Posts Tagged ‘US Tax policy’

Six Fortune 500 Companies including Vale, Walt Disney and Kraft, Move Regional HQ to Shanghai

Six Fortune 500 Companies including Vale, Walt Disney and Kraft, Move Regional HQ to Shanghai

China, Shanghai, Bund, man on promenade taking photograph

Courtesy of Mish

When you have a tax policy that begs corporations to move workers and profits overseas, this is what you should expect: 24 multinationals move HQ to Shanghai

24 multinational companies, have decided to move their regional headquarters to Shanghai, including 6 Fortune 500 companies such as Vale, Walt Disney and Kraft Foods.

This will push the total number of companies with regional headquarters in Shanghai to nearly 300. Nearly 500 have regional research and development centers there.

Shanghai has been China’s top destination, for multinationals. Even during the world economic slump, the city’s foreign direct investment still increased. Data shows Shanghai’s foreign direct investment has already surpassed more than 5 billion US dollars in the first half of this year.

US Tax policy allows deferral of taxes on corporate profits held overseas. Tax policy, in conjunction with global wage arbitrage, practically begs corporations to move jobs and profits overseas.

Meanwhile, small businesses struggling in the US face higher taxes and increased medical expenses thanks to the Obama administration. It’s a lose-lose situation for small businesses vs. larger multinationals.

The worst part of this sorry situation is small businesses are the real economic driver for jobs.

For further discussion of small businesses, job creation, and our inept policies, please see Bleak Outlook for Small Businesses and Job Creation; Where Obama Went Wrong, and What to do About It.

Addendum

A couple people pointed out the word "Regional." Offices did not move out of the US.  

True enough.

However, the likelihood those regional offices are bigger at the expense of US is high, but admittedly there is no way of knowing. However the underlying message on tax policy is valid regardless.

Mike "Mish" Shedlock 


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Mish Mailbag: IBM Abandons U.S. Workers

Mish Mailbag: IBM Abandons U.S. Workers

Courtesy of Mish

Here is an Email from "Voice in the Dark" about IBM and outsourcing. VID writes …

Hello Mish

IBM Building, Chicago, Illinois, USA

I read your blog every day. I do not comment much, but I think the MSM and most blogs are missing out on the greatest story not being told.

Large corporations are abandoning the US. I work for IBM. Here is a snapshot of IBM’s US headcount:

2005 133,789
2006 127,000
2007 121,000
2008 115,000
2009 105,000
2010 98,000 estimate

These are all good paying jobs that can support a family and pay taxes.

Today, 75% of the total headcount is overseas. The overseas revenue is 65%. The company reported record profits last year. IBM decided to stop reporting their US headcount this year.

You know that many companies are moving their resources overseas. China is the new spot to build development centers. These incremental loses are adding up. But the saddest thing is that they are giving away the building blocks for innovation.

I just read a few weeks ago the Applied Material is planning to replace their US research center for a new one in China. That is another example of what is going on.

And no venture capitalist would attempt to build a solar panel factory from scratch in the US. The costs and the EPA will prevent that.

Please tell this story.

Sign me: Just Another Voice in The Dark 

Hello "Voice in the Dark".

I covered the situation with Applied Materials in High Tech Research Moves From U.S. To China

Goodbye Silicon Valley, hello Xi’an China. Applied Materials will do new cutting edge research on solar panels in Xi’an. …

Please see Brain Drain as a followup.

Two Drivers For Outsourcing 

Outsourcing jobs has been going on quite some time. Let’s address why.

For starters, global wage arbitrage is one huge factor in play.

Unfortunately, wage equalization and standard of living adjustments between industrialized countries and emerging markets will be a long painful process for Western society.

On that score, there is little that can be done except reduce wages and benefits in the public sector and stop wasting money being the world’s policeman. We simply can no longer afford it. Besides, neither of those things ever made any sense anyway.

US Tax policy…
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Zero Hedge

DOJ Hires Antitrust Staff As "Broad Investigation" Into Big Tech Firms Accelerates

Courtesy of ZeroHedge View original post here.

The US Department of Justice Antitrust Division has been on a hiring spree amid investigations into Silicon Valley tech giants, according to Reuters, citing two DOJ officials with knowledge of the matter.

The department is scheduled to post an advertisement for positions, potentially on Monday, for additional attorneys, paralegals with an ...



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Phil's Favorites

Coronavirus outbreak: WHO's decision to not declare a global public health emergency explained

 

Coronavirus outbreak: WHO's decision to not declare a global public health emergency explained

Masks are selling out in Singapore amid concerns about the Wuhan virus. Ng Sor Luan/EPA

Courtesy of Tom Solomon, University of Liverpool

The World Health Organization’s decision to not declare the novel coronavirus outbreak in China a public health emergency of international concern, or PHEIC, will surprise many. The number of reported cases and deaths is doubling every co...



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Insider Scoop

4 Energy Stocks Moving In Monday's After-Market Session

Courtesy of Benzinga

Gainers

SAExploration Holdings, Inc. (NASDAQ:SAEX) stock moved upwards by 6.3% to $2.77 during Monday's after-market session.

Abraxas Petroleum, Inc. (NASDAQ:AXAS) stock surged 6.2% to $0.30. According to the most recent rating by Johnson Rice, on November 19, the current rating is at Accumulate.

Pacific Drilling, Inc. (NYSE:PACD) stock increased by 4.7% to $1.80. The most recent rating by Fearnleys...



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Chart School

Top Patterns for Retail Investors

Courtesy of Read the Ticker

Retail investors are last in line for market leading research, no matter, the retail investor can profit from these secret sauce patterns..

Well not so secret now, the main point is you do not have to climb Mount Everest to be called a mountain climber, there are many other hills to climb to make your mark. Just like stocks.

You do not have to battle with the high frequency traders to win in the markets, there are long and slow methods to do just as well.  

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The Technical Traders

The Wuhan Wipeout - Could It Happen?

Courtesy of Technical Traders

News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.

In most of Asia, the Chinese New Year is already in full swing.  Hong Kong, China, Singapore, Malaysia, India and a host of other countries are already starting to celebrate the 7 to 10 day long New Year.  Millions of people have already traveled hundreds of thousands of miles to visit family...



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Kimble Charting Solutions

Bad News For Crude Oil Should Come From This Pattern, Says Joe Friday

Courtesy of Chris Kimble

It’s a good idea for investors to be aware of key indicators and inter-market relationships.

Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.

Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.

When crude oil tops or bottoms, it seems that ...



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Biotech

Snakes could be the original source of the new coronavirus outbreak in China

Reminder: We are available to chat with Members, comments are found below each post.

 

Snakes could be the original source of the new coronavirus outbreak in China

Chinese cobra (Naja atra) with hood spread. Briston/Wikimedia, CC BY-SA

Haitao Guo, University of Pittsburgh; Guangxiang “George” Luo, Univers...



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Members' Corner

The War on All Fact People

 

David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.

The War on All Fact People 

Excerpted from David Brin's new book, the beginning of chapter 5, Polemical Judo: Memes...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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