Tag Archives: Rich

News

Obama blasts private jet tax breaks created by his own stimulus

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From the Heritage Foundation, my favorite think tank.

Excerpt:

The chief economic culprit of President Obama’s Wednesday press conference was undoubtedly “corporate jets.” He mentioned them on at least six occasions, each time offering their owners as an example of a group that should be paying more in taxes.

“I think it’s only fair to ask an oil company or a corporate jet owner that has done so well,” the president stated at one point, “to give up that tax break that no other business enjoys.”

But the corporate jet tax break to which Obama was referring – called “accelerated depreciation,” and a popular Democratic foil of late – was created by his own stimulus package.

Proponents of the tax break lauded it as a means to spur economic activity by encouraging purchases of large manufactured goods (planes). So the president’s statement today – and his call to repeal that tax break generally – is either a tacit admission that the stimulus included projects that did not, in fact, stimulate the economy, or an attempt to “soak the rich” without regard for the policy’s effects on the economy.

For many Americans, those effects could be dramatic. Cessna and Gulfstream have facilities in a combined 15 cities nationwide (and another four abroad). A significant decline in consumption of private jets would undoubtedly have adverse effects on at least some of those local economies. Given the sizable bump in consumption that the initial tax break yielded, its repeal would likely have that economic domino effect.

Rightly or wrongly, any increase in the taxes paid by any US-based business is going to result in higher prices for consumers, or layoffs, or both. Even talking badly about businesses causes them to feel uncertain about the future. And when businesses are uncertain, they don’t hire people and they don’t expand. Obama’s solution to the recession created by the Democrat housing policies was to take money from the private sector and blow it on the public sector. Private companies realize that the bill is going to come due soon, and they are sitting on their money in case Obama succeeds in his plan to raise taxes on businesses.

 

News

What causes rich Democrats to lay off Americans and ship jobs overseas?

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First off, I spotted this American Spectator story by Robert Stacy McCain on The Other McCain.

Excerpt:

California Democrat Rep. Jane Harman’s family business is laying off American workers – including engineering employees in California – and shifting jobs overseas.

A letter from the human resources director of one Harman company, obtained exclusively by The American Spectator, describes a “permanent” layoff of dozens of California workers that went into effect last week.

[…]Harman is the third-richest member of Congress, and her net worth increased last year $40 million, according to a study of Federal Election Commission records conducted by The Hill newspaper. Her husband, Sidney Harman, founded Harman International Industries, which was valued in 2007 at about $8 billion.

[…]By May 2009, the company had already slashed its U.S. workforce by 900 and expected to make more than a thousand more layoffs by mid-2010, according to a Saturday Evening Post article that noted: “[W]hile shutting down U.S. facilities, Harman was simultaneously opening factories in China and India, as well as massive multimedia outlets in Dubai and New Delhi.”

She’s a rich Democrat… and she is shipping American jobs overseas? Why???

Well, California is an anti-business state and it’s run by socialist Democrats who hate businesses and capitalism. (H/T ECM)

But what about other countries? Why do they ship jobs overseas?

Look what is happening in New Zealand with the new Hobbit movie. (H/T Anon)

Excerpt:

At least half a dozen countries, including Australia, are lobbying to win the right to film The Hobbit and Hollywood accountants are now doing the numbers of rival offers, the movie’s co-producer and co-writer Phillipa Boyens says.

The $US150 million Sir Peter Jackson blockbuster has been mired in an industrial dispute in recent weeks, following complaints from a group of international labour unions over poor on-set working conditions for actors.

Jackson, who strenuously denies the claims, has accused the Australian-based Media Entertainment and Arts Alliance of bullying to gain control over the production, which he says may be forced out of New Zealand.

Boyens told New Zealand’s National Radio’s Nine to Noon programme the movie was ready to begin filming in January but has now been thrown in turmoil by the actors’ boycott.

She said New Zealand Actors’ Equity seemed to believe the whole thing was a bluff.

“I am concerned over some of the statements made… by New Zealand Equity that there is still a misunderstanding on the seriousness of what is involved here and what is at stake,” she said.

“That is very real and that has put at risk the livelihood of countless thousand New Zealand industry workers,” she said.

Scotland, Ireland, Canada and Eastern European countries had entered the negotiations in a “feeding frenzy” inspired by the threat of union action.

And it’s not just left-wing anti-capitalist governments and unions that cause outsourcing and shipping jobs overseas.

It’s the uncertainty caused by massive spending, constant interventions, anti-business regulations, the appointment of radical anti-capitalists and judicial activists to positions of power.

Here’s a story from Reuters.

Excerpt:

Tough budget measures to keep its international bailout on track have helped prompt thousands of Romanian companies to relocate to neighboring Bulgaria, where lower taxes and more stable regulations offer an easier place to do business.

Bulgaria has corporate and income tax on profits of just 10 percent, compared with Romania’s 16 percent, and now also has lower value added tax after Bucharest hiked its rate as part of efforts to meet the conditions of a 20 billion euro EU/IMF bailout.

Sofia has also cut red tape and initial capital for setting up a company is now 2 levs ($1.39), compared with a previous 5,000 levs and 200 lei ($63.55) in Romania. It takes less than a week, almost half the time needed in Romania.

That may seem like small beer, but business people say the speed of the changes forced by the bailout and uncertainty over future cuts in Romania have encouraged them to move base.

Bulgarian authorities have not released precise data, but local media report up to 2,500 Romanian companies have set up there already and another two are registering daily in the border city of Ruse alone.

“Romanian legislation and taxation are changing from one day to another. So how can I have any guarantee, any certainty if I open a company here?” said 23-year-old Bogdan Popescu from Bucharest, who wants to open an online television business.

“I could as well wake up with a 40 percent income tax tomorrow (instead of 16 at present),” said Popescu, who plans to put his headquarters in Bulgaria. “The present fiscal legislation is in no way a stimulus.”

The two Balkan countries share a long border and though links can be complicated — only one bridge connects the states along a 470 kilometer (294 miles) stretch of the Danube — companies can set up a paper headquarters but still effectively run operations from Romania.

Both suffered deep and painful recession after 2008’s financial crisis, but while Romania is having to cut spending and raise taxes, Bulgaria previously ran large fiscal surpluses and has enough reserves to keep taxes low despite dwindling revenues.

Whenever government and their union supporters make life difficult for businesses, the businesses leave. Governments and unions ship jobs overseas. Governments and unions outsource jobs to other countries. Businesses just dance the the tune that governments and unions play. It’s no use complaining about big corporations and rich greedy executives. If you want a job then you promote the conditions that will attract businesses. Left-wing unions, left-wing political parties, left-wing news media and left-wing judges attack businesses, and that’s why unemployment goes higher.

And businesses know that massive government spending is going to require higher taxes or printing more money to that will devalue savings. They are not going to expand in banana republic economies like the United States until we vote a large enough number of Democrats out of all three branches of the federal government.

What I resent is when rich Democrats create the legal conditions that require companies to outsource and then complaining about outsourcing while engaging in outsourcing themselves. That’s hypocrisy.

News

Intel CEO blames Democrats for destroying the economy

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Article from CNET News by someone who understands job creation. (H/T Neil Simpson’s latest round-up)

Excerpt:

Intel Chief Executive Officer Paul Otellini offered a depressing set of observations about the economy and the Obama administration Monday evening, coupled with a dark commentary on the future of the technology industry if nothing changes.

Otellini’s remarks during dinner at the Technology Policy Institute’s Aspen Forum here amounted to a warning to the administration officials and assorted Capitol Hill aides in the audience: unless government policies are altered, he predicted, “the next big thing will not be invented here. Jobs will not be created here.”

The U.S. legal environment has become so hostile to business, Otellini said, that there is likely to be “an inevitable erosion and shift of wealth, much like we’re seeing today in Europe–this is the bitter truth.”

[…]Otellini singled out the political state of affairs in Democrat-dominated Washington, saying: “I think this group does not understand what it takes to create jobs. And I think they’re flummoxed by their experiment in Keynesian economics not working.”

Here’s Republican Senate candidate Carly Fiorina, from the same article:

The comments from Intel’s chief executive echoed statements made a day earlier by Carly Fiorina, the former HP CEO turned Republican Senate candidate.

America’s skilled-worker visa system is so badly broken and anti-immigration that “we have to start from scratch,” Fiorina said, adding that too many government policies push jobs overseas instead of making U.S. companies competitive against international rivals.

“Our corporate tax rates are the second highest in the world,” and Congress has repeatedly failed to make an R&D tax credit permanent, Fiorina told the Aspen audience. It’s time to start “acknowledging the reality that companies go where they’re welcome,” she said. (The effective U.S. corporate income tax is 35 percent, far over the industrialized-nation average of 18.2 percent.)

Here’s a recent IBD article with more from Otellini, and other CEOs

First Otellini:

“I can tell you definitively that it costs $1 billion more per factory for me to build, equip and operate a semiconductor manufacturing facility in the U.S.,” he said. And 90% of that added cost, he said, is due to taxes and regulations that other countries don’t have.

Then other CEOs:

Earlier in the week, Illinois Tool Works CEO David Speer, whose company employs 60,000 worldwide, laid out his dilemma — and that of hundreds of other CEOs: “I could borrow $2 billion tomorrow for 3 1/2%,” Speer said. “But what am I going to do with it?”

[…]In June, Ivan Seidenberg, CEO of Verizon Communications and head of the Business Roundtable, warned of a growing anti-business slant in both Congress and the White House. Tax hikes, regulations and constant policy shifts, he said, “harm our ability … to grow private-sector jobs in the U.S.”

And don’t forget the costs that Obamacare imposed on companies, causing all medical premiums to go through the roof because of the new health care mandates and taxes on things like medical devices.

Red State explains what the Obammunists should be doing:

As our government continues to make it more difficult to do business in the US, companies must increasingly look to more favorable climates abroad. If Washington really wants to spur job creation here in the US, they should repeal the health care overhaul, reduce spending, cut the corporate tax rate, give up on cap and trade, and reform litigation. Instead we have been treated to an extended experiment in government control – one that is obviously not producing new wealth, new jobs, or any real hope for the emergence of the industries of the future.

It takes a lot of courage for a CEO like Otellini to come out against the Obama administration, and the neo-Keynesian oligarchy in Washington. Taking a billion dollars from Intel to study Chinese prostitutes and to build turtle tunnels is not a good thing to do if you want to have more jobs. But the thing is – Obama thinks it is a good thing to do, because he is totally ignorant of how the economy works. So, don’t vote for him or any of his silver-spoon limousine liberal friends who were born with rich parents. Democrats don’t know how jobs are created.