Originally posted by dutchmilpo
Hmmm.. It takes some time to cut through the wishy-washy-whoolly legal speak, but to me it looks like the bill wanted to put a penalty on outsourcing,
but nót so high a penalty that outsourcing could Still not still be profitable.
Buuut.. It also wanted to make "insourcing" more attractive. There is some sort of logic to it: Outsourcing means missed opportunities for workers in
the US. Those missed opportunities will cost the government (read:taxpayer)money. The companies that insíston outsourcing, are in this way forced to
pay for the loss of jobs on US soil.
I wonder: would it be feasible to subsidize those companies that keep their production on US soil? Carrots & sticks, so to speak.
Oh, wait, that's what this bill is about, so it seems. And to boot,Through the taxes paid by the outsourcers (is that even a word??) the tax-cuts for
the middle incomes could be financed for the foreseeable time. Which, in turn, would keep the middle-class in better shape to spend. Maybe even
re-start a healthy housing market.
Maybe I see this as a bit too simplistic?
edit on 19/7/12 by dutchmilpo because: Forgot something
I dont think you're being too simplistic. I think this bill is intended to penalize and incentivize - but I'm reading it as a very heavy penalty with
only a one time tax credit incentive.
Think of it like this: I'm going to roughly double your taxes from now on if you outsource at all - because from now on all costs of doing business
(an amount normally deductible from your "income") are non-deductable if they're from outside the US.
But if you bring some jobs home, I'll give you a credit worth up to 20% of the cost to bring those jobs into the US.
It costs me $100 million to operate outside the US every year. It would cost me $700 million to bring that operation home.
I would get a one time $140 million dollar credit on next years taxes - but after that, back to normal taxes, which by the way just tripled because
China doesn't make me pay Social Security and Medicare or matching Income taxes on my overseas operations.
If I DON'T do this - then I have to pay full income taxes on the additional $100 million of what is deemed non-deductible operating costs.
All around, you're just trying to raise taxes on me. Either in a long slow burn of me bringing jobs to the US, or in a quick hit by making my
overseas operating expenses non-deductible.
Maybe I'm making it too simplistic?
edit on 19-7-2012 by gncnew because: (no reason given)