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What Greg said about corporate tax rates. Legolas Send a noteboard - 18/09/2012 07:48:39 PM
Jobs for the umemployed seems to be the main issue in this election. I've spent some time in thought as to how I would try to generate more jobs for Americans. I'm very interested to hear other ideas.

The obvious suggestion is simply "get the economy growing again" - the question is how, and of course America can only go so far on its own if there is still crisis in the rest of the world.
First, I try to get to the root of the problem. The main point that people gripe about is that there are so many jobs outsourced to foreign countries. What's the root cause of this? Companies exist for one reason: to make money. The main motivation of any company is to make as much profit as possible. One of the ways to do this is to keep costs as low as possible, i.e. keep labor costs as low as possible. Due to working conditions in some countries, companies have the option of outsourcing their work to these foreign workers who work for pennies on the dollar.

That's rapidly ceasing to be the case - there just aren't many countries left where wages remain "pennies on the dollar" while productivity is at acceptable levels. Those differences are growing smaller, and will continue to grow smaller. Though of course it depends on the industry. I'm personally active in the chemical industry, so that's the one I know - and there, American companies are enjoying a major boom as we speak, due to the shale gas cost advantage, and regaining ground compared to the Chinese and others. A lot of the new factories or expansions of factories are being built in the US, because that's where the shale gas is.
So how do we bring jobs back to America? The left believes in more taxes and the right believes we need to lower taxes. America has the highest corporate tax rates of any developed country. Thus, companies try to use every legal angle possible to move their money overseas, where it's taxed at a much lower rate. Something seems to be wrong in America if companies are moving labor and money to other countries. How can we stop this? Do we cowtow to corporations? Do we become even more strict? What's the answer?

See Greg's reply. That "we have the highest corporate tax rates of any country!" argument is extremely disingenuous and extremely tiresome, unless you're using it simply to make a case for a simpler and fairer corporate tax code with less byzantine deductions (in which case I'd quite agree). America is and remains a very good place for a company to have its corporate seat, even when the company has outsourced much of its labor.
I honestly don't know. Corporations already have so much power. I've considered an idea where, if a company's labor force is 100% American, then they will owe no income tax. If it's 90%, then maybe a 2% tax rate. 80% etc. you get the idea. Would that tax savings be enough to entice companies to employ Americans at good labor rates? What other incentives can we offer companies? Maybe a subsidy for employing X number of people?

There are no magic solutions that will suddenly undo or reverse all the outsourcing. Among the factors that could limit it or slow down the trend - besides just waiting for wages and working standards in other countries to grow closer to American ones - you should definitely include improvements in education, sufficient spending on infrastructure, keeping the levels of regulation and red tape acceptable, investment in research and innovation, and so on.
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How would you fix unemployment? - 18/09/2012 05:43:17 PM 772 Views
Kill off every third unemployed person; that'll teach the lazy bastards. *NM* - 18/09/2012 06:11:58 PM 214 Views
And encourage population control! Brilliant! *NM* - 18/09/2012 06:28:34 PM 223 Views
What Greg said about corporate tax rates. - 18/09/2012 07:48:39 PM 619 Views
Workhouses. - 18/09/2012 08:24:04 PM 579 Views
Get a job.* Fixed! - 18/09/2012 10:38:48 PM 500 Views
Ban most of the innovations in business from the last 50 + years - 18/09/2012 10:54:51 PM 523 Views
The left does not believe higher corporate taxes create jobs; it believe they reduce federal debt. - 18/09/2012 10:57:53 PM 640 Views
A reply to a single paragraph should result in a reply back of manageable length... right? - 18/09/2012 11:30:02 PM 517 Views
Good luck with that (sorry Joel, but it is true ) - 18/09/2012 11:36:09 PM 546 Views
I do not think the first and fourth paragraphs of my response to him should count as two paragraphs. - 18/09/2012 11:55:08 PM 612 Views
no, - 19/09/2012 12:03:25 AM 582 Views
Caring MORE about Western living standards=/=caring NOTHING about Third World ones. - 18/09/2012 11:48:54 PM 575 Views
That much is true, yes. - 19/09/2012 07:04:05 PM 577 Views
Wait...is there something wrong about not caring about other countries? - 19/09/2012 03:15:00 AM 521 Views
That is, obviously, a rather subjective question. - 19/09/2012 06:33:41 PM 496 Views
Put a bird on it! *NM* - 18/09/2012 11:02:41 PM 314 Views
Good old fashioned relief works. - 19/09/2012 09:45:19 PM 492 Views
Duct tape. *NM* - 19/09/2012 11:01:10 PM 265 Views
I think you named the root problem quite well... - 25/09/2012 01:12:55 PM 497 Views
"For the love of money is a root of all kinds of evil," - 30/09/2012 10:52:05 AM 618 Views
get rid of unemployment extensions so the lazy people go out and find jobs - 25/09/2012 01:44:23 PM 555 Views

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