Tag Archives: Business

News

Why do corporations ship jobs overseas? What causes outsourcing of jobs?

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World Corporate Tax Rates
World Corporate Tax Rates

Here is a news story from Yahoo News that explains the problem and the cause of the problem. (H/T Dad)

Excerpt:

Large U.S. companies boosted their offshore earnings by 15 percent last year to a record $1.9 trillion, avoiding hefty tax bills by keeping the profits abroad, according to a new report.

The overseas earnings stockpile has climbed by 70 percent over the past five years, said research firm Audit Analytics. Data in its report covers the Russell 3000 index of the largest U.S. corporations.

U.S.-based multinationals do not have to pay U.S. corporate income tax on foreign earnings as long as the earnings do not enter the United States. Accounting rules also let the companies avoid recognizing a tax expense if management intends to keep the earnings indefinitely reinvested overseas.

“It would probably be nice to have this money in our country being used in our economy, but at the moment we see it growing elsewhere,” said Don Whalen, general counsel and director of research at Audit Analytics.

Conglomerate General Electric Co (GE.N), had the most indefinitely reinvested overseas earnings, at about $108 billion, while drugmaker Pfizer Inc (PFE.N) was next with $73 billion, according to Audit Analytics.

The simple answer is that Americans believe that corporations need to pay high taxes and operate under burdensome regulations. This eats into their profits, making it harder for them to grow and expand. The plain truth is that it is easier for corporations to expand and hire in countries with lower taxes and fewer regulations. Besides, who wants to be wiped out by a nuisance lawsuit just because someone spills coffee on themselves and then refuses to take responsibility? The smart play is to just opt out completely, and that’s what many corporations do – earning higher profits in more business-friendly countries.

News

Americans finding out the true costs of Obamacare

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The Daily Caller has a sobering article about the true costs of Obamacare.

Excerpt:

Millions of Americans are receiving double-digit premium hikes. For many people under 30, their health insurance premiums are going up much more — by as much as 189 percent. What happened to candidate Barack Obama’s 2008 promise that every family’s health care costs would go down by $2,500 by the end of his first term? (Costs actually went up by $3,000.)

The Congressional Budget Office projects Obamacare will cost tens of billions more over the next decade than the agency projected just three years ago. Those increases were not budgeted for, and will add to massive deficits.

So much for the promise that the law “will not add one dime to the deficit.”

Millions of workers at places like Wendy’s and Olive Garden are now being preemptively reclassified as part-time, and an estimated 7 million to 20 million employees face the loss of workplace health benefits altogether.

So much for the oft-heard promise that “If you like your health care plan, you can keep your health care plan.”

[…]Seniors were assured that the new system wouldn’t affect their benefits, despite Obamacare’s $716 billion in ten-year cuts to Medicare (to help pay for the new entitlement).

That promise was broken recently, when the Medicare agency issued surprise regulations cutting Medicare even more deeply than Congress had directed — cuts that target a popular and very successful part of Medicare, one that actually features consumer choice and competition, namely, Medicare Advantage (MA).

Seniors who opt into MA enjoy greater care coordination, disease management for chronic conditions, and on-call nurses available by phone. Those extra services — which in some cases mean the difference between life and death — are now slated for the chopping-block.

Rosemarie Battaglia will be among the millions of victims of these new regulations, which beginning April 1 will effectively shave MA plan payments by about 2 percentage points. On top of prior cuts enacted in Obamacare, that spells an 8 percent cut next year — a level higher than the profit margins for these plans.

Actuarial experts at the American Action Forum predict the cuts will cause between 2 and 5 million seniors to lose their MA benefits, and that MA recipients face health care cost increases averaging $2,235 a year.

When a President makes promises about economic policy, we shouldn’t believe him unless we have reasons to believe that he understands business and economics. We had no reason to believe that Obama understood economics. And, when given the reins of the economy, he’s proven that. Instead of electing people who sound nice in speeches, we should be electing people who have shown that they know how to solve the problems we’re facing in the economy. A track record of success at creating jobs, reducing the costs of health care, improving health care quality and choice, etc. should have counted for more than rhetoric. We chose the rhetoric and now we’re getting the screws.

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News

Obama violates his own stimulus law by refusing to release status reports

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The Weekly Standard reports.

Excerpt:

Have you heard much about President Obama’s $787,000,000,000 economic “stimulus” (now estimated to cost $831,000,000,000) lately?  In its last report, published in 2011, the president’s own Council of Economic Advisors released an estimate showing that, for every $317,000 in “stimulus” spending that had by then gone out the door, only one job had been created or saved.  Even in Washington, that’s not considered good bang for the buck.

Moreover, that was the fifth consecutive “stimulus” report that showed this number getting progressively worse.

Alas, that was the last report we’ve seen.  Never mind that Section 1513 of the “stimulus” legislation, which Obama spearheaded and signed into law, requires the executive branch to submit a new report every three months.  It reads:

“In consultation with the Director of the Office of Management and Budget and the Secretary of the Treasury, the Chairperson of the Council of Economic Advisers shall submit quarterly reports to the Committees on Appropriations of the Senate and House of Representatives that detail the impact of programs funded through covered funds on employment, estimated economic growth, and other key economic indicators.”

[…]By now, [the Obama administration] was supposed to have released fourteen such reports.  It has released only eight.  The last one covered the period ending in June 2011.  That’s right — 2011.

With only 58.6 percent of Americans currently employed — down 2.4 percent from the time of Obama’s first inauguration — it’s not surprising that the Obama administration doesn’t really want to fulfill it legal responsibilities and release subsequent reports on its failed “stimulus.”  However, it hardly seems fair — to use one of Obama’s favorite words — that the rich and (extremely) powerful think that they can choose whether or not to abide by the laws they spearhead and sign, while the rest of us are forced to obey them.

I’m not surprised by this, because we all know that Democrats are the biggest tax cheats ever. It’s not surprising to me that they pass laws that they have no intention of following themselves, because they are hypocrites. The laws are meant to stop others from succeeding, but Democrats themselves always seem to be exempt. Just like the waivers that the big labor unions got from Obamacare. Poverty for thee, but not for me.\

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