[DeTomaso] NPC - Corporate taxes

[JJD1010 at aol.com]

"One of you wrote me off list to the effect that if we would just  remove 
all corporate taxes, they wouldn't be motivated to move  offshore."
 
 
 
There's a lot more than taxes as to why companies move jobs offshore,  not 
the least of which is that the stock market rewards companies for doing  it, 
rightly or wrongly. And that means the CEO and top management get even  
bigger rewards since their paychecks are greatly influenced by the market value 
 of the company. So who wouldn't offshore when it can have big effects  on 
your paycheck, even if you know it is not the right thing to do. The market  
punishes you for doing the "right" thing, ie, treating your employees as  
stakeholders.
 
I find it interesting that in Germany, labor is a formal stakeholder  in 
the corporate entity and is represented on the Board of Directors. Here there  
is a lot talk of treating employees as stakeholders, but in reality, most  
companies treat them as nothing more than assets, and assets cost  money. 
This is how the stock market views them as well. Assets are mostly  always 
purchased based on the best ROI so it is no wonder a job are offshored.  It's a 
simple accounting issue, it should be offshored.
 

BTW I'm not real sure that Taxes are being considered properly in this  
discussion. One of the main reasons companies move functions overseas is to  
get an incremental cost advantage. Taxes are just one part of the cost of 
doing  business along with compliance costs and taxes, real labor costs,  
expertise, doing business close to the purchaser, production costs, raw  
materials, etc, etc. 

 
 
And it's not called offshoring anymore, it's called best shoring,  anywhere 
for a small incremental cost advantage.
 
Jeff
6559
 
PS. Henry Ford paid his employees good wages because he knew they were  
potential customers. It will be interesting (especially for you Ayn Randers  
out there) to see if or when it might be in a company's self interest to start 
 treating employees as stakeholders. It's complicated and globalization  
ain't working for us, methinks.