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If progressive politicians can gather an audience, he or she can be assured a standing ovation by shouting this statement: “We must find a way to punish these corporations who take jobs overseas.”
This mob reaction usually doesn’t go much further than that. No one seems to follow-up with just what should be done to prevent these businesses from doing business across the pond. Should we put these companies out of business, tax them at 100 percent or perhaps execute their top officials?
It might be more beneficial to study just why corporations choose this path. The answer can be summarized by three words – taxes, regulations, unions. The corporate tax rate for the United States is the second highest of the industrialized world. The country with the highest tax rate, Japan, is planning to decrease their corporate rate by 10 percent. Skeptics might ask is this the only reason corporations exist, so they can pay less income tax? No it isn’t, but it is a factor. Let’s say you owned a company and were contemplating a move to another state. You have studied transportation costs, education, and health services for your employees and other factors. By doing so, you have narrowed it down to a potential site in two different states. One state has no income tax; the other a tax rate of 15 percent. Might that influence your decision just a little?
Income taxes for corporations can be a little complicated and for some of you a little boring. But please stay with me for an important fact on corporate taxes. If a U.S. based corporation has operations over seas, they will pay taxes on profits there and not be taxed an additional amount until the after-tax proceeds are brought back to the United States. Most conservatives want to allow these companies a tax holiday so these companies can bring these monies back to the States and grow U.S. business. Our president and the liberals say no. This position almost forces these U.S. companies to expand overseas.
The corporate haters have another related point that has been dominant in columns and letters to the editor in The Sun Times. They complain vigorously about large international companies paying little or no income tax. What they really mean, omitted purposefully or because of ignorance, they pay little or no U.S. income tax. If U.S. companies make all their profit overseas and only break even or have a loss in this country, should they have to pay duplicate income taxes on operations? Some liberals would say yes as that will teach them to move jobs and operations overseas. The natural reaction for corporate officials would be to move their headquarters or home offices to more friendly environs. This would move executive and administrative jobs out of this country and eliminate hundreds of millions of federal and state dollars to the taxing authorities here.
Another important factor in corporate decisions on where to operate is the ever increasing burden of government regulations. This is especially so given the anti-business bent of the Obama administration. As Republican Senator Susan Collins notes in a recent column, right now federal agencies are preparing (your tax dollars at work) 4,200 rules, 845 of which affect small business. More than 100 are major rules with an economic impact of more than $100 million each.
She cities as an example the proposed rule by the Environmental Protection Agency (EPA) on wood waste boilers that would require a small businessman in Maine to scrap a new $300,000 boiler he recently installed. As Senator Collins emphasizes we need a time-out so that we can stop sending more jobs overseas by creating more rules for American business. She notes that the proposed rule on boilers could, along with other pending regulations, cause 36 American pulp and paper mills to close and put more than 20,000 Americans out of work.
You see why people scoff and hoot every time Obama gets a serious look on his face and dramatically states every waking moment he is concentrating on putting people back to work. The answer is simple and yet elusive for our president. Simply call off the dogs in the EPA and the hundreds of other entities that can only be described as anti-business.
The third leg of the stool deals with our unions. In practically every major industry in this country unions have been a major factor in jobs leaving our shores. Today more than ever union demands, not just for current compensation, but demands for pensions, health care, work rules and time off are putting a bind on our U.S. companies.
If we are serious about banning our companies from moving jobs overseas, what do we do about foreign companies setting up shop here? The door swings both ways. Hundreds of foreign companies hire millions of workers in this country. Should we insist they cease U.S. operations and go back to their home country?
Like it or not we live in a worldwide community. Trying to ignore this is futile. Policies that restrict trade and worldwide operations will only bring higher costs and a much lower standard of living. Communication and trade goes a long way toward building a peaceful world.
(Jerry Jackson of Heber Springs writes his “conservative viewpoint” column each Wednesday)
If progressive politicians can gather an audience, he or she can be assured a standing ovation by shouting this statement: “We must find a way to punish these corporations who take jobs overseas.”
This mob reaction usually doesn’t go much further than that. No one seems to follow-up with just what should be done to prevent these businesses from doing business across the pond. Should we put these companies out of business, tax them at 100 percent or perhaps execute their top officials?
It might be more beneficial to study just why corporations choose this path. The answer can be summarized by three words – taxes, regulations, unions. The corporate tax rate for the United States is the second highest of the industrialized world. The country with the highest tax rate, Japan, is planning to decrease their corporate rate by 10 percent. Skeptics might ask is this the only reason corporations exist, so they can pay less income tax? No it isn’t, but it is a factor. Let’s say you owned a company and were contemplating a move to another state. You have studied transportation costs, education, and health services for your employees and other factors. By doing so, you have narrowed it down to a potential site in two different states. One state has no income tax; the other a tax rate of 15 percent. Might that influence your decision just a little?
Income taxes for corporations can be a little complicated and for some of you a little boring. But please stay with me for an important fact on corporate taxes. If a U.S. based corporation has operations over seas, they will pay taxes on profits there and not be taxed an additional amount until the after-tax proceeds are brought back to the United States. Most conservatives want to allow these companies a tax holiday so these companies can bring these monies back to the States and grow U.S. business. Our president and the liberals say no. This position almost forces these U.S. companies to expand overseas.
The corporate haters have another related point that has been dominant in columns and letters to the editor in The Sun Times. They complain vigorously about large international companies paying little or no income tax. What they really mean, omitted purposefully or because of ignorance, they pay little or no U.S. income tax. If U.S. companies make all their profit overseas and only break even or have a loss in this country, should they have to pay duplicate income taxes on operations? Some liberals would say yes as that will teach them to move jobs and operations overseas. The natural reaction for corporate officials would be to move their headquarters or home offices to more friendly environs. This would move executive and administrative jobs out of this country and eliminate hundreds of millions of federal and state dollars to the taxing authorities here.
Another important factor in corporate decisions on where to operate is the ever increasing burden of government regulations. This is especially so given the anti-business bent of the Obama administration. As Republican Senator Susan Collins notes in a recent column, right now federal agencies are preparing (your tax dollars at work) 4,200 rules, 845 of which affect small business. More than 100 are major rules with an economic impact of more than $100 million each.
She cities as an example the proposed rule by the Environmental Protection Agency (EPA) on wood waste boilers that would require a small businessman in Maine to scrap a new $300,000 boiler he recently installed. As Senator Collins emphasizes we need a time-out so that we can stop sending more jobs overseas by creating more rules for American business. She notes that the proposed rule on boilers could, along with other pending regulations, cause 36 American pulp and paper mills to close and put more than 20,000 Americans out of work.
You see why people scoff and hoot every time Obama gets a serious look on his face and dramatically states every waking moment he is concentrating on putting people back to work. The answer is simple and yet elusive for our president. Simply call off the dogs in the EPA and the hundreds of other entities that can only be described as anti-business.
The third leg of the stool deals with our unions. In practically every major industry in this country unions have been a major factor in jobs leaving our shores. Today more than ever union demands, not just for current compensation, but demands for pensions, health care, work rules and time off are putting a bind on our U.S. companies.
If we are serious about banning our companies from moving jobs overseas, what do we do about foreign companies setting up shop here? The door swings both ways. Hundreds of foreign companies hire millions of workers in this country. Should we insist they cease U.S. operations and go back to their home country?
Like it or not we live in a worldwide community. Trying to ignore this is futile. Policies that restrict trade and worldwide operations will only bring higher costs and a much lower standard of living. Communication and trade goes a long way toward building a peaceful world.
(Jerry Jackson of Heber Springs writes his “conservative viewpoint” column each Wednesday)
