Articles

The State of Legislation to Disincentivise Offshoring

Very few Bills to disincentivise offshoring have been enacted into law.  California has had the best success, but even there, the majority of Bills either are voted down or more likely die in Committees, which is the favorite method of dispatch.  When bills are introduced, the recommended likelihood of success is in the single digits, meaning not likely at all. Most of the bills that would truly discourage outsourcing have been introduced and co-sponsored by Democrats or Independents.  They have also been discouraged by Republicans and not promoted by Democrats generally.  Most are also watered down to be so specific, in order to pass, that they are not very effective.  The three areas that are usually introduced are bills that involve disclosure of such activity, involve personal information and the risk of such information going off-shore, or involve disallowance from […]

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Tax Cuts and Jobs Act (TCJA), the Trump GOP Tax Law, Effect on Offshoring

The Tax Cuts and Jobs Act (TCJA), theTrump/GOP tax law, will not stop offshoring of industries or jobs and it will not likely have any affect on creating new jobs either. There is nothing in the TCJA that incentivizes these kinds of changes to the law that existed prior. The previous system of taxation encouraged multinational corporations to shift profits offshore and to shift real and personal investments offshore and to shift jobs offshore as well to avoid paying U.S. taxes. It is arguable that the tax benefits to offshoring companies far outweighed the cost of labor differential that has been used to justify offshoring. This system of shifting assets offshore and deducting the cost here in the U.S. has been termed “artificial”1 and rightfully so. Corporations were required to pay a 35% tax rate after subtracting foreign taxes paid […]

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Proof that private enterprise and cost cutting are not better than government

When the Flint, Michigan disaster hit the newspapers, the focus was on the Governor, as well it should have been. But what was also discovered was that unelected leaders made some of the decisions. Michigan’s emergency management law gave the “governor’s appointee sole decisionmaking power on budget issues in cities like Flint.” See: The Poisoning Of An American City, Josh Sanburn, Time, p.34, February 1, 2016. That is the danger of the belief that the private sector and not government have the best solutions and can provide for society better and less costly. The near religious believers forget that unlike private enterprise, government is held to a moral and ethical standard and the elected officials are more likely to pay the price for not acting ethically or morally. It is easy to be removed from governmental office. It is much […]

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Why the lower corporate tax rate and supply side economics will not work

This web site does not include bills or legislation that use lower corporate tax rates as a method to disincentivise offshoring. Like supply side economics that cannot work because of offshoring, simply lowering corporate tax rates will not change incentive for companies to hire in the U.S. or trading partner governments to try to reach parity in trade agreements. Corporate interests may state otherwise because it is in their best interests for them to do so but there is no evidence to suggest that it would and most have a conflict of interest in doing so. Lower corporate tax rates will instead, start a new race to the bottom for corporate tax rates around the world and create economic deficiencies and treasury losses for the trading partners. Like supply side economics it will only fuel wealth inequality and corporate over-reaching. […]

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