Friday, May 8, 2009

Target Rich Environment

Hey maaaan, this is good sh-t . . .

I knew when Obama was elected President, I'd have a lot to say. But, not in my wildest dreams did I think it would be like this. Everyday, he comes up with some new idiotic scheme that emphasizes his total ignorance of the business world, government in general and what is good for this country. It's like having a stoned college junior majoring in political science being handed the keys to the world and being told to "have at it!". You can't make this stuff up. Here's the latest:

First the good news: earlier this week President Barack Obama admitted that high taxes kill jobs. Now the bad news: he wants to raise taxes on U.S. companies anyway. Pitching his new tax reform plan Monday President Obama said that our tax code “says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.” As the Wall Street Journal quipped: “That sounds like a great argument for lowering taxes on the guy creating jobs in Buffalo. Alas, that’s not what he has in mind.”

Instead, President Obama wants to raise taxes on U.S. companies by: 1) limiting the ability of American business to defer U.S. tax on their foreign income and 2) reducing the credit American businesses receive for foreign taxes paid. The President’s proposals demonstrate a fundamental misunderstanding of tax policy principles and the market forces that drive the global economy. Currently, most other countries do not tax their companies’ overseas profits. So, as the WSJ illustrates:

A German firm doing business in Ireland, say, pays no German income tax on its Irish profits, but it does pay Ireland’s corporate income tax at its 12.5% rate. The U.S. company competing with that German business in Ireland, by contrast, pays Ireland the same 12.5% on its profits — and it then pays Uncle Sam up to 35%, minus a credit for what it paid the Irish. And because almost everyone else’s corporate tax rates are lower than America’s, U.S. companies end up paying higher taxes than their international competitors.

And those higher taxes mean a big competitive disadvantage for American firms. Even business leaders that were highly supportive of Obama’s presidential campaign are livid over this latest revenue grab.

The San Francisco Chronicle reports:

Silicon Valley executives made clear to all that Obama’s hunt for revenue to finance his ambitious agenda, from green energy to health care, should leave them alone. … The plan would “make very good companies very uncompetitive,” said Kevin Surace, chief executive of Serious Materials of Sunnyvale. As it is, he said, with the cost advantages that Chinese companies have already, “we’re almost uncompetitive now.”

Punishing U.S. companies for competing overseas will ultimately kill jobs here at home. For every worker employed by a U.S. subsidiary in a foreign country, 2.3 Americans are employed in the U.S. And a 10 percent increase in foreign investment by businesses has been associated with a 2.6 percent increase in investment in the businesses’ home countries. So, we were delighted to see the President begin to learn that high taxes kill jobs; unfortunately he still needs a couple more classes.

Of course, he did have experience as a community organizer.


Mike West said...

Just another part of the "big picture."

vwatt said...

From tonight's White House correspondent's dinner(I think I like this guy):

"Obama, for his part, played it all for laughs: "I must confess I really didn't want to be here tonight. But I had to come. That's one more problem I inherited from George Bush." The crowd roared.

vwatt said...

And now I really like the comedian Wanda Sykes. I may have to get one of her CDs:

“He was so funny,” said CNBC’s Jim Cramer, as he made his way out of the dinner. “And Wanda Sykes! She gave us a ‘Curb Your Enthusiasm’ Wanda. Oh, it was so good.”

It was also Ms. Sykes who provided one of the more charged lines of the evening, when she took on Rush Limbaugh, accusing him of “treason” for saying that “he hopes this administration fails.”

“I think maybe Rush Limbaugh was the 20th hijacker, but he was just strung out on OxyContin and missed his flight,” she said, to cheers and nervous groans. “Too much?”

But then she continued anyway. “Rush Limbaugh. ‘I hope the country fails’? I hope his kidneys fail, how about that? He needs some more waterboarding, that’s what he needs.”