The Department of Commerce has released a white-paper discussing the economic value of innovation and coupling that value to the need for reform of the US Patent Laws. The report focuses on (1) the need for “timely patents” in order to successfully obtain venture capital financing; (2) the need for “high-quality” patents in the area of pharmaceuticals; and (3) the negative effects of poor quality patents and uncertainty in enforcement. These background points are fairly well accepted.
The more controversial aspect of the report are the Department’s policy conclusions. Namely, the Department of Commerce argues that (1) USPTO Fee setting authority (and what the Office does with that authority) will help to reduce the backlog; and (2) more broadly available and efficient post grant opposition proceedings will help reduce the cost of litigation. Finally, the report notes that the US patent office is “tax-free” in the sense that taxpayer money is not used to administer the office. The ability to avoid appropriations makes PTO reform a politically attractive policy lever.
USPTO fee-setting authority adds flexibility, allows the Office to more quickly raise needed funds, and also allows for the potential of aligning align fees with actual costs. As an example, the white paper notes that “abandoned” applications pay only about one-third of the total examination costs. That front-end cost is “subsidized by back-end patent issuance and maintenance fees that are assessed on successful applicants.” The report states flatly that “With fee-setting authority, the USPTO could deliver on its aggressive goal of reducing to 20 months total average pendency. This anticipated 40% reduction in average pendency would offer greater certainty to innovators of all stripes, allowing for more timely and accurate R&D investments, and thus, substantially improve prospects for improvement in the Nation’s innovative performance and overall economic growth.”
A more efficient post grant review system would benefit the patent system offering a low-cost and quick mechanism to challenge weak patents. “These patents will then be taken out of the system, saving both potential litigation costs and costs to consumers from the exercise of unwarranted market power. . . . Indeed, almost every academic economist who has ever examined whether an enhanced system of post-grant review should be adopted has favored such adoption. . . . [E]nhanced post-grant review also offers advantages to those seeking to assert valid patents. Litigation-related delay in the resolution of validity contributes to uncertainty for technology investors, increasing the likelihood of underinvestment and mistaken investment, and adding transaction costs to technology commercialization.”
The report is titled “Patent Reform: Unleashing Innovation, Promoting Economic Growth & Producing High-Paying Jobs” and is signed by Professors Arti Rai (Chief Administrator of the USPTO’s office of External Affairs), Stuart Graham (Chief Economist of the USPTO), and Mark Doms (Chief Economist of the Department of Commerce).
This report needs one great big “WARNING – This is a biased academic paper” label.
“I’m not one who thinks of everything Euro=good and US=bad.”
Really? What one thing US=good and Euro=bad that you would recommend switching?
Thanks ping. I saw it. But I had nothing new to say. Art 115 has been part of the EPC since 1973. Great provision. On behalf of one client or another I have used it myself, at least twice in 30 years. You must know already the boring negative stuff I have written on this blog already, about Peer to Patent etc.
I’m not one who thinks of everything Euro=good and US=bad. The fact-finding procedures of English common law are indispensible to do justice. I just happen to like the 101,2,3,12 structure that was devised by Europe when in 1973 its Member States chose to throw away all their ages old mutually incompatible national patent laws. They were all convinced that the EPC represented an improvement. Perhaps they were all wrong. But the EPC has served ever since as a model patent law for non-European countries to adopt. Consider Eurasia and China, for example.
I collect that in the USA a consensus remains, that FtI and the grace period gives it an edge over the rest of the world. That’s perfectly fine with me. Perhaps that US consensus is well-founded, perhaps not. Competition between two incompatible patent systems is in any case interesting for me to observe.
What’s nice for me about this blog is that contributers are ready to criticise the European system. Such criticism helps me to see where my US clients are coming from. If you want more debate, ping, I’ve been waiting for years for an intellectually sound attack on the approach that the EPO takes to obviousness.
Maxie,
I had to chuckle while over at Patent Docs today – your pal Skeptical wanted you to look at “37 CFR 1.99 Third-party Submissions” for your windmill fantasy of EP’inizing the US patent system. He shoulda had you look at “37 CFR 37 CFR § 1.291 Protests by the Public Against Pending Applications” while you were at it.
The windmill tilting contest is athataway –>
“6, btw, you don’t pay taxes. You’re a govn’t employee. By definition, you take tax money, not pay in.”
Wrong. He takes patent fee money.
BJA,
“I have however done the math, and after I pay off my house, I’d be money ahead to take cash only jobs and live off of unemployment and such.”
I’d really like to see that math if you believe you believe the people at the bottom are that well off.
People who can afford more, pay more taxes. Granted, there’s currently a wage space between the poor who qualify for many social services and those with incomes high enough to afford the costs of health care and kids, but none of us are in that range.
Thas ok Maxie – the more distance between your ideas and US law, the better.
6, the tax thing is “flow” thing. people make money on the pushing around, and congessmen and senators make money from people wanting that push to happen in certain areas. It don’t matta too much the beginning and end points for these considerations.
Better yet 6, will we see you in the grand court today?
“6, btw, you don’t pay taxes. You’re a govn’t employee. By definition, you take tax money, not pay in. ”
You can be my tax attorney and tell the IRS that k?
“If you net it out, they’re really just deciding what you get paid based on how well you’re conforming to their social engineering pushes.”
That’s kind of true.
But, on the other hand, it turns out that you can save a lot of money on things like buying a house (deduct interest paid) through the taxes system.
Other than the whole deductions thing I pretty much agree with you, the gov making people that work for it pay taxes seems like a waste o money.
Sorry ping. I had a look but couldn’t find what you say is there. Never mind.
Hey Maxie,
I see you got a fan over at the Docs on the subject of this thread. I was rootin for him until he got all soft and wants to work witcha to integrate your brainchild into US law. You let me know how that works for ya, ok?
Lionel, I have too much pride to be a mooch. That’s the short answer. I have however done the math, and after I pay off my house, I’d be money ahead to take cash only jobs and live off of unemployment and such. It’s wrong that the system is set up like that, regardless how much your heart bleeds.
6, btw, you don’t pay taxes. You’re a govn’t employee. By definition, you take tax money, not pay in. You do a job required by the Constitution, so no ill will. I really think that you guys shouldn’t have witholding or be required to file a return honestly (for govn’t only income) because it’s just unnecessary, redundant paperwork. If you net it out, they’re really just deciding what you get paid based on how well you’re conforming to their social engineering pushes. I guess that’s the value in having you fill out all that paper?
…or did you…
“while growing up in my largely blue collar community”
That explains a LOT Mooney. Like where all your f’ed up, snarky, negative, screw “the rich,” anti-prosperity, poverty minded, attitudes come from.
It’s amazing that you didn’t wind up serving up blue collar burgers as the local MacDougal’s.
BJA,
That 40% consists of people on fixed incomes, single parents, and generally people who don’t make a lot of money. It’s that simple.
If the poverty racket is so attractive, why don’t you quit your job, take a job in construction or as a migrant worker, and join the 40%? Not going to do that? That’s what I thought.
With regard to a flat tax, I don’t disagree. though. Eliminate all deductions and include a higher exemption that would help people at the bottom, and the people at the top will pay more than under the current system.
Withholding came about because too many scrooges decided they wanted a free ride.
6,
What are you doing on this thread? The court is waiting for you.
NAL is so-so, for her age she probably looks decent. At least in so far as a (not so?) recent corporate pic o her shows. But I would definitely not think she’s skanky. Save for her beliefs on patents.
Well it is the female sex. But who I am referring to that it may be, looks more like a basketball player
HBH sarah?
I didn’t know you swung that way.
HBH: The preferred, abbreviated form of Hobag Hottie, a term that applies to skankily attractive individuals (namely of the female sex).
A guess, NAL is H B-H.
“just another way to sux money outta the people without them getting too pissy.”
lol – see Arti Rai and yet another way:
link to patentdocs.org
Now 6, hear that trumpet? court calls.
Idk guys, at least with a flat tax you can hold the government more accountable because you can see more clearly exactly what tax they’re taking. People would notice it more. Do you think they passed the bs tax lawls around 1916 because the people wanted their taxes to come from their payroll? Do you think that withholdings came about because THE PEOPLE wanted it? No, it was just another way to sux money outta the people without them getting too pissy. Fact is, considering ALL the taxes I pay currently my tax rate is probably somewhere in the neighborhood of 45%. That sht needs to go.
I’d prefer that, like when this country was set up, we ALL work and we ALL contribute and we ALL vote.
Most of the people who did the real work back then weren’t allowed to vote.
What is “so little” in your mind? 75% of the Federal revenues being paid by the top 10%, and you view that as being “so little”?
That means the next 90% combined pay about 25% of federal income taxes; except as we know more than half of them actually pay nothing.
That wouldn’t change much with a flat tax, or with any type of tax reform.
Rich people still have more income per person than poor people, so they’re paying a percentage of a larger base amount. You’ll still have a small percentage of people paying a larger percentage of the tax unless you have a highly regressive rate structure.
Also, a lot of the people who pay no taxes have very little income to be taxed under any system. You’ve got your standard lazy “liberal” welfare recipients that conservatives would have us believe make up the entire 40%, but also the disabled, the retired, children, stay-at-home spouses, people who are legitimately out of work because of the economy…
BJA I’d prefer that, like when this country was set up, we ALL work and we ALL contribute and we ALL vote.
Hmm. Is that something that Woodrow Wilson wrote?
Boiled, my point was obscured. I just meant that it won’t work if you have people voting who aren’t paying.
My solution isn’t that people should be denied the vote, but that they should be made to pay “their fair share” (i.e., ANYTHING AT ALL).
Ned, I believe in opportunity. I also know that the feds are not chartered to be in that business. Now is not the time to “find common ground”. We are going bankrupt. Period. We either turn it around, or drive it off the cliff.
Socialism fails because you’re punishing hard workers and enabling freeloading. It’s that simple.
Legal aristocracy is bad, see my second post. I’d prefer that, like when this country was set up, we ALL work and we ALL contribute and we ALL vote. My point was simply that it doesn’t work if you let the children run the house, the inmates run the asylum, or the welfare dependents run the country. It’s doomed to failure.
Ned, you need to read up on “progress” if you think that they can be convinced that socialism is not the way to go. It’s central to that belief system, that utopia can be achieved here on earth through govn’t. That’s Wilson, not me. See American Progressivism: A Reader.
As far as STATE programs go, I think you should get a voucher for a grade school education, and then be able to take out loans at fixed rates for any higher education you want. Everyone gets the same opportunity and access to those programs. I’ve also previously said that provisions for those who physically cannot provide for themselves should be made.
“Boiled, I don’t even know who that is.”
HERESY! Someone posting on a patent law blog doesn’t know Heinlein? Oh the shame of it, the shame of it! 😉
Seriously, Heinlein was a mid-20th century science fiction writer who had a lot to say about society and group morality in his stories. Your thinking along the lines of limiting voting franchise to taxpayers would have suited him pretty well.
Boiled, I don’t even know who that is. I read a lot of very irrelvant people like John Locke, Thomas Jefferson, James Madison, Woodrow Wilson, FDR, Ben Franklin, etc.
Bad Joke, yes and no. I would hope you would agree that a legal aristocracy is a bad idea. I would further hope you would agree in the concept of equal opportunity.
Now the with regard to the latter point, I somewhat agree that it is better to provide everyone with a floor education, access to food and housing, and to some degree, health care. This does tend to convert the slogan of equal opportunity into reality.
The problem I have with the a lot of the socialist agenda is that they not only want to help the poor, they want to hurt the rich. Further they want to the government to run everything as a state monopoly ignoring the reality that all monopolies are bad for society.
A secondary problem is that by providing the basics of living essentially free of charge, we have created the opportunity to live one’s entire life on welfare, not unlike the situation of our Indian reservations. We need to fix this.
BTW, I would argue that LBJ knew that his welfare legislation would lead to blacks and other poor people living in separate ghettos and that this was fully intended. Nixon pointed out that this would happen and argued that we should do everything possible to integrate blacks into society as a solution to poverty. Thus was born affirmative action. But the welfare state persisted and worked to segregate blacks nontheless.
Regardless, our best argument with the socialists is to agree with them on certain principles that we all seem to share, and then argue that punishing the rich, monopolizing education or health care, does not help, but rather, hurts us all. I think they can also be persuaded that integration is the way forward and that welfare, structured as it is, impedes progress.
MM writes, “[1] Not nearly so much as it bothers me that the ultra-wealthy get away with paying so little… [2] Speaking as someone who lives comfortably ….thanks to Uncle Sam and his generous grants and loans for higher education…. … [3] don’t understand the sentiment of making it more difficult for lower-income families and their children”
[1] What is “so little” in your mind? 75% of the Federal revenues being paid by the top 10%, and you view that as being “so little”?
That means the next 90% combined pay about 25% of federal income taxes; except as we know more than half of them actually pay nothing.
[2] Speaking as a former ward of the state (foster child for the uninitiated) who clawed his way by working through several degrees with no assistance from anyone, much less Mooney’s Uncle Sugar (because by working during school, each year he’d learn that he made too much money to qualify), pray tell WHAT a discussion on spreading federal income taxes to the 50% of non-payers has to do with grant/FSL programs? Very nice and heartwarming story, though.
[3] Speaking of heartwarming and fuzzy; just couldn’t help yourself, had to go and bring in the ubiquitous “[wrings hands] but… but… what about The CHILDREN” into the narrative, eh?
How about teaching the children that proud citizens support their government, too? It’s not just for “the rich” to do so?
Tired liberal lines by MM: why do you h@te poor people version.
“I really don’t understand the sentiment of making it more difficult for lower-income families and their children to get a leg up. Baffling, really.”
Let’s see, if my parents don’t work…. free school, free school food, free college, free college food and housing, free law school, free law school food and housing. Wow, that’s a tough way to get ahead.
Now my parents worked. Property taxes for school, pay for food at school, 50k for college, pay for college room and board, 100k for law school, pay for room and board. Now I’m competing for work with 200k in debt versus a guy with zero debt.
It’s just so hard for the “poor” to get a leg up, huh?
MM, why do you h@te people who work for a living?
BJA – side question: Read much Heinlein?
Tired liberal lines by IANAE:
You can’t be rich if everyone else has the same amount as you.
Have you ever seen poor? We define poor as a house, car, big screen tv, DVD player, cable, phone, internet, computer, and a plate full of pizza and hamburgers. THAT’S RICH. WE ARE ALLLLL RICH. I’ve seen poor, and it didn’t look ANYTHING like a plate of pizza. In fact, it looked like starving to death.
Boiled, you’re right about AGI taxable, etc.
You’re also right about having a stake. I don’t care if it’s 1 dollar. But getting a handout as a “refund” and then CONTROLLING the mechanism for getting that handout is simply legalized theft.
To have a stable system, you can’t have people voting themselves other people’s money. You’ll run out of other people’s money. But you know that. It’s a choice. To have a stable system, you either have people on the take who can’t vote because they’re on the take, or you simply don’t allow people to be on the take (unless some phyical disability or such applies) and allow everyone to vote. Anything else, and your system is doomed to failure, or so any rational person would surmise.
IANAE writes, “You can’t be rich if everyone else has the same amount as you.”
Oh, how helpful to the conversation. Ad hominem by implication.
MM, another topic on which you have no knowledge. Is there anything that you DO know anything about?
Get away with paying so little taxes. BWHAHAHAHAAHAAHAHAH. Have you honestly NEVER read any report of the amount of taxes paid and by whom, or even any of the posts above your’s?
What do you call this alternate planet you live on?
“You can’t be rich if everyone else has the same amount as you.”
Sure I can. I just might not be richer.
“most people wouldn’t pay it, and I therefore wouldn’t work it.”
Does that mean that someone else would be hired to work what you wouldn’t? That might not be a bad thing.
BJA wrote, “Boiled, your nits picked are wrong. Deductions from income apply BEFORE you calculate your AGI and tax liability. Credits are applied against tax liability.”
Just looked at my 1040 and both of us are putting some things in the wrong order. AGI is calculated by subtracting out certain expenses and just a few deductions such as SEP/SIMPLE plans, student loan interest, etc. But all the regular deductions (mortgage, charities) and exemptions are subtracted from AGI to give you taxable income.
Anyways, while your idea of not allowing the non-payers to vote is attractive and the way you stated it was pretty pithy (“dependents”), it still bothers me and I wouldn’t agree to it.
Instead, I want all Americans voting federally to have a vested interest in their federal government, even if it’s just a small stake.
I really don’t understand the sentiment of making it more difficult for lower-income families and their children to get a leg up.
You can’t be rich if everyone else has the same amount as you.
Doesn’t it trouble you that half of the taxpayers in this great nation of ours are completely divested of responsibility for paying into the general revenues?
Not nearly so much as it bothers me that the ultra-wealthy get away with paying so little.
Speaking as someone who lives comfortably in the top 4 or 5% (thanks to Uncle Sam and his generous grants and loans for higher education, as well as the decent public schools I had the good fortune to attend while growing up in my largely blue collar community), I really don’t understand the sentiment of making it more difficult for lower-income families and their children to get a leg up. Baffling, really.
Ned, those ideas may sound great in the halls of a university surrounded by like minded yes men, but when the rubber meets the road and natural law comes into play in what we adults call “the real world”, it all falls apart, and Russia, Italy, Greece, Weimar Repulic, and the Roman Empire all fall apart.
Adam, the rate question is really the marginal time, marginal cost, and opportunity cost question.
I work about 60 hours a week average.
Getting me to work the 35th hour is pretty darn easy. It doesn’t take much. Same for the 40th.
The 50th is eating into my family time, and I’m ready to go home and not miss out on life.
The 60th hour is eating into my sleep. You’re now going to have to pay me real money to stay at work.
The 70th hour? You’re going to pay out the wazoo, or I’m going to the house.
Now if you start taking more of my money the more hours I’ve worked, then that 70th hour will cost you TWO wazoos, most people wouldn’t pay it, and I therefore wouldn’t work it.
Boiled, your nits picked are wrong. Deductions from income apply BEFORE you calculate your AGI and tax liability. Credits are applied against tax liability.
I don’t care if they don’t pay in. Just don’t take a handout and call it a refund, and don’t vote. Letting your dependents dictate the house rules is bad at home, and it’s bad for the country.
All, to understand how socialists think, you have to go back to their roots, Rousseau. For example, Rousseau believed that all economic inequality was immoral and created a moral imperative to end or reduce it. link to sparknotes.com
His ideas were adopted with some force by the French revolution, and by all leftists since.
When we talk to a socialist, we have to understand where they come from and not just say they are wrong. In the context of France of Rousseau’s era, dominated as it was by a legal aristocracy, some of what he had to say made sense.
TINLA,
Your numbers are inaccurate.
If the top 5% make 66% of all income, and you go to a flat tax with no deductions/credits, then they would indeed pay 66% of the taxes. Right now though, the top 5% pay somewhere between 50-60% of all taxes, and I can’t find the number on what percentage of all income they make. It is DECIDEDLY less than 50-60%.
Let’s look at another number. The top 20% recieve 45% of all income. They pay 83% of all taxes. So in other words, they’re paying double their “fair share”.
BJA wrote, “Those deductions pretty much all have phase outs that “the rich” long passed.”
Not to mention that even the deduction phase-outs don’t matter when you get smacked with AMT.
It’s pretty disappointing every year to do my taxes according to the routine scheme and look like I might just break even, then do it via the AMT scheme and find out I have to cut a check for $5000.
Wish they’d just let me stipulate that I’m going to get hit with AMT so I could skip the drudgery of doing the first return according to the regular scheme.
BJA,
If the whole world had the same policy of taxing the top 5% (who have 66% of the imcome and 95% of wealth and property) then you’d see different results. As it is, if we were to try and make them pay their “fair share,” they would just go somewhere else “trickle down” on the folks over there. If we ever do want to make people stop resting on their laurels, and make them “use or lose” that horded wealth, we’ll have to have a world government. I know that’s really scary and all, but that’s basically the only way I can think of that it would ever work.
“If the current tax rate were 10-15% I bet you’d argue that 5-8% would be much more reasonable.”
10 cents on the dollar is a heck of a lot less of a burden that 30 cents that you think I should be willing to cough up if I want that dollar bad enough.
The problem is INSANE, your perspective is all wrong. I’d say, if you’re going to take 30 cents of my dollar, its not that I don’t want it bad enough, its just not really worth my time. The fact is, I might not get off the couch for 70 cents, but I will for 90 cents.
BJA, “That 40% has zero federal AGI. They pay no state taxes either, and may get additional welfare in most states.”
I get what you’re saying, but not necessarily agree with all of it. First, note they may well have >zero federal AGI, they just don’t have tax liability once the taxable income is calculated and after deductions and/or credits (yes, this is picking a nit, but there’s a reason). Then, it will depend on their own state tax scheme whether or not they have tax liability.
And for any interested, I’m not against progressivity in general. I am against having approximately 50% of our voters not really having a true federal stake. Crap, tax them (the 50% of current non-paying folk) from 2% at the bottom to 5% or something at the top of that particular heap.
IANAE,
I assume from your comments then that you think we need more welfare, higher taxes on “the rich”, more unions, and more tariffs.
How’s that working out in Europe, and why not just go to your utopia? It’s already there.
We all know they’re broke, and you’re literally, definitively insane for suggesting that the same won’t be our fate.
Boiled,
You’re overlooking a number of things.
That 40% has zero federal AGI. They pay no state taxes either, and may get additional welfare in most states.
Their SS and medicare are vastly exceeded by their handouts.
They simply exercise a right to sieze your money. There’s no two ways about it.
IANAE, I think might be wrong about the flat tax being better for the rich. The top 5% in income make 66% of the money, but pay 33% of the taxes. Doesn’t a flat income tax by definition eliminate exclusions and deductions so that they would have to pay 66% of the taxes?
On the other hand, maybe your are only contemplating a system that is neither progressive nor regressive in rate. But the rate is progressive now. So going flat would reduce taxes on the rich and increase them on the poor as you suggested. That must be what you mean.
Of course, if it’s a sales tax as Forbes suggested, then they only pay taxes on what they spend. Whatever they horde is tax free until they spend it, and the rich are the ones who will have money left over. Going from an income tax to a flat slaes tax liek that would have greatly benefited the rich and robbed Congress of its influence, since they practice social engineering through deductions and exclusions.
ping –
We’re defining it differently. I’m using flat to mean flat rates; everyone’s tax liability is determined on a 10% basis, 12% or whatever.
I’d prefer no deductions or credits, but I was not using “flat” that way.
And no, for big unconsitutional fed govn’t types like IANAE, the fight is on the rate, not deductions and credits. The deductions and credits arguments are just window dressing. Marginal rates are exponential as it is. Most people pay nothing to the feds, or over 30%. The income range for lower marginal rates is very small because all of the deductions and credits phase out at the same points or lower than the rate increases. It’s like a step function. You either 1) are on the take or pay nothing, or 2) you pay over 30%; very few fall anywhere in between. When you hear a liberal talking about the deductions that “the rich” get, just write them off. Those deductions pretty much all have phase outs that “the rich” long passed.
MM: “And taxes remain too low for $1,000,000+/yr earners.”
This is an insane statement.
Doesn’t it trouble you that half of the taxpayers in this great nation of ours are completely divested of responsibility for paying into the general revenues?
Yes, they pay their 7.5% social security and medicare. Yes, depending on state of residence, they pay somewhere between 0% and 6+% of their income to their state. And if they own a home, they’ll pay real estate taxes.
But half pay zippo into the general fund (not to mention many of them also get a small bit of a “refund” despite paying no federal IC taxes).
Doesn’t it bother you that there’s a huge population of citizen voters who have no investment in the federal government except for the two social welfare programs?
IANAE,
eliminating the tax code would increase the marginal rate for 40% of the country.
Boy, that’s a really inconvenient fact for you and your “fair share” buddies isn’t it?
A flat tax just affects the rate, not the process.
Specifically, a flat tax increases the marginal rate at the low-income end, and decreases it at the high-income end, relative to the current system.
Wouldn’t that dig the welfare trap even deeper than it already is? How desperately do we really want to discourage poor people from getting off their couches and doing something taxable? Especially if we’re talking about reducing lower- and middle-class wages by reducing union power and otherwise making American labor competitive with the rest of the world so we can even have a domestic economy at all.
BJA,
But wouldn’t the flatness of the rate be the driver? As I understand it (poorly), isn’t the jockeying about the un-flat portion – which deductables, apply or not, which special circumstances apply and when, part of the battle? With flat, all that goes away.
ping-
No, flat wouldn’t.
Most battles are for defining what consitutes income and expenses for purposes of determining income. A flat tax just affects the rate, not the process.
Sarah, no, I am an American.
“If you’re going to unevenly tax American based companies because they use facilities in countries with very low labor standards….. why wouldn’t they just leave altogether?.”
BJA,
Point well taken, but I still stand by being (generally) a politically conservative. I also pointed out I don’t necessarily think “taxation” (or tariffs) is necessarily the solution. What’s really needed is put the entire world on the same level playing field, not tilted like it currently is against America where labor costs tend to be high (but the standard of living is also better and with more consciousness of being safe and enviro-friendly), relative to those in India and especially China (who aren’t as concerned about safety or enviro-friendliness). China is particularly troublesome because they too often completey cut corners, including providing products that are toxic (witness, for example, the pet food scandal), put no restrictions on pollution (what I call poor stewardship of our global resources, unless it’s the Olympic games where they almost shut down their industry because of the pollution issue), etc. Europe isn’t much better as they discriminate against importing American agricultural products, yet then screams when we try to prevent “dumping” by them through the use of our ITC.
At least some of this lack of “levelness” is our own fault as we don’t push as hard as we could or should with, for example, by using our International Trade Representative to make that playing field more level. Most significantly, we could do more for our American small businesses so they’re not so burdened by taxes, regulations, and so forth (I’m not saying allowing unsafe practices but at least heed the fact that smaller businesses can’t deal with huge amounts of bureaucratic paperwork like large businesses can).
Most of my comments about “runaway flag businesses” are also directed at large, essentially multi-national companies that are simply “American” in name only, but offshore as many functions as they can or can get away with. What’s ironic is that at least some of the “offshoring” has not worked out very well and later, these same companies try to bring those functions back onshore. The trouble is that there isn’t anyone here to return to those functions because no one is training/going to school for those functions for obvious reasons (i.e., the opportunity has dwindled or disappeared offshore).
Again, if you want to be treated as an American (and not a “foreign”) company, act like one that cares about American employees (also don’t get the idea I favor unions which I don’t) and American job growth. Unfortunately, larger companies don’t generally manifest that attitude (and in fact are generally shedding American jobs), but smaller companies do (which are our current job growth center). Given that, how would you propose encouraging larger companies who act like “real” American companies?
“Flat tax. That way everyone pays “their fair share” – That depends on what you mean by “fair”.”
My fair is more fair than your fair.
Wouldn’t a flat tax wipe out half of all accountants and at least a third of the IRS?
Oh so it’s okay to steal an idea from someone. Or a job from another. Because hmmm let me think. You need the quid? And I should serve you at a McDonalds?
So do you know a Law firm named Barnes and Thornburg. Someone is yanking my chain here.
I used the cell phone this morning calling another Law firm.
And as I was leaving a message that was very informative. The call was dropped. That happens whenever I mention my problems from a cell phone.
Ned aren’t you from Europe. Akin Gump?
But what is very certain is that when a company gives up, and moves its production overseas, it is not a matter of greed. It is a matter of life or death.
How is it “very certain” that when a company does something to save money it is a matter of “life or death”? What if that company tries to negotiate a better deal on office supplies? Also life or death? Or the usual slavish devotion to next quarter’s earnings?
What an utterly INSANE thing to say. I give the full value of my efforts, I want the full value of each of my dollars…
No you don’t. You think 10-15% tax is reasonable, so clearly this isn’t a principled stand about getting the “full value” of each of your dollars. You just want to be taxed less because you’d rather have the money, same as everyone else. If the current tax rate were 10-15% I bet you’d argue that 5-8% would be much more reasonable.
not another six pack of 40s for the boyz in the hood.
I wasn’t aware of that particular government program.
Flat tax. That way everyone pays “their fair share”
That depends on what you mean by “fair”.
WOW, the progressive non-thinking intellectuals (i.e., Sarah, IANAE, Hutz) really out-did themselves last night.
I’ll summarize:
The solution to the current problem of job outsourcing and recession is to increase taxes on investors and business owners, increase taxes on companies, increase regulation, and place tariffs on goods produced by American based companies overseas.
I continue to be amazed at how good your marketing efforts are to sell that pile.
You’re going to take away the ability of business people to increase the size and scope of their businesses and make new businesses, increase tax expenses of American based companies, increase compliance expenses of American based companies, and THEN, increase the acutal price of good made by American companies relative to their foreign rivals?
And this all helps who? How?
You guys are EXCELLENT salesmen.
Especially when you’re selling this to the people who LOSE THEIR JOBS under your plan; the businessmen, lawyers, and accountants who work and run this American based global companies.
You guys are pretty determined to destroy the economy of America, huh?
“Mr Smith, what methods would you suggest, other than tariffs, would be appropriate to penalize job outsourcing and/or promote job insourcing to this country?”
Rewards are much more powerful than “penalties.”
If you want jobs to stay in the U.S., make the U.S. more business friendly: reduce corporate taxes, reduce union influence, get rid of this ridiculous notion of limiting executive pay (unless the tax payer is funding it).
I would say however, that perverse incentives to raise the short term corporate profits, like wide spread layoffs that are followed by executive bonuses should be disincentivized with extreme prejudice. Its like a human version of corporate pollution. You could offer tax credits but take them back retroactively in view of short sighted layoff pogroms.
EG,
You’re not a conservative, or you wouldn’t propose non-solutions. If you’re going to unevenly tax American based companies because they use facilities in countries with very low labor standards….. why wouldn’t they just leave altogether?
IANAE,
Flat tax. That way everyone pays “their fair share” instead of 47% of the country free loading and 40% of the country getting a check from me just for clogging the highways every day.
“Liberal republicans”. The comedy of errors never stops with you. By definition, there is no such thing as a liberal republican or a progressive republican. They’re properly called RINO or Republican In Name Only. Which is why I dislike the republican party to begin with; they allow people to use the monikor who don’t believe in the fundamentals.
You’re obviously beyond help, and so goes our country.
“Anybody who doesn’t want to earn a dollar and give away 30 cents doesn’t want that dollar bad enough anyway”
What an utterly INSANE thing to say. I give the full value of my efforts, I want the full value of each of my dollars…
If not, I want something meaningful for that 30% – not another six pack of 40s for the boyz in the hood.
sarah, et al., ouch!
Many of you simply have no idea that companies have to fight every year, every month, every day, every hour to survive. If they produce products, they must always strive to produce those products with higher quality and lower price, else they will be eaton alive by their competition.
In almost any situation where an American company is moving production overseas they are doing so because they have no choice. America imposes costs on companies in many different ways that we should address and consider in order to keep American companies and American jobs here. But what is very certain is that when a company gives up, and moves its production overseas, it is not a matter of greed. It is a matter of life or death.
So do not point your fingers at corporate America. Point your fingers at yourself. You, America, are the problem.
Well I for one think it’s time to charge so much (when a company leaves here that it’s not cost productive to buy from them) so they can’t sustain themselves in our market.I don’t expect our borders to close. But when you are an american company that hires and works the people and the economy, and some other Greedy american company decides they can turn a higher profit at the cost fo Jobs in america. Then it is time to take drastic measures. And if the Government finally realizes that drastic times call for drastic measures. This country will be great again. Otherwise the tea Leaves are already understood. And this absolutely nothing to do with the Right or the Left. My God wake up Congress. Who do you think you are working for?
“it’s still way better to earn more money than to earn less, and it’s still way better to be rich than to be poor.”
I love the way this is put – completely inarguable. Not sure how it relates to the discussion, but truisms are always good.
However, I would definitely trade “earn a dollar and give away 30 cents” for “earn a dollar and give away 15 cents”, arbitrary or not.
I also don’t know what wanting the dollar bad enough has to do with any position under discussion. If the question comes down to the opportunity cost of a net seventy cents, I’d have to know what the competing opportunities are.
Mr Smith, what methods would you suggest, other than tariffs, would be appropriate to penalize job outsourcing and/or promote job insourcing to this country?
I’m sorry but 30% or more is a high rate. 10%-15% would be reasonable.
Those numbers sound completely arbitrary.
Sure, we’d all prefer to be taxed at lower rates, but how do you know what rate is reasonable and what rate is too high? I mean, other than by checking which administration enacted the rate.
Even at 30%, it’s still way better to earn more money than to earn less, and it’s still way better to be rich than to be poor. Anybody who doesn’t want to earn a dollar and give away 30 cents doesn’t want that dollar bad enough anyway.
“No one in this country is taxed at a high rate;”
If you believe this, then I would suggest YOU are the perversion.
I’m sorry but 30% or more is a high rate. 10%-15% would be reasonable.
“We need to reintroduce tariffs”
Isn’t that what Smoot and Hawley said? It led to a deepening of the Great Depression.
Great idea
PutzHutz let’s deepen suffering.“ “America is supposed to be a free capitalist nation.” – I must have missed the part in civics that wed the political to the economic. Must have been a good surf day.”
I feel all scholarly, quoting myself.
Those “too many companies” are simply being companies. Even though the Supremes think that companies have a voice like individuals, they do not have “citizenship” in the same sense as individuals. Asking them to constrain themselves to act in the best interest of any particular country is an arbitrary and fruitless exercise. You cannot ask, you must demand.
“(4) We need to reintroduce tariffs on companies that move jobs overseas for taking advantage of poor labor standards, unsafe working conditions, environmental destruction, socialized medicine, and all the other reasons companies move jobs overseas.”
Lionel,
I, a political conservative, agree with your last point. There are too many companies HQed here that are “American” in name only. They act just like “run away flag” ships do, owing allegiance to no nation, including ours. Tariffs may not be the right answer, but someting needs to be done to prevent “offshoring” of our economy. Sorry, I’m an American, first, last, and always.
I like your style Lionel.
HERE HERE!
A perversion calling itself Adam Smith wrote:
“If I tax everyone at a high rate, except those on the dole, there will be no incentive to invest and grow.”
(1) No one in this country is taxed at a high rate;
(2) The people who make the most do not pay the highest rate as most of their income is capital gains. Plus social security is such a small part of their taxes, they do not even see it.
(3) If you wantb to lower corporate taxes and simply raise taxes on those who receive the most income, I am all for that. Actually someone who makes $100M should not be motivated to make more money as those are the people who create and/or participate in crazy financial shenanigans. If the money they earned was actually tied to real value such as production, I would have less problem with it.
(4) We need to reintroduce tariffs on companies that move jobs overseas for taking advantage of poor labor standards, unsafe working conditions, environmental destruction, socialized medicine, and all the other reasons companies move jobs overseas.
Tim Geithner is a liberal? That’s pretty funny.
they’re liberals. They enjoy raising taxes and not paying them
What, you mean like all those rich liberal Republicans who want to raise taxes on people other than themselves?
Seems to me it’s perfectly capitalist to want to keep all your money while the government takes someone else’s money to buy you stuff. Unless I’m mistaken in my understanding that capitalists generally like accumulating money and dislike giving their money to other people.