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KEN-JENNINGS
I am all that is MOD!
+2,773|4105|949

Dilbert_X wrote:

KEN-JENNINGS wrote:

not to mention dilberts drive-by explanation of manufacturing costs is simplistic at best.
I thought I'd better dumb it down for Uzique's benefit.

Yes, labor costs (in China) are not as far off as people generally assume.  Resources are cheaper in developing nations.  Ability to scale manufacturing is cheaper.  Labor laws are more pro-industry.  Environmental laws aren't as strict.  China is not the cheapest labor pool in the world anymore, but pure labor cost isn't everything.
They suck up a lot of shit and say yes sir no sir so execs like them, but quite often moving stuff to China costs more and creates other problems.
I don't know many people in the business world who turn down potential business - the Chinese are no different from any other demographic in that regard.  Everyone sucks up in the business world.  The Chinese advantage is becoming incredibly ruthless regarding price concessions, and if you're not careful, adjusting your BOM to lower their cost while passing zero savings on to you.

Jay wrote:

Cybargs wrote:

KEN-JENNINGS wrote:

not to mention dilberts drive-by explanation of manufacturing costs is simplistic at best.

Yes, labor costs (in China) are not as far off as people generally assume.  Resources are cheaper in developing nations.  Ability to scale manufacturing is cheaper.  Labor laws are more pro-industry.  Environmental laws aren't as strict.  China is not the cheapest labor pool in the world anymore, but pure labor cost isn't everything.
To be honest it isn't OBM's that are 'sending jobs overseas', pretty much all manufacturing is outsourced and done by a supplier. Companies just source material from whoever can give the better value.
It seems that a lot of consumer goods are all built in the same factories, just with different brand names affixed. Like, Sam Adams beer is actually brewed by Miller in Milwaukee because they have the facilities that can handle the large scale manufacturing. Sam Adams simply provides the recipe and oversees the ingredient procurement. If I walk into a Home Depot I'll see the same tool with three different brand names on it and at three different price points. There is no Ridgid factory anymore, or a Milwaukee tools factory, it's all made by TTI in Hong Kong. Differences between the products are negligible. We've commoditized everything and it's all been VE'd to fail at 10,000 cycles.
OEM and ODM business is far more prevalent than OBM business, but yeah, it's not the manufacturers themselves ANYMORE.  The infrastructure is in place - investment in China has resulted in a booming EMS industry that doesn't outside investment anymore - you simply go where the infrastructure, knowledge, supply chain focus, top down authoritarian mandates favor manufacturing, etc.  But to pretend this wasn't some long term decision based primarily on the cost of labor and profit maximization is stupid.  China has spent the last 25 years investing heavily into manufacturing - and you can draw parallels to where China is now and where the US was right after WW2 - both had a leg up on manufacturing, China because of the reasons previously listed, and the US because most other producing nations had their infrastructure demolished because of the war.

Why would a company invest in US jobs when everything is already skewed towards China?

This is an area of expertise for me....I have been working in global supply chain for over 10 years now, specifically electronics.
Jay
Bork! Bork! Bork!
+1,959|2831|London, England
If our corporate tax rate was even marginally competitive, it would help, but it's not. At least we don't have a VAT.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
Cybargs
Moderated
+2,268|4190

Jay wrote:

If our corporate tax rate was even marginally competitive, it would help, but it's not. At least we don't have a VAT.
VAT is so much smarter than a sales tax tbh.
https://cache.www.gametracker.com/server_info/203.46.105.23:21300/b_350_20_692108_381007_FFFFFF_000000.png
Dilbert_X
The X stands for
+1,592|3579|eXtreme to the maX

Jay wrote:

Rust belt Americans had skills that were made obsolete. It will correct itself among their kids. It's painful, but not permanent.
Locally any number of middle aged men are on the career scrapheap. Suicide amongst is at an all time high.
My colleague's husband is an unemployed cabinet-maker, five of his friends have killed themselves in the last five years, another yesterday. It is painful and it is permanent.
What jobs are their kids going to pick up? None of the rust-belt states have picked up in the last 40-50 years, they aren't going anywhere.
The only jobs for people who are stuck in the catch 22 of not being able to afford an education for a job which doesn't exist are, as you know, menial service work or join the military.
Your virus system is infected with windows. Please to be giving me your credit card details urgently
Dilbert_X
The X stands for
+1,592|3579|eXtreme to the maX

Jay wrote:

If our corporate tax rate was even marginally competitive, it would help, but it's not. At least we don't have a VAT.
If you had a VAT you could have a competitive corporate tax rate, this is not complex.
Your virus system is infected with windows. Please to be giving me your credit card details urgently
KEN-JENNINGS
I am all that is MOD!
+2,773|4105|949

Corporate tax rates do not significantly influence where a company chooses to manufacture.  Corporate tax rates influence where a company chooses to base itself.  And I do not believe that a reduction of corporate tax rate will lead to more multi-national headquarters choosing the USA over any country that allows for tax shelters.  Why would they? There is virtually no benefit to stockholders to move to the US if there is always a less-restrictive place. 

Manufacturers virtually always take into account VAT and/or import taxes.  It's irrelevant to the discussion of fixing America's trade because the cost will always be included and passed on to the consumer/end user.

But yeah, let's pretend VAT and tax rates are the issue with America's trade.  Give me a fucking break.
Jay
Bork! Bork! Bork!
+1,959|2831|London, England

Cybargs wrote:

Jay wrote:

If our corporate tax rate was even marginally competitive, it would help, but it's not. At least we don't have a VAT.
VAT is so much smarter than a sales tax tbh.
They're both abominations. Income tax? Yeah, ok. Property tax? Sure. But how does the government justify a tax on every transaction when it has contributed nothing to it?

We don't have universal sales taxes. Some states don't have one, while other, more kleptocratic-leaning states, like my own, have relatively high ones. I get to pay an additional 9.875% on everything except unprocessed foods and clothing purchases under $100. Wanna grow an economy? Put that 10% back in the hands of the consumer so they can buy more crap.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
Jay
Bork! Bork! Bork!
+1,959|2831|London, England

KEN-JENNINGS wrote:

Corporate tax rates do not significantly influence where a company chooses to manufacture.  Corporate tax rates influence where a company chooses to base itself.  And I do not believe that a reduction of corporate tax rate will lead to more multi-national headquarters choosing the USA over any country that allows for tax shelters.  Why would they? There is virtually no benefit to stockholders to move to the US if there is always a less-restrictive place. 

Manufacturers virtually always take into account VAT and/or import taxes.  It's irrelevant to the discussion of fixing America's trade because the cost will always be included and passed on to the consumer/end user.

But yeah, let's pretend VAT and tax rates are the issue with America's trade.  Give me a fucking break.
It's a tax on where the sale was generated, not on where the HQ is. Apple is still paying full income tax on all sales made in the US, it's their overseas profits that they park in Ireland so they don't get hit with the US tax rate (on income earned overseas, which is preposterous) when they bring the cash home. It just encourages the money to stay overseas and to be reinvested there instead of here.

But yes, it's a complex issue that isn't just "lower the corporate tax rate and the jobs will come home", but it is one thing that will help. Paring back on some of the ridiculous OSHA laws would help too. I would mention unions, but right-to-work states seem to be doing ok comparatively, so they're on their way out anyway.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
unnamednewbie13
Moderator
+1,741|4245|Banoi, PNG

I remember when an anonymous complaint drew the great eye of OSHA to my business. Nothing wrong was actually found, but it still cost thousands of dollars in consultation while we were still in the stage of trying to stock up on equipment that allowed us to stay in business. Also fantastic that the employers have to process income withholding for child support. Sounds nice when they call you a "valued partner," but the paperwork and check writing falls on your shoulders unless you pay for someone to do it for you.

/fwp
KEN-JENNINGS
I am all that is MOD!
+2,773|4105|949

Corporate profit tax is based on where the company is located, not where the sale happens.  You pay sales tax based on where the sale is generated.  You pay profit tax based on where your company was incorporated.  That makes it so you don't pay US profit tax AND Ireland profit tax if you are a company located in Ireland doing business in the US (double dipping).  If you are not incorporated in the US, that means you don't have a Federal tax ID (EIN). If you do not have an EIN, how can you pay tax federal profit tax?  But regardless-

Your argument is that if we had lower corporate tax in the US, companies would manufacture here because they would offset any losses from a difference in CoGS with the lower tax rate?  Why would they do that?  They would continue to manufacture in China, and reap the rewards of a lower corporate tax in the US.  How is that an incentive?  You're an economics guy, so you should understand the idea of incentive.  There is no economic incentive for a company to bring manufacturing back to the US, except in very small corner cases.
Jay
Bork! Bork! Bork!
+1,959|2831|London, England

KEN-JENNINGS wrote:

Corporate profit tax is based on where the company is located, not where the sale happens.  You pay sales tax based on where the sale is generated.  You pay profit tax based on where your company was incorporated.  That makes it so you don't pay US profit tax AND Ireland profit tax if you are a company located in Ireland doing business in the US.  Double dipping.  If you are not incorporated in the US, that means you don't have a Federal tax ID (EIN). If you do not have an EIN, how can you pay tax federal profit tax?  But regardless-

Your argument is that if we had lower corporate tax in the US, companies would manufacture here because they would offset any losses from a difference in CoGS with the lower tax rate?  Why would they do that?  They would continue to manufacture in China, and reap the rewards of a lower corporate tax in the US.  How is that an incentive?  You're an economics guy, so you should understand the idea of incentive.  There is no economic incentive for a company to bring manufacturing back to the US, except in very small corner cases.
There is none. As a country we're entitled. We've moved way beyond just being happy to have a job, and our social safety net allows people to be picky. I'm not saying that that's a bad thing at all, it's just not competitive with a place like China or Vietnam where they crawl over each others corpses to get any sort of job that gets them out of poverty. They don't have the environmental laws, they don't have the labor laws, and they have a motivated workforce that moves to where the jobs are.
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
uziq
Member
+138|926

Jay wrote:

KEN-JENNINGS wrote:

Corporate profit tax is based on where the company is located, not where the sale happens.  You pay sales tax based on where the sale is generated.  You pay profit tax based on where your company was incorporated.  That makes it so you don't pay US profit tax AND Ireland profit tax if you are a company located in Ireland doing business in the US.  Double dipping.  If you are not incorporated in the US, that means you don't have a Federal tax ID (EIN). If you do not have an EIN, how can you pay tax federal profit tax?  But regardless-

Your argument is that if we had lower corporate tax in the US, companies would manufacture here because they would offset any losses from a difference in CoGS with the lower tax rate?  Why would they do that?  They would continue to manufacture in China, and reap the rewards of a lower corporate tax in the US.  How is that an incentive?  You're an economics guy, so you should understand the idea of incentive.  There is no economic incentive for a company to bring manufacturing back to the US, except in very small corner cases.
There is none. As a country we're entitled. We've moved way beyond just being happy to have a job, and our social safety net allows people to be picky. I'm not saying that that's a bad thing at all, it's just not competitive with a place like China or Vietnam where they crawl over each others corpses to get any sort of job that gets them out of poverty. They don't have the environmental laws, they don't have the labor laws, and they have a motivated workforce that moves to where the jobs are.
so you're just agreeing with what i said and what you disagreed with about a page ago?
Jay
Bork! Bork! Bork!
+1,959|2831|London, England

uziq wrote:

Jay wrote:

KEN-JENNINGS wrote:

Corporate profit tax is based on where the company is located, not where the sale happens.  You pay sales tax based on where the sale is generated.  You pay profit tax based on where your company was incorporated.  That makes it so you don't pay US profit tax AND Ireland profit tax if you are a company located in Ireland doing business in the US.  Double dipping.  If you are not incorporated in the US, that means you don't have a Federal tax ID (EIN). If you do not have an EIN, how can you pay tax federal profit tax?  But regardless-

Your argument is that if we had lower corporate tax in the US, companies would manufacture here because they would offset any losses from a difference in CoGS with the lower tax rate?  Why would they do that?  They would continue to manufacture in China, and reap the rewards of a lower corporate tax in the US.  How is that an incentive?  You're an economics guy, so you should understand the idea of incentive.  There is no economic incentive for a company to bring manufacturing back to the US, except in very small corner cases.
There is none. As a country we're entitled. We've moved way beyond just being happy to have a job, and our social safety net allows people to be picky. I'm not saying that that's a bad thing at all, it's just not competitive with a place like China or Vietnam where they crawl over each others corpses to get any sort of job that gets them out of poverty. They don't have the environmental laws, they don't have the labor laws, and they have a motivated workforce that moves to where the jobs are.
so you're just agreeing with what i said and what you disagreed with about a page ago?
When did I ever say the jobs were going to come back?
"Ah, you miserable creatures! You who think that you are so great! You who judge humanity to be so small! You who wish to reform everything! Why don't you reform yourselves? That task would be sufficient enough."
-Frederick Bastiat
Dilbert_X
The X stands for
+1,592|3579|eXtreme to the maX
We seem to have gone down the spurious argument avenue.

Levelling up corporate tax rates isn't going to bring manufacturing jobs back, it will bring the money though and provide tax revenue.
If a company is registered in a jurisdiction they should pay their taxes there, not in some tax haven where they have no more than a nameplate.
Dividing revenue in proportionbetween jurisdictions with equivalent tax levels would be reasonable, any difference should be paid over to their primary jurisdiction.
American citizens are required to file a tax return whether they live and work there or not, corporations shouldn't get better treatment.

But Trumps alt-rich buddies aren't going to fix this one.
Your virus system is infected with windows. Please to be giving me your credit card details urgently
SuperJail Warden
Member
+166|1193
Anyway

I was listening to the David Axelrod podcast (Obama's 2008 campaign leader) and he had John Kerry on. Kerry was relaxed throughout but got noticeably excited, maybe irritated, when David brought up criticism of the Trans Pacific Partnership. Kerry went on to defend TPP and free trade and argued that the issues that middle america is facing due to free trade is the result of a lack of redistribution of profits and gains downward to the lower classes.

It makes sense but I don't see how we can get displaced people to go along with redistribution of wealth without scaring them or making them throw a fit when they think they won't get a "fair" cut.
uziq
Member
+138|926
the only way to fix it is through progressive redistribution, it's true. the conservative response makes businesses uncompetitive and economically unfeasible.
Dilbert_X
The X stands for
+1,592|3579|eXtreme to the maX

SuperJail Warden wrote:

Anyway

the issues that middle america is facing due to free trade is the result of a lack of redistribution of profits and gains downward to the lower classes.
Because essentially their bread and butter jobs have been taken away and the profits offshored, thanks to thing like the TPP not being linked with rational corporate tax structures.
Your virus system is infected with windows. Please to be giving me your credit card details urgently
SuperJail Warden
Member
+166|1193
What are the odds of a recession in the next 4 years? They happen in cycles and we are probably overdue. Trump probably isn't going to help the situation. What happens after?
Dilbert_X
The X stands for
+1,592|3579|eXtreme to the maX
I think there'll be a Trump euphoria boom which will implode when people realise nothing adds up.
Your virus system is infected with windows. Please to be giving me your credit card details urgently
SuperJail Warden
Member
+166|1193
Trump team floats tariffs
The Trump transition team is floating the possibility of an early executive action to impose tariffs on foreign imports, according to multiple sources.

Such a move would deliver on President-elect Donald Trump's "America First" campaign theme. But it's causing alarm among business interests and the pro-trade Republican establishment.
The Trump transition team didn't immediately respond to a request for comment on the prospect of new tariffs. But a transition official said the team has discussed implementing a border adjustment tax measure under consideration by House Ways and Means Committee Chairman Kevin Brady, which would tax imports to spur US manufacturing.
http://www.cnn.com/2016/12/21/politics/ … index.html

Prediction: trump will slap some bullshit tariff on some negligible item and then claim a big victory
Cybargs
Moderated
+2,268|4190

SuperJail Warden wrote:

Trump team floats tariffs
The Trump transition team is floating the possibility of an early executive action to impose tariffs on foreign imports, according to multiple sources.

Such a move would deliver on President-elect Donald Trump's "America First" campaign theme. But it's causing alarm among business interests and the pro-trade Republican establishment.
The Trump transition team didn't immediately respond to a request for comment on the prospect of new tariffs. But a transition official said the team has discussed implementing a border adjustment tax measure under consideration by House Ways and Means Committee Chairman Kevin Brady, which would tax imports to spur US manufacturing.
http://www.cnn.com/2016/12/21/politics/ … index.html

Prediction: trump will slap some bullshit tariff on some negligible item and then claim a big victory
it'll most likely be on chinese made products which is fair enough.

trying to import something into china is a fucking nightmare.
https://cache.www.gametracker.com/server_info/203.46.105.23:21300/b_350_20_692108_381007_FFFFFF_000000.png
SuperJail Warden
Member
+166|1193
Tariffs directed specifically at China would be a really dumb thing to do. I meant I expect him to put a tariff on something like imports on a certain kind of wood or minor specialized electronics. Then he can go to American factories and talk about how many jobs he saved with his tariff.
KEN-JENNINGS
I am all that is MOD!
+2,773|4105|949

Cybargs wrote:

SuperJail Warden wrote:

Trump team floats tariffs
The Trump transition team is floating the possibility of an early executive action to impose tariffs on foreign imports, according to multiple sources.

Such a move would deliver on President-elect Donald Trump's "America First" campaign theme. But it's causing alarm among business interests and the pro-trade Republican establishment.
The Trump transition team didn't immediately respond to a request for comment on the prospect of new tariffs. But a transition official said the team has discussed implementing a border adjustment tax measure under consideration by House Ways and Means Committee Chairman Kevin Brady, which would tax imports to spur US manufacturing.
http://www.cnn.com/2016/12/21/politics/ … index.html

Prediction: trump will slap some bullshit tariff on some negligible item and then claim a big victory
it'll most likely be on chinese made products which is fair enough.

trying to import something into china is a fucking nightmare.
yeah, we should put tariffs on chinese made products because it's hard to import stuff into china.

A+ bro.
Cybargs
Moderated
+2,268|4190

KEN-JENNINGS wrote:

Cybargs wrote:

SuperJail Warden wrote:

Trump team floats tariffs

http://www.cnn.com/2016/12/21/politics/ … index.html

Prediction: trump will slap some bullshit tariff on some negligible item and then claim a big victory
it'll most likely be on chinese made products which is fair enough.

trying to import something into china is a fucking nightmare.
yeah, we should put tariffs on chinese made products because it's hard to import stuff into china.

A+ bro.
If china wants to play fuck fuck games, so can murica.
https://cache.www.gametracker.com/server_info/203.46.105.23:21300/b_350_20_692108_381007_FFFFFF_000000.png
Cybargs
Moderated
+2,268|4190

SuperJail Warden wrote:

Tariffs directed specifically at China would be a really dumb thing to do. I meant I expect him to put a tariff on something like imports on a certain kind of wood or minor specialized electronics. Then he can go to American factories and talk about how many jobs he saved with his tariff.
China makes americans pay almost double what other countries pay for visa's entering china. it's part of their diplomacy tool box.
https://cache.www.gametracker.com/server_info/203.46.105.23:21300/b_350_20_692108_381007_FFFFFF_000000.png

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