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Vet67to82 (< 20)

Exportation of Jobs and Tech 101

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December 01, 2009 – Comments (9) | RELATED TICKERS: T

 I have a suggestion for the problems relating to USA companies exporting jobs and technologies to other countries.

When I looked at the problem, many companies, like AT&T, argue they are not exporting jobs, that they have hired a consulting company and that company "may" have hired employees ... or an external consulting concern that is employing non-USA citizens. This is clearly a "wink and a nod" distancing of, and from, accepting responcibility for being part of the problem, and not part of the solution.

The companies employing external companies and non-citizens, are not paying taxes they'd HAVE to pay if those "employees were USA citizens. Non-citizens are deriving a vast social and economic benefit from the hiring company, as the hiring company is shifting their tax responcibilities to a declining USA employed base. This is NOT good Economics.

My suggestion is this: Order every USA company to declare their "off-shore headcount" and order them to pay the taxes ... SSI, FUTA, Federal, State, and local ... etc ... just as they'd have to pay, if they were employing USA citizens. The benefit with this suggestion .. is that many jobs may be repatraited to the USA. Also, non-USA citizens will, and should have NO claim, to taxes paid therein to the USA, until such time as they become tax paying residents, and/or citizens of the USA.

 

9 Comments – Post Your Own

#1) On December 01, 2009 at 12:47 PM, russiangambit (29.45) wrote:

> The companies employing external companies and non-citizens, are not paying taxes they'd HAVE to pay if those "employees were USA citizens.

You are wrong , all legal immigrants working in the US pay US taxes, incluyding SSN, which they cannot even collect.

Are you talking about illegal immigrants? I doubt AT&T would hire illegals.

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#2) On December 01, 2009 at 12:57 PM, brickcityman (< 20) wrote:

The counter argument is then of course why would they decide to continue being USA companies?

 

Why not shift corporate headquarters over seas (on paper), and operate stateside under subsidiaries...

 

Remember, in the game of cat and mouse the cat (government) usually loses.  the mouse is smaller, more nimble, and has more to lose.  The more you try to correct a problem with stiff penalties the more cause you give the mice/rats to jump ship.

 

Personally I'd like to see less worry about current businesses and more about those yet to be formed...  If we can ensure a healthy structure is in place to allow new businesses to prove that operating stateside is doable, and to steal marketshare existing businesses in the process then things should work themselves out. 

 

Remember, there are now multiple generations of MBA types whose most creative contribution to the running of their businesses is picking out new color schemes for their offices.  You are never going to penalize or incentivize changes in their way of thinking.  The only way to shake them up is to make them worry that their job is on the line.

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#3) On December 01, 2009 at 1:02 PM, russiangambit (29.45) wrote:

> Remember, there are now multiple generations of MBA types whose most creative contribution to the running of their businesses is picking out new color schemes for their offices.  You are never going to penalize or incentivize changes in their way of thinking.  The only way to shake them up is to make them worry that their job is on the line.

Ha, that is harsh. The one thing that is really drilled into MBAs is that their purpose is to maximize shareholder value. If that means opening a call center in Bangalore, what is wrong with that? Change the incentives, and MBAs will change accordingly.

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#4) On December 01, 2009 at 1:10 PM, chk999 (99.98) wrote:

In general, making it more difficult to run a business in an area means that businesses (and their jobs) leave that area. California is currently on the sharp end of this point.

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#5) On December 01, 2009 at 1:16 PM, brickcityman (< 20) wrote:

@ russiangambit...

 

I agree in general, but picking specific ways to incentivize and using penalties in the process is too often prone to un-intended consequences.  Just think of the number of foreign owned businesses who maintain operations here and might be apt to retreat if their governments did the same.

 

My philosphy when it comes to things like this is simple.  Giving an example is better than giving an ultimatum.  

 

Because look at it this way... If you can help foster new employers and current employers attempt to emulate them.  Then great, you've multiplied your ROI.  If they don't then at the very least you are left with employers operating under the new paradigm.  If on the other hand you think you can intimidate or entice current employers to do what you want, and they don't then you are left with nothing to show for it.

 

Of course much of this is moot...  thanks to our political process little will ever get done that threatens the dominance of the status quo.

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#6) On December 01, 2009 at 1:35 PM, Vet67to82 (< 20) wrote:

Thanks one and all.  You each have valid points, arguments, and counter points.   My thoughts in tossing in this SUGGESTION ,,, is that it ( jobs creation, jobs exportation, tech exportation ... etc ) isn't being discussed ... and just look ... each of you have contributed to the discussion.  This is certainly a positive first!  

 

Thank you! 

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#7) On December 01, 2009 at 1:44 PM, cubanstockpicker (20.26) wrote:

Vet,

 That really is an issue now? That has been happeneing since 2000 when Bushie decided to "incentivise" jobs by offering multinationals to pay next to no taxes for expeorting the "good jobs." Why did that tax beneift get created in the first place?

Briskcity, the specific regualtions of incentives for exporting jobs was prone to unintended consequences, like if no one could have figured out that this plan would destroy the middle class, or at least move a large part of it downwards.

Why hasn't the tax exemption been removed? It was part of Obamas talking points. Alas the pull of lobbyists has its hold.

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#8) On December 01, 2009 at 2:02 PM, brickcityman (< 20) wrote:

@ cubanstockpicker...

 

I was admittedly less concerned with the goings on in D.C. and around the world in 2000... could you provide some additional context around what you law change you are referrring to?

 

Seems to me though that instead of trying to redesign the mouse trap to more effectively punish bad behavior why not work more on the incentive side of things?  

 

Why not work to improve the patent and IP protection process, and perhaps give additional incentives that foster more stateside research and development and help along newby inventors...  Perhaps grants for small companies to cover patent application costs? Perhaps nationality of the listed inventors could be grounds for pipelining applications or offering extended coverage?


Or better yet work on reforming problem areas in our educational system to remove the excuse that foreign workers are filling a gap?

 

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#9) On December 01, 2009 at 3:17 PM, vriguy (80.91) wrote:

Companies like ATT are pursuing the financial interests interests of their stockholders. If they are breaking any law, prosecute them.  Globalization, unfortunately for many Americans, means competing with sometimes better-trained and always lower paid residents of Bangalore or Bangkok.  American students have largely shunned science the last three decades. No surprise then that our high-tech hubs are filled with foreign-born workers, and companies "export" jobs to where those workers are. 

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