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Post By
neil

In Reply To
mjyoung

Subj: Re: Joe The Plumber...
Posted: Sat Oct 18, 2008 at 12:07:43 pm EDT (Viewed 751 times)
Reply Subj: Re: Joe The Plumber...
Posted: Sat Oct 18, 2008 at 01:08:54 am EDT (Viewed 925 times)



> It could be a simple situation where a company decides to manufacturer their products in another country, then sell the products to the US. Example: Chrysler builds cars in china and sells them in the US, whereas they use to just manufacture and sell them in the US.

You were talking about corporate tax rates for hypothetical corporate relocation. This is another beast altogether - the manufacturing level jobs have been steadily farmed out for decades, and it has nothing to do with taxes. Rather, it has to do with finding countries that accept money in return for allowing the exploitation of their citizens - long days, insufficient safety and health considerations, 25 cent/hour pay rates.

So I'm not sure what you think this says about the USA - that its human rights standards are too high, maybe?

> Or they could sell off part of or all of their company to a company from another country. Example: Annheiser Busch was bought by InBev, a Brazilian/Belgian company.

Which is an example that doesn't actually speak to your point about relocating due to corporate tax levels.

> But the current result is that US companies would rather invest overseas than in the US.

I'm not sure you can blame this one on taxes. Especially when the American market is heavily developed and difficult to break into with new ventures, whereas Coca-Cola can (and has) dropped in anchor in countries where there is no soft drink market and buy the right to a monopoly. They invest overseas because they can create a market where one doesn't exist, rather than risk failing in one here that's already over-crowded.

> It's the same reason why companies move their headquarters from NYC to a much more favorable location.

And yet it's unlikely that we'll see NYC unseated as the world's (much less the country's) financial hub in this century. For every established company that moves out to save some pennies, an upstart company with something to prove and legitimacy to be gained will move in.

> But since they did it, it wasn't just an empty threat.

I'm talking systemic threats here, not anecdotal ones. There's no threat that a significant number of American corporations will relocate - for tax reasons or otherwise. You found a link that lists 10 that have moved out of the USA - you could have just as easily found documents that describe foreign corporations that move in the opposite direction. (I mean, just Google it.) But 10 out of thousands is hardly a trend worth presenting as evidence.

> So you are using the two of the richest people as an example?

If your logic is as sound - as wholly determinant - as you think, then the richest people should be the most likely to leave the country. But they don't - and, in fact, people with loads of money continue to emigrate to the United States. Within your stated logic, that shouldn't happen. So you've obviously missed something. It should be clear by now that I think it's a huge mistake to look at corporate tax rates in isolation. (And I'm also skeptical about the methodology being employed by the people from whom you get your numbers. Are they looking at the rates alone, or are they accounting for the various rebates and incentives that are inevitably foisted upon corporations to make sure they stay put?)

> But way to stack the deck against me.

I'm just dealing the cards - you shuffled the deck. \:\)



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