Senate Why don't people love capitalism?

I don't disagree with that. I was showing the black mark on the French was addressed adequately. That's all.

And no one is certain communism will never rise again. Only thing we can say is that over the last twenty years it has seen substantial decline. It's down but not out.

There. Liberal peace among posters.

 

Wonder what 'conservative peace' and 'communist peace' looks like...

 

There is Marxist theory in IR.

Also, conservative is liberal……..dude.

*munches popcorn*

edit: by the way, I'm not conflating different concepts of liberalism. You're failing to grasp its wider applications and implications.

Want some popcorn?

edit:

Marxist IR theory in a nutshell:

conflict conflict conflict, imperialism, conflict conflict conflict, exploitation, conflict conflict conflict, MNCs are the devil.

The end. j/k!

 

Yeah I'm like, there's whole paradigms Vivec don't know about here.

Vivienne, these are the dominant paradigms in international relations theory:

Realism
Marxism
Liberalism
Constructivism

However my experience in diplomacy and international policy has illustrated that realism (as defined by Hans Morgenthau) is the only one that's in effect by states.

 

*kissenger wheezes contentedly*

 

You realist you. You are certainly not alone. It's a whole theoretical school for a reason: it can point to some evidence.

 

I would contend that, once you've been inside the Von Bismark Sausage Factory you can't accept anything but realism. States act in their own inherent self interest.

 

OK, so in another thread a fairly silly claim was made that conservatives support legislation which sends jobs overseas.

I wanted to talk about offshoring with you guys, since at least we can have an intelligent discussion.

Offshoring jobs typically occurs because the cost to a business can be drastically reduced by sourcing cheaper labour. Labour's probably, in domestic terms, the least flexible commodity in the production of goods and services in terms of pricing. This is an obvious matter - after all, we're talking about people here so there's laws on minimum wage, etc.

It is also more frequently occurring with some services. India and the Philippines in particular have positioned themselves in this manner - the former has relatively cheap labour costs relative to domestic PPP and a highly educated population. Their IT expertise has been firmly leveraged by Western firms. The latter have high levels of English language fluency - American English, no less - and again low labour costs. They've positioned themselves well to leverage off a lot of call centre/contact centre functions.

Obviously, the net effect is a domestic job gone. I don't know if you can accuse a government of facilitating this outcome - firms are simply doing what all firms do and trying to control OPEX. After all, the whole point of a cyclical economy in capitalism is that success and growth lead to inflation; inflation builds and eventually triggers a contraction as the market self-corrects. Offshoring is a symptom of boom cycles in other words.

Now, we can and eventually will get to Schumpeter and creative destruction, but I wanted to get people's initial reaction to outsourcing. Nominally communist states achieve full employment by creating redundant positions and filling them - since the state is subsidising the wages too they are just triggering the inflationary spike that those countries so often enjoyed. Capitalist states will take the lower end of the labour skill tree and outsource it where cost effectiveness can be achieved. Is this good, bad, both or neither?

 

Outsourcing to India is common here and generally works well. We don't have the volume of IT expertise in this country that's needed. By that I mean that a lot of businesses require a number of people in relatively dull jobs that require a degree of IT skill and/or numeracy that we simply don't have in our general population. Meanwhile the specialists are doing the truly specialist work and have no interest/are genuinely overskilled for these types of roles.

With outsourcing, many of our businesses are able to grow at a rate that would not otherwise be possible, which is good for our economy. Mumbai attracts hard currency, which is great for the Indian economy.

The only losers here are the ill-educated, fat, stupid Brits with an overdeveloped sense of entitlement who *didn't* manage to get a job paying more than an architect with fewer working hours with Transport for London.

 

And those who did managed to get a fulfilling job keeping tigers out of the Tube resisted mightily, lead by the modern day hero Bob Crowe, against efficiency and progress - if I'm not mistaken.

 

Absolutely. Were they not sat, open mouthed, in ticket offices that are never used the entire network would be overrun with the stripey buggers.

 

Capitalism isn't loved because of stuff like this:

http://www.standard.co.uk/news/lond...ction-after-rent-promise-revoked-9864869.html
http://www.standard.co.uk/news/lond...n-of-investors-39m-country-house-9884917.html

(Evening Standard ain't exactly a left-wing paper either)

 

I love capitalism. Does that count?

 

That's a commercial development, why shouldn't they charge market rents?

I struggle with people's sense of entitlement to cut price accommodation. Why should my tax fund people to live in nicer accommodation than me for less money?

 

I would be inclined to agree. Property is tricky because they're not building more land and I mean, everyone is eating rent and mortgage stress in their budgets. It's hardly "VICTIMISE THE POOR" day...

 

Outsourcing isn't inherently bad -- however, the "free market" which this uses doesn't account for ancillary negatives. People focusing solely on "an American job lost" is small-picture.

It also has the following effects, negatively on the government, compounded by each person who has been replaced:

1) Lost taxation on wages.
2) Potentially lost governmental funds depending on whether the person takes governmental assistance, even unemployment, for any period of time.
3) Lost consumer spending.
4 ) Potentially lost corporate taxation (i.e. if an entire subsidiary is closed and moved overseas, etc.)

It also disproportionately affects solely US-domiciled corporations who contract with outsourced resources to replace onshored employees, rather than already-international corporations who can easily move money around the ledgers of holding companies to make the finances work no matter what.

Realistically, I think we'll see increased corporate taxation on outsourcing resources though I'm not certain what that's going to look like. I don't think it'll ultimately stop companies from doing it, but it may placate the US government's deficit so will be seen as "win-win"...

 

You mean the so-called GATCA regime and the like, the whole international tax transparency regimes?

 

In his very first post in this thread GrandAdmiralJello summed it up perfectly and I hate myself for agreeing with him...you know...for presenting a reasonable and logical correction without rhetoric.

 

I wasn't aware that's what GATCA was essentially designed to cover business resources, only personal accounts worth more than $X offshored by US account holders (to eliminate foreign domiciling of funds to avoid taxation). That's something I think we're going to see in reverse as well, most notably in real estate in the high-priced locations where extremely rich people buy real estate and are taxed "peanuts" comparatively to the growth on investment while simultaneously destroying local RE prices since they essentially pay to have an apartment empty. I suspect that will be taxed in short-order.

What I was more talking about was "for every offshored EMPLOYEE utilized by a US company, there would be a tax" type of situation -- I would wager we're not far off from that.

 

Sure, but the point of FATCA was not to close tax loopholes, it was budget repair. It's inconceivably bad policy to declare all US born persons are tax residents of the United States; a diplobrat born there to Spanish parents has to declare her income to the IRS for the rest of her life? Getowdahere.

So yes, when that kind of global tax transparency becomes the norm I agree there'll be a push to try and capture additional tax revenue and it'll be hard to escape it. I mean, look at Google and how it uses Ireland as a base of operations simply to mitigate its tax footprint. There's going to be a drive at some point to wind that back, for sure.

 

E_S, you're correct with regards to everything else, but there's one thing that you're artificially expanding the scope of. FATCA doesn't cover all income. You identified the 1st requirement, which is being a "US Person," which includes the following:

a citizen or resident of the United States,

a domestic partnership​

a domestic corporation​

any estate (other than a foreign estate)​

any trust if a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more United States persons have the authority to control all substantial decisions of the trust.​

​

But the person also has to be a US taxpayer. So, if your diplobrat borne in the US to Spanish parents set up an IRA, trust, or other income producing activity within the US, then yes, they would be subject to the law for the rest of their life. (or as long as they had an income source within the US) And really, the reporting requirement applies to foreign sources. So they would have to have some sort of income connected to the US that is then funneled to a foreign account. But even then, once a year, you just report that income on IRS form 8938.

But if the same diplobrat moves back to Spain and earns all of their income there, or doesn't have any income connected to the US, then they wouldn't be subject to the law just because they are a US citizen. So you can tell that Spanish diplobrat to rest easy.

 

Ummmm... no? Pretty sure I get a 1y amnesty on moving abroad, retaining US citizenship and working for my company in Hong Kong but then after that 1y, I'm responsible for taxes back to the motherland...

 

Yeah, that's correct dp. We have to look for "US indicia" in client applications, ensure appropriate reporting, etc etc.

The US needs a non-resident for tax purpose designation. Really.

 

Eh, not so fast my friends.

Is your company a US one or foreign one? As in, is it a US company with a subsidiary in Hong Kong?

Keep in mind, the hierarchy goes downwards. For example, if you work for IBM (or any corporation based in the US) then your wages would still be subject to FATCA because it's taxable to the US. Your status as a US citizen abroad isn't the controlling one vs the status of the source of your income (which is a US corporation). Anyone who works for a US-based company would be subject to a tax liability back to the IRS. Even if you work for a completely foreign company, you'd have to report your income, but none of it would be taxable. I don't think there is any tax amnesty time period for moving abroad, but that aspect I'm not sure of either. You would get deductions for moving expenses that aren't reimbursed, and for any foreign taxes collected by Hong Kong.

However, now let's say you don't have any taxable income connected to the US. You move to another country and earn all of your income from foreign sources. Then, if you want to keep your citizenship, you might have to report income, but you wouldn't be responsible for any tax, because you have no taxable income that is collect back by the IRS.

E_S's original example was a child born to foreign diplomats. If that child has no income source in the US, then that child may have to account for income under FATCA, if they are concerned with their US citizenship, but they wouldn't be beholden for taxes just because they may be a US citizen for the rest of their life.

EDIT: I think the issue may be that we're saying the same thing, for which I take responsibility for. Looking back at E_S's original post just now, he did say "declare" income to the IRS. Yes, that diplobrat would have to declare income as part of her citizenship, but she wouldn't be paying anything or otherwise be beholden to any taxes.

 

How is that ambiguous?