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October 24, 2014

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Letter to the editor:

Competitiveness isn’t what it seems

Another view?

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There recently was a meeting in Washington, D.C., that included a coalition of business leaders who talked to politicians about their list of 200 concerns.

This coalition, the Council on Competitiveness, wants lower tax rates, streamlined regulations, a more highly trained workforce, a permanent tax credit for research and development, and improved infrastructure. Well, who would not want all those things?

Let me give you a definition of competitiveness: “It is an ability to compete while supporting high living standards for average Americans.” I’ll bet that coalition declined to mention that definition as one of its goals.

The coalition complains about a 35 percent tax rate, which in reality no one pays. The average U.S. corporate tax rate for 2011 was 12.9 percent. Many corporations, including General Electric, paid no income tax.

Many corporations pay their CEOs more than they pay in taxes. The corporation’s workers pay a higher tax rate than the corporation while the CEO’s pay is 325 times the workers’ rate of pay. Many corporations spend more on marketing than research and development.

The coalition is against those annoying regulations that attempt to keep the corporations from committing fraud on their customers. Corporations want an improved infrastructure but do not want to contribute to the cost of infrastructure through fair taxes. This does nothing for the working class.

Some of the attendees were the same corporations that are hoarding $3 trillion in cash in the U.S. and another $2 trillion in offshore tax-dodging accounts.

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  1. "There you go again." Bashing business. Where did you guys work and who did you work for? Non-profits? The Government? Or, more likely, were you one of the parasites who got "free stuff" from Uncle Nanny? 100s of millions of hard-working folks work for "businesses" that treat them fairly and provide them with the financial means to pay their bills and, perhaps, sock aside a little money as well and all guys like Starr & Jeff can do is denigrate them. Without businesses and entrepeneurs, where would those guys and their fellow travelers be? They'd be growing their own food, sewing their own clothing, building their own homes, walking instead of driving, reading by candlelight or, perhaps, they would now be dead - killed by some disease that wasn't conquered because no one put up the money for the research necessary to defeat it. I guess by now you get the picture. These ingrates have no idea of what it took and of what it takes to provide them with all of the necessities & luxuries they take for granted. Someone invested the money, time and effort to "build" those business that have made their lives easier and all they can do is carp. I guess it's true that "No good deed goes unpunished" when one deals with the economically functionally illiterate.

  2. Remember letter writer the first meeting President Obama held at the White House after his reelection was with the labor leaders and union representatives who bankrolled and supported his campaign. If you're looking for symbolism and meaning in which comes first with this President and Administration, labor or business, the answer is very simple.

    CarmineD

  3. The funny thing is that the author is another person who expects us to govern based on what may well be an outlier in the flow of tax revenue. The percentage was close to 30% in 2007. Over 30% in 2008 and then fell sharply. This according to a graph from the Congressional Budget Office. The average from 1987-2008 was 25.6% and the CBO expects the average to return to that level over the next few years. So, should we focus on the low point in a graph as the single point 'trend'?

    The number mentioned is based on total taxes divided by total profits. This makes the number skewed based on the results of the largest companies. The ten largest companies paid around 9%. Lots of smaller companies actually pay close to the actual statutory rate and that is the real problem. Like with personal taxes, the problem should be looking at why some companies pay so little and perhaps correcting that while lowering rates a bit. Just like taking a few people who make a lot of money and pay a low rate and painting that as the norm rather than looking at what the aggregate is.

    The tax system, both for corporations and individuals, is in need of a serious overhaul. Most people would be willing to give up some deductions if they knew that everyone else was giving up similarly, but almost nobody seems to believe that would happen. So, we lumber on with a badly deformed tax system and people throwing around even worse statistics.

  4. ReFreeman wrote,

    "The Simpson-Bowles plan replaces the current six-bracket individual tax rate schedule with a three-bracket schedule with the lower rates of 9%, 15%, and 24%." (Reasonable. What's the holdup? LTV)

    "The republican tax reforms the individual income tax code eliminating loopholes and reducing taxes into two simple brackets: 10% and 25%." (Reasonable. What loopholes to eliminate? LTV)

    "Simpson-Bowles recommends lowering the corporate tax rate to 26% while the republican plan lowers it to 25%. Both plans recommend to remove corporate tax loopholes." (Again, reasonable, but what loopholes to eliminate? LTV)

    "Businesses are now waiting for more fiscal certainty from government before investing in expensive business expansion plans." (Agree. LTV)

    ReFreeman, this is one of your best response, if not the best. Good information. Balanced, factual and educational. A healthy discussion should follow, a response from other commentators is recommended.

  5. http://www.foxbusiness.com/personal-fina...
    Read the above Fox News post. A classic!!!These firms employ vast numbers of Americans. Pay them nothing, but top management....millions and millions and millions. A CEO needs to make $15 million a year to sell hamburgers and fries.
    Only in America!!!!In other parts of the world execs make a fraction of what they make here and the difference in $$$$ goes to the worker.

  6. http://www.forbes.com/pictures/efkk45iem...
    Forbes gave BMW the title of most reputable company in the world.
    BMW ties exec compensation to blue collar compensation. In Germany a BMW worker makes $70 an hour including perks. Read the below article.
    http://www.businessweek.com/globalbiz/co...
    A completely different mind set. Here the entire working class will soon be on welfare.

  7. Jeff,

    Much of our current crisis is manufactured by Republicans in Washington. Uncertainty is the key goal. Much of the uncertainty started in 2009 with the negative campaign waged by House and Senate Republicans telling America Business in so many words, don't invest in America because we are shutting down the US Government for the next 4 years.

    Night after night throughout the media the message was sent to scare off investments and lending. Enough to drive away any business person that was thinking of expanding or investing in America. The message sent by Republicans was launched out to the media outlet on day one of President Obama taking office. The negative numbers we are seeing are from the efforts by Republican to scare off any type of recovery from the worst recession since the great depression. A constant drum beat of negative press, primarily coming from the stage of Foxnews. As parade after parade of Republicans marched through the set of Foxnews to bashed the President and tell Americans (America Business') that America is in decline and run for the hills (the Hills, meaning--China).

    So, it is very easy to show negative numbers from the past 3 1/2 years. So when you see commentators showing comparisons from past years to years with similar situations, this is false and misleading. The cause of the negative numbers are not being discussed or acknowledged.

    For one, the eight years of the Bush presidency is a cause for the negative numbers. Secondly, the Republicans campaigned against doing business in America, is other cause for the negative numbers. Now, many on both sides argue numbers that are false...self made. Instead of investors jumping off buildings like in 1929, investors and business's moved production and investments out of the USA. Why? In part because the Republican campaign of uncertainty for American business's.

    Uncertainty was the goal of Senate and House Republicans. This was an extreme measure. They achieved the goal to the detriment of the Republican Party, as evident on November 6, 2012.

  8. ReFreeman,

    You can pretend to be naive, but I think you are smart and not consumed the numbers you read daily.

    The Republicans had many goals during the last 3 1/2 years. Uncertainty being among the top. The main goal was to remove President Obama from office by elected Mitt Romney or anyone from the Republican Party. As we all know, that didn't happen. The majority of American voters rejected Mitt Romney and the Republican agenda.

    The numbers you posted are a direct result of the uncertainty caused by Republicans in the Senate and the House. Where the effects because of the uncertainty does not matter. The end result was to remove the President no matter the casualties.

    Now, many Republicans are saying, "I will not honor the Norguist pledge." Going from destroying the country, to agreeing to items they once showed extreme opposition. Means they were in extreme opposition going from day to night. From off to on. From Black to White. No matter how you look at it, the position of the House Republican and under the leadership of Reince Priebus, the Republicans have acted extreme. So the numbers who posted are a result of the actions by Republicans to cause uncertainty. Your arguing an intentional man-made crisis. A false debate. A Debate fashioned for people in the Bubble, a Bubble Citizen.

    From one extreme position to another extreme position. Fighting against tax increases for the wealthy 2% of Americans to saying, yes, lets tax the rich. That is extreme by any measure. This causes uncertainty by any measure. And by any measure this is the cause of the Republicans in control of the House of Representatives. Uncertainty, they met the goal and killed the party.

  9. ....Bottom line, uncertainty is here because of Senate and House Republicans. Bottom line!

  10. Manufacturing jobs have been lost because 700 million Chinese workers were willing to work for a few dollars a month. Now that Chinese wages have gone up by double digits for years manufacturing is coming back. Domestic manufacturing is at a 15 year high according to a recent report.
    Without protectionism its hard to compete with workers that work for next to nothing. Try living here on Chinese and Indonesian wages.

  11. OK, explain it to me again. The many Posters who denigrated Romney for legally and legitimately avoiding taxes don't want to consider FIXING the tax code so that people can't avoid quite so much? There is a lot of sense in limiting deductions so that far fewer people itemize deductions. And there is a lot of sense to the revenue gains from limiting deductions, credits, special-interest social welfare in the tax code. I would support serious and significant changes that apply across the board, not just to the 2%, to all tax return filers. While the home-loan interest deduction seems sacred, in reality it is much like all the other deductions--the rest of us supporting your debt. Home ownership remains a real value although many Americans can not swing it right now. As soon as they can, many more Americans will get back into home ownership REGARDLESS of the tax code--what they need are good jobs starting with ANY JOBS. May we agree to concede the smaller "sacrifices" for ourselves to move forward with a more level tax structure and a healthier economy.

  12. Jeff: You didn't address THE issue. Will the "middle class" accept minimal restrictions on what they itemize and deduct or does it ALL have to be on the high-income earners? Where is the compromise, bipartisianship.....? Let's get a SIMPLER tax code while we're at it--let's work towards a flat tax. If you don't earn anything, you still pay zero.