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

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.

Filed under: News, Business, Corporate Tax, Corporate Taxes, Corporations, Economy, Job Creation, Jobs, Multinational, Private Sector, Profits, Regulation, Repatriation, Tax Holiday, Tax Rates, Taxation, Taxes, Wealth, World

Americans finding out the true costs of Obamacare

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.

Related posts

• New study: Obamacare will raise cost of medical claims by 32%
• Five Guys franchise owner says Obamacare will force him to raise prices
• How the new Obamacare mandates are reducing full-time employment
• How does Obamacare cause medical premiums to rise?
• Obamacare’s new tax on medical devices trickles down to hospitals and patients
• Medical premiums will continue to rise as Obamacare is implemented
• Christian business Hobby Lobby defies Obamacare abortion mandate
• When health insurance is forced to cover more, insurance premiums go up
• Obamacare in action: Denny’s to charge 5% surcharge and cut employee hours
• Papa John pizza CEO: cuts to employee hours likely, because of Obamacare
• A primer on the fiscal cliff facing us in January 2013: tax hikes and Obamacare
• Companies announce layoffs in the wake of Obama’s re-election
• Sally Pipes: how Obamacare causes doctors to quit practicing medicine
• Why do some people oppose Obamacare? What does Obamacare do?
• The full list of Obamacare tax hikes in order from largest to smallest
• California: Obamacare exchanges will raise health insurance premiums up to 25%
• Health insurance premiums up $3,000 since Obama was elected
• Report: Obamacare regulations will cost taxpayers and businesses $1.8 trillion
• CBO: Unemployment rises to 9.1% in 2013, health care spending doubles by 2022
• Obamacare subsidizes the risky behaviors of sexually active women
• Obamacare begins forcing states to cap and cut prescription drug benefits
• CBO: 20 million Americans could lose employer-provided health coverage under Obamacare

Filed under: News, Barack Obama, Big Government, Business, Costs, Coverage, Death Panels, Debt, Deficit, Democrat Party, Economics, Economy, Government, Government Spending, Health Insurance, Health-care, Healthcare, Medicine, Nationalization, Obamacare, Premium, Rationing, Recklessness, Regulation, Socialism, Socialized Medicine, Spending, Subsidies, Unemployment, Waste

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

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.\

Related posts

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• CBO report predicts 30% higher taxes and trillion-plus dollar deficit
• Did Obama’s $800 billion dollar stimulus program stimulate the economy?
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Filed under: News, Business, Community Organizer, Corporations, Debt, Deficit, Democrat, Democrat Party, Economics, Employment, Feelings Vs Evidence, Government Spending, Government waste, Intentions Vs Results, Jobs, Keynes, Keynesian, Kickback, Payoff, Pork Barrel, Porkulus, Professor, Solyndra, Spending, Spendulus, Stimulus, Unemployment, Waste

Fiscal cliff deal raises taxes by $600 billion, increases spending $330 billion

The Heritage Foundation explains.

Excerpt:

The Congressional Budget Office (CBO) just now released its score of the bill the Senate passed early this morning while everyone was celebrating the beginning of the New Year. Despite knowing for a long time that taxes would go up on all Americans today, the Senate waited until we technically went over the cliff to act. Washington’s dysfunction was even fodder for New Year’s revelers in Times Square.

Going over the cliff allows Congress to technically say that it isn’t raising taxes, but is cutting them instead. CBO’s score backs them up on this by scoring the Senate bill as a $3.6 trillion tax cut. No one should fall for this. The Senate bill is a tax hike because it allows taxes to go up from 2012 to 2013. The tax increases in the bill will reportedly raise about $600 billion over the next 10 years.

Also of note in the CBO score is that the Senate bill increases spending by around $330 billion by extending expanded unemployment benefits, a temporary “doc fix” patch to prevent cuts to Medicare, and extension of the agriculture programs.

There was some good in the Senate bill — the harmful defense sequester cuts were postponed and most tax hikes were avoided. But there was bad — tax hikes that will hurt the economy and do little to tame the deficit, especially factoring in the spending in the bill.

As I noted before, the CBO has predicted that the bill will add $4 trillion to the national debt, taking us over the $20 trillion mark.

Bloomberg:

The budget deal passed by the U.S. Senate today would raise taxes on 77.1 percent of U.S. households, mostly because of the expiration of a payroll tax cut, according to preliminary estimates from the nonpartisan Tax Policy Center in Washington.

More than 80 percent of households with incomes between $50,000 and $200,000 would pay higher taxes. Among the households facing higher taxes, the average increase would be $1,635, the policy center said. A 2 percent payroll tax cut, enacted during the economic slowdown, is being allowed to expire as of yesterday.

According to the CBO, the deal would raise taxes by $41 for every $1 cut from the budget. Have we really dodged a fiscal cliff?

 

Filed under: News, Bankruptcy, Barack Obama, Budget, Business, CBO, Debt, Deficit, Fiscal Cliff, Government, Job Creation, Job Creator, Jobless, Joblessness, Jobs, John Boehner, Recession, Recovery, Spending, Tax Cuts, Taxes, The Rich, Trillion, Unemployment

Obama’s fiscal cliff plan would increase debt to $20 trillion by 2016

Forbes magazine explains why Obama’s plan doesn’t solve our long-term spending problem.

Excerpt:

The President, while not presenting concrete proposals, has been quite clear on what he wants: to raise taxes on the top two percent, keep the Bush tax cuts for everyone else, offer only vague promises of future spending cuts, and gain the unprecedented authority to raise the debt limit without Congressional approval. He does not plan to reform the entitlements so dear to his heart and his base’s. Instead of less spending, he would like to spend more on “stimulus” and “investments.” Obama knows that physicians will desert Medicare if he cuts their compensation by the scheduled 26.5 percent. That is simply not going to happen.

Here are Obama’s desired alternative fiscal policies to avoid the fiscal cliff in order of their effect on the five-year budget as estimated by the CBO:

1. Preserve Bush tax cuts and other tax provisions for everyone except the top 2 percent: Raises the five-year deficit by $2.0 trillion.

2. Drop the fiscal-cliff sequestration of spending and expand discretionary spending by the rate of inflation: Raises the five-year deficit by another trillion dollars.

3. Raise the tax rate on the top 2 percent:  Lowers the five-year deficit by $300 billion.

4. Extend enhanced unemployment benefits: Raises the five-year deficit by $200 billion.

5. Do not cut Medicare payment rates to physicians: Raises the five-year deficit by some $100.

Four of the five fiscal policies on Obama’s wish list raise the deficit. Only one – the vaunted tax on the rich on which he based his campaign – lowers the deficit, but only by a miniscule $300 billion ($60 billion per year). If Obama gets the tax and spending changes he wants, his 2017 successor will inherit a national debt in excess of  $20 trillion.

A warning: The 2013-2017 budget deficits could be much higher. No one knows what the costs of Obama Care will be. By 2017, the federal government will be spending more on health care than on social security. The CBO projection assumes that the costs of Obama Care come in on target. If Obama Care cannot contain health care costs, we could easily see a five-year deficit well in excess of $5 trillion, for an annual deficit of more than a trillion dollars. The CBO also uses a historically low rate of increase of discretionary non-defense spending equal to the rate of inflation. If we return to “business as usual” in Washington, the discretionary spending figure could also be blasted out of the water.

Obama based his re-election campaign on “the rich should pay their fair share” and “I killed Osama.” Well before the election, it was clear from the government’s own figures that taxing the top two percent would make only a tiny contribution to solving our deficit problems.

Why was this not pointed out by the media, who played along with the “tax the rich” fairy tale?  Why was this not the central theme of the Republican campaign?

I think that point I highlighted in bold deserves emphasis. Obama ran up over $6 trillion in new debt – pushing us to a $16.5 trillion dollar debt. His “balanced approach” will generate a measly $60 billion a year in “new revenues”, assuming that “the rich” don’t just curtail their productive activities and shift their operations elsewhere (Canada). If you generate $60 billion in revenues, there is NO WAY that this is going to pay for a trillion dollars a year in new debt. So we are on track to hit over $20 trillion in national debt in Obama’s second term, taking us into Greece-like territory.

And that is according to the official CBO numbers.

Filed under: News, Bankruptcy, Barack Obama, Budget, Business, CBO, Debt, Deficit, Fiscal Cliff, Government, Job Creation, Job Creator, Jobless, Joblessness, Jobs, John Boehner, Recession, Recovery, Spending, Tax Cuts, Taxes, The Rich, Trillion, Unemployment