Now Obama is driving Microsoft overseas
It takes an incredibly powerful company to threaten the U.S. government in hopes of impacting a significant decision, but that’s precisely what Microsoft is doing. Microsoft CEO Steve Ballmer made headlines when he publicly attacked President Barack Obama’s plan to cut tax breaks on U.S. companies’ foreign profits, a plan which is currently awaiting Congressional approval. Mr. Ballmer suggests that if the tax succeeds, Microsoft may begin a significant move out of the U.S., taking with it tax revenue and jobs. He states, “It makes U.S. jobs more expensive. We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”
The plan, proposed by President Obama on May 4, seeks to help raise tax revenue and balance the budget by rolling back $190B USD in tax breaks for offshore companies over the next decade. Microsoft is not the first to oppose the measure — the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable are among the numerous others to voice their disapproval.
Previously, companies could defer paying corporate rates as high as 35 percent on most types of foreign profits, contingent that the company invests the money overseas. The idea was that foreign profits are not the domain of the U.S. President Obama disagrees, arguing that U.S. corporations’ profits are U.S. earnings. He believes that by taxing foreign profits, companies will be more likely to invest in the U.S., rather than shelter their money overseas.
Thanks to the current provision Microsoft enjoyed a very low tax rate of only 26 percent in 2008 on its profits. A company report describes, “Our effective tax rates are less than the statutory tax rate due to foreign earnings taxed at lower rates.”
Some, like Barry Bosworth, an economist in Washington at the Brookings Institution research center, accuse Microsoft and others of wrongdoing. He says the company has exploited the system, an expensive abuse that has cost our nation tax revenue and domestic investment. Indeed, Microsoft’s shell game is a bit strange — it typically develops products like Windows and then transfers the licenses for free to an Ireland subsidiary. This subsidiary then proceeds to sell them, free of U.S. taxes. Mr. Bosworth states, “What Microsoft wants to do is deduct the cost at a high tax rate and report the profits at a low tax rate. Relative to where they are now, the administration’s proposals are less favorable, so there will be some rebalancing on their part.”
Symantec Corp. and some smaller companies such as privately held Bentley Systems, an Exton, Pennsylvania-based maker of engineering software, carry out similar practices and are similarly opposed to the measure. Symantec says it’s frustrated with being called a tax cheat. Symantec Chairman John Thompson adds, “It is a little bit ironic that most of our most significant trading partners and partners globally have taken the tack that they’ll reduce corporate tax rates to stimulate economic growth and not raise corporate tax rates.”
Mr. Ballmer, perhaps the most outspoken critic, did acknowledge that the Obama proposal preserved research and experimentation cost tax breaks. He warned, though, that the cuts to foreign exemptions would raise the cost of Microsoft’s 56,552 U.S. employees. He says this could necessitate moving them overseas. Microsoft was previously embroiled in a controversy over whether it should lay off foreign workers before U.S. ones.
THE PERIL OF FEEDING FANATICS
NO matter how gently you pet a snake, it's not going to love you back. And faith-fueled fanatics always show their fangs in the end.
Nobody seems to learn. Again and again, states imagine that they can use and control Islamist extremists. Then the terrorists turn against their "masters." That's what happened Monday in Pakistan, when Muslim militants brazenly struck a police academy near the Indian border -- far from the lawless tribal regions. The terrorists killed seven cops and two civilians. Nearly a hundred officers suffered wounds during the siege. The terrorists blew themselves up, rather than be captured. They knew Allah would welcome them. The one captured fanatic meant to die.
Pakistan's homegrown jihadis began with local takeovers in the back country. In response, the government -- which had backed the Taliban in the hope of controlling Afghanistan -- tried to cut deals. But the deals only helped the extremists, ceding them territory. Their attacks spread to major cities, such as Peshawar and Quetta. Then terror crossed the Indus River into the heartland. Benazir Bhutto was assassinated. Islamabad's Marriott Hotel suffered a catastrophic bombing. Even Sri Lanka's visiting cricket team was marked for death.
Now the terrorists have reached right across Pakistan to mount a frontal assault on a police academy. Give 'em credit -- that took guts. And fervor. Fired by visions of serving an angry god, the terrorists are sure that they're bound to win, that all those of weaker belief will fall before them. Nothing short of death will make them quit.
The story isn't new. The US supported Muslim fanatics against the Soviets in Afghanistan. At the time, it seemed awfully clever. After all, the mujahedin were the baddest hombres in the Hindu Kush, willing to fight on after others quit. Of course, we didn't take faith's power seriously. We still don't. Washington continues, frantically, to deny that belief has anything to do with religious terrorism.
Inevitably, the serpents bit those who imagined they were pets. We're still getting fanged. The Saudis, who funded al Qaeda enthusiastically, learned to their horror that even their own abusive Wahhabism wasn't cruel enough for Allah's avengers.
Not so long ago, some Israelis hoped that the newborn Hamas would be a useful tool to weaken the PLO's grip on the Palestinians. The bad news is they were right.
The phenomenon shows up in secular history, as well. During the Weimar Republic, German conservatives were confident that they could exploit that down-market ex-corporal and his Brownshirts, then brush them aside. (Slow learners, the same Germans had viewed Lenin and his Bolsheviks as useful mischief-makers.)
Never underestimate a fanatic's fanaticism. Dealing with religious extremists is the toughest challenge of all. They have one great advantage over the rest of us: True believers submerge their lives in their cause. Our own leaders -- or Pakistanis or Saudis -- may act in the national interest, but they're always aware of their personal interests, as well. Faith-inspired terrorists are not only willing but often impatient to die for their cause. That trumps working overtime in Washington.
When dealing with those who believe they're on a mission from their god, our cult of negotiations plays into their hands. They'll break any agreement, when the time is right. A deal isn't a deal. Unbelievers have no standing.
Nor is this only a problem for the Muslim world. Indian politicians have unleashed Hindu extremists and may find their rage uncontainable one day. Any politician, anywhere, who thinks he can exploit religious fanatics with impunity is dancing with cobras.
Pakistan can no longer get the serpents it nurtured back into the basket. Even Iran may find that the Shia terrorists it encourages may fail to be charmed by Tehran's magic flute when a crisis comes. When governments seek to manipulate religion to their own ends, they're not just playing with fire. They're playing with hellfire.
OBAMA AND PLANTATION POLITICS
Obama To Poor Blacks – Stay Poor
While professing to care about the plight of the poor, Obama continues to take actions that keep blacks impoverished, so he can use black grievances for partisan political gain. In his book “Dreams From My Father”, Obama wrote disdainfully about blacks who complain about being poor, yet continue to vote for Democrats — like Obama — who keep them poor. On page 147 of his book, Obama described what he and his fellow Democrats do to poor blacks as “plantation politics” when he wrote: “A plantation. Black people in the worst jobs. The worst housing. Police brutality rampant. But when the so-called black committeemen came around election time, we’d all line up and vote the straight Democratic ticket. Sell our soul for a Christmas turkey.”
While in the Illinois Senate, Obama helped keep blacks corralled on the Democratic Party’s economic plantation when he provided funding for slum projects in Chicago, as was exposed in the Boston Globe article that can be found on the Internet here
That Boston Globe article shows how Obama provided millions of tax dollars to his slum lord buddies, including now convicted felon Tony Rezko who contributed hundred of thousands of dollars to Obama’s political campaign and helped Obama buy a million-dollar house in a shady real estate deal.
As president, Obama put a poison pill in the Stimulus Bill that kills welfare reform, so that tax dollars can no longer be used to help the poor become self-sufficient through job training and child care assistance. Instead welfare will, once again, become a government handout that keeps poor blacks mired in generational poverty. Welfare has destroyed the black family, and Uncle Sam has replaced the father in black urban homes.
After Obama worked to end the school choice opportunity scholarship program in the District of Columbia that helps poor blacks get a better education, he produced a budget that, astonishingly, eliminates the $85 million designated for the HBCU’s (Historically Black Colleges and Universities). In typical hypocritical liberal fashion, Obama is sending his own two children to a private school, while kicking poor blacks out of that same private school and effectively sending the poor blacks back to the failing DC public school system.
Waking up to the danger Obama poses to the poor and our economy, the National Black Chamber of Commerce (NBCC) issued an alarming report showing that Obama’s “cap-and-trade” mandates – designed by radical environmentalists – would make American consumers poorer and the products they buy more expensive.
The NBCC study found specifically that the cap-and-trade law, known as the Waxman-Markey legislation, will cost 2.5 million U.S. jobs by the year 2030 and reduce GDP by $350 billion. Further, it will reduce earnings for the average U.S. worker by $390 per year and reduce the average household’s annual purchasing power by $830 per year. That report can be found on the Internet here
Another study reported by the Heritage foundation demonstrates that Obama’s cap-and-trade, or “cap-and tax”, law could be an even bigger economic disaster, raising electricity rates by 90 percent and the price of gasoline by 74 percent. Only a hard-core liberal would be so wedded to his liberal agenda that he would deliberately put that agenda above the well-being of the people in this country. That report may be found here
Just as some black Republicans, including the NBRA, are fighting to help save black communities from continued destruction by the Democratic Party‘s socialist policies, average Americans are in a battle to save our country from being turned into a failed socialist nation by Obama and his Democrat minions. With the liberal media refusing to hold Obama accountable and Democrats in control of Congress, there is no check on Obama’s power, except we, the people. Our only real weapon is our vote.
Three cheers to the sensible people in California who, by an incredible 65-35 margin, said “no” to five initiatives for higher taxes for irresponsible spending on “feel good” social programs that are wrecking California’s economy. “Tighten your belt”, Californians shouted at their government, each citizen wielding just one vote, but, oh, the impact of that vote. Remember also that no Republican in the House of Representatives voted for that economy-wrecking Stimulus Bill.
The auto industry takeover has all happened before on a planet faraway
Here’s some history. In 1952, the merger of several British auto companies resulted in the British Motor Corporation. It was the largest of its day with 39% of British output. Despite established dealerships for the various models, a series of poor management decisions resulted in the loss of market share.
By 1968, British Leyland was formed out of British Motor Corporation and became British Leyland Motor Corporation Ltd. In 1975, it was partially nationalized and the government became a holding company. UK market share barely changed and despite brands such as Jaguar, Rover and Land Rover, the government motor company continued its decline. By 2005, the MG Rover Group went bankrupt, bringing to an end the production by British owned companies. The MG became part of Chinese Nanjing Automobile.
The 1970s were difficult economic times for the United Kingdom and its Labor government (1974-1979), as noted above, created a holding company with the government as the major shareholder. At that point British Leyland employed 159,000 people in its many divisions that included a bus and truck operation.
In 1984, Jaguar Cars became independent once more through a public sale of its shares, but the Leyland truck and bus operation was sold to Volvo in 1988. The Rover Group was sold by the government to British Aerospace that in turn sold it to BMW. Suffice it to say, the British auto industry is now largely owned by companies in other nations or operating as a mere shadow of its former self.
Anyone who thinks that General Motors will revive is wrong. As Larry Kudlow, the radio-TV business maven, recently wrote, “Taxpayers won’t get their money back” and that figure now stands at $50 billion.
Both GM and Chrysler should have been allowed to choose bankruptcy months ago, but the U.S. government in its infinite wisdom has thrown our money down a rat hole created by bad management and excessive labor union demands over the past four decades. Meanwhile, as was the case in the UK, Chrysler is now owned by an Italian auto manufacturer.
The U.S. government now owns GM, AIG an insurance company, and billions in housing mortgages through the government entities of Freddie Mac and Fanny Mae. Kudlow said, “We’re talking about hundreds of billions of taxpayer dollars that will never be repaid.”
That news is bad enough, but consider now that the U.S. government has just increased the standards of how much mileage must be achieved from a gallon of gasoline at the very same time it demands that more of that gasoline be mixed with ethanol. Ethanol reduces mileage. President Obama has already made clear that he wants GM to manufacture “green” automobiles. No one will buy them.
The Telegraph, a British newspaper, recently did the math on the price of “green” cars, noting that the present UK models cost the equivalent of more than about $5,000 extra. “To benefit from the difference in fuel efficiency, you would have to drive 198,000 miles, the equivalent of driving around the world eight times.” The same will apply to comparable American-made “green” cars.
Here in America, the biofuels industry receives a 45 cent tax credit for every gallon of ethanol or biodiesel it produces or about $3 billion a year. The US government requires that 10% of all gasoline be blended with these biofuels whether consumers want it or not. This mandate is scheduled to double by 2015. Not only will the automobiles cost more and get less mileage per gallon, but the Congressional Budget Office last month reported that “the increased use of ethanol accounted for about 10% to 15% of the rise in food prices.” That’s because the main ingredient of ethanol is corn. That is insane.
At the same time, the government refuses to permit exploration and extraction of known oil reserves in the nation’s interior and off its continental coastal shelf despite estimates of literally billions of barrels of untapped oil. In the Bakken Formation under North Dakota and Montana, there are an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil. And we’re not even talking about the billions of barrels off the coast of California, Florida and other coastal states. The U.S. by some estimates has eight times as much oil as Saudi Arabia, eighteen times as much as Iraq and twenty-two times as much oil as Iran.
There is one, single reason why we can’t get at those oil and natural gas reserves, as well as being denied access to the massive amounts of U.S. coal reserves. It is the environmental organizations that maintain a campaign against energy use in the nation. The government is to blame, of course, but you can thank Greenpeace USA, Friends of the Earth, the Sierra Club, the Environmental Defense Fund, and the United Nations Environmental Program, among countless others that have fought against any and all development, any and all economic expansion and growth.
Government control of the auto industry is now merely a prelude to its eventual end. Jobs will disappear forever. “Green jobs” are a myth. The economy will suffer a grievous loss. And, if you draw the lessons from the British experiment, you can accurately predict the future of our auto industry.
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