts = Job Shifts, not new jobs. Mostly supply and demand create or retract jobs.
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Sep 12, 2011, 03:21 PM
 
Originally Posted by Athens View Post
Tax cuts = Job Shifts, not new jobs. Mostly supply and demand create or retract jobs.
Many times, yes, but not always.

However, as long as we are losing jobs to other countries due to high taxes, why no "shift" them back ?
(Same applies to jobs lost due to onerous regulations, policies, government interference etc...)

-t
     
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Sep 12, 2011, 04:49 PM
 
Originally Posted by turtle777 View Post
Many times, yes, but not always.

However, as long as we are losing jobs to other countries due to high taxes, why no "shift" them back ?
(Same applies to jobs lost due to onerous regulations, policies, government interference etc...)

-t
I said mostly because I knew you would hit me on that Yes but not always. Taxes are not the cause of the shift. Labor costs are. The west is at a unfair disadvantage over China and other countries with low cost working conditions. You can't bring back 12.00 a hour jobs from a market people get paid $2.00 a day with tax cuts. Or where environmental and safety standards result in tens of thousands to hundreds of thousands in costs from a environment that has next to no standards and no costs involved.

Would stream lining regulations and policies be good? You bet, I think you and agree on that. But even streamlined we will still have related costs for safety and environmental protection that puts us at a disadvantage. Besides Automation is becoming a bigger problem. Even people in China are losing jobs due to it. As companies streamline jobs will get lost as productivity increases. I think we just have to be prepared for a world that requires fewer workers to achieve the same or more productivity.
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Sep 12, 2011, 05:04 PM
 
Originally Posted by Athens View Post
Labor costs are.
Last time I checked, the US governments has been very successful in driving up labor cost.
Payroll taxes, employer contributions, minimum wage laws, union power etc.

This all leads to high labor cost, and therefore, shifting of labor somewhere else.

I don't think it's far fetched to call all these effects a "tax" on the labor or economic system.
Reducing that "tax" would definitely increase employment here.
And since I donm't care about the effect on China or India, it counts as a net employment increase in my book.

-t
     
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Sep 12, 2011, 09:30 PM
 
At what cost. How far do you go to compete in labor costs. What provides us with a better standard of living.
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Sep 13, 2011, 01:41 AM
 
^ Definitely not government.
     
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Sep 13, 2011, 04:01 AM
 
So people are paid fairly by the good grace of corporations. Safety is a prime concern because of the good grace of corporations. Environmental protection from the good grace of corporations. Regulatory bodies have no roll in this at all? Enforced rules don't make all this happen?
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Sep 14, 2011, 12:06 AM
 
You present the usual black and white view of things- the standard false premise that we either have overbearing, out of control government, or rule by corporate whim, with nothing more reasonable in between. Of course, this isn't actually the case.

If massive/bloated/all-powerful/over-regulating every facet of everyone's existence/ government was really the solution to anything, then the biggest, most bloated of all like the Soviet Union would have produced utopias, not nations full of walled-in captives with wretched standards of living and environmental wonders like Chernobyl. By the same standard, India should lead the world in standard of living, just as it leads the democratic world in red-tape, regulation, and bureaucracy.

What provides you with a better standard of living is the fact that you live in a free society that values (LIMITED!) government of and by the people, free enterprise, and yes, rule of law. Unfortunately, today's statists are moving us farther away from all of these, and ironically, also strengthening the unholy alliance between government and big business that they claim to hate so much. (Such as stomping their feet and whining to shred the constitution in order to give power to the govt. to mandate one purchase insurance from private companies in a power grab over citizens those companies themselves probably never fully imagined.)
     
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Sep 14, 2011, 12:45 AM
 
Originally Posted by CRASH HARDDRIVE View Post
^ Definitely not government.
???
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Sep 14, 2011, 12:51 AM
 
Originally Posted by Athens View Post
???
The answer to "What provides us with a better standard of living."

-t
     
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Sep 14, 2011, 02:51 AM
 
Originally Posted by Athens View Post
So people are paid fairly by the good grace of corporations. Safety is a prime concern because of the good grace of corporations. Environmental protection from the good grace of corporations. Regulatory bodies have no roll in this at all? Enforced rules don't make all this happen?
Why don't you go read up on the history of these things before and after the industrial revolution. Pay, safety and health considerations, working conditions, overall standard of living…these things all got exponentially better without government force. Most of the major labor laws and regulations that were enacted in the late 19th/early 20th centuries STARTED with business and labor, not with the government. These things, like so many other things are just another example of the bureaucrats yammering "ME TOO! ME TOO!" and co-opting other peoples' issues for political gains.

Things like pay and safety don't have to be regulated by the government. In a free and wealthy country where there is prosperity and a strong, dynamic economy people have the power to choose to avoid negligent companies or those who don't pay well. Favorable conditions are what attracts quality personnel, and fosters a good reputation among the public. You know, those whom companies try to make money from. It is in a businesses best interest to provide a good place to work. If they don't, they will slog along in mediocrity and eventually fail.

All that being said, if I were willing to work a crappy, dangerous job for little pay the government has no right to deny me my right to choose to do so, or another's right to choose to let me work under such conditions. It's a 100% voluntary relationship. After all, whose body and whose life is it anyway?
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Sep 14, 2011, 06:57 AM
 
Originally Posted by smacintush View Post
Why don't you go read up on the history of these things before and after the industrial revolution. Pay, safety and health considerations, working conditions, overall standard of living…these things all got exponentially better without government force. Most of the major labor laws and regulations that were enacted in the late 19th/early 20th centuries STARTED with business and labor, not with the government. These things, like so many other things are just another example of the bureaucrats yammering "ME TOO! ME TOO!" and co-opting other peoples' issues for political gains.

Things like pay and safety don't have to be regulated by the government. In a free and wealthy country where there is prosperity and a strong, dynamic economy people have the power to choose to avoid negligent companies or those who don't pay well. Favorable conditions are what attracts quality personnel, and fosters a good reputation among the public. You know, those whom companies try to make money from. It is in a businesses best interest to provide a good place to work. If they don't, they will slog along in mediocrity and eventually fail.

All that being said, if I were willing to work a crappy, dangerous job for little pay the government has no right to deny me my right to choose to do so, or another's right to choose to let me work under such conditions. It's a 100% voluntary relationship. After all, whose body and whose life is it anyway?
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Sep 14, 2011, 07:37 AM
 
Originally Posted by OAW View Post
@ebuddy

Let's get to the crux of the matter...

You make some valid points WRT to repatriation and the complexity of the tax code. However, the only position I was taking is that in the context of a global economy .... especially considering the massive disparity in wage structure between the US and Asia (i.e. China) along with the trade deficit resulting from Chinese currency manipulation .... there are a variety of factors that impact net job creation in the US.
None of which are addressed by raising minimum wage, bolstering failed businesses with taxpayer dollars, massive shovel-ready programs paying $250k for two years of employment @ $60k/yr, union handouts and collective bargaining, green "jobs" provided by companies like Solyndra having received over $500m of taxpayer dollars now bankrupt, mandated healthcare, low-e windows and other such busy-body regulatory bureaucracy, The prospect of raising taxes because of a spending problem in Washington and/or a tax code so ridiculously complex only those larger corporations with a battery of tax attorneys can exploit to its full benefit, etc. None of these make us more competitive with China if that truly is the crux of your concern.

And many of them play a much larger role than tax policy ... as evidenced by the distinct lack of net job creation in an economic environment that already has the second lowest tax burden in the developed world.
Again, if given a choice of two car lots; one providing a 35% discount over 180 days for filing a 55,000 page rebate form (sometimes more than once) and the other simply providing a 29% discount, my choice is clear and anyone listening to the business community will have the same take-away. It's not about right or left, it's about right or wrong and a government deciding who wins or loses.

Therefore I take issue with this simplistic notion being bandied about on the right that "Tax Cuts = New Jobs. Always and forever." I trust that you can understand where I'm coming from and why I'm taking a position that, quite frankly, I think is a lot more balanced and nuanced than the bumper sticker mentality we so often see on the left and the right. But if you disagree, then please explain why you think a tax cut in the existing system* will automatically result in net job creation in the US in an economic environment that is not showing any signs of significant increase in private sector demand?
There's a reason why companies like Berkshire Hathaway and its purveyor call on tax increases for the wealthy while, themselves, owing more than $1bn in back taxes from 2002 or others hesitant to provide numbers on their overseas labor and that's not because the US is a friendly tax environment. Personally, I'd be willing to give more when the government shows me that it can be a good steward of the fruits of my labor. They've proven otherwise and frankly there is no reason to continue feeding the beast. It's not my fault we now need someone to regulate a corporate/government run amok.

Small businesses drive the US economy, they drive the overwhelming majority of new jobs, and they employ people giving them the sense of confidence we need for them to bolster demand. Giving the large entities married to their government sweethearts and agendas a few tax loopholes and 12 more pages of tax code isn't helping small businesses drive the economy. If given the choice between a trickle-down economy provided by the government or trickle-down economy provided by the private sector, my bet is always on a private sector that manages its own activities and bankrolls its own risks or it does not continue to exist. There is no such sense of survival from a government that can simply take more from you when it needs to pay off its over-drawn credit cards or produce another giveaway to ACME-FAIL because they like what they stand for.
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Sep 14, 2011, 09:06 AM
 
@ebuddy

I hear what you are saying above. And we are on the same page with a lot of what you had to say. But you are straying OT onto larger philosophical issues. Whereas I asked you a direct question about whether or not tax cuts will automatically lead to net job creation in the US … by small businesses or large corporations … in an environment that is not experiencing increased private sector demand? A question you seemed determined to avoid.

OAW
     
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Sep 14, 2011, 07:51 PM
 
Originally Posted by smacintush View Post
Why don't you go read up on the history of these things before and after the industrial revolution. Pay, safety and health considerations, working conditions, overall standard of living…these things all got exponentially better without government force. Most of the major labor laws and regulations that were enacted in the late 19th/early 20th centuries STARTED with business and labor, not with the government. These things, like so many other things are just another example of the bureaucrats yammering "ME TOO! ME TOO!" and co-opting other peoples' issues for political gains.

Things like pay and safety don't have to be regulated by the government. In a free and wealthy country where there is prosperity and a strong, dynamic economy people have the power to choose to avoid negligent companies or those who don't pay well. Favorable conditions are what attracts quality personnel, and fosters a good reputation among the public. You know, those whom companies try to make money from. It is in a businesses best interest to provide a good place to work. If they don't, they will slog along in mediocrity and eventually fail.

All that being said, if I were willing to work a crappy, dangerous job for little pay the government has no right to deny me my right to choose to do so, or another's right to choose to let me work under such conditions. It's a 100% voluntary relationship. After all, whose body and whose life is it anyway?
You can relocate to China any time you like then if you want to work an unsafe, low paid job.
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Missed 2012 by 3 days, RIP Grandma :-(
     
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Sep 14, 2011, 09:08 PM
 
Originally Posted by OAW View Post
@ebuddy
I hear what you are saying above. And we are on the same page with a lot of what you had to say. But you are straying OT onto larger philosophical issues.
Repetition is the key to retention. I prefer "bigger picture" over "larger philosophical".

Whereas I asked you a direct question about whether or not tax cuts will automatically lead to net job creation in the US … by small businesses or large corporations … in an environment that is not experiencing increased private sector demand? A question you seemed determined to avoid.
To be clear, you attempted to convolute the discussion by avoiding the tax aspect repeatedly in your last post citing that it's more than that, we're not competitive with China, there's no demand, etc. yet you can't answer how a 35% tax rate helps us compete with China, or how a 35% rate increases consumer demand, or how a tax increase on the "rich" ($200k/year) increases consumer demand.
  • ebuddy: The tax rate is too high and needs to be lowered. It is too complicated and creates a more hostile environment for business.
  • OAW: But some of the largest, most profitable US companies... G.E. (most unfortunate example)... 25 of the top 100 highest paid CEOs... Top 25 CEOs...
  • ebuddy: Krugman failed to explain what drives the US economy. As tempting as the class warfare may be, small businesses are not privy to the breaks enjoyed by the most profitable US companies (I suspect oil is among them; a lower profit margin than your average public utility) or G.E. (Obama's petco)
  • OAW: You seemed determined to avoid the question of whether or not tax cuts will automatically lead to net job creation in the US in an environment that is not experiencing increased private sector demand?
  • ebuddy: Private sector demand is the product of consumer confidence. Consumer confidence is very low. (cited Obama's approval rating on economy as exhibit A) Consumer confidence hinges on stable employment. Billions have been spent with no appreciable impact on employment. Policies not geared toward business growth will not result in business growth or the stable employment necessary to bolster consumer confidence. This is precisely what you see today. Companies that invest in innovation and creativity will excel even in an environment of lacking consumer confidence. (cited Apple) Investment costs money. Taxes cost money. A complex tax code costs resources, money, and makes new prospects more hesitant while encouraging tax avoidance by those capable of exploiting loopholes available to them. This results in companies either keeping their employee count down or moving it elsewhere such as the examples I provided earlier; Apple and Pfizer, both lobbying the government for lower taxes. For whatever reason, we refuse to listen to those we're trying to encourage.
  • OAW:
  • ebuddy: You've gotten the most direct answers you'll ever find OAW, the problem is you don't like the answers so you'll just pretend you've got cucumbers over your eyes. They're too simplistic for you, but you've yet to offer any complicated explanation for how a high tax rate accomplishes any of this.

Originally Posted by OAW
Therefore I take issue with this simplistic notion being bandied about on the right that "Tax Cuts = New Jobs. Always and forever."
This response is indicative of the left's utter frustration with the obvious failure of the Keynesian model and you'll see more like it such as; Well... mmgrrr... go live in CHINA THEN!!!

Simplistic notions are still exponentially better than moronic notions. Until the left has a firm grasp on the basics, frankly there's no reason to make things any more complicated than they need to be.
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Sep 14, 2011, 09:49 PM
 
@ebuddy

We'll just note that you continue to try to muddy the waters and duck the question. The very fact that your post above talks about a "35% tax rate" that's too high shows that you either aren't listening or are trying to pull a fast one. Again … that is the STATUTORY tax rate. The EFFECTIVE tax rate … that is the rate businesses large and small ACTUALLY PAY on average is in fact the second lowest in the developed world. Even lower than CHINA.

The bottom here my friend is that if US businesses are already paying less in taxes than all other businesses in the developed world except for ICELAND … then clearly US jobs aren't being outsourced overseas because of the tax burden. We can debate politics or ideology all day long. But I'm sorry … simple mathematics is not subject to interpretation. If you dispute that US businesses don't pay the second lowest tax rate in the developed world then just say that and present your evidence to the contrary. But don't just continue to ignore the point and the logical conclusions that ensue from it. If net job creation in the US was as simple as handing out yet another tax cut to the wealthy or as the GOP would say "job creators" … whether they actually do so or not … then the Bush years would have been off the chain. But yet net job creation was ZILCH. Middle class income declined. And the rich got even richer. Obama has left those tax cuts in place. Even added more. Let's not forget that the stimulus package was somewhere between 20-40% tax cuts IIRC. Now we can debate the effectiveness of the stimulus if you'd like. But if you take the position that it was ineffective then you have to also take the position that the hundreds of billions in tax cuts it contained were also ineffective. Because surely you know you can't get away with the standard GOP mantra of trying to claim the stimulus package was all new spending … least of all with me right?

Oh and by the way ... in case you were going to take issue with the graph I listed above not listing China then take a look at this one.

In its Paying Taxes 2009 publication, based on its 2009 Doing Business report, the World Bank-International Finance Corp. estimated that the United States has a lower effective rate of current corporate tax than that of several other nations, including Germany, Canada, India, China, Brazil, Japan, and Italy. The publication also included a figure that compared effective and statutory corporate tax rates for several G-8 and BRIC [Brazil, Russia, India, China] countries:

http://mediamatters.org/research/201004260006

Look at where the US is in relation to China and then see if you can finally acknowledge that US corporations pay a higher effective tax rate in China than they do in the US .... yet they still outsource to China. Clearly a lower tax burden isn't the panacea that the GOP portrays it to be. Imagine that.

OAW
( Last edited by OAW; Sep 14, 2011 at 10:33 PM. )
     
 
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