Why Not Tax the Hell Out of Companies Who Send Jobs Overseas?

But, we leave a better world for our children. Seems like this is the first generation that doesn’t believe in that. Everything is about now, now, now! We need jobs now, who cares what the world looks like after we’re gone because of the methods we used to keep jobs here.

The point of my post is that it’s quote from a famous economist pointing out that if you posit a sufficiently long span of time, any economic problem will tend to solve itself, if only through the death of everyone concerned with it. He was saying that economics was actually very much a “here and now” topic, and economists who counsel patience for their solutions should not be listened to.

Oh, okay then.

“Why Not Tax the Hell Out of Companies Who Send Jobs Overseas?”
The question I would ask is “Why Tax the Hell Out of Companies Who Send Jobs Overseas?”
There seems to be a feeling that these jobs are somehow “ours”, that we somehow have a moral right to them. Why? Why are we so more deserving than any other country? If someone had titled a thread “Why Not Tax the Hell Out of Companies Who Hire Black People?”, people would be calling it hate speech. Why is favoritism on the basis of nationalism okay, but not on the basis of race? Here in California, there are ads asking to “Buy Californian”. What do they have against the rest of the country? Why would I give preference to someone simply because they live in the same state as me? This sort of thing makes my skin crawl.

ResIpsaLoquitor

Your use of quote marks implies that it is a direct quote, but I can’t recall those words being used. Are you referring to Article I, Section VIII, Clause I? I guess I can see how it might be interpreted that way, but it doesn’t explicitly state that.

Evil Captor

What, is doing something automatically better than doing nothing, no matter what that something is?

Because, as has been pointed out, what they want to try only makes things worse.

One aspect most people do not realize is that “American” corporations are owned by investors around the world, not only in America. Those people invest (and create jobs) in the USA because they see it as a good place to invest. If you tell them you are going to make it more difficult for them to make a profit they will just take their money elsewhere. A tax on corporations which export jobs would be a disaster because a lot of invested money would be withdrawn from the US and it would mean the loss of more jobs than you were losing before.

Subsidies to American corporations would almost always be illegal under Nafta, WTO etc. As an individual if you ant a good paying job you need to have skills that are in demand. There is no way around that. As a country it is the same thing. A country which imposes tariffs is just isolating itself from the rest of the world economy and will go backwards pretty fast. china and Japan tried it in the 17th and 18th centuries and it did not work. While you isolate yourself other countries are developing their economies.

**

It’s not that I think we’re deserving of anything. I’ll readily admit that my desire to keep jobs in the US stems solely from selfish reasons. I want to see myself and my friends and family gainfully employed.

I want good paying jobs available so that some people may not turn to crime to support themselves, meaning that my possessions will still be there when I return home.

I want Americans employed so they’ll have disposable income to spend, and keep our economy chugging along.

I want Americans working because then they’ll be paying taxes into the general pool, and human services and government programs won’t need to be cut.

Do I necessarily think my neighbor, or my sister is more “deserving” of a job than someone in, say, Mexico? No. The person in Mexico is probably more needful of a job. (It’s nearly impossible to starve to death in the US, after all.) As I said, it’s self-interest: I’d support policies designed to keep those jobs here, simply because I want my community, and in a larger sense, my country, to benefit from them.

I guess I don’t understand your point of view.

Whenever possible, I buy from my hometown bookstore. I pay more than I would if I went to a chain, or if I ordered my books online, but I’d rather keep the money in my community. I buy vegetables grown in my state if given the option, because I’d rather support my neighbors than someone far removed.

I was thinking of the SCOTUS cases interpreting the taxing power of Article I, Section 8 to mean “raise revenue.”

You don’t get it. You offer nothing. There is no chance that doing nothing will make things better. There’s a chance that your economic ideas are wrong (let’s face it, a lot of economic ideas have turned out to be wrong) and that it WILL work. What you offer loses by default.

What you offer will make things worse as experience and the reasoning of many posters in this thread shows.

First of all I did not propose doing nothing. I proposed not doing X with X being taxing the hell out of companies who send jobs overseas.

They’re not “my” ideas, they are ideas shared by pretty much everybody who knows about economics. Or show me some reputed economist who thinks the OP is a good idea. This is not the first time in history that an economy is adapting to new circumstances. In fact, it is happeneing continually and experience has shown that protectionist measures almost always have negative effects. You are ignoring that experience. You are also ignoring the plenty of reasons which have been aduced by me and by others in this thread. You have not addressed any of them. You just wave your hands and say “something must be done!!”.

Well, no. Sometimes doing nothing is the best course of action. When you go to the doctor with an ache and he tells you doing nothing is the best course of action, what do you do? Do you then go to the witch doctor who will tell you to put some horse dung over the wound? Would you do that?

Furthermore, the problems of the American economy are greatly exagerated. It is the healthiest economy in the world by far. Compared to other developed countries it is the most productive and has the lowest unemployment rate. And you want to convince us that it is very sick and we should try remedies which have failed in the past and which educated people believe will lead to making the situation worse. No thanks.

Because the American economy is so productive there is a lot of foreign capital invested in the USA. That foreign capital creates jobs in the USA. If you make conditions undesirable for that capital to be invested in the USA then it will just go elsewhere. How the hell can you avoid that? How the hell are you going to force European or Japanese automobile manufacturers to build plants in the USA? How the hell are you going to force investors in other countries to send their money to the USA? Don’t you realize how dependent the USA is on foreign investment? And that is just one of the many problems with the proposal you are supporting. Please address this and the other arguments which have been cited in this thread.

Massive amounts of foreign capital are flowing into China these days. If China taxed the hell out of companies that later took some of their operations somewhere do you think anybody would invest in China?

Would you buy at a grocery store which required you to pay a fine if you stopped buying there?

That’s great. You should have the right to do this. But you seem to want to force that point of view on others by taxing companies which don’t adhere to your line of thinking. Go ahead and lobby for people to buy locally. Start or join a national campaign to encourage people to “buy American”. If that is what people really want, then they’ll go along with you. If not, I see no reason to force them to.

Unless, of course, you think you know what is best for others.:slight_smile:

I agree with John Mace. You can shop from whoever you want but don’t try to push your agenda on me because i want the freedom to do whatever I want. Generally i just want to buy whatever offers me the best deal because I think that is what makes the economy lost efficient. But If another person wants to pay more for goods from poor countries in oder to help them develop, why should anyone prevent that? Freedom is the ultimate value. It is priceless.

OK, but you dodge the issue which Lissa raised in her OP – what about all these people who are losing their homes, their life savings, the ability to put their kids through school, because US companies are shipping jobs overseas wholesale. Sure, they can and will look for new jobs, but the labor pool here is shrinking, and a lto of people are caught out. While nobody starves, the American dream is starting to look very thin and tattered to a lot of people. Many of the things that are happening here feel like degredation not progress. Not a problem for you perhaps, but a problem for many Americans. At least Lissa is facing it and not hiding behind a haze of economic ideology.

They’re not “my” ideas, they are ideas shared by pretty much everybody who knows about economics.

They’re your ideas in the sense that you are advocating them. That’s all I meant. I know there are a lot of people who advocate them, so what? A lot of people think the Drug War is a GOOD thing.

**In fact, it is happeneing continually and experience has shown that protectionist measures almost always have negative effects. You are ignoring that experience. You are also ignoring the plenty of reasons which have been aduced by me and by others in this thread. You have not addressed any of them. You just wave your hands and say “something must be done!!”. **

You see immediate capital flight if tax barriers are erected to sending jobs overseas. I see guys saying, 'Let’s see if we can keep the jobs here and avoid the tax hassles. Maybe there’s other ways we can ramp up productivity to make up for higher wages. I mean, it’s not a BAD thing to hire Americans."

Spare me the neocon economists screaming it won’t happen that way. The job drain is a real problem, unlike ideology.

Well, no. Sometimes doing nothing is the best course of action.

Of course. How will doing nothing help the unemployed and the seriously underemployed?

Furthermore, the problems of the American economy are greatly exagerated. It is the healthiest economy in the world by far. Compared to other developed countries it is the most productive and has the lowest unemployment rate. And you want to convince us that it is very sick and we should try remedies which have failed in the past and which educated people believe will lead to making the situation worse. No thanks.

Thanks for all the economic ideology. I hope you will understand when I tell you that I do not share your rah-rah vision of American economics.

Please address this and the other arguments which have been cited in this thread.

I already have earlier in this post, by positing a rational response by companies instead of the sturm und drang you are spouting.

Massive amounts of foreign capital are flowing into China these days. If China taxed the hell out of companies that later took some of their operations somewhere do you think anybody would invest in China?

Everybody knows countries only invest in China to take advantage of the slave labor there. Are you saying we should set up slave labor conditions here to compete with the Chinese? Boy, that would really HELP a lot of Americans.

Implicit in your argument is that these jobs somehow belong to Americans. That “shipping a job overseas” is akin to stealing a job from someone. But the fact is the jobs “belong” to the person or corporation that creates them in the first place. There is no right to a job. Only the right to sell your goods or services in the marketplace. If you think you can make a business profitble with only American employees, have at it. There are, in fact, many businesses in the US that do.

My bolding. Everybody doesn’t know that. I deal with many, many electronics companies that have operations in China and which do not employ “slave labor”. And I suppose it’s also “slave labor” that attracks companies to Mexico, India, Thailand, etc. Sorry, but that argument doesn’t wash.

Well…I hate to sound a bit like a neo-con here but I think some of you are missing the point.

Yes, we could impose a restrictive (even coercive) tariff on certain industries to require them to keep a certain percentage of jobs in the US. And that would have the folks in the boardrooms considering moving the entire operation overseas. I agree completely.

I also agree with John Mace that people in the US have no inherent ‘right’ to jobs that manufacture goods sold to the US market.

Here’s where I begin sounding like an economic neo-con…

But at the same time no firm has the inherent ‘right’ to the US marketplace.

The simple fact is that without the market in the United States all talk of ‘globalization’ would dry up and blow out to sea like overused topsoil.

How long will it take some grandstanding politician to say, “Hey Nike? Don’t want to employ American workers but want to sell in the US? Fuck you. Suddenly your right to do business in the United States is revoked.” It won’t be by revoking it per se…but I could easily see a confiscatory tax rate levied on Nike products not with the goal of bringing employment back inside the United States but instead with the goal of removing Nike from the marketplace entirely.

Nike without the US market = No Nike.

Frankly, any of the multinationals without the US market and going to drop like a stone. And that’s a power that could be exploited in a pretty straightforward manner. Sooner or later someone will say ‘we have the power…I think it’s time we used it’ (cue the General Tagge music here).

And when Nike goes down how long will it take Adidas, Reebok and their brethren to get the idea?

Really, I’ve got no real beef against Nike per se…they’re just one more corporation and they’d been introduced in the discussion so I picked on them.

What I’m trying to say is that the American electorate will at some point get tired of hearing ‘globalization will pay off in the long run while they fall behind on the car payment’. Only people with full bellies worry about the long term (and a lot of people wouldn’t worry about the long term under any circumstances).

And when that point is reached you’ll see an expectation out of the electorate that our leaders do something. And those corporations are going to be easy damn targets.

The American Electorate generally expects the political class to keep the streets safe, the roads paved, and provide good jobs. Start falling behind on that last one and it’s a ticket to unemployment for career politicians.

And they hate that thought. They’ll do anything to avoid it.

You’re assuming that globalization will negatively affect the US economy in the long run. Why?

You lost me with the neo-con references. I’m not familiar with what a “neo-con stance on globalization” is.

Also, I’d take issue with your statement that no one has a right to the US marketplace. I damn sure believe that I have the right to sell my goods and services in the US unless I am engaged in some sort of criminal behavior. The government might require me to get a business license, but it cannot withold one arbitrarily.

OK, the neo-con thing was a throw off because I once heard Wolfowitz say “We have the power…”

I’m not saying that globalization will affect the US negatively in the long-term…though I’m not entirely convinced it’s the panacea so many people think it is. What I’m saying is the short-term pain may be enough to force the electorate away from it.

Access to markets: You’re in the US, John. A firm that moved overseas to dodge draconian tax measures is no longer ‘in the US’ and is vulnerable to all sorts of political chicanery.

And you may believe you have the right to buy and sell…but that right can be abrogated pretty easily by people looking towards re-election.

If the US government adopts such protectionist measures you would see more people in her situation, not fewer. Think about it. To secure employment for a fe people who make shoes you make the entire United States pay more for shoes. Who do you think is paying for the salaries of those overpaid workers? Everybody. it does not come free. Do you think it would help the poor if they had to pay $150 for a pair of cheap shoes? Cheap imports mean poor people can live better, not worse. You only see the good part but the bad part is worse.

You do not understand how international capital markets work. Such measures would just mean the stock market would drop like a stone and American companies could not raise a cent in capital. Do you think anyone is going to invest in America when they can invest elsewhere with better conditions? Capital flows to America because it offers good conditions. Change that and capital dries up. Then you have NO jobs.

Well you can talk all you want. Thankfully for you and for all Americans, the people in charge know better than you and they are not doing what you propose which would be a disaster for America if it were done. It ain’t gonna happen.

By not making things worse. What you propose would result in them paying more for everything.

Which just shows how badly informed you are. If you want to talk numbers i am quite willing as I have just finished a study comparing the Mexican and US economies in the last few years. Please tell me which country you believe has better economy than the USA. Higher per capita income? Lower unemployment? Higher productivity? Which one? And do they use protectionist policies? In fact, please tell me of a single country which is successful and has a protected economy.

The USA is successful primarily because it exports. If it were to apply protectionist measures, other countries would retaliate in kind and American exports would diminish greatly. Look what happened when the USA imposed tariffs on steel. The EU sued before the WTO and imposed tariffs on American products. Do you think America can impose measures which will give an advantage to American companies and the rest of the world would not retaliate?

No you haven’t. Again, please give me examples of cases where protectionist measures made a country’s economy great. Please give me examples of rich countries closed to outside markets. Show me economies which are better than the USA and are being protectionist. Show me. Give me names.

You can call it slave labor but the Chinese welcome it. If I want to buy a pair of shoes from the Chinese for $5 why should I be forced to buy it from Americans for $50? The chinese are happy and I am happy. Who are you to take away my freedom to choose? Why should a Chinese lose his job so an American worker can keep his?

Nope. And I am a very good example of things. I live and own property on both sides of the Atlantic and travel quite a bit. I buy things where ever I can find the best deals. If things got more expensive in the USA I would be buying less there and more elsewhere. If business conditions get worse in the USA many people would just go elsewhere. Protectionist measures would help foreign business just as much, if not more. By making American products more expensive in the global marketplace you are making foreign made products more attractive.

You need to understand that we live in a global economy. I used to work for an American company which bought German machines and sold them and installed them in Mexico. How can you force them to “keep jobs in America”? That is impossible. Any hassles imposed on them would result in that company folding and some foreign company doing their job.

Anyway, as I said, it ain’t gonna happen so it’s all academic.

[fixed tags --Gaudere]

Jonathan Chance, shutting down Nike in your example is why I don’t want government involved in setting tariffs or coercive taxes.

In your example, sneaker workers in the U.S. become very happy because they feel the government is doing something to help keep their jobs in the U.S. Unfortunately, Nike isn’t all about building sneakers. Nike spends BILLIONS in advertising throughout the U.S. How many advertising agencies have you just put out of business? You just traded sneaker-making jobs for advertising jobs. And how about all the no-name actors and actresses in the commercials? How about the many events Nike funds for advertising purposes?

First, yes there is. It is called the business cycle. That’s not to say that sneaker making jobs will ever come back, but jobs will become available and the workforce will adapt to the domestic business needs.
Second, to analogize: My car isn’t working. I don’t know what’s wrong with it. Do I pour sugar water in my gas tank, just to do something? No, because not only do I know that it won’t work, I know that it will make things even worse. Just because I don’t know how to help the people who are affected by the flight of jobs in select industries doesn’t mean I don’t know what won’t work. In a perfect world, everyone would reinvent themselves and train in needed professions and move to where there are jobs. That’s not going to happen en masse; people feel to privileged. People expect their job to be preserved where they live, simply because that’s the way it was. A century ago, buggy whip manufacturers probably lobbied congress to preserve their jobs too.

Most subsidies and loopholes are products of bad legislation. It is also why I wouldn’t want to see congress attempting targeted tariffs and punitive taxes. Congress has all the sublety of a bull in a china shop, and has trouble repealing bad legislation (such as many farm subsidies). Targetted tax cuts can be beneficial. NYC often offers tax breaks to companies which employ large numbers of people. What they give up in taxes from the company, they gain in taxes from the workforce and from the ripple effect of the workforce on the rest of the local economy. If our congress could find a way to meaningfully slash the budget, I might back such tax cuts.

Interesting article about this issue here.

I wouldn’t call it a panacea. To me it’s just plain old free trade that makes sense to participate in and would be foolish to try to avoid.