Moparman wrote: In reply to alfadriver: The tax breaks are repaid. They are repaid by workers now earning better wages and paying more taxes. Tax cuts often result in higher tax revenues and tax increases often result in lower tax revenues. Ever hear of the Laffer curve?
Thank you for proving my point. The corporation gets to run off with their tax break, and the tax cost is left with the workers.
They were going to build a plant somewhere, the only reason tax breaks are given is to entice companies to set up shop, and hope that the income tax makes up for what was given up.
And the laffer curve should be renamed the laugher curve. It's a joke of a policy, and has not exactly worked over the past 30 years... IMHO.
BTW, for those of you who are convinced that the American auto makers have just obnoxious build costs vs. toyota, you may want to check some basic finance info that is easily found on Yahoo finance:
In 2007, can we say that GM made barely more vehicles than Toyota did? It was quite close, but GM did end up winning. Based on that- Toyota's 2007/08 fiscal report has them with $262B of revenue selling all of thier product. However, it cost $215B to make that, based on Cost of Revenue statement. GM, OTOH, had revenues of $181B vs. cost of revenue of $169B.
So, somehow, making just under the same amount of cars, Toyota spent $56B MORE than GM to make those cars. That's just OVER $1000 more per car made. And you can't put that all on materials....
We argue that GM isn't all that efficicent, but they spend less money making more cars than Toyota. Hmm.
A different way to look at it, as a consumer, you are being duped into paying more for a car from Toyota than GM, since they have revenues that are $80B more than GM... Interesting.
BTW, I'm not arguing against the tax breaks that companies get, but if you are willing to give a break to a forgien company, shouldn't you offer loans that will be paid back to companies where the profits stay home? Oh, and the question of Toyota profits- they do go to Japan- since the largest shareholder of Toyota is a Japanese bank. Or did you not hear that they suspended the plant build in Mississippi?
And IF GM made $10B in profit, this board would be all over them much like Exxon/Mobile, but Toyota makes $10B in profits, much of it coming from the US. No big deal. Stunning.
Anyway, I'm going to try to enjoy my Christmas break, and not read this thread anymore. Too many of you hate American industry, and worship American Wall Street. Which is backwards of how it should be, in terms of actual wealth growth for a country.
Merry Christmas, and Happy New year, all.
Eric
