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Walton Family has 1 out of every 1000 dollars in America

  • TravelinMan said... (original post)

    no

    You're really on quite the little roll today, aren't you? Did the doctor change your meds or something?

    Just spreading around the truth. Sorry it disturbs you.

    Haven't been to a doctor for anything for 6 years, and that was for a cortisone shot for my arthritic knees. Only "meds" I take now are a couple of naproxin sodium tablets a couple of times a week for my arthritis. Unlike you, I'm not on anti-psychotics.

  • Madhatter536 said... (original post)

    Maybe Chinese made goods are all they can get because the corporate overlords don't make anything in this country anymore because the corporate overlords wanted more for themselves and sent the manufacturing to China instead of paying decent wages to make things here. It's damn hard to buy American, though a lot of us try, when companies that used to make things in America now manufacture in China and bring it back here to sell, at the same price as when it was made here. They save manufacturing costs, but DON"T pass the savings on to the consumer, they keep the difference and put it in their own already fat pockets. It IS the rich who are to blame, not the middle class. We can't buy what isn't available. And it isn't available because of the GREED of the rich.

    You mean to tell me that Walmart put all those mom and pop made in america businesses out of business all by themselves? The mass number of people who stopped shopping and buying those made in america goods have no blame? They willingly went along to save a buck. They put all those dollars in china. Without demand, no money would be going to china. Perhaps you better starting looking at those who make buying decisions as the real problem about money going overseas.

    Would Toyota be the number one auto company if people didnt buy there cars? Would all TVs be made in Asia if people would have bought Zeniths and the host of other US TV manufacturers that are gone. The story goes on and on. Consumers make choices and that is the biggest driver of why our dollars end up in china and other countries.

    This post was edited by lars 3 years ago

  • lars said... (original post)

    You mean to tell me that Walmart put all those mom and pop made in america businesses out of business all by themselves? The mass number of people who stopped shopping and buying those made in america goods have no blame? They willingly went along to save a buck. They put all those dollars in china. Without demand, no money would be going to china. Perhaps you better starting looking at those who make buying decisions as the real problem about money going overseas.

    Would Toyota be the number one auto company if people didnt buy there cars? Would all TVs be made in Asia if people would have bought Zeniths and the host of other US TV manufacturers that are gone. The story goes on and on. Consumers make choices and that is the biggest driver of why our dollars end up in china and other countries.

    More conservative lies and spin from lars. Big surprise.

  • lars said... (original post)

    Why single out the rich. Its actually all those people who shop at walmart because they can get cheap chinese goods that sends far more money overseas. If people just stopped buying stuff from walmart, foreign big screen tvs, Korean cars and all the other stuff made in cheap labor markets. So if when you take that money from the rich and give it to those walmart shoppers..even more of it will wind up in the same place..over in china. Smart thinking.

    Are you serious? Did you spend more than 2 seconds on that simplistic rebuttal?

    The vast majority of income the poor and middle class receive is spent on housing, food, transportation, and healthcare. You can't spend any more "locally" than that with the possible exception of transportation (foreign cars/oil). The poor and middle class don't have the options to send their money overseas like the rich do.

  • ming said... (original post)

    Are you serious? Did you spend more than 2 seconds on that simplistic rebuttal?

    The vast majority of income the poor and middle class receive is spent on housing, food, transportation, and healthcare. You can't spend any more "locally" than that with the possible exception of transportation (foreign cars/oil). The poor and middle class don't have the options to send their money overseas like the rich do.

    Really? Have you been inside a Wal*Mart lately?

  • TravelinMan said... (original post)

    Really? Have you been inside a Wal*Mart lately?

    Yeah, I understand that.

    The point I was trying to make is that the poor spend the vast amount of their income in the local economy. Compare what the average poor person spends at Walmart on foreign produced goods vs. what they spend on domestically produced goods like housing, food and health care. The Walmart argument is just silly.

  • ming said... (original post)

    Are you serious? Did you spend more than 2 seconds on that simplistic rebuttal?

    The vast majority of income the poor and middle class receive is spent on housing, food, transportation, and healthcare. You can't spend any more "locally" than that with the possible exception of transportation (foreign cars/oil). The poor and middle class don't have the options to send their money overseas like the rich do.

    Its not just the poor..we are talking about the driver of spending in the economy..which is the middle class. Walmart is one piece of the economy. You do understand that Walmart is the largest US retailer? and the 70% of the GDP is consumer driven? Who spends the money in these stores? The rich who make up less than 5% of the population? Or the vast majority of middle class who make up the rest of the consumers? Its not hard to figure out. The middle are the people are buying up all the goods made in china..which collectively dwarfs any amount of money that the rich can or would send over to invest in china. ( I would be surprised if any rich person has more than 5% of their money invested in China). China is still not see as a grade A investment.

    China is 4-6 trillion dollar economy..most driven by exports and a huge chunk of that is to the US consumer. Im sorry but the US rich are not investing a trillion or two a year in China. That money is coming from sales to US consumers.

    When you complain about money going over to china. The only reason it happens is because consumers have made buying decisions to support it. Whether its walmart, target, best buy and on and on..its the driver of the economy and our trade deficit.

    Its the same reason..you can't tax the rich enough to cover our govt costs. There is just not enough money there. To get to the truly large multi trillion dollar economy you have to tap into the middle class. They drive the economy and they are also the ones who decide by their buying decisions to send trillions overseas. Sorry..I know it doesn't fit with your rich are the source of all our problems narrative. But those are the facts.

    This post has been edited 5 times, most recently by lars 3 years ago

  • lars said... (original post)

    Its not just the poor..we are talking about the driver of spending in the economy..which is the middle class. Walmart is one piece of the economy. You do understand that Walmart is the largest US retailer? and the 70% of the GDP is consumer driven? Who spends the money in these stores? The rich who make up less than 5% of the population? Or the vast majority of middle class who make up the rest of the consumers? Its not hard to figure out. The middle are the people are buying up all the goods made in china..which collectively dwarfs any amount of money that the rich can or would send over to invest in china. ( I would be surprised if any rich person has more than 5% of their money invested in China). China is still not see as a grade A investment.

    China is 4-6 trillion dollar economy..most driven by exports and a huge chunk of that is to the US consumer. Im sorry but the US rich are not investing a trillion or two a year in China. That money is coming from sales to US consumers.

    When you complain about money going over to china. The only reason it happens is because consumers have made buying decisions to support it. Whether its walmart, target, best buy and on and on..its the driver of the economy and our trade deficit.

    Its the same reason..you can't tax the rich enough to cover our govt costs. There is just not enough money there. To get to the truly large multi trillion dollar economy you have to tap into the middle class. They drive the economy and they are also the ones who decide by their buying decisions to send trillions overseas. Sorry..I know it doesn't fit with your rich are the source of all our problems narrative. But those are the facts.

    Good lord. I've never seen someone put so much effort into a red herring. What does Walmart have to do with your original argument? You were trying to say that investing by the wealthy results in job creation and my response was that given the global economy there was no guarantee that those investments would benefit the US economy as you were implying. I provided evidence of that fact. Then you bring up the poor like to shop at Walmart and that's your rebuttal? Wtf does that have to do with anything? confused

  • lars said... (original post)

    What do you think the wealthy do with their money? Stick it under a mattress? No..they INVEST IT. They put into businesses..buy businesses..start new businesses..buy real estate..buy stocks (buying businesses)...buy bonds (fund the govt and business). All of these actions put MONEY BACK INTO THE ECONOMY and produce jobs and income for people. So stop with the false assumption that the wealthy don't put their money back into the economy. You have to spend your paycheck at Walmart to put money back into the economy.

    lars from 16 hours ago, meet lars from 5 hours ago...

    lars said...

    Its the same reason..you can't tax the rich enough to cover our govt costs. There is just not enough money there. To get to the truly large multi trillion dollar economy you have to tap into the middle class.

    So lars from 5 hours ago thinks your concerns regarding the wealthy are irrelevant because they represent an insignificant portion of the US economy.

  • lars said... (original post)

    You mean to tell me that Walmart put all those mom and pop made in america businesses out of business all by themselves? The mass number of people who stopped shopping and buying those made in america goods have no blame? They willingly went along to save a buck. They put all those dollars in china. Without demand, no money would be going to china. Perhaps you better starting looking at those who make buying decisions as the real problem about money going overseas.

    Would Toyota be the number one auto company if people didnt buy there cars? Would all TVs be made in Asia if people would have bought Zeniths and the host of other US TV manufacturers that are gone. The story goes on and on. Consumers make choices and that is the biggest driver of why our dollars end up in china and other countries.

    Have you researched Walmart extensively enough? Do you know the tactics they use on their suppliers?

    Look when Sam Walton was in charge almost all of their commercials had a "Made in America" "Great Value" sort of vibe to it.

    He was no more in the ground when those commercials pretty much vanished and the emphasis switched to "Low Cost" "Rollback". Walmart then pressured the shit out of their suppliers to lower costs and in many of their contracts demanded that year over year their price goes DOWN regardless. This forced a lot of suppliers to either a) move manufacturing to lower cost places or b) take their chances without Walmart as a customer.

    Now should the average consumer have been paying better attention to this? Yeah most definitely. But in their defense, if you walk into a Walmart to buy an item and see the same brand you've always bought for years, are you going to closely examine where it was manufactured? I mean it's not as if these companies are going to advertise in big bold letters and commercials that they are now making their stuff in China versus the US. This was a gradual shift on a lot of the products. And once consumers got hooked on getting what they thought were the same exact items at Walmart for a much cheaper price than they'd get at a mom and pop store, it was an easy switch for most manufacturers and eventually all other stores.

    Of course a bigger irony here is you now chastising those consumers for their actions when you've been a major cheerleader of off shoring in order to deliver the best value to consumers.

  • TrapperGus

    MSULordyoda said... (original post)

    Have you researched Walmart extensively enough? Do you know the tactics they use on their suppliers?

    Look when Sam Walton was in charge almost all of their commercials had a "Made in America" "Great Value" sort of vibe to it.

    He was no more in the ground when those commercials pretty much vanished and the emphasis switched to "Low Cost" "Rollback". Walmart then pressured the shit out of their suppliers to lower costs and in many of their contracts demanded that year over year their price goes DOWN regardless. This forced a lot of suppliers to either a) move manufacturing to lower cost places or b) take their chances without Walmart as a customer.

    Now should the average consumer have been paying better attention to this? Yeah most definitely. But in their defense, if you walk into a Walmart to buy an item and see the same brand you've always bought for years, are you going to closely examine where it was manufactured? I mean it's not as if these companies are going to advertise in big bold letters and commercials that they are now making their stuff in China versus the US. This was a gradual shift on a lot of the products. And once consumers got hooked on getting what they thought were the same exact items at Walmart for a much cheaper price than they'd get at a mom and pop store, it was an easy switch for most manufacturers and eventually all other stores.

    Of course a bigger irony here is you now chastising those consumers for their actions when you've been a major cheerleader of off shoring in order to deliver the best value to consumers.

    When did Sam die becuase I recall Walmart using purchaing pressure almost from the beginning...Sam was not a saint in this regard...

    Lurking on tRCMB since 1996

  • TrapperGus said... (original post)

    When did Sam die becuase I recall Walmart using purchaing pressure almost from the beginning...Sam was not a saint in this regard...

    Sam Walton died in 1992.

    And please reread my part where they emphasized "American Made" and "Low Prices" The "American Made" theme went out the window after he died.

  • ming said... (original post)

    Good lord. I've never seen someone put so much effort into a red herring. What does Walmart have to do with your original argument? You were trying to say that investing by the wealthy results in job creation and my response was that given the global economy there was no guarantee that those investments would benefit the US economy as you were implying. I provided evidence of that fact. Then you bring up the poor like to shop at Walmart and that's your rebuttal? Wtf does that have to do with anything? confused

    (Sigh). Ok. Can you stop with the silly diversions and pretending you don't understand basic economy activity. Perhaps you don't but I doubt it. So one more time..

    You BROUGHT UP money going to china.

    ming said...

    Which economy? Are the American people supposed to be grateful that wealthy US investors are creating more jobs and income for the Chinese for example?

    I responded to your comment about American money going to China. By pointing out the truth. Which is the VAST MAJORITY of money that goes to China comes from the CONSUMER from the choices they make in the marketplace. The rich are not socking away all their money in Chinese banks..and if some money is being invested in China. It is dwarfed in comparison by the amount of money that is sent to China from the US consumer. I brought up Walmart as an example of that..since you know. .. they are the largest US retailer. But Walmart is not my point..the point again..is that the US consumer drives the vast majority of money to China ( which does in fact create jobs there).

    No on to a DIFFERENT POINT. Which is that the VAST majority of wealth from the rich actually stays here in America. And when they invest it in America. That creates economic activity. Please prove that wrong. And give up the silly diversions about red herrings and acting stupid. You can do better than that.

    This post was edited by lars 3 years ago

  • lars said... (original post)

    (Sigh). Ok. Can you stop with the silly diversions and pretending you don't understand basic economy activity. Perhaps you don't but I doubt it. So one more time..

    You BROUGHT UP money going to china.

    ming said...

    Which economy? Are the American people supposed to be grateful that wealthy US investors are creating more jobs and income for the Chinese for example?

    I responded to your comment about American money going to China. By pointing out the truth. Which is the VAST MAJORITY of money that goes to China comes from the CONSUMER from the choices they make in the marketplace. The rich are not socking away all their money in Chinese banks..and if some money is being invested in China. It is dwarfed in comparison by the amount of money that is sent to China from the US consumer. I brought up Walmart as an example of that..since you know. .. they are the largest US retailer. But Walmart is not my point..the point again..is that the US consumer drives the vast majority of money to China ( which does in fact create jobs there).

    No on to a DIFFERENT POINT. Which is that the VAST majority of wealth from the rich actually stays here in America. And when they invest it in America. That creates economic activity. Please prove that wrong. And give up the silly diversions about red herrings and acting stupid. You can do better than that.

    You are blabbing on and on about a completely separate topic. The rich investing in China was simply an example. I suppose if I would have used Brazil or any of the other BRIC countries besides China you may not have been so easily distracted.

    Now again...

    You were trying to push the theory that by virtue of the Rich having more money to invest that it will lead to more jobs and income. Your statement obviously implied that those jobs and income would be created in America. I pointed out that we live in a global economy and there is no guarantee that those investment monies would benefit Americans rather than say Brazilians or Russians (is that better?) due to the fact that the growth potential in those emerging economies can offer much higher returns than investing in a matured economy like the US. I then provided 2 articles that show that the wealthy are increasing their investments overseas.

    So based on that, WTF does Walmart have to do with that? The US trade deficit is a completely separate topic. You get that right?

  • ming said... (original post)

    You are blabbing on and on about a completely separate topic. The rich investing in China was simply an example. I suppose if I would have used Brazil or any of the other BRIC countries besides China you may not have been so easily distracted.

    Now again...

    You were trying to push the theory that by virtue of the Rich having more money to invest that it will lead to more jobs and income. Your statement obviously implied that those jobs and income would be created in America. I pointed out that we live in a global economy and there is no guarantee that those investment monies would benefit Americans rather than say Brazilians or Russians (is that better?) due to the fact that the growth potential in those emerging economies can offer much higher returns than investing in a matured economy like the US. I then provided 2 articles that show that the wealthy are increasing their investments overseas.

    So based on that, WTF does Walmart have to do with that? The US trade deficit is a completely separate topic. You get that right?

    And ...you continue to ignore the obvious fact. That the vast, vast majority of investment by the rich happens in the US.. NOT brazil, china, russia or any other risky, somewhat unstable country. Is that to say no investment happens there? Of course not there is money going to these markets..but as a percentage I would bet its less than 5% of wealth assets. These are not 'safe' bets..they are by nature risky economies, currencies and political conditions. And no one with any sense is taking 50%-100% of their wealth and putting in Brazil or China.

    So back to the fact. Yes investment creates jobs and economic activity. And, yes most of that investment still happens in the US. Meaning that your fairy tale that all the rich are taking all their money and dumping in China, Brazil...etc is bunk. In fact, if you dropped the double taxation on money earned overseas..you would see about 2 trillion of foreign dollars that are held outside of the US come back. Business can't bring back the bulk of foreign earning because they get hit by huge US taxes. Get rid of that tax and companies are itching to bring it back to the US ..because it the safest place to invest cash. That 2 trillion would do wonders for the US economy.

    This post has been edited 2 times, most recently by lars 3 years ago

  • lars said... (original post)

    And ...you continue to ignore the obvious fact. That the vast, vast majority of investment by the rich happens in the US.. NOT brazil, china, russia or any other risky, somewhat unstable country. Is that to say no investment happens there? Of course not there is money going to these markets..but as a percentage I would bet its less than 5% of wealth assets. These are not 'safe' bets..they are by nature risky economies, currencies and political conditions. And no one with any sense is taking 50%-100% of their wealth and putting in Brazil or China.

    So back to the fact. Yes investment creates jobs and economic activity. And, yes most of that investment still happens in the US. Meaning that your fairy tale that all the rich are taking all their money and dumping in China, Brazil...etc is bunk. In fact, if you dropped the double taxation on money earned overseas..you would see about 2 trillion of foreign dollars that are held outside of the US come back. Business can't bring back the bulk of foreign earning because they get hit by huge US taxes. Get rid of that tax and companies are itching to bring it back to the US ..because it the safest place to invest cash. That 2 trillion would do wonders for the US economy.

    For fuck's sake. No one said that investors were putting 50-100% of their investments in Brazil or China rather that investments in emerging markets are at record levels and growing. Investors are chasing growth and the most growth potential is overseas. And so that you don't get your panties in a bunch, yes most American investment dollars are invested locally but more and more American investment capital is being sent overseas... in record amounts.

    And allow me to blow a massive hole in your "if corporations only had a tax holiday they would create jobs in the US" nonsense. First, I get bonus points for actually citing sources. And second, I get double bonus points because one is the Wall Street Journal and the other is the Heritage Foundation. Considering that both of these sources sit squarely inside your information bubble I'm shocked you missed them...

    1. The WSJ recollects what happened the last time we tried a tax repatriation holiday...

    - The report warned against repeating the tax break, calling the 2004 effort "a failed tax policy" that cost the U.S. Treasury $3.3 billion in estimated lost revenues over 10 years and led to U.S. companies directing more funds offshore.

    - The 15 companies that repatriated the most after the 2004 tax break on the return of overseas profits later cut a net 20,931 jobs between 2004 and 2007 and slightly decreased the pace of their spending on research and development, found the report surveying 19 companies' activity.

    - The report noted that Pfizer had the single largest share of the repatriated profits, bringing home $35.5 billion in foreign earnings, while also cutting 11,748 U.S. jobs between 2004 and 2007. Similarly, IBM brought back $9.5 billion, but cut 12,830 jobs

    - Meanwhile, the top 15 repatriating companies also accelerated their spending on stock buybacks and executive compensation after the tax break. The top five executives at those 15 companies saw their compensation rise 27% from 2004 to 2005 and then another 30% between 2005 to 2006

    2. Here's what the Heritage Foundation thinks about trying that idea again...

    While the tax break would likely prompt companies to bring home overseas profits, those companies wouldn’t use the extra cash to hire workers, launch mergers or make other new investments they wouldn’t already undertake, argue senior fellow J.D. Foster and senior policy analyst Curtis Dubay.

    The companies that would benefit from a repatriation tax holiday aren’t currently squeezed for capital, so an influx of funds won’t alone be motivation enough to create new jobs, the pair write. “The repatriation holiday would have little or no effect on investment and job creation, the key to the whole issue, simply because the repatriating companies are not capital-constrained today.”

    The 2004 tax holiday prompted 843 corporations to bring back $312 billion to the U.S., according to the Internal Revenue Service. But the repatriated funds were primarily used to reward shareholders, largely through dividends and stock buybacks, according to a 2009 study published by the nonpartisan National Bureau Of Economic Research.

    “In short, the companies received an unexpected tax break and the shareholders saw a shift in their portfolios. But these events did not create jobs,” the Heritage report cautions.

    Report: Repatriation Tax Holiday a 'Failed' P

    The 15 companies that benefited the most from a 2004 tax break for the return of their overseas profits cut more than 20,000 net jobs and decreased the pace of their research spending, according to report from the Democratic staff of the Senate Permanent Subcommittee on Investigations released Monday night.

    http://online.wsj.com/article/SB10001424052970203633104576623771022129888.html


    Would Another Repatriation Tax Holiday Cre

    U.S. companies that own foreign subsidiaries pay taxes abroad—and they often pay taxes again when the companies bring the earnings home—known as repatriation. This double taxation naturally hurts competitiveness at home and abroad, and encourages U.S. companies to leave these earnings abroad. A proposal to reduce the U.S. tax on profits previously earned—a repatriation tax holiday—is gaining momentum in Congress. This sequel to a similar 2004 holiday would, like its predecessor, have a minuscule effect on domestic investment and thus have a minuscule effect on the U.S. economy and job creation. Heritage Foundation tax policy experts J.D. Foster and Curtis Dubay explain why this tax cut would not be a step toward the sound policy of territoriality, and suggest a more useful step toward territoriality and fundamental reform that would strengthen U.S. competitiveness at home and abroad.

    http://www.heritage.org/research/reports/2011/10/would-another-repatriation-tax-holiday-create-jobs
  • ming said... (original post)

    For fuck's sake. No one said that investors were putting 50-100% of their investments in Brazil or China rather that investments in emerging markets are at record levels and growing. Investors are chasing growth and the most growth potential is overseas. And so that you don't get your panties in a bunch, yes most American investment dollars are invested locally but more and more American investment capital is being sent overseas... in record amounts.

    And allow me to blow a massive hole in your "if corporations only had a tax holiday they would create jobs in the US" nonsense. First, I get bonus points for actually citing sources. And second, I get double bonus points because one is the Wall Street Journal and the other is the Heritage Foundation. Considering that both of these sources sit squarely inside your information bubble I'm shocked you missed them...

    1. The WSJ recollects what happened the last time we tried a tax repatriation holiday...

    - The report warned against repeating the tax break, calling the 2004 effort "a failed tax policy" that cost the U.S. Treasury $3.3 billion in estimated lost revenues over 10 years and led to U.S. companies directing more funds offshore.

    - The 15 companies that repatriated the most after the 2004 tax break on the return of overseas profits later cut a net 20,931 jobs between 2004 and 2007 and slightly decreased the pace of their spending on research and development, found the report surveying 19 companies' activity.

    - The report noted that Pfizer had the single largest share of the repatriated profits, bringing home $35.5 billion in foreign earnings, while also cutting 11,748 U.S. jobs between 2004 and 2007. Similarly, IBM brought back $9.5 billion, but cut 12,830 jobs

    - Meanwhile, the top 15 repatriating companies also accelerated their spending on stock buybacks and executive compensation after the tax break. The top five executives at those 15 companies saw their compensation rise 27% from 2004 to 2005 and then another 30% between 2005 to 2006

    2. Here's what the Heritage Foundation thinks about trying that idea again...

    While the tax break would likely prompt companies to bring home overseas profits, those companies wouldn’t use the extra cash to hire workers, launch mergers or make other new investments they wouldn’t already undertake, argue senior fellow J.D. Foster and senior policy analyst Curtis Dubay.

    The companies that would benefit from a repatriation tax holiday aren’t currently squeezed for capital, so an influx of funds won’t alone be motivation enough to create new jobs, the pair write. “The repatriation holiday would have little or no effect on investment and job creation, the key to the whole issue, simply because the repatriating companies are not capital-constrained today.”

    The 2004 tax holiday prompted 843 corporations to bring back $312 billion to the U.S., according to the Internal Revenue Service. But the repatriated funds were primarily used to reward shareholders, largely through dividends and stock buybacks, according to a 2009 study published by the nonpartisan National Bureau Of Economic Research.

    “In short, the companies received an unexpected tax break and the shareholders saw a shift in their portfolios. But these events did not create jobs,” the Heritage report cautions.

    Lars owned yet again.

  • ming said... (original post)

    For fuck's sake. No one said that investors were putting 50-100% of their investments in Brazil or China rather that investments in emerging markets are at record levels and growing. Investors are chasing growth and the most growth potential is overseas. And so that you don't get your panties in a bunch, yes most American investment dollars are invested locally but more and more American investment capital is being sent overseas... in record amounts.

    And allow me to blow a massive hole in your "if corporations only had a tax holiday they would create jobs in the US" nonsense. First, I get bonus points for actually citing sources. And second, I get double bonus points because one is the Wall Street Journal and the other is the Heritage Foundation. Considering that both of these sources sit squarely inside your information bubble I'm shocked you missed them...

    1. The WSJ recollects what happened the last time we tried a tax repatriation holiday...

    - The report warned against repeating the tax break, calling the 2004 effort "a failed tax policy" that cost the U.S. Treasury $3.3 billion in estimated lost revenues over 10 years and led to U.S. companies directing more funds offshore.

    - The 15 companies that repatriated the most after the 2004 tax break on the return of overseas profits later cut a net 20,931 jobs between 2004 and 2007 and slightly decreased the pace of their spending on research and development, found the report surveying 19 companies' activity.

    - The report noted that Pfizer had the single largest share of the repatriated profits, bringing home $35.5 billion in foreign earnings, while also cutting 11,748 U.S. jobs between 2004 and 2007. Similarly, IBM brought back $9.5 billion, but cut 12,830 jobs

    - Meanwhile, the top 15 repatriating companies also accelerated their spending on stock buybacks and executive compensation after the tax break. The top five executives at those 15 companies saw their compensation rise 27% from 2004 to 2005 and then another 30% between 2005 to 2006

    2. Here's what the Heritage Foundation thinks about trying that idea again...

    While the tax break would likely prompt companies to bring home overseas profits, those companies wouldn’t use the extra cash to hire workers, launch mergers or make other new investments they wouldn’t already undertake, argue senior fellow J.D. Foster and senior policy analyst Curtis Dubay.

    The companies that would benefit from a repatriation tax holiday aren’t currently squeezed for capital, so an influx of funds won’t alone be motivation enough to create new jobs, the pair write. “The repatriation holiday would have little or no effect on investment and job creation, the key to the whole issue, simply because the repatriating companies are not capital-constrained today.”

    The 2004 tax holiday prompted 843 corporations to bring back $312 billion to the U.S., according to the Internal Revenue Service. But the repatriated funds were primarily used to reward shareholders, largely through dividends and stock buybacks, according to a 2009 study published by the nonpartisan National Bureau Of Economic Research.

    “In short, the companies received an unexpected tax break and the shareholders saw a shift in their portfolios. But these events did not create jobs,” the Heritage report cautions.

    I don't see any reason why a company, if they've got workers who work for much, much less than they do here... would hire American workers. Even if my profits keep going up and up and up.... I'm just seeing more money in my pocket. Why would I hire American workers? For charity?

    This is a serious question, which I know is an exception to most of my banter.

  • xsanguine said... (original post)

    I don't see any reason why a company, if they've got workers who work for much, much less than they do here... would hire American workers. Even if my profits keep going up and up and up.... I'm just seeing more money in my pocket. Why would I hire American workers? For charity?

    This is a serious question, which I know is an exception to most of my banter.

    And your failure to understand the reason is also a huge part of the jobless problem in the country. Your viewpoint is exactly the same as all the companies that have moved off shore. They don't care about anything except their own greedy pockets. What they, and you, don't realize is that the well is going to run dry pretty soon. If people here don't have jobs because the jobs they used to have are now off shore, then where are they going to get the money to keep buying the things you make off shore that used to be made here?

    You said it yourself, the people working off shore make little to nothing, so they aren't going to buy what they are making and without domestic purchasers you are dependent on foreign purchasers. But if your largest market is also unable to afford your product, who does that leave? Most of the countries that do purchase foreign goods also have tariffs in place to protect their own manufacturing base so you couldn't undersell their domestic manufacturers which leaves you a very limited area to sell. Moving manufacturing off shore also leaves the country vulnerable if the off shore country decides to take over the company and refuses to sell to the originating country. It's happened before, and there is no reason it won't happen again. The Chinese are a lot smarter than American manufacturers and eventually they ARE going to nationalize every industry that has moved there. Then where will the business owners be? We can keep shooting ourselves in the foot, or we can wake up and bring our industry back here. We are just asking for an economic Pearl Harbor if we don't.

  • Madhatter536 said... (original post)

    And your failure to understand the reason is also a huge part of the jobless problem in the country. Your viewpoint is exactly the same as all the companies that have moved off shore. They don't care about anything except their own greedy pockets. What they, and you, don't realize is that the well is going to run dry pretty soon. If people here don't have jobs because the jobs they used to have are now off shore, then where are they going to get the money to keep buying the things you make off shore that used to be made here?

    You said it yourself, the people working off shore make little to nothing, so they aren't going to buy what they are making and without domestic purchasers you are dependent on foreign purchasers. But if your largest market is also unable to afford your product, who does that leave? Most of the countries that do purchase foreign goods also have tariffs in place to protect their own manufacturing base so you couldn't undersell their domestic manufacturers which leaves you a very limited area to sell. Moving manufacturing off shore also leaves the country vulnerable if the off shore country decides to take over the company and refuses to sell to the originating country. It's happened before, and there is no reason it won't happen again. The Chinese are a lot smarter than American manufacturers and eventually they ARE going to nationalize every industry that has moved there. Then where will the business owners be? We can keep shooting ourselves in the foot, or we can wake up and bring our industry back here. We are just asking for an economic Pearl Harbor if we don't.

    Actually, I think he gets the reason. I think his response more geared to lars. (Not sure why he quoted ming though.) Ming basically shredded lars with his post so I think xsanguine's question is a legitimate question to ask lars.

  • ming said... (original post)

    For fuck's sake. No one said that investors were putting 50-100% of their investments in Brazil or China rather that investments in emerging markets are at record levels and growing. Investors are chasing growth and the most growth potential is overseas. And so that you don't get your panties in a bunch, yes most American investment dollars are invested locally but more and more American investment capital is being sent overseas... in record amounts.

    And allow me to blow a massive hole in your "if corporations only had a tax holiday they would create jobs in the US" nonsense. First, I get bonus points for actually citing sources. And second, I get double bonus points because one is the Wall Street Journal and the other is the Heritage Foundation. Considering that both of these sources sit squarely inside your information bubble I'm shocked you missed them...

    1. The WSJ recollects what happened the last time we tried a tax repatriation holiday...

    - The report warned against repeating the tax break, calling the 2004 effort "a failed tax policy" that cost the U.S. Treasury $3.3 billion in estimated lost revenues over 10 years and led to U.S. companies directing more funds offshore.

    - The 15 companies that repatriated the most after the 2004 tax break on the return of overseas profits later cut a net 20,931 jobs between 2004 and 2007 and slightly decreased the pace of their spending on research and development, found the report surveying 19 companies' activity.

    - The report noted that Pfizer had the single largest share of the repatriated profits, bringing home $35.5 billion in foreign earnings, while also cutting 11,748 U.S. jobs between 2004 and 2007. Similarly, IBM brought back $9.5 billion, but cut 12,830 jobs

    - Meanwhile, the top 15 repatriating companies also accelerated their spending on stock buybacks and executive compensation after the tax break. The top five executives at those 15 companies saw their compensation rise 27% from 2004 to 2005 and then another 30% between 2005 to 2006

    2. Here's what the Heritage Foundation thinks about trying that idea again...

    While the tax break would likely prompt companies to bring home overseas profits, those companies wouldn’t use the extra cash to hire workers, launch mergers or make other new investments they wouldn’t already undertake, argue senior fellow J.D. Foster and senior policy analyst Curtis Dubay.

    The companies that would benefit from a repatriation tax holiday aren’t currently squeezed for capital, so an influx of funds won’t alone be motivation enough to create new jobs, the pair write. “The repatriation holiday would have little or no effect on investment and job creation, the key to the whole issue, simply because the repatriating companies are not capital-constrained today.”

    The 2004 tax holiday prompted 843 corporations to bring back $312 billion to the U.S., according to the Internal Revenue Service. But the repatriated funds were primarily used to reward shareholders, largely through dividends and stock buybacks, according to a 2009 study published by the nonpartisan National Bureau Of Economic Research.

    “In short, the companies received an unexpected tax break and the shareholders saw a shift in their portfolios. But these events did not create jobs,” the Heritage report cautions.

    ..sigh.. Ming can't see the forest the through the trees. Perhaps a harvard finance professor and the ny times can enlighten you. I am not talking about a one time tax holiday. We need a permanent fix. Oh and you still haven't shown how investing money in America by the rich doesn't create jobs. Still waiting on that one.

    How to Bring Our Companies’ Foreign Profits Back Home
    By ROBERT C. POZEN
    Published: September 19, 2011

    Boston

    AS Congress starts the next round of debt ceiling negotiations, the United States Chamber of Commerce and other business groups are advocating tax relief for foreign profits of corporations based in the United States. Those profits are now subject to a 35 percent corporate tax rate, but the tax can be totally avoided as long as the United States corporations hold the profits in their accounts at foreign banks.

    The current system needs reform: it generates minimal tax revenue while deterring American corporations from using their foreign profits to build facilities in the United States.

    Business interests are calling for a so-called tax holiday, in which American corporations would be allowed to transfer their foreign profits to their American bank accounts at a tax rate under 6 percent for one year. Such a holiday would raise revenues and create jobs in the United States, according to the WinAmerica Campaign, a coalition of companies including Apple, Google and Pfizer.  

    But the last time such a holiday was tried, in 2004, it raised less than $19 billion and did not substantially increase jobs. Most of the repatriated profits went to corporate shareholders, through dividends or stock repurchases.

    Instead of a one-off holiday, some corporations — Caterpillar and Kimberly Clark, for example — have called for a permanent fix: a territorial system for taxing foreign corporate profits, as most industrialized countries use. In a pure territorial system, the profits of multinational companies based in the United States would be taxed only by the country in which the profit is earned.

    But none of our major trading partners takes a pure territorial approach, for two good reasons. First, almost all countries impose domestic taxes on “mobile” corporate income — for example, investment interest or royalties that can easily be shifted from one country to another. Second, many countries still collect taxes on foreign profits of domestic corporations if those profits are earned in tax havens that collect little or no taxes, like Bermuda and the Cayman Islands. These havens violate the premise of the territorial system, which is that corporate profits are taxed somewhere in the world at a reasonable rate. (The major European powers have been pressing Ireland to raise its 12.5 percent corporate tax rate to a minimum level acceptable to the European Union.)

    Congress should use the budget crisis as an opportunity to permanently adopt a modified territorial system for taxing foreign corporate profits. Here is how the system would work.

    First, Congress should exempt United States corporate profits earned in countries with effective corporate tax rates, on average, of 20 percent or higher. These countries include England, France and Japan. (This exemption would be subject to two exceptions: passive income like investment interest, and profits artificially transferred through complex transactions to countries exempt from United States tax.)

    Second, Congress should levy a 20 percent tax on United States corporate profits in any country with an effective corporate tax rate below, on average, 20 percent. Corporations would no longer be allowed to indefinitely defer American taxes on profits in these  jurisdictions. 

    But the 20 per cent levy should be reduced to reflect any taxes paid by United States multinationals in low-tax jurisdictions.

    If a foreign subsidiary of an American corporation pays some tax in a low-tax jurisdiction, it should receive a tax credit for that amount against the 20 percent tax.  For example, if corporate profits in Ireland were taxed at 12.5 percent, they would be subject to an American tax of only 7.5 percent (20 percent minus 12.5 percent). 

    Third, Congress should allow American corporations to transfer foreign profits earned overseas before 2012 back to the United States at a low rate — say, 10 percent — for the next two or three years. This rate would be part of a transition to a better permanent approach — not a one-off repatriation holiday.

    Such a transition is needed because, in the past, corporations reasonably relied on the current system, which allowed them to defer American taxes forever on their foreign profits as long as they were kept abroad. It would be unfair to suddenly impose a 20 percent tax on a strategy that until now has been perfectly legitimate. 

    This three-part proposal, while not perfect, is far superior to a one-off tax holiday or indefinite deferral under the current system. This proposal would raise revenues from corporate activities in jurisdictions with no or low taxes, while encouraging American corporations to repatriate their foreign profits at reasonable rates.

    The money can be used to reward shareholders, build factories or create jobs in the United States. Our economy needs all of these.   

    Robert C. Pozen, a longtime investment executive, is a senior lecturer at Harvard Business School, a nonresident senior fellow at the Brookings Institution and the co-author of “The Fund Industry: How Your Money is Managed.”

    This post has been edited 2 times, most recently by lars 3 years ago

  • lars said... (original post)

    ..sigh.. Ming can't see the forest the through the trees. Perhaps a harvard finance professor and the ny times can enlighten you. I am not talking about a one time tax holiday. We need a permanent fix. Oh and you still haven't shown how investing money in America by the rich doesn't create jobs. Still waiting on that one.

    I never said that "investing money in America doesn't create jobs". It's a dishonest trick of yours to put words in my mouth and ask me to defend them. I simply stated that there is no guarantee that the wealthy having even more investment capital would result in more jobs being created in the US rather than overseas. Does that mean that NO jobs would be created in the US? No. Nor should it mean that ALL jobs would be created in the US. The problem that I'm trying to explain to you is that MORE jobs are being created overseas and LESS here in the US and it's getting worse.

    Another link...

    But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.

    Here's a simple question: US businesses are sitting on record amounts of cash (held domestically) yet they are not increasing the hiring of American workers. Why would they start hiring if they had even more cash?

    Do you think it's possible that this problem can't be solved by tax policy? That it may be more complicated than simply shouting "give the wealthy, uh, I mean job creators, more money" ?

  • MSULordyoda said... (original post)

    Actually, I think he gets the reason. I think his response more geared to lars. (Not sure why he quoted ming though.) Ming basically shredded lars with his post so I think xsanguine's question is a legitimate question to ask lars.

    This.

    Sorry, I must have quoted the wrong individual.

  • ming said... (original post)

    I never said that "investing money in America doesn't create jobs". It's a dishonest trick of yours to put words in my mouth and ask me to defend them. I simply stated that there is no guarantee that the wealthy having even more investment capital would result in more jobs being created in the US rather than overseas. Does that mean that NO jobs would be created in the US? No. Nor should it mean that ALL jobs would be created in the US. The problem that I'm trying to explain to you is that MORE jobs are being created overseas and LESS here in the US and it's getting worse.

    Another link...

    But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.

    Here's a simple question: US businesses are sitting on record amounts of cash (held domestically) yet they are not increasing the hiring of American workers. Why would they start hiring if they had even more cash?

    Do you think it's possible that this problem can't be solved by tax policy? That it may be more complicated than simply shouting "give the wealthy, uh, I mean job creators, more money" ?

    Come on man, what they're sitting on now is "rainy day" money in these troubled times. That money they could repatriate is the "Mad Money" needed to create jobs and grow.

    Isn't that the standard line?

  • ming said... (original post)

    I never said that "investing money in America doesn't create jobs". It's a dishonest trick of yours to put words in my mouth and ask me to defend them. I simply stated that there is no guarantee that the wealthy having even more investment capital would result in more jobs being created in the US rather than overseas. Does that mean that NO jobs would be created in the US? No. Nor should it mean that ALL jobs would be created in the US. The problem that I'm trying to explain to you is that MORE jobs are being created overseas and LESS here in the US and it's getting worse.

    Another link...

    But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.

    Here's a simple question: US businesses are sitting on record amounts of cash (held domestically) yet they are not increasing the hiring of American workers. Why would they start hiring if they had even more cash?

    Do you think it's possible that this problem can't be solved by tax policy? That it may be more complicated than simply shouting "give the wealthy, uh, I mean job creators, more money" ?

    Well that is cute reply. "No Guarantee". Of course there is no guarantee. There are no guarantees with any tax or spending policies. What you are trying to do is ENCOURAGE a likely outcome. Clearly putting more money in to the hands of people whether is the rich or middle (best to do both) should encourage more economic activity right here at home. But that's not a a guarantee of course. But is very LIKELY..and has historically produced those positive results. So much for your theory that all those dollars will go overseas. BTW when the US economy expands and grows..much of that money that is chasing higher (but risky) returns will come back to the US. The only reason it goes overseas is because the US economy is not expanding. People would rather keep that money home than risk it in emerging markets that are volatile. Even so, we are NOT talking about the bulk of money from the wealthy moving oversees.. you continue to miss that point. I would be very surprised if in general people who are wealthy keep any more than 5% of their money in foreign investments. Its definitely a risky play to hold much more in foreign investments.

    As for US businesses holding onto cash. As has been discussed many times in other threads. Profits don't equal new jobs. Demand and productivity is what drives jobs. Right now demand is flat...but productivity is keeping up with demand..So businesses don't need to hire and yet they are still making money.
    So there you have it. I hope this has been educational for you. Either that or you are so steeped in your liberal view of the world that you can't see how basic investments work in the US.

    Lets summarize for you:

    1-The vast majority of money in the hands of the wealthy STAY in US investments. Only a very small but recently increasing % of the assets of the wealthy are moved overseas to risky emerging markets.

    2-When the wealthy make investments it stimulates economic activity in a variety of ways..which does create jobs, supports and funds industries that employ millions of people like banking, financial markets, IPOs, mergers and acquisitions and new innovative businesses.

    3 - If you are going to complain about money going overseas. The rich should not be your focus. They make up a small percentage of US dollars that go overseas. The vast majority of money moving overseas if from the US consumer buying foreign goods.

    4-If you want to encourage more US money to come back to America the best ways are to change the PERMANENT foreign profits tax structure for businesses. Make it economical sensible for them to bring back some 2 trillion in foreign profits for the long haul..(not a one time tax holiday). And secondly, a growing US economy will natural bring back the money that is moving into risky emerging markets..because some wealthy are chasing returns with a small amount of their total assets.

    School is out..have a good holiday! Merry Christmas!

    This post has been edited 2 times, most recently by lars 3 years ago