OK Bill
Maybe you can add some value here. A shocking thought but maybe, just maybe!
Lets focus on this tax facts page from the brookings institute, year 2000. I don't want to use estimates for this year because I think tax estimates for 2003 forward are wrong. I will choose 2000 because it was a year where corporations made a lot of money and contributed to the tax rolls.
In 2000, according to this, individual income taxes were 49.6%, corp taxes 10.2%, Social Security (aka "payroll taxes") - 32.2%, excise tax + other 8.9%
49.6 + 10.2 + 32.2 + 8.9 = roughly 100% of taxes collected in the US.
the 49.6% is obviously paid by individuals, indirectly related to jobs in the US.
The 10.2% is corporations.
The 32.2 is split, but also tied to jobs in the US.
I'll assume the 8.9% is NOT paid by corporations. These are use taxes mostly.
So the overall point is, most of the tax base in the US is paid by individuals working at their jobs. Corporations only pay 10.2% of the taxes we collect in this country!!!
taxpolicycenter.org
I don't get what the problem is.
Can you see the problem now? Oracle moved 4000 developers offshore. We have lost, in round terms maybe 20K per employee per year in payroll + income taxes that oracle used to indirectly pay. Total- 80 million dollars, PER YEAR. Multiply this times many companies in the US.
You say Oracle is streamlining, becoming more efficient. Well yeah, now they pay 1/4 or less taxes that they used to, can we shrink the US budget by 3/4? (not with Bushonomics, we can't). This is the current economic picture.
Taking the future software industry into account, assuming Oracle operates entirely offshore with only the skeleton management here. As a "US based corporation" (wink,wink) here are the pros and cons for Oracle/USA.
USA pros
Oracle pays corporate taxes, we would not get those $$ if they were HQed in India. But remember corp taxes only account for 10% of our tax base.
USA cons
Oracle as a "US based corporation" is free to transfer workers to and fro their "global operations" using the L1 visa and other legal means set up to facilitate global trade for US corps. This means oracle can move indian employees to the US temporarily while paying them in indian rupees offshore (no US taxes). This offshore labor import is the equivalent of dumping, just like when Japan would sell electronics for below cost in the US to destroy our industries in the 80s.
New US-based software companies (startups and the like) cannot compete with the Oracle offshore pay structure of approx $800./month salary per worker with no taxes. The VC industry leaves software or moves to india also (in fact this has happened).
Oracle as a "US based company" is free to bid on government projects, homeland security and the like, even though they are really an indian company. This is the ultimate screw of the US taxpayer. It takes taxes that US workers primarily pay, and sends them to an offshore company to do whatever. Sort of the US taxpayer equivalent of "dividend double taxation", in reverse.
If Oracle were forced to move offshore, because most of their workforce is offshore, they would have a much more difficult time with labor dumping. The visa avenue would be closed for one thing, they could not bid on gov't projects and some new US based companies could gain a foothold in the industry. That is my view anyway. |
