Being ignorant is not so much a shame, as being unwilling to learn.
Benjamin Franklin
Territorial Taxation? Thumbs UP!
Most Americans probably don't know enough about international trade to understand the implications of what President Obama in 2009 misleadingly referred as an international business tax reform measure: the net effect would be to limit foreign tax credit and to limit tax deferrals. Obama and Geithner, for ideological reasons, misled the nature of taxation in a way to suggest that these were "tax giveaways" to multinational corporations. The bottom line is that Obama was really introducing protectionist (i.e., anti-free trade) legislation: it was meant to discourage American companies from investing in overseas operations. (Now why would businesses from a country with 5% of the world's population have an interest in participating in the growing global economy of the other 95%? Go figure...)
NFTC has a good background paper describing the basic issues: in particular, there is a discussion of Capital Import Neutrality (thumbs UP!) and Capital Export Neutrality (thumbs DOWN!) In simple terms, CEM treats earnings from foreign subsidiaries as if they were de facto American operations. We can consider taxes as a cost of doing business. Now foreign businesses are really subjected to a different tax system. So we see an immediate conflict: double taxation of the same dollar of foreign earnings. CIN says effectively, applying US tax rates, especially if they are HIGHER, than the target country's tax rate, effectively raise the cost of American companies operating in foreign countries. These costs cannot be passed along to foreign consumers of relevant goods and services because domestic and other international companies don't have to pay the same costs; essentially, it has the effect of discouraging foreign operations--where, among other things, you are closer to your target customers, have lower delivery costs, are somewhat protected against foreign currency issues, and can leverage existing distribution channels. CEM policies attempt to mitigate these problems by allowing companies to defer American taxes until distributions are made from the subsidiary back to the home base and by allowing deductions for foreign taxes.
Hence when Obama talks about limiting foreign tax deductions and limiting deferrals, given the fact that America has (after recent Japanese business tax cuts at the higher brackets) the highest business tax rates in the world, this means that Obama is engaging in a shakedown of businesses operation by reaping the spread between uncompetitive domestic tax rates and foreign taxes already paid--to operations not benefiting from American government expenditures.
The real strategy of Obama is obvious: he's effectively lessening the attractiveness of foreign investments, feeling that the corporations will have no choice but to invest locally under counterproductive, arbitrarily high, uncompetitive tax rates. He's dead wrong. He still hasn't figured out why companies are sitting on tons of locally generated cash instead of investing. There are a lot of reasons for that, including uncertainties regarding an unsustainable national debt and uncompetitive domestic tax and regulatory policies. But high business tax rates constitute a barrier for BOTH domestic and foreign investment. Obama doesn't conceptually get that high tax rates restrict the tax base. Obama's "tax reform" is a desperate attempt to change the rules after the game has been played, all in a futile attempt to defer the day of making the necessary policy adjustments needed to increase the tax base.
In past posts, I've advocating a streamlining and simplification of tax rates (including eliminating various special-interest tax credits/deductions), and I've also advocated a modest VAT proposal (vs. a retail-only sales tax) which could realize tax revenue on an interim/incremental basis of products and services. The more you look at what Obama is doing, the more you realize he's imitating mistaken policies from the Hoover, FDR, and JFK administrations. In particular, the Congress passed and JFK implemented a CEM approach that included domestic tax breaks (e.g., investment tax credits and accelerated depreciation: does that sound familiar?) and distinguished between active and passive foreign subsidiary income where active income could be deferred.
The fact is that JFK's hybrid "solution" is no longer sustainable in a growing global economy where most competitors have no problems with undercutting the US's business tax structure and have done so. The Hill article cited above points out that, as usual, Democrats are worried about businesses trying to shift costs and operations to dodge higher domestic tax rates (so-called transfer pricing), but there are studies cited in NTFC and the Heritage piece that show that foreign operations investment is a win-win situation with the home base growing well-paid positions and the transfer pricing fears overblown.
Senate Republicans and GOP Presidential frontrunner Mitt Romney (as one would expect, given his superior understanding of business and economics issues) are favorably inclined towards territorial taxation. The fact that Great Britain and Japan have migrated to territorial taxation recently, but "lead from behind" Barack Obama continues to stubbornly hang onto, even extend obsolete "solutions", speaks volumes. Remember how he was alone at foreign leader meetings, trying to get everyone to adopt his neo-Keynesian approach to massive ineffectual stimulus spending and failed to convince anyone (again)? This is a LEADER? Give me a break!
Congratulations, Regis Philbin!
Courtesy of David Shackbone/Examiner
Faithful readers of this blog know that I will occasionally feature non-political features, including a regular music video, a sports moment or an occasional tribute. I never saw Jack Paar, but Regis really made the host chat concept an art form. For most of his 23 years with Kathie Lee and Kelly, I've been working during the times his syndicated show, but I would occasionally watch and found his host chats charming.The 1953 Notre Dame graduate was always talking about his beloved Fighting Irish; it would take me back to my high school years in south Texas.
I used to go to Sunday obligation masses on Saturday night; I would get up early on Sundays to bundle and deliver the heavy Sunday newspapers. The rest of the family would go to Mass while I babysat my baby sister. During the fall the local TV station would run these condensed one-hour versions of the previous day's Notre Dame football games. I would boil some eggs and make breakfast sandwiches for my sister and me. Technically my mom had strict rules about eating between family mealtimes, so I would keep that part a secret. Then one Sunday morning my sister was impatient with the rest of the family; they seemed to be slower than usual getting out for Mass, and she told them to hurry up and leave so Ronald would make her breakfast. I thought my Mom was going to yell at me, but she thought it was sweet I was feeding my sister. She did end up ironically marrying a guy with an Irish surname. The strange thing is my brother-in-law and his late father have over the years flown to attend some football games in person, even though neither attended Notre Dame.
As a Catholic boy, of course, I always knew about Notre Dame. They did post a faculty position the year I graduated; I did try to contact them, but they never acknowledged my inquiries. I probably also tried 2 or 3 times in later years to no avail; I was prepared, just as in the case of my Providence College visit, to make salary concessions.
[Ironically, especially for someone whom started college seriously considering the priesthood and earned my BA at a Catholic college, I never got an offer from any of my 3 Catholic college campus visits; while I was living in Illinois a few years back, I came very close to resuming my academic career with a DC area Catholic college, when the college abruptly broke off contact.
[In the last conversation I had with the chairwoman whom was recruiting me, she mentioned having met a couple of tenured Illinois State professors at a past conference, and the context of the conversation was she hadn't talked to them about me. I met the married couple only casually at department meetings and social events. I mentioned in a past post I had a one-year visiting appointment at Illinois State at the end of my academic career; the chairman had violated my academic freedom during the fall semester and then threatened in the spring to relieve me of teaching responsibilities if I filed a complaint against him. This was based purely on his paranoia; I didn't have any intent of filing a grievance; I was more focused on finding a follow-up faculty appointment. In fact, the ISU business school was recruiting a tenure-track MIS position (the visiting appointment was in a hybrid applied computer science department), and I was under active consideration for this position. There had been a flurry of communications between the business school and myself to arrange a first meeting around the time of the ACS chair's unexpected visit to my office to issue the threat. After I filed the complaint against the chair with the university and subsequently the academic freedom charge he feared (unanimously confirmed after I left ISU by the faculty investigatory subcommittee), the business school suddenly broke off contact and wouldn't return my calls or emails. Ironically the ISU business school had been more actively recruiting me than vice versa; they were looking for primarily coverage of service (core MIS) courses, while I was more interested in an established MIS program. It doesn't take a genius to figure out why the ISU business school refused to acknowledge subsequent communications, and the same thing goes for the chairwoman of the DC area Catholic college.
[(The parties engaged in wrongdoing normally lawyer up and are advised against doing or saying anything that could be used to sue the university, but why would you want to work for or with people you don't respect personally or professionally? It's not worth it; besides, they're the ones whom lost out on hiring one of the best professors around. I think I was more disappointed that a Catholic college would tolerate this unethical behavior by their administrators.)
[ The chairwoman of course lacked the integrity to discuss the ISU matter with me or to personally deliver the rejection after all but offering me the job the last time we spoke; I don't recall the exact context--whether she wanted a campus visit first or was waiving that and going ahead with the paperwork, but she was effusive at the end of the phone call, saying she was looking forward to working with me.) The next communication I got from the college was an HR notice that after reviewing their pool of applicants, they had decided to withdraw the position and reopen it for the next academic year, and I was encouraged to reapply. Yeah, right. This sufficiently annoyed me to snap off an email to the chairwoman asking her to explain why I should even bother to reapply when she had turned down the opportunity to hire me in the first place. (It was a rhetorical question.) She coolly responded she "was trying to be nice about it".
[What a piece of work... Life is too short to work for people you don't respect, like Barack Obama--never in a million years, even if he offered me a $10M signing bonus to take the reins over Fannie Mae. Hear that, Jon Huntsman and Newt Gingrich? I'll wait for America to elect a real President, not the person whom plays one on TV.]
SIGH! I guess instead of rooting for Notre Dame, I'll just have to have to settle for my 11-0 University of Houston Cougars. Eat 'em up, Coogs!
Regis has carved his own niche; in 2004, he passed Hugh Down to have logged more hours on TV than any other personality. I hate to say this to the long-time co-hosts Kathie Lee and Kelly, but to me what carried the show was the force of his personality, his sense of timing, his humor and goofiness, his banter with the show's producer and his expressions. He plays off his co-hosts so well. It was even how he might pick up the newspaper to a relevant item and read it in a way which really reinforced that the show was live, like you were sitting across his breakfast table. In a way I see parallels in our personalities, although I'm edgier and attract more enemies, and many of my ad libs are plays on words.
I was always amused with his ability to poke fun at himself and talk about himself in the third person. There were the mock awards, the so-called Relly's, and the endless celebrity guest impersonations of Regis; I never realized the trademark "out of control" line was an SNL invention, much like Tina "Sarah Palin" Fey's "I can see Russia from my house". (Regis mentions in one of the videos that he would love to guest host SNL; that is a no-brainer.)
Political Humor
"The Occupy Wall Street people are so angry at Mayor Bloomberg and it’s starting to look really bad for his seventh term." - David Letterman
[It's almost like they might think the billionaire mayor is part of the 1%--wait a minute...]
"People say Herman Cain was rambling and embarrassed himself while trying to answer a question about Libya. Some say it proves he’s not qualified to be president. But the good news is, rambling and embarrassing himself does qualify him to be vice president." - Jay Leno
[People say Barack Obama was rambling and embarrassed himself while trying to answer a question about Libya. Some say it proves he's not qualified to be president. But the good news is, rambling and embarrassing himself does qualify Joe Biden to be vice president.]
Musical Interlude: My Favorite Groups
Boston, "A Man I'll Never Me". How great a voice did the late Brad Delp have? I invert this song in my mind and regret the women whom can't see the man I really am.
