IBM, Other Multinationals "Detaching" From the US 812
theodp writes "If you're brilliant, work really hard, and earn a world-class doctorate from a US university, IBM has a job for you at one of its US research sites — as a 'complementary worker' (as this 1996 piece defined the then-emerging term). But be prepared to ship out to India or China after you've soaked up knowledge for 13 months as a 'long-term supplemental worker.' Newsweek sketches some of the bigger picture, reporting that IBM, HP, Accenture, and others are finding it profitable to detach from the United States (even patenting the process). 'IBM is one of the multinationals that propelled America to the apex of its power, and it is now emblematic of the process of creative destruction pushing America to a new, less dominant, and less comfortable position.'"
Re:And the solution...? (Score:5, Informative)
You might want to look at the effective corporate tax rate, since no actual corporations pay 39% with our loophole-riddled tax code of exceptions, credits, and deductions. The actual rate they pay [taxanalysts.com] is about 22%, the 2nd-lowest in the developed world (after Ireland).
You get what you pay for. (Score:5, Informative)
This is what our factories have to compete with. Plants which poison children.
http://news.yahoo.com/s/ap/20090820/ap_on_re_as/as_china_lead_poisoning [yahoo.com]
Laws that protect us from this kind of behavior add costs that push companies to these countries.
Democracy isn't cheap.
Re:Who's chasing them? (Score:4, Informative)
I hope the "we" you are talking about isn't the US. We actually [taxfoundation.org] have one of the [taxfoundation.org] highest corporate [kpmg.com] tax rates [heritage.org] in the world. [rightsidenews.com]
Perhaps Google would have helped you a little.
Re:Solution is You and Me (Score:5, Informative)
In fact a load of it happened under Bush. Are you telling me he's a "redistributionist" who scared off companies? In fact it's usually Republicans that allow companies to import people on H1-Bs and allow them to move work over seas with no negative effect. That is probably what makes companies move.
The fact is that when it comes down to it, neither Obama or Bush really make a difference. Foreign workers definitely don't do a better job (like wise their work isn't inferior). What it's all about is someone in Manila can be paid for a year on a couple months of my salary, they have no expectations of pensions, private health care, etc. They're just happy to have a good job.
My company employs over seas staff. I know what they're paid, what they get and it's quite obvious why my company uses them. The employment laws are more lax and they 6 people for 1 of me.
It's not fucking rocket science.
The truth isn't just relative (Score:3, Informative)
Re:You get what you pay for. (Score:2, Informative)
Democracy isn't cheap.
Good thing we don't live in a Democracy. [wimp.com] However, we're tending that way all the time.
Re:The truth isn't just relative (Score:3, Informative)
Obama has already spent more money then Bush has in his entire 8 years in office. Don't forget Bush, but do not give Obama a pass because of him.
Re:And the solution...? (Score:2, Informative)
To be honest exporting US jobs to foreign nations has been going on for a while now.
Jimmy Carter did it to export jobs to Mexico and Canada. Gave Japanese Automakers a cut in the import tax to compete with US auto makers as well.
Ronald Reagan did it for manufacturing jobs to be moved to Mexico and overseas.
George H. W. Bush did it with moving more jobs overseas than just manufacturing.
Bill Clinton signed NAFTA and ASEAN and other trade deals to offshore Engineering and IT jobs to India, China, Russia, Eastern Asia, etc. It lead to the Dotcom Busts as Engineering and IT employees that lost their jobs tried to found new Internet based companies to avoid losing their jobs to overseas competitors. Also Clinton raised the cap on H1B Visa Workers.
George W. Bush did all of the above and more, and even offshored jobs to Iraq to help jump start their economy.
Barrack Obama hasn't been in office long enough to pass such a bill. He claims he will create jobs in the USA as part of his Stimulus package but we cannot prove it one way or another yet. It is too soon to tell. One way to do that is to cut down on H1B Visa quotas, and repeal the Foreign trade bills and put a tax on companies that offshore work. But we haven't seen that yet. Obama claims to create Green Jobs, but we haven't seen that yet either. But in creating Green Jobs it means the Classic Jobs that aren't Green will have to go away. That means people need more education and more training and certification. Obama promises to pass an education bill with federal public student loans, and graduates can work for the government or a community organization for ten years and have the student loan paid off. Which to me sounds like he plans to create government and non-profit organization jobs. So to be honest I think Obama is trying to create jobs in the USA. We must wait and see if any jobs are created.
Re:Solution is You and Me (Score:2, Informative)
Hahaha, 15k would be a kings ransom. Try 3-5k.
So myopic (Score:2, Informative)
Bush Jr watched his dad get crucified in an election against Clinton. His father had raised taxes (as did Reagan) to keep the budget balanced (ish). Clinton also did that. It is speculated that Bush Jr's experience of his fathers election loss jaded him over treating the budget responsibly - afterall, the voters panned his father.
Bush Jr ruined the budget as follows:
So Obama (the bad guy =) inherited a financial crisis whose complex antecedents go back at least 20 years. Just when the US needs to spend big, Bush had already bankrupted the budget.
Obama has already spent more money then Bush has in his entire 8 years in office.
So myopic.
For the record, Reagan, Bush and Bush were huge spenders, but Reagan and Bush Senior had the wisdom to also raise taxes. The Republicans are all about huge government, and are the ones who tax and spend - by their actions. Except Bush Jr just who spent, so that future presidents can deal with the tax part.
Obama's spending is about averting a depression.
Carter is Republican scapegoat for islam hate (Score:3, Informative)
Although I do *not* support the Iranian revolutionaries, the Shah was one of those nasty idiot dictators that was a puppet of Western powers. So the revolutionaries had it in for western imperial powers, and for good reason. It would have been better for everyone if a bunch of moderates took over, but that is history.
Carter angered Iranian revolutionaries by toasting the Shah just before the revolution. Carter tried to work with the new regime after the take-over, however, he really pissed them off again by allowing the Shah to receive medical treatment in the US. Note that Carter only granted the request to the Shah because of pressure from Rockefeller and Kissinger.
The paranoid revolutionaries in Iran thought that the USA was plotting a "counter" coup, but they never were. To consolidate power, the revolutionaries started the hostage crisis. There was probably nothing that could have been done to militate the course of events. Dealing with hostile paranoid revolutionaries is hard - esp. when they already hate you and blame you for all of their problems.
Carter attempted to negotiate, and then there was the ill-fated rescue mission. Perhaps you think Carter should have let the US embassy staff rot in hell? They were just doing their jobs, and the US administration was doing nothing wrong at the time.
The talks that successfully negotiated the release of the hostages were initiated by Carter two months before the election. The release occurred shortly after Reagan was sworn in as president.
THE REAGAN ADMINISTRATION HAD NOTHING TO DO WITH THEIR RELEASE, but in a twist of irony, they got the entire political capital for it - essentially because of the campaign. The Republican administration did nothing to set the history straight in the publics mind, by giving credit where it was due.
You can read all about it on the internet. It might open your eyes.
Re:Who's chasing them? (Score:5, Informative)
In 2007, Exxon reported paying a 44% effective tax rate in their sec filings.
Goldman sax went bankrupt in 2008 didn't they? Remember the bank bailouts? Besides, they paid a 34% effective tax the previous year and attributed the lowered tax rate to the increase in permanent benefits as a percentage of lower earnings and changes in geographic earnings mix. This means that the their profits were paid out and the tax money didn't disapear, it will be paid by those people.
You entire 0% rate is fictional to any company that is solvent. It isn't because of loopholes and it isn't because the rates set down don't have any meaning. The rates have an effective disposition because they are higher then what they should be and the government lowers them for companies who do certain things they want them to do. It's like the mortgage interest deduction, if your making over a certain amount of money, you should be owning instead of renting in order to lower your tax burden. That's by design and accurately reflects the intended rates. What doesn't accurately reflect the intended rates, is you misunderstanding of the tax system and those who participate.
Re:Who's chasing them? (Score:3, Informative)
We actually have one of the highest corporate tax rates in the world.
This is true. Please provide the names of the corporations in the Fortune 500 that actually pay that rate.
Re:Solution is You and Me (Score:4, Informative)
Quit your bitching.
You knew what they were up to when Watson was still in charge. He didn't rename the company "American Business Machines". The Nazi banks ran on equipment he sold them. The Nazi rockets were modeled mathematically on equipment he sold them.
The ethnic populations were CERTAINLY tabulated by the Nazis. On equipment he sold them.
Funny. I know Jews who won't ride in a Volkswagen, but make sure iBM is in their portfolio.
So, screw Godwin, and screw INTERNATIONAL Business Mahines.
Re:Who's chasing them? (Score:5, Informative)
We actually have one of the highest corporate tax rates in the world.
You're quoting KPMG and right wing propaganda machines as authoritative sources on corporate tax rates? Edwin Feulner runs the Heritage Foundation, one of the groups helping organize the "Tea-Birthers". One of his own favorite quotes:
"We conduct warfare in the battle of ideas."
Yes, they do. And those ideas are almost always promoting conservative policy items including corporate welfare. The tax rate is meaningless, the US is actually a corporate tax haven. Because of exceptions, credits, deductions, depreciation and amortization, plus a little lawful and unlawful income shifting, tax deferments and shelters, the effective rate paid by corporations in the US (13.4%) was below the average (16.1%) for the 19 OECD nations in 2000-05. So, sure, lower the tax rate and close off the deductions, then watch those very sources have a collective heart attack.
You'll believe anything if it's on Fox News.
Re:Some Perspective (Score:3, Informative)
Re:Who's chasing them? (Score:3, Informative)
Everyone's actual effective tax rate is lower then the applicable rate. That's by design and because we have a progressive tax system. If you are in the 25% bracket, you are not paying 25% on all your earning, you are paying 25% on the amounts over the threshold that brings you to that bracket.
I do not know what you point is unless it's that you are ignorant of the tax system and want to claim having a 34% effective rate while being in a 45% bracket is somehow taking advantage of loopholes.
Re:Solution is You and Me (Score:5, Informative)
If the latter, then I'd like to point out to the people modding you that IBM was indeed the provider for the tracking software used at the concentration camps and labor camps of the Third Reich. The numbers tattooed on Jews weren't just decoration, they were tied to a punch card system IBM developed and maintained for the Third Reich. The numbers represented what "crime" you were arrested for (Jew, Gypsy, Homosexual, etc), your point of origin, and the camp you were assigned to. And this wasn't like a modern system where IBM can say they only sold it and didn't know its use. The systems which were used would've required constant on-site maintenance by IBM employees, which means there's no way they couldn't have seen what was being done to the prisoners held there. Additionally, contracts, internal memos, and other paperwork still exists showing that IBM's headquarters in the US was well aware of what was going, and what their equipment was being used for. They simply didn't care.
Re:Who's chasing them? (Score:2, Informative)
Goldman did not go bankrupt. They made a nice profit every quarter in 2008 except for Q4. They were positive for the year. Q1 of 2009 they had record earnings $3.4B.
Exxon's rate of 44% includes taxes (mostly) paid to foreign governments. They don't pay that in the US. Foreign governments hit them hard and they can't dodge it because of the physical need to drill.
Re:Solution is You and Me (Score:4, Informative)
The security of the job market works either as a payment from the municipality or as a insurance (where the government pays for most of it, but you get a more decent monthly payment). The system hunts you down to get a new job as fast as possible (by you hating it so much to get away from useless courses and forced applications), or getting an education (either payed by the municipality or the educational state system). The companies on the other hand gets much more freedom (than other EU-countries that is) to fire and hire people as they please.
For a mixed economy, the system works pretty well, and this is probably why we haven't felt the recession yet (yes, we have had stimulus packages to banks and what not). But the price is that we pay over 50% personal taxes (+25% sales tax and "behavioral" taxation of almost every product available) with some subsidies (mainly interests; good for home owners and banks).
Re:Solution is You and Me (Score:3, Informative)
In spite of the presence of the communist government in China, one thing that the Chinese government has learned is that regulations and taxation kill business. Instead of taxing everything, the Chinese government is instead an investor .... and the business policies are often decided on the basis of how good it can be for Chinese business, as the sale of goods to America ends up often going straight into the pocket of the Chinese government.... more often than not the "People's Liberation Army" more directly. Yes, the Chinese Army is running factories that supply goods and services to the U.S. Army on sometimes a very direct fashion.
Nice fanciful things like environmental laws and OSHA are simply non-existent in China as well. In other words, they don't have to worry about carbon tax credits, they don't even have to worry about what happens when they dump toxic waste directly into the Yellow River. Certainly luxuries like concerns over mine safety is something that is also very much missing.... hundreds or even thousands of Chinese miners die each year due to mining accidents that would permanently shut down any American mine. Injuries in factories are no different.
As a result, "the tools that make the tools" like CNC machines, lathes, and other basic machine tools that make more tools are about 10% of the cost as you can buy them in America. They are more labor intensive, but labor isn't something the Chinese are lacking. Skilled labor isn't even a huge problem. So the tools to make the factories are cheaper, they can do eminent domain to build factories at pennies on the dollar compared to what a company would have to do in America, and they have what appears to be an unending supply of peasant labor coming from the rural parts of China.
It isn't just the cheaper labor costs, it is the cheaper everything cost in China that has turned that country into America's manufacturing center. And the influx of cash, with a deliberately designed weak currency to keep money flowing in that drives the current relationship between China and America.
Re:Carter is Republican scapegoat for islam hate (Score:3, Informative)
Lets take that apart:
AND, the Iran-Contra Scandal had NOTHING to do with the hostage crisis that Carter SOLVED. The US hostages involved in the Iran-Contra scandal were 6 US citizens being held by Hezbollah.
Just as you can claim Fox News has a right-wing bias, so can you prove that Moveon.org and other liberal blogs that they run and create are also biased but in a left-wing sense.,
It's not a matter of bias in this case, but getting a few basic facts straight. rotfl!
Re:Carter is Republican scapegoat for islam hate (Score:3, Informative)
Good god. In Iran-Contra [wikipedia.org], the Reagan administration facilitated the sale of arms to Iran in the hope of freeing hostages in Lebanon taken from 1982 onward [wikipedia.org], years after the Iranian hostage crisis.
So what history books have you been getting your information from?
Re:Who's chasing them? (Score:5, Informative)
I'm not sure why this is a troll, unless we've got some very unschooled libertarians moderating tonight.
Corporations owe their complete existence to the government and the people. A corporation is a legal entity created out of nothing by government action, and supported by the people. Benefits include tax breaks, jurisdictional freedom, limits on officer liability, access to publicly run and regulated markets (Wall Street), and so on.
Private companies, on the other hand, are not corporations, and do not owe a certain responsibility to the public.
Re:The truth isn't just relative (Score:3, Informative)
Obama has already spent more money then Bush has in his entire 8 years in office. Don't forget Bush, but do not give Obama a pass because of him.
That's a flat lie. Obama is asking for money in his budget; his spending so far has been based on the budget submitted last year, by Bush. The 2009 federal spending budget, which Bush built, was $3.1 trillion. Obama's 2010 budget wants $3.6 trillion. That's way too much, but half a trillion dollars is only a fraction of a single years' spending, not eight years' worth plus change.
Re:The truth isn't just relative (Score:5, Informative)
As a public service, I have to reiterate: sumdumass is wrong. Bush increased the debt by about $7 trillion dollars in his 8 years. Obama, in the middle of a recession, has budgeted an additional $1.7T of deficit spending in his first year.
Re:Who's chasing them? (Score:5, Informative)
Too bad that's not stopping IBM from laying off Irish workers, too. [www.rte.ie]
Re:And the solution...? (Score:2, Informative)
Research social mobility some time and educate yourself.
Ok:
Recent researchers collecting data on the economic mobility of families across generations, looked at the probability of reaching a particular income distribution in regards to where their parents were ranked and found that 42 percent of those whose parents were in the bottom quintile ended up in the bottom quintile themselves, 23 percent of them ended in the second quintile, 19 percent in the middle quintile, 11 percent in the fourth quintile and 6 percent in the top quintile.[1] These data indicate the difficulty of upward intergenerational mobility.
Re: Chasing them away? (Score:4, Informative)
I gave it a read. It's well researched, but repetitive and sensational.
The system worked like this. One punchcard per person. Take the census data, find out a person's ethnicity, parent's ethnicity, religion, occupation, education etc. Now if you need to find the Jewish people, all you do is run a sort based on ethnicity. They were able to use the census data and the card sorters to find people with as little as 1/16 Jewish ancestry.
Now you have a stack of cards for each concentration camp. If you need a thousand people to build a railway, sort on profession, age, etc. Done. Distribute the cards to the guards and find people to find the prisioners with the right numbers tattooed on their armptis.
It's no surprise that the German subsidary did this work though. It was a German company. The surprise was how Watson was able to keep his hands in the cookie jar from over a wartime border.
Re:Solution is You and Me (Score:3, Informative)
Would you mind posting a citation for this? My wife is a teacher in the poorest area of our town and they are losing funding because state government is cutting education to trim the budget. :\
I recently saw an article somewhere (Google can probably find it) that describes how politicians would rather cut from education and social programs than release some non violent criminals to save some money.
Re:And the solution...? (Score:3, Informative)
http://www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/index_03.html [nytimes.com]
Barely more than half of the people in the top 20% of the income bracket were still there even 10 years later. Not even close to the 99% intergenerational figure you were trying to claim.
Re:Who's chasing them? (Score:2, Informative)
Goldman sax went bankrupt in 2008 didn't they?
Actually, Goldman Saches did not go bankrupt in 2008. In fact, they did relatively well throughout the crisis. Your response to the other poster explaining that they could have gone bankrupt while still making profit is also irrelevent, because they didn't go brankrupt.
Re:Who's chasing them? (Score:3, Informative)
Global accounting firm...what allegiance do they have to the truth? Hey, someone had to take Arthur Andersen's place. They come in, five or six of them, once a quarter and take over a meeting room or hallway with their little laptop network and their job is to make sure that your actual corporate tax rate comes out at or below that 13% figure. Or that at least you don't get caught cheating too much. And if you think there isn't collusion between the auditors and executive row, then maybe one day you'll be able to work up to a cubicle with a red Swingline stapler.
All KPMG cares about is billing. And you can bet anything they publish, anywhere, is tied to that goal. Your marginal tax rate is 35%, second only to Japan...you guys keep leaving out that talking point. People spent a lot of money on think tanks and PR for those talking points, you should at least include that one when you're parroting shit you hear on one of the business channels or Fox News. But if you use our auditing service we can show you the tricks to get your actual tax rate down to just 13% (plus our billing, which is in very small print).
Maybe you've heard of their IT consulting group, BoringPoint...I mean, BearingPoint. Or did they spin off that loser finally? They would sell Girl Scout cookies if it would increase their billing, so they certainly are going to tell their client base what they want to hear. Hell, half their board are probably also the people in those think tanks spending the money to get people like you to vote against their own interests. And that's the only part amazing to me, is how they manage to convince hordes of stupid poor people to vote against their interests so consistently. Just amazing. It's like those street cons playing a rigged game, only the chump never catches on. Or maybe they think that if they work hard, some day, they'll be at the top of the pile. Yeah, you keep believing that...but first you have to earn that red Swingline stapler for your cubicle.
10 years and it will all be coming back (Score:2, Informative)
At my work we have a Chinese production facility. They do molding design as well. Molding design and Manufacturing are just as expensive. So skilled labour is just as expensive here as it is over there. Only thing is assembly is cheaper. But I can already see prices starting to rise. It's cheap but not that cheap. And then you have to send your stuff all across the world, this takes 3 months. Transportation is not free as well. So in all it's better now in China but when wages increase all this work will be coming back. And we will have a large Chinese middle class ready to spend some of their cash over here.
Re:achievable? (Score:1, Informative)
Looking at OECD stats from September 2005 (OECD Note on productivity levels, September 2005, the latest I can find in 5 minutes searching), labour productivity in the US is exceeded by
France
Belgium
Ireland
Norway
France is barely ahead on total labour productivity in PPP-terms, but since they have a 35 hour working week (!) and because the statistics are based on total productivity during all hours worked, the actual productivity per hour is significantly better than the US.
In other words, French workers put in about 15-20 hours less time at the factory or the office, and yet manage to produce more than the US.
Most of the rest of the OECD is in the same boat, producing more per hour (in PPP terms, which is important for citizens because it's about how much they can purchase in their local currency than how many USD they can convert their salaries to) than the USA, but because they don't seem to work people so hard, having generally lower GDP per capita.
Re:And the solution...? (Score:3, Informative)
>>You don't get it. If there were perfect class mobility, then 20% of the top would stay in the top and 20% of the top would move to the very bottom.
No, you have it completely backwards. Our null hypothesis is that people will be making around the same amount of money in 10 years as they do today. The fact that 45% of people fall out of the top bracket in a mere 10 years is evidence of a huge amount of social mobility.
>>It is a class mobility that incorporates a heavy dose of birthright. Your NYTimes page proved my point. Thanks.
If you want to see what birthright actually looks at, read some studies of social mobility when Europe had a noble class, or even under socialist regimes like modern-day France. Socialist regimes are quite conservative when it comes to social change. They don't let their corporations fail, and crush up-and-coming competitors. So whereas a Mr. Facebook could make his millions in America, in a socialist regime the established company would crush it and stop him from rising in class.
Re:Solution is You and Me (Score:3, Informative)
That's absolute bullshit. When you reach a higher tax bracket, you get taxed at a higher rate on the money earned within that bracket. So, the first several thousand (is it $15k now?) doesn't get taxed at all. The next several thousand gets taxed at the next level and so on. It's only the amount that you earn within the particular bracket that gets taxed at that rate. You sir, know nothing about progressive taxation. And I think your story is a lie.