This from Bloomberg (the news service, not the mayor)
“Emerson Electric Co. Chief Executive Officer David Farr said the U.S. government is hurting manufacturers with regulation and taxes and his company will continue to focus on growth overseas. “Washington is doing everything in their manpower, capability, to destroy U.S. manufacturing,” Farr said today in Chicago at a Baird Industrial Outlook conference. “Cap and trade, medical reform, labor rules.”
Emerson, the maker of electrical equipment and InSinkErator garbage disposals with $20.9 billion in sales for the year ended September, will keep expanding in emerging markets, which represented 32 percent of revenue in 2009. About 36 percent of manufacturing is now in “best-cost countries” up from 21 percent in 2003, according to slides accompanying his speech. Companies will create jobs in India and China, “places where people want the products and where the governments welcome you to actually do something,” Farr said.
The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983. Emerson, which Farr said employs about 125,000 people worldwide, has eliminated more than 20,000 jobs since the end of 2008 to lower expenses. “What do you think I am going to do?” Farr asked. “I’m not going to hire anybody in the United States. I’m moving. They are doing everything possible to destroy jobs.”
If you take into account the federal corporate tax rate and the average state rate, companies are paying nearly 40% of their income towards taxes. But other countries have figured out that if you incentivize businesses, it is good for your economy. So that means that if your company had a revenue stream of $ 10 million, you would be able to keep about $6 million of that. But if you located in, for instance Switzerland, you would be keeping about $9 million of that same revenue. This is simple stuff here, folks.
So if the portion of your business that obtains the patents is in America, you will be paying a lot more of your revenue to Uncle Sam. And countries like Switzerland have discovered that if your patent holding portion of your company goes to another country, the manufacturing part is likely to as well. Now further if your company wanted to build a manufacturing facility to make your product, once you repatriated that money into the United States, then you would be taxed at the higher U.S. rate.
What Obama now wants to do to American businesses is to change our present corporate tax laws from only being able to tax income that is repatriated into the U.S., to being able to tax ALL of a company’s income, whether it is repatriated or not.
What will this do? Well already we are seeing businesses begin the transformation from being American companies with foreign operations into foreign companies that have American operations. This is just plain crazy because to drive these companies and the jobs they create out of the United States is economic suicide, yet that is exactly what Obama is doing.
It would seem that this administration and this president are doing the direct opposite of what is needed to “jump start” our economy. Forcing our great American industry to locate elsewhere is the last thing we want to do at this time, yet that seems to be the modus operandi in Washington D.C. these days. Is it that Obama wants to destroy our economy to the point that the American public has to turn to the government? Does Obama genuinely want to help, but is just so ignorant of what it takes to successfully run a business that he truly has no idea what it takes to KEEP our businesses in America? Or is it that socialism and Marxism are so ingrained in him that it is all he knows?
I do not know the answers to these questions, but I can tell you one thing; we need to make sure the next election cycle counts. We need to make sure that our voices are heard, loud and clear.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a_EbBQyskKl0
Matt
I believe that future generations should have the same opportunities that myself, and those that came before me, had. My parents taught me that I could do anything I wanted to do. I don’t want to have to tell my daughter, “You can do whatever the government tells you to do.” We are at a crossroads in this country; are we going to be free, or are we going to be slaves to the nanny state. I choose freedom.
Of course he’s doing the opposite of jump-starting the economy! more people unemployed and underpaid = more people relying on the government
more people relying on the government = more people voting for Democrats
Obama knows EXACTLY what he’s doing.
It makes one wonder why they continue to do things that will have a negative impact on our economy. They are not stupid, so there must be something they are trying to accomplish. The sunrise looked very red this morning.
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This post was mentioned on Twitter by HansGruen: Capitalism under the bus?? http://ff.im/-bADRm…
For me, again, this comes to the question, is this naivete, or intentional. Anyone with a brain knows that increasing burdens on business will cause them to either lay people off, re-locate, or close. Or is that the goal?
Obama has been steeped in Marxism, socialism, left wing intelligentsia and liberal Democrat politics for so long I think Obama and his cronies actually think big government socialism (with them in charge, of course) is the best thing for everyone.
To put it another way, I think he really believes free markets, completion and capitalism doesn’t work and is ‘unfair’.
It’s hard to understand what is happening with the Obama Presidency or what his motives are. I tend to believe he simply doesn’t know what to do with the economy or what it will take to correct the slide. One thing is for certain. The more expensive we make it for companies to do business in America, the more likelihood they will move to a different country or have to lay off workers to make ends meet. That is one sure way of NOT stimulating our economy.
LD, I have to respectfully disagree, not in the result, but for the question of intent. I would respectfully ask that you look up the Cloward-Piven strategy.
If he was only proposing one thing that would make it difficult for business, one could say that it is naivete, but when so many of them will make it impossible to compete, one can assume there is a pattern. What if Health Care, Cap and Trade, Card Check, and his higher taxes ALL go through? I’d venture to guess that 10% unemployment will seem to paradise a year or two from now.
I guess you could say that I am hoping for the best from this President, but if his intentions are not good, our country is in for a very long and hard time.