Indian firms diligently report hiring quarter-to-quarter. It's a key metric and a source of pride. Among those providing detailed data is India IT services firm Tata Consultancy Services. It employs about quarter of a million people, with about 90% of their workforce counted as Indian.
In the U.S. it's different story. The big IT firms, Hewlett-Packard, Dell, Oracle and most others, with the exception of Microsoft, only provide global headcounts, and not country breakouts.
When HP, for instance, announced global layoffs earlier this year, it did not detail how many U.S. workers were getting cut.
For years, IBM was an exception to this industry practice. It reported its U.S. employment until 2010, when it released its annual report without a U.S. headcount breakout.
The last time that IBM made a public statement about its U.S. workforce was in congressional testimony in the fall of 2009, when it put its U.S. workforce at 105,000. It was at 121,000 at the end of 2007, and more in previous years.
At the time that IBM stopped reporting its U.S. headcount, it was beginning to appear that India was on trajectory to surpass its U.S. workforce. Crossing such a threshold is a symbolic shift more than anything else -- a globalization footnote. With a global workforce of 430,000, less than a fourth of IBM's employees are in the U.S.
According to an internal document obtained by Computerworld, IBM has 112,000 workers in India, up from 6,000 in 2002. IBM won't comment on this document or authenticate it, so this information has an asterisk next to it. ...
The only source today of IBM U.S. employment data is from the Alliance@IBM/CWA Local 1701, which puts the U.S. headcount today at about 92,000. ...
The average pay for all IBM workers in India was at $17,000, according to the document. That may seem shockingly low to U.S. IT workers, but it is in alignment with IT wages in India.
The Everest Group said the annual wages generally in India for a software engineer range from $8,000 to $10,000; for a senior software engineer, $12,000 to $15,000, and between $18,000 and $20,000 for a team lead. A project manager may make as much as $31,000. ...
Ron Hira, a public policy professor at the Rochester Institute of Technology, believes the impact of IBM's outsourcing model on the company's bottom line shows up in the cost of goods sold, which includes labor costs, which went from 57% in 2003 to 47% in 2011.
IBM is a "good microcosm for the American economy," said Hira, "with increasing corporate profits, higher stock prices, and a weak U.S. labor market."
Selected reader comments follow:
So in 10 years IBM grew by 49,000 jobs, and killed 68,000 jobs in the US - effectively hiring 117,000 people in other countries in the process. These are high paying jobs that helped fuel our economy, and you can be sure other large companies are doing the same thing.
You need to look no further to see why the US economy is in such bad shape - it is its large corporations who have effectively abandoned the US and the government encourages them to move these high paying, high skilled jobs to other countries with its policies.
IBM has had to abandon the PC business and other high tech business. The product line that is now sustaining IBM is the legacy technology developed during the days of the 360/370 technology, developed by US STEM workers at least five decades ago.
IBM like many other companies including HP, Cisco, Microsoft, are having to reduce labor costs to the bare bone by moving their operations to India and Communist China.
The H-1B visa allowed these companies to do that by bringing the visa holders into the US on work visas, training the visa holders, dismantling US operations after training completion, and reassembling their operations in India.
There are now shockingly large numbers of IBM staff using mainframe forum sites to ask questions that are so elementary that even I could answer them as a trainee in the Netherlands more than 20 years ago.
When a former employer outsourced its entire IT department to an even cheaper location (the Philippines) the five people who were allowed to stay for first line support collectively handed in their resignations a few months later because they were doing the bulk of the work.
An Indian IBM'er runs one of the above mentioned internet forums. When at some stage he told another newbie that this newbie had to use a function that is rarely used by anyone other than systems programmers to print a floating point number (which can easily be done with normal code), and I pointed him out that he should not discuss matters he obviously didn't know anything about, rather than admitting his mistake, he just deleted my posts and revoked my access.
Another former employer, in the time of Y2K, brought some of their Indian staff to the UK, so that we could train them to help with changing code. They were supposed to stay for three months, but sometime at the halfway stage one of them announced that he was leaving at the end of the week. His father had found him a wife... We already knew from the business side that some people would sometimes lost their colleagues in Mumbai overnight!
Around 180 IBM staffers are to be moved across to the Northampton-based company under a Transfer Of Undertakings (TUPE) regulation early next month, say sources.
Selected reader comments follow:
I doubt somehow they will get there returns they hope for having seen how badly all previous outsourcing deals have been handled by Phoenix and other companies which so far have left them all at a loss.
It strikes me as funny that all the most recent directors taken on at Phoenix seem to have a background in TUPE! and then seem to bail with large bonus’s the moment there is a hint of irregularity!! or loss!!
When will they realise that outsourcing is rarely is cost effective in the long term for all concerned due to mounting logistic costs and external vendors costs and the service to the customer and quality suffers greatly due to increased time delays by third parties and limited resource to save money think on Phoenix. (The future is cloud? is that not just the internet?)
Consider than his basic eye exam takes 30-45 minutes, and BVV would reimburse only $70, its easy to see why. He needs to pay for office stay shared with another optometrist, i.e. receptionist, two fitters, accountant, general admin, etc. The prior plan reimbursed $100, which is marginal, unless you keep exams short. With BVV, he says optometrists have to limit eye exams to <15 minutes -- just like your primary care doctor. So his rate for 2013 goes to $150.
I would much rather pay the higher monthly premium for VSP, which has agreements with quality optometrists. Being the vision plan is a break-even affair for ibm, why'd they change to low-cost BVV. Were people complaining about high premiums? Realize that vision plan premiums have barely gone up the last 10 years, same for dental plus, and compare that with major medical premiums (which go up and up and up)
“Employees everywhere–in recessionary as well as growth economies–express some level of their concern about their financial and professional security, their stress on the job, their trust in their company’s leadership, the support that they receive from their managers, and their ability to build their careers,” the report explains. “Many have been doing more with less–for less–for over half a decade, and that reality doesn’t seem likely to change soon, if ever.”
Why? The relationship between companies and their employees is in tremendous flux, thanks to pressures like globalization and slow economic growth. Many corporate bosses now live a life that’s dictated by short-term concerns alone, as I see it. Essentially, they’ve got to “make their numbers” every quarter or they’re out of a job. When that’s your true focus (despite the brown bag lunches HR plans for your direct reports about achieving work-life balance) you don’t have the luxury of thinking about the bigger picture, like whether you have alienated most of your team along the way or that you’ve created an office culture that no one can endure without taking Prozac. Because workers correctly feel like they are treated like a commodity, and not human beings, productivity and customer service suffers–and it gets harder and harder for the company to achieve its goals. ...
If the health reform actually does result in affordable premiums (and that’s still a huge “if”) it’s going to be easier for talented people who are tired of shabby treatment by corporate employers to quit and set up shop on their own. I co-founded a site for independent professionals called the $200KFreelancer, and I can’t tell you how many people have told me they’d like to go out on their own but can’t afford to buy health insurance–or have had to take a job with benefits after freelancing for a while because they can’t pay insurance premiums. (It’s a big ticket item: My family now pays $36,000 a year in New Jersey).
If you’re one of the estimated 44 million Americans who can answer yes to either question, be on the alert for an e-mail or letter announcing “Important Changes to Your Retirement Benefits.”
There are three types of changes you might be confronted with, all part of an effort by older companies to reduce the risk on their balance sheets of guaranteeing employees’ retirement security.
The first, which has been spreading for a decade, is a pension “freeze”: Workers currently covered by defined benefit plans are told they won’t accrue any additional pension benefits.
The other two are just starting to catch fire this year. In one, a company offers to pay current retirees and former employees lump sums in lieu of promised monthly pension payments. In the other, it replaces former employees’ pensions with equivalent annuities purchased from Prudential or another insurer. General Motors and Ford have combined the two–offering some former nonunion employees the choice of taking a lump or being dumped on an insurer. Here’s what you need to know.
In addition to the stores where we had planned strikes, we heard about other coworkers in Atlanta, GA, Ocean City, MD, Tupelo, MS, and even Paducah, KY-who were inspired to strike by the incredible outpour of support by community members like you!
Unsurprisingly, Walmart's high-priced PR team is doing everything they can to downplay these historic events and ignore its employees. Deciding to go on strike on Black Friday was never about boycotting or affecting Walmart's bottom line. It was about changing the national debate about workers in this country. With more than 2,000 news stories covering the historic strikes, we are making our voices heard.
With tens of thousands of supporters on our side, we will continue to grow more support and build more alliances. Rest assured, if Walmart does not stop its retaliation against workers who speak out for change, we will strike again. We know change will not happen overnight, especially in the face of Walmart's fierce opposition and illegal threats. But the truth is out-and we will not back down. We will continue to raise our voices, and we will continue to bring on new supporters every day.
We are not afraid to stand up and speak out, because with your support, we all see that change is possible.
In Solidarity, Strikers from OUR Walmart.
By now technically you should have a rough draft of your PBC completed needing only a few tweaks to add your accomplishments from the last 30 days. (A good manager would have explained this to you at the beginning of the year. It's up to you to follow through on the mentoring and coaching info when given)
Moreover, Even after you have done all of this, when the decision has to be made on whom to cut, none of that will really matter. It's a crap shot where the best logic is not always being used. Your motivation for doing this has to be sourced from within as you know it's the way to professionally govern yourself and to manage your career.
Lastly, if you are not monitoring the market and working to keep your skills current, you are setting yourself up for a long post IBM mountain to climb. I was out of work for only 2 months. Some of this was due to the timing as hiring in the technology sector had picked up. But other reasons are because I didn't let my skills become obsolete and I didn't let the IBM Sweat shop atmosphere tarnish my attitude or enthusiasm.
Hang in there and remember there is life after IBM. Just have a plan on how you are going to transition in mind and ready to invoke. (This by the way assumes that your resume is current and hot ready to be released at a moments notice - if not what are you waiting on?) -GladToBeGone-
Policymakers should explicitly consider limiting consumers’ health plan choices in the new health insurance exchanges to a manageable number. Furthermore, they should provide robust decision making aids to improve consumers’ ability to navigate the resulting choice set. Such interventions include standardizing benefit design, direct assistance, summary data about plans, and more to help consumers organize and evaluate their options.
The 2006 report described a trial that compared three diabetes drugs and concluded that Avandia, the company’s new drug, performed best.
“We now have clear evidence from a large international study that the initial use of [Avandia] is more effective than standard therapies,” a senior vice president of GlaxoSmithKline, Lawson Macartney, said in a news release.
What only careful readers of the article would have gleaned is the extent of the financial connections between the drugmaker and the research. The trial had been funded by GlaxoSmithKline, and each of the 11 authors had received money from the company. Four were employees and held company stock. The other seven were academic experts who had received grants or consultant fees from the firm.
Whether these ties altered the report on Avandia may be impossible for readers to know. But while sorting through the data from more than 4,000 patients, the investigators missed hints of a danger that, when fully realized four years later, would lead to Avandia’s virtual disappearance from the United States...
Arguably the most prestigious medical journal in the world, the New England Journal of Medicine regularly features articles over which pharmaceutical companies and their employees can exert significant influence. Over a year-long period ending in August, NEJM published 73 articles on original studies of new drugs, encompassing drugs approved by the FDA since 2000 and experimental drugs, according to a review by The Washington Post.
Of those articles, 60 were funded by a pharmaceutical company, 50 were co-written by drug company employees and 37 had a lead author, typically an academic, who had previously accepted outside compensation from the sponsoring drug company in the form of consultant pay, grants or speaker fees.
In imperfect health care markets, competition can be counterproductive. The larger an insurer’s share of the market, the more aggressively it can negotiate prices with providers, hospitals and drug manufacturers. Smaller hospitals and provider groups, known as “price takers” by economists, either accept the big insurer’s reimbursement rates or forgo the opportunity to offer competing services. The monopsony power of a single or a few large insurers can thus lead to lower prices. For example, Glenn Melnick and Vivian Wu have shown that hospital prices in markets with the most powerful insurers are 12 percent lower than in more competitive insurance markets.
So health insurance exchanges are probably welcome news for hospitals, physicians, and pharmaceutical and medical device companies throughout the United States. If health insurance exchanges divide up the market among many insurers, thereby diluting their power, reimbursement rates may actually increase, which could lead to higher premiums for consumers.
Brewer's decision announced Wednesday means the federal government will set up an online marketplace for the state, offering subsidized private health coverage to the middle class. The governor reiterated her unwavering opposition to the health care overhaul, and said there were too many costs and questions associated with a state-run exchange. ...
Brewer joins other Republican governors in such states as Texas and Maine who have balked at creating state-run exchanges, although others in Nevada and New Mexico have opted to proceed. She sent a federal official a one-page letter conveying her decision. ...
An alliance of hospitals, insurance companies and business groups wanted Arizona to have a state-run exchange, arguing that it would increase coverage while giving the state flexibility in designing a program to its liking.
Conservative advocacy groups such as the Goldwater Institute stood in opposition. They said Arizona shouldn't help implement a law that could foist new expenses on the state and raise health insurance prices for residents.
But that began to change a few years ago, when the city’s largest hospital, St. Luke’s Health System, began rapidly buying physician practices all over town, from general practitioners to cardiologists to orthopedic surgeons.
Today, Boise is a medical battleground.
A little over half of the 1,400 doctors in southwestern Idaho are employed by St. Luke’s or its smaller competitor, St. Alphonsus Regional Medical Center.
Many of the independent doctors complain that both hospitals, but especially St. Luke’s, have too much power over every aspect of the medical pipeline, dictating which tests and procedures to perform, how much to charge and which patients to admit.
In interviews, they said their referrals from doctors now employed by St. Luke’s had dropped sharply, while patients, in many cases, were paying more there for the same level of treatment.
Boise’s experience reflects a growing national trend toward consolidation. Across the country, doctors who sold their practices and signed on as employees have similar criticisms. In lawsuits and interviews, they describe growing pressure to meet the financial goals of their new employers — often by performing unnecessary tests and procedures or by admitting patients who do not need a hospital stay.
In Boise, just a few weeks ago, even the hospitals were at war. St. Alphonsus went to court seeking an injunction to stop St. Luke’s from buying another physician practice group, arguing that the hospital’s dominance in the market was enabling it to drive up prices and to demand exclusive or preferential agreements with insurers. The price of a colonoscopy has quadrupled in some instances, and in other cases St. Luke’s charges nearly three times as much for laboratory work as nearby facilities, according to the St. Alphonsus complaint.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.
Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.
Under those burdensome rates, moreover, both employment and the gross domestic product (a measure of the nation’s economic output) increased at a rapid clip. The middle class and the rich alike gained ground.
So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities.
And, wow, do we have plenty to invest. The Forbes 400, the wealthiest individuals in America, hit a new group record for wealth this year: $1.7 trillion. That’s more than five times the $300 billion total in 1992. In recent years, my gang has been leaving the middle class in the dust.
A huge tail wind from tax cuts has pushed us along. In 1992, the tax paid by the 400 highest incomes in the United States (a different universe from the Forbes list) averaged 26.4 percent of adjusted gross income. In 2009, the most recent year reported, the rate was 19.9 percent. It’s nice to have friends in high places.
The group’s average income in 2009 was $202 million — which works out to a “wage” of $97,000 per hour, based on a 40-hour workweek. (I’m assuming they’re paid during lunch hours.) Yet more than a quarter of these ultrawealthy paid less than 15 percent of their take in combined federal income and payroll taxes. Half of this crew paid less than 20 percent. And — brace yourself — a few actually paid nothing.
The companies represented by executives working with the Campaign To Fix The Debt have received trillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholes that virtually eliminate the companies' tax bills.
The CEOs are part of a campaign run by the Peter Peterson-backed Center for a Responsible Federal Budget, which plans to spend at least $30 million pushing for a deficit reduction deal in the lame-duck session and beyond.
During the past few days, CEOs belonging to what the campaign calls its CEO Fiscal Leadership Council -- most visibly, Goldman Sachs' Lloyd Blankfein and Honeywell's David Cote -- have barnstormed the media, making the case that the only way to cut the deficit is to severely scale back social safety-net programs -- Medicare, Medicaid, and Social Security -- which would disproportionately impact the poor and the elderly.
As part of their push, they are advocating a "territorial tax system" that would exempt their companies' foreign profits from taxation, netting them about $134 billion in tax savings, according to a new report from the Institute for Policy Studies titled "The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks" -- money that could help pay off the federal budget deficit.
Yet the CEOs are not offering to forgo federal money or pay a higher tax rate, on their personal income or corporate profits. Instead, council recommendations include cutting "entitlement" programs, as well as what they call "low-priority spending."
Many of the companies recommending austerity would be out of business without the heavy federal support they get, including Goldman Sachs and JPMorgan Chase, which both received billions in direct bailout cash, plus billions more indirectly through AIG and other companies taxpayers rescued.
In a blog post on Tuesday, Krugman focuses on one tax proposal floated by Congressional Republicans that would essentially create a "tax bubble," disproportionately hurting the upper middle class. (Nate Silver has an explanation and a chart here.) Krugman writes that taking this tack would let the GOP protect the super-rich at the expense of the working rich (using the decades-old language of Oliver Stone's Wall Street) who make six-figure salaries.
"When push comes to shove, the GOP seems ready to throw the bottom 90 percent of the top 1 percent overboard, in order to protect its real patrons, the superelite," Krugman writes.
One possible answer is that they’re still imagining that they can pull a fast one — that they can sell supposed revenue raisers that don’t actually raise much revenue, or that they can find a way to renege on whatever agreement might be reached by appealing to the various interests with a stake in particular deductions. ...
But there’s a third possibility, which Nate Silver and Josh Marshall both raise in slightly different ways: they may be trying to protect the players at the expense of the $400,000 a year working stiffs.
The terms, in case you’re wondering, come from the original Wall Street:
I’m not talking a $400,000 a year working Wall Street stiff flying first class and being comfortable, I’m talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player, or nothing. ...
Under this particular proposal, everyone making more than 250K would pay more — but as a percentage of income, it would be significant for those making 400K, trivial for the Masters of the Universe making $10 million or more. And this is basically going to be true of any proposal that doesn’t actually raise rates.
The point, as Josh says, is that when push comes to shove, the GOP seems ready to throw the bottom 90 percent of the top 1 percent overboard, in order to protect its real patrons, the superelite.
Over the weekend, a horrific fire swept through a Bangladesh clothing factory, killing more than 100 workers, many of whose bodies were burnt so badly that they could not be identified. In its gruesome particulars — locked doors, no emergency exits, workers leaping to their deaths — the blaze seems a ghastly centennial reenactment of the Triangle Shirtwaist fire of 1911, when 146 workers similarly jumped to their deaths or were incinerated after they found the exit doors were locked.
The signal difference between the two fires is location. The Triangle building was located directly off New York’s Washington Square. Thousands watched the appalling spectacle of young workers leaping to the sidewalks 10 stories down; reporters and photographers were quickly on the scene. It’s not likely, however, that the Bangladesh disaster was witnessed by anyone from either the United States or Europe — the two markets for which the clothes made inside that factory were destined. For that, at least, Wal-Mart should consider itself fortunate. ...
If this were an isolated incident of Wal-Mart denying responsibility for the conditions under which the people who make and move its products labor, then the Bangladeshi disaster wouldn’t reflect quite so badly on the company. But the very essence of the Wal-Mart system is to employ thousands upon thousands of workers through contractors and subcontractors and sub-subcontractors, who are compelled by Wal-Mart’s market power and its demand for low prices to cut corners and skimp on safety. And because Wal-Mart isn’t the employer of record for these workers, the company can disavow responsibility for their conditions of work.
This system isn’t reserved just for workers in faraway lands: Tens of thousands of American workers labor under similar arrangements. Many are employed at little more than the minimum wage in the massive warehouses in the inland exurbs of Los Angeles, where Wal-Mart’s imports from Asia are trucked from the city’s harbor to be sorted and packaged and put on the trucks and trains that take them to Wal-Mart stores for a thousand miles around.
The warehouses are run by logistics companies with which Wal-Mart contracts, and most of the workers are employed by some of the 200-plus temporary employment companies that have sprung up in the area — even though many of the workers have worked in the same warehouses for close to a decade. Last year, the California Department of Industrial Relations, suspecting that many of these workers were being cheated, charged one logistics company that runs a warehouse for Wal-Mart with failing to provide its employees with pay stubs and other information on their pay rates. Wal-Mart itself was not cited. That’s the beauty of its chain of deniability.
The SEC, which ignored his warnings about Madoff, is “captive to the industry it regulates, and it is afraid of bringing big cases against the largest, most powerful firms,” he said. “The SEC continues to roar like a mouse and fight like a flea. . . . I gift-wrapped and delivered the largest Ponzi scheme in history to them, and somehow they couldn’t be bothered to conduct a thorough and proper investigation.”
But since then, the private investigator has come upon a rather different trail of evidence. “There’s a total sea change at the agency,” Markopolos told me Tuesday. “They are aggressive. There’s no more free passes on Wall Street. They eagerly seek out big cases. . . . They used to be industry’s lapdog and now they’re actually an investor’s watchdog.”
The difference, he said, is Mary Schapiro, who announced Monday that she will step down as SEC chairman after four tumultuous years on the job. It’s not a stretch to say she has saved the regulatory body from irrelevance, if not outright extinction, and she has rebuilt it into a powerful presence on Wall Street. When she took over the agency, there were voices inside and outside the administration calling for carving up the agency, which missed the Madoff scandal.
Bloomberg news reports that based on their calculations, those tax deductions cost the rest of us more than $105 million a year in tax revenue that the Treasury can't get its hands on. Yet.
Today's deduction - which originated with the Revenue Act of 1950 - is partly credited to the work of Theodore L. Jones, a Baton Rouge attorney and die-hard fan of the Louisiana State University Tigers. Jones has been a season ticket holder (on the forty-third yard line) for nearly twenty years. When the Tax Reform Act of 1986 was being hammered out, the beloved sports ticket tax deduction became a target. That's when the LSU athletic director enlisted the help of Jones. Thanks to Jones' relentless lobbying of Congress, the tax break survived. ...
Not all schools set donation levels, but those with the most popular teams capitalize on the public's desire for prime seats at the games by jacking up season ticket prices. They establish the face value and then expect donations totaling hundreds of thousands of additional dollars. Of course "donation" implies voluntary, but the extra money is actually conditional to the availability of tickets. Even so, by law, fans who pay enough are able to write off 80 percent of the donation, provided they itemize their tax returns.
In other words, dividends may once more be taxed as regular income -- and that's how it should be.
Thanks to the 2003 tax cuts enacted under President Bush, dividend tax rates are now extremely low. They were higher in both the 1980s and the 1990s. Extremely affluent households have been the main winners from that 2003 tax cut because the wealthy own the vast majority of all stock. It's been estimated that in 2012, the top 1 percent of households will receive a stunning 71 percent of all capital gains. What's more, because dividends paid on stocks in 401(k)s are not taxed (they are reinvested), more ordinary Americans who own modest amounts of stock saw virtually no benefit from the cut to dividend taxes enacted by Bush.
Rarely has any tax cut cut in history shoveled more money to wealthy households than the 2003 tax cut for both dividends and capital gains. That law -- along with a previous tax cut for capital gains in 1997 -- is a big reason that tax rates on the very richest Americans have declined in the past 20 years. As the Center for Budget and Policy Priorities has noted:
The top 400 households paid 16.6 percent of their income in federal individual income taxes in 2007, down from 30 percent in 1995. This decline works out to a tax cut of $46 million per filer in 2007, or a total of $18 billion in tax cuts for these households per year.
According to the Congressional Research Service "changes in capital gains and dividends were the largest contributor to the increase in the overall income inequality," between 1996 and 2006. In other words, even as inequality is routinely depicted as some inevitable and unavoidable economic fact of life, it turns out that the biggest driver of inequality in recent times have been intentional changes in tax policy.
They were, it turned out, misinformed about political reality. But the disappointed plutocrats weren’t wrong about who was on their side. This was very much an election pitting the interests of the very rich against those of the middle class and the poor.
And the Obama campaign won largely by disregarding the warnings of squeamish “centrists” and embracing that reality, stressing the class-war aspect of the confrontation. This ensured not only that President Obama won by huge margins among lower-income voters, but that those voters turned out in large numbers, sealing his victory.
The important thing to understand now is that while the election is over, the class war isn’t. The same people who bet big on Mr. Romney, and lost, are now trying to win by stealth — in the name of fiscal responsibility — the ground they failed to gain in an open election. ...
The answer, as I have already suggested, is to rely on stealth — to smuggle in plutocrat-friendly policies under the pretense that they’re just sensible responses to the budget deficit.
Consider, as a prime example, the push to raise the retirement age, the age of eligibility for Medicare, or both. This is only reasonable, we’re told — after all, life expectancy has risen, so shouldn’t we all retire later? In reality, however, it would be a hugely regressive policy change, imposing severe burdens on lower- and middle-income Americans while barely affecting the wealthy. Why? First of all, the increase in life expectancy is concentrated among the affluent; why should janitors have to retire later because lawyers are living longer? Second, both Social Security and Medicare are much more important, relative to income, to less-affluent Americans, so delaying their availability would be a far more severe hit to ordinary families than to the top 1 percent.
Or take a subtler example, the insistence that any revenue increases should come from limiting deductions rather than from higher tax rates. The key thing to realize here is that the math just doesn’t work; there is, in fact, no way limits on deductions can raise as much revenue from the wealthy as you can get simply by letting the relevant parts of the Bush-era tax cuts expire. So any proposal to avoid a rate increase is, whatever its proponents may say, a proposal that we let the 1 percent off the hook and shift the burden, one way or another, to the middle class or the poor. ...
So keep your eyes open as the fiscal game of chicken continues. It’s an uncomfortable but real truth that we are not all in this together; America’s top-down class warriors lost big in the election, but now they’re trying to use the pretense of concern about the deficit to snatch victory from the jaws of defeat. Let’s not let them pull it off.
Businesses want to keep costs down and that means they don’t hire people unless they really, really need to. They hire people when doing so will make them more money, they lay people off when it will save them money. Employees are only hired or kept on the payroll if they are needed, and not hiring one necessary person would therefore hurt the business that was successful enough for the owner to make at least $794,000 after all deductions.
So assuming the business owner knew what he or she was doing, and only had the number of employees that were needed, the following year the business would do worse without that needed employee, and the owner would make less. Would an employer really do this? Of course not.
Let me ask another question. How come every time I closely examine a conservative economic claim it falls apart, and was really about fooling people into giving more money to rich people, not making things better for all of us?
What are the policies of austerity? They involve the cutting of public investment and services such as education, health care, and retirement insurance. In addition they also include the privatizing of existing government assets. Public employees suffer wage freezes or cuts and mass layoffs as part of austerity measures. Labor laws are revised to empower employers at the expense of employees' job security, wages, benefits, and voice on the job. And austerity also involves increased taxes and fees on working class people.
Austerity is sold as the only available means of reducing the debt. However, there is plenty of money to take care of these financial imbalances. It is in the pockets of the wealthy and big business elites whose think tanks and politicians are, not coincidentally, the architects of austerity. They want nations' economies to be run more like the corporations and banks, prioritizing that their shareholders get paid first and foremost at the expense of everyone else. ...
What are the results of austerity? They depress the economy in the countries in which they are enacted and reduce the government's revenue while fattening the big business elites' financial reserves. With the January 1st Fiscal Cliff deadline in the U.S., the Economist Intelligence Unit cut its expectations for growth. According to the International Monetary Fund (IMF), Spain’s economy will contract by 1.5 percent, Italy’s by 2.3 percent, Portugal’s by 3 percent, Greece’s by 5.2 percent, Britain’s by 0.6 percent, Germany’s by 0.9 percent, and France’s by 0.1 percent. ...
The truth is that the world economy is not in crisis because of debt. It is because too many have too little to buy what has been created. Without a stronger consumer base the capitalists have no reason to invest in making more commodities and creating more jobs. How are they going to realize a profit if few can afford to buy what is produced?
Before the Great Recession the big business elites of the world had gotten around this problem by indulging in an orgy of financial speculation, especially in the U.S. This extra cash, created out of nothing, enabled them to continue handing out dicey loans while repackaging and selling these toxic assets as good investments. As long as the cash spigot was flowing today, why worry about tomorrow, was the line of reasoning for the 1%. This created massive financial bubbles in, for instance, housing in the U.S. and several European nations.
U.S. Bankruptcy Judge Robert Drain in White Plains, New York, today approved formation of a committee of retired employees to defend their rights in connection with the intended cuts. Drain is also being asked to consider Hostess’s request to close and its bid to pay as much as $1.75 million in incentive bonuses to 19 senior managers during the company’s wind-down.
“It feels like the harder we work, the more they take from us,” said Mr. Hicks, 55, as he waited for a meat truck one recent afternoon. “And it seems like there’s an awful lot of people in the United States who don’t pay any taxes.”
These are common sentiments in the eastern suburbs of St. Louis, a region of fading factory towns fringed by new subdivisions. Here, as across the country, people like Mr. Hicks are pained by the conviction that they are paying ever more to finance the expansion of government.
But in fact, most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.
Households earning more than $200,000 benefited from the largest percentage declines in total taxation as a share of income. Middle-income households benefited, too. More than 85 percent of households with earnings above $25,000 paid less in total taxes than comparable households in 1980.
Lower-income households, however, saved little or nothing. Many pay no federal income taxes, but they do pay a range of other levies, like federal payroll taxes, state sales taxes and local property taxes. Only about half of taxpaying households with incomes below $25,000 paid less in 2010.
Exhibit A: The defenestration of Tom Cole.
Cole, a deeply conservative congressman from deeply Republican Oklahoma, is not to be confused with a RINO: Republican in name only. But when the lawmaker, who has been part of House GOP leadership, floated a perfectly sensible notion this week — that Republicans should accept President Obama’s offer to extend tax cuts for the 98 percent of Americans who earn less than $250,000 a year — he was treated as if he had been caught reading Marx in the Republican cloakroom.
“I think he’s wrong, and I think most of the conference thinks that he’s wrong,” declared rookie Rep. Raul Labrador (R-Idaho). Cole, he said, is “a man who has voted for a lot of the increased spending in Washington, D.C., and that’s the problem. We have a lot of Republicans who are, you know, catching their hair on fire right now, but they’re the ones who were here for 10 or 20 years causing all the problems that we’re now facing.”
Rep. Scott Garrett (R-N.J.) called Cole’s position “absurd.” House Speaker John Boehner went before the cameras to deliver Cole a rare public rebuke.
Cole, who enjoys a lifetime rating of 92 percent from the American Conservative Union as he enters his sixth term, isn’t worried about a putsch. “I think I’m going to be hard to sell as a dangerous liberal,” he told me with a chuckle. The outrage, he said, “surprised me a little bit, because I think the politics of this are blindingly clear.” ...
The Republicans’ negotiating position is morally indefensible. They are holding 98 percent of Americans hostage by refusing to spare them a tax hike unless the wealthiest 2 percent are included.
“Some people seem to think this is leverage. I think that’s wrong,” Cole said. “You don’t consider people’s lives as leverage. I live in a blue-collar neighborhood. I’ve got a retired master sergeant as my next-door neighbor, police officer across the street. These are working folks, they’re great people, and the idea that I would ever use them as leverage is just wrong.”
In defying the party purists, Cole is taking a novel approach: doing what his constituents want him to do. His staff reports that calls and e-mails to his Washington office are running 70 percent favorable, and calls to his south-central Oklahoma offices are 90 percent positive. ...
Cole’s stand is a refreshing reminder that being conservative doesn’t mean you have to be unreasonable. “Both sides, I think, need to be a lot more clear-eyed,” he told me. “We’re going to be living in this house together for four years in all likelihood. Let’s get some things done that we can agree on.”
U.S. multinationals have spent years pushing for a change to the tax code that would eliminate taxes on business profits overseas, just as these firms are banking their futures on growth abroad.
Now, with the debate over the country’s fiscal future in the spotlight, executives, lobbyists and some on Capitol Hill are latching onto the “fiscal cliff” as a potential springboard for their cause.
To the companies, no other tax issue matters more. ...
Some tax experts warn, however, that such a change could radically alter how companies behave and have broad implications for the economy. Without the right safeguards, they say, eliminating taxes on foreign profits and switching to what is known as a “territorial” system would blow a hole in tax revenue, give multinationals more leeway to exploit tax havens and drive jobs overseas.
“The territorial tax system they envision would gut the entire U.S. corporate tax code,” said Edward D. Kleinbard, a professor of tax policy at the University of Southern California. “It would lose gigantic sums of money every year.” ...
Democrats are largely opposed to a territorial tax system, often contending that it would encourage firms to move more operations overseas, as Obama frequently argued on the campaign trail. The Obama administration has instead proposed a “global minimum tax” that would apply to income earned in any country.
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