Wintery Knight

…integrating Christian faith and knowledge in the public square

American corporations are expanding outside the United States to avoid high taxes

From Investors Business Daily.

Excerpt:

Walgreen, America’s venerable drug-store chain, is thinking the unthinkable: relocating to Europe. Not because it sees growth and opportunity there, but because of onerous taxes here in the U.S. It’s an ominous trend.

The Financial Times of London calls it “one of the largest tax inversions ever.” That is, a company seeking to avoid punitive taxes in one market by moving to another.

No doubt the FT is right. And after its recent $16 billion takeover of Swiss-based Alliance Boots, it would be easy for Walgreen to remake itself as a Swiss company.

If it did, the Democratic Party’s liberals would no doubt call Walgreen unpatriotic for wanting to lessen its tax burden. In fact, they are responsible for an economic environment so hostile to capital and investment that companies now find it intolerable.

[...]According to an analysis by UBS, Walgreen’s U.S. tax rate is 37.5% — compared with Alliance Boots’ rate in Europe of about 20%. That’s a huge gap, worth billions of dollars a year.

But it’s even worse than that. A recent OECD study says the “integrated tax rate” — taxes on capital and income — for U.S. companies is a nightmarish 67.8% vs. 43.7% for the OECD.

Many companies facing steep tax rates and insane regulations in the U.S. have had enough. They’re keeping their profits overseas. Last week, Senate Finance Committee chief Ron Wyden, an Oregon Democrat, reported U.S. corporations now hold $2.1 trillion in earnings in overseas accounts — a massive amount, roughly equal to 12% of U.S. gross domestic product.

A total of 547 companies — including Apple, GE, Microsoft and Pfizer — have dramatically expanded their so-called foreign indefinitely reinvested earnings overseas, which let them avoid the punishing rates here at home.

[...]Not only are taxes too high, but also new laws such as Dodd-Frank and ObamaCare, a vast expansion of regulation, debt and the size of government, the federal takeover of entire industries, the bullying of Wall Street and demonization of CEOs, and forced CO2 cuts that will hammer manufacturers have made this the least pro-free market U.S. government in generations.

If you make it harder for businesses here to do business (higher taxes and burdensome regulations), then they will expand abroad instead, and in some cases, they will just move completely. How does that help create jobs here? It doesn’t.

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Liberal feminist Hanna Rosin debunks the 77 percent pay for women myth

In the far-left Slate, of all places.

Excerpt:

The official Bureau of Labor Department statistics show that the median earnings of full-time female workers is 77 percent of the median earnings of full-time male workers. But that is very different than “77 cents on the dollar for doing the same work as men.” The latter gives the impression that a man and a woman standing next to each other doing the same job for the same number of hours get paid different salaries. That’s not at all the case. “Full time” officially means 35 hours, but men work more hours than women. That’s the first problem: We could be comparing men working 40 hours to women working 35.

How to get a more accurate measure? First, instead of comparing annual wages, start by comparing average weekly wages. This is considered a slightly more accurate measure because it eliminates variables like time off during the year or annual bonuses (and yes, men get higher bonuses, but let’s shelve that for a moment in our quest for a pure wage gap number). By this measure, women earn 81 percent of what men earn, although it varies widely by race. African-American women, for example, earn 94 percent of what African-American men earn in a typical week. Then, when you restrict the comparison to men and women working 40 hours a week, the gap narrows to 87 percent.

But we’re still not close to measuring women “doing the same work as men.” For that, we’d have to adjust for many other factors that go into determining salary. Economists Francine Blau and Lawrence Kahn did that in a recent paper, “The Gender Pay Gap.”.”They first accounted for education and experience. That didn’t shift the gap very much, because women generally have at least as much and usually more education than men, and since the 1980s they have been gaining the experience. The fact that men are more likely to be in unions and have their salaries protected accounts for about 4 percent of the gap. The big differences are in occupation and industry. Women congregate in different professions than men do, and the largely male professions tend to be higher-paying. If you account for those differences, and then compare a woman and a man doing the same job, the pay gap narrows to 91 percent. So, you could accurately say in that Obama ad that, “women get paid 91 cents on the dollar for doing the same work as men.”

I believe that the remainder of the gap can be accounted for by looking at other voluntary factors that differentiate men and women.

The Heritage Foundation says that a recent study puts the number at 95 cents per dollar.

Excerpt:

Women are more likely than men to work in industries with more flexible schedules. Women are also more likely to spend time outside the labor force to care for children. These choices have benefits, but they also reduce pay—for both men and women. When economists control for such factors, they find the gender gap largely disappears.

A 2009 study commissioned by the Department of Labor found that after controlling for occupation, experience, and other choices, women earn 95 percent as much as men do. In 2005, June O’Neil, the former director of the Congressional Budget Office, found that “There is no gender gap in wages among men and women with similar family roles.” Different choices—not discrimination—account for different employment and wage outcomes.

A popular article by Carrie Lukas in the Wall Street Journal agrees.

Excerpt:

The Department of Labor’s Time Use survey shows that full-time working women spend an average of 8.01 hours per day on the job, compared to 8.75 hours for full-time working men. One would expect that someone who works 9% more would also earn more. This one fact alone accounts for more than a third of the wage gap.

[...]Recent studies have shown that the wage gap shrinks—or even reverses—when relevant factors are taken into account and comparisons are made between men and women in similar circumstances. In a 2010 study of single, childless urban workers between the ages of 22 and 30, the research firm Reach Advisors found that women earned an average of 8% more than their male counterparts. Given that women are outpacing men in educational attainment, and that our economy is increasingly geared toward knowledge-based jobs, it makes sense that women’s earnings are going up compared to men’s.

When women make different choices about education and labor that are more like what men choose, they earn just as much or more than men. What does it mean that people on the left keep pushing pseudo-science on us to try to punish men and reward women? Why are men so awful that they need to be denigrated like this? And how will men respond to social expectations when they have to face being told that they are “bad”? It seems to me that putting men down is going to lower their level of engagement.

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Stephen Moore: how environmentalist restrictions are killing energy sector jobs

From the Heritage Foundation.

Excerpt:

[...][I]f you visit the drilling sites in Williston, N.D., you discover an amazing phenomenon: At night, this little energy town of fewer than 30,000 people lights up like Manhattan on New Year’s Eve. All these lights are flares burning off the natural gas that was drilled that day. Why on earth would the drillers do that? Because they want oil, which sells at $100 a barrel, as opposed to natural gas, which is now so abundant that it’s cheap.

But why don’t they sell the natural gas too? Because they don’t have the pipeline capacity to bring it to the markets where it’s needed. So they are burning off an energy source, without capturing the power. What a waste.

The pipelines aren’t getting built, simply because the government isn’t letting them get built. It has been an eye-opening experience to watch liberals block an infrastructure project — the Keystone XL pipeline — that two of three Americans (and even a plurality of Democrats) support. Pew had an amazing poll last month reporting that just about every demographic group in America supports the Keystone pipeline, except for Democrats with Ph.D.s and Democrats who earn more than $100,000.

But this problem goes well beyond the Keystone pipeline. We need to build in America a national network of pipelines from coast to coast, much as Eisenhower built the interstate highway system. Unlike the highways, the private sector will gladly build the pipelines; they just need the permits. And Uncle Sam won’t give them out.

We are talking about a lot of jobs here — and really high-paying, often union, jobs. Welders and pipe fitters and construction workers and truckers earn $70,000 or more — well above the median salary in America.

But the environmentalists hate pipelines because they encourage drilling, and drilling is bad because it kills windmills, er, the planet. The enviros have been running a campaign in Washington to keep the oil and gas in the ground. And if you can’t transport it, why drill it? These activists are the same sort of people who opposed the Great Alaska Pipeline back in the 1970s. Can you imagine how much we’d be in hock to the Saudis these days if we’d listened to their loopy advice back then?

And since they won’t allow pipelines, we use trains and trucks — which is much worse for the environment than building the pipelines. Remember the rail crash several weeks ago with massive explosions? Thank the Sierra Club.

Meanwhile, in Canada, where the Conservative Party is firmly opposed to global warming nonsense, the government has decided to build pipelines from Alberta to the West and East coasts.

Excerpt:

Foreign Minister John Baird said Sunday he’s sure there will be a pipeline from Alberta’s oilsands to the Pacific coast.

Without mentioning the Northern Gateway specifically, Baird sounded confident when discussing pipelines on Fox News on Sunday morning.

Asked for his thoughts on recent comments from former U.S. energy secretary Spencer Abraham, who expressed doubt President Barack Obama will approve the Keystone XL pipeline, Baird said Canada’s energy resources are vast and that he expects a decision from the president within two months.

“Listen, we want to get this project approved,” he said on the U.S. network. “We want to work with our American friends, our partners in freedom and liberty.

“At the same time there will be pipelines going to the Pacific coast and even reverse pipelines going to the Atlantic so we can diversify our markets.”

I expect that Republicans will be making a big deal of the jobs that could be created if we the government were giving out the appropriate energy production permits and approving the Keystone Pipeline. I think people will be responsive to a message like that when Obamacare kicks in for employer-provided health care and employers start to cut jobs. I know the Democrats are happy right now keeping everyone on unemployment payments, but eventually, that money is going to run out. It might not be tomorrow, but it’s coming one day.

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Wisconsin House passes Scott Walker’s tax cut bill, headed to governor’s desk

Wisconsin Gov. Scott Walker: All He Does Is Win

Wisconsin Governor Scott Walker: All He Does Is Win

The leftist Milwaukee Journal-Sentinel reluctantly reports on another victor for Governor Scott Walker.

Excerpt:

Gov. Scott Walker’s $541 million tax cut proposal ended its trek through the Legislature on Tuesday with a final vote in the Assembly, clearing the way for the governor to sign it by next week.

The Assembly voted, 61-35, in support of the bill, with three Democrats joining all Republicans in favor of the proposal. It now goes to the Republican governor for his approval.

“That’s exactly what taxpayers want — giving their money back to them rather than keep their dollars here in Madison,” Assembly Speaker Robin Vos (R-Rochester) said, urging lawmakers, “Let’s give it back.”

[...]With growing tax collections now expected to give the state a $1 billion budget surplus in June 2015, Walker’s tax proposal will cut property and income taxes for families and businesses, and zero out all income taxes for manufacturers in the state.

Though the state’s tax revenues are increasing, GOP lawmakers and Walker will use that growth as an occasion to trim overall state spending slightly for the next three years rather than increase it.

Rep. Jim Steineke (R-Kaukauna), a Realtor, said the state’s property taxes are a considerable barrier to people buying a home and staying in it into their old age.

“What we’re doing today does move us back in the right direction, lowering the property tax,” he said.

[...]Under Walker’s bill, the average income tax filer would receive a tax cut of $46 in April 2015 and the typical homeowner would save $131 over the existing law on this December’s bills, according to the Legislature’s nonpartisan budget office.

Also, the governor has separately had his administration alter income tax withholding rates so workers have less taken out of each paycheck — about $520 a year for a married couple making a total of $80,000 a year — starting in April.

The bill also would lower income taxes for factory and farm owners by $36.8 million over the current two-year budget and $91.3 million over the following two years.

GOP supporters of the manufacturing tax cut in the bill see it as fuel for one of the state’s main economic engines. Democratic opponents see it as a giveaway with a dubious payback to some of the richest people in the state, averaging about $800 for roughly 30,000 tax filers in 2015.

The Christian Post had a story about Scott Walker as well.

Excerpt:

A Wisconsin-based atheist organization has demanded that that Governor Scott Walker remove a posting on the social media website Twitter that is religious in nature.

The Freedom From Religion Foundation stated Tuesday that they took exception to Walker’s official account, including a tweet posted Sunday that simply read, “Philippians 4:13.”

As rendered by the New King James Version, Philippians 4:13 states, “I can do all things through Christ who strengthens me.”

On Sunday, Walker tweeted “Phillipians 4:13″ on the @GovWalker twitter handle. This is noted as being the “Official Twitter Account of the 45th Governor of the State of Wisconsin, Scott Walker.” Walker has another twitter handle, @ScottWalker.

The @GovWalker tweet of the verse citation received as of Tuesday evening 52 retweets and 76 favorites. It also received diverse responses from other Twitter accounts.

As of Wednesday, the tweet was still up. So I re-tweeted it and favorited it.

I think that in 2016 we should be looking at candidates who will take the fight to the Democrats. We don’t need another Mitt Romney. I want to see a candidate who sticks his neck out for what he believes in and comes out on top. Real accomplishments, this time. Not rhetoric. Why do we always have to care what our opponents think of us? Why not just beat them up and then be magnanimous in victory? If he runs for President on the platform of zeroing out manufacturing income tax, he will win. Every union worker will vote for him.

During the Christmas vacation, I read governor Walker’s new book, which was a Christmas present from my friend ECM. If you want to learn more about governor Walker, I recommend picking that up. I actually got the audio version, and it’s read by governor Walker himself.

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New study: 39 percent of private employers will cut workers if minimum wage is raised

Fox News reports on a study that should make Obama change his mind about his plan to raise minimum wage.

Excerpt:

Thirty-eight percent of America’s private employers say they will lay off workers if Congress agrees to raise the minimum wage to $10.10, according to a new survey by the nation’s largest privately held staffing firm.

Fifty-four percent of employers who are paying their workers the current minimum wage of $7.25 per hour say they would reduce hiring, while 65 percent say they would raise prices on their goods and services to offset the bumps in pay.

Of the 1,213 business and human resources professionals surveyed by Express Employment Professionals last month – which include whose who pay their employees the minimum wage as well as those who do not – 19 percent say they’d fire workers, 39 percent would reduce hiring and 51 percent would raise prices on their services to make up the salary costs.

“As with any such policy change, there are upsides and downsides. But based on this survey, there’s no denying that raising the minimum wage will result in layoffs, reduced hiring, and higher prices at a large chunk of American companies,” Bob Funk, CEO of Express and the former chairman of the Federal Reserve Bank of Kansas, said. “How severe will those effects be? That remains to be seen, but policymakers will certainly want to be mindful of this reality as they legislate.”

Last month, the Congressional Budget Office released a report that said that while raising the country’s minimum wage might boost the incomes of millions of Americans, it would simultaneously mean hundreds of thousands of fewer workers.

According to the CBO, a graduated boost in the minimum wage to $10.10 by 2016 would lead to an estimated decline in employment of 500,000 workers by the second half of that year.

Although wages might go up for millions of workers, businesses would have to charge more for whatever they were selling. So really, it’s just redistribution of wealth, except for the massive layoffs.

My worry about these dumb policies is like Obamacare and minimum wage hikes is that people see bad things happening and blame businesses rather than bad policies. I think we need to be studying economics to explain what is really happening to people, so that when they have a chance to vote, they vote smart.

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