Posts Tagged ‘Electron’

How high US tax rates are causing companies to flee the country

by John Lott on Sunday, October 20th, 2013

This is article 284 of 307 in the topic Taxation/IRS
There is a growing trend of US companies buying foreign companies and reincorporating overseas so a to reduce their tax burden.

The recent merger of California chip maker Applied Materials and Japanese company Tokyo Electron saved a lot of money by reincorporating in the Netherlands. From the New York Times:

. . . The merged company will save millions of dollars a year by moving — not to one side of the Pacific or the other, but by reincorporating in the Netherlands.

When Applied Materials announced its deal for Tokyo Electron, it said that its effective tax rate would drop to 17 percent from 22 percent as a result. For a company that had nearly $2 billion in profit in 2011, that amounts to savings of about $100 million a year.

Last year, the Eaton Corporation, a power management company from Cleveland, acquired Cooper Industries, based in Ireland, for $13 billion, and reincorporated there. The company expects to save $160 million a year as a result of the move.

In July, Omnicom, the large New York advertising group, agreed to merge with Publicis Groupe, its French rival, in a $35 billion deal. The new company will be based in the Netherlands, resulting in savings of about $80 million a year.

Also in July, Perrigo, a pharmaceutical company from Allegan, Mich., said it would acquire Elan, an Irish drug company, for $6.7 billion. Perrigo will also reincorporate in Ireland, bringing its effective tax rate to 17 percent from 30 percent, and saving the company an estimated $150 million a year, much of it in taxes.

Ireland’s 12.5 percent corporate tax rate is a big draw for some companies. Earlier in the year, Actavis, based in Parsippany, N.J., bought Warner Chilcott, a drug maker with headquarters in Dublin, and said it would reincorporate in Ireland, leading to an estimated $150 million in savings over two years.

“These companies are doing the math and seeing they can save a couple hundred million dollars by doing this,” said Martin A. Sullivan, chief economist at Tax Analysts, a nonprofit group that publishes analysis about global taxes.

But the small fortunes saved by inverted companies amounts to billions in revenue not collected by Washington. . . .

The article has other examples:

Tyco went to Bermuda in 1997 to lower its tax bill. A year later, Fruit of the Loom moved to the Cayman Islands. And in 2001, Ingersoll-Rand reincorporated in Bermuda. . . .

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The Obama Car: Unaffordable, Unreliable And Ultimately Dirty

by John Myers on Wednesday, January 9th, 2013

This is article 215 of 268 in the topic energy
The Obama Car: Unaffordable, Unreliable And Ultimately Dirty

UPI FILE

Four more years with Barack Obama as our President, and we are likely to see many green schemes whose time has not come. Who can doubt that the idiocy of the electric car is just coming into fruition? It will mark only more than a century of engineering on a project that shows little spark and even less hope.

Never fear, electric lovers; Obama has chipped in $5 billion in taxpayer money behind his goal of having 1 million electric cars on U.S. roads by 2015.

Never mind that GOP Presidential Nominee Mitt Romney said it was money wasted on “losers.” It is such a feel-good idea that people couldn’t help but embrace it. Then again, people have never been all that smart when it comes to electric cars.

When I moved to Spokane, Wash., in 1981 with my new wife and our baby I still had the last remnant of my bachelorhood. It was my 1977 Pontiac Firebird Trans Am, fire-engine red with a screaming chicken on the hood that covered the 400-cubic-inch engine. It also had a shaker hood that rattled when the V-8 was just idling noisily as the exhaust moved through the Hollywood mufflers.

Because it was bought in Canada, it also had a block heater on the engine. A block heater is nothing more than a coil that you plug in to an electric socket at night to keep the engine warm so a car will start during subzero-temperature winter nights in Canada.

A middle-aged man in a nice suit saw my muscle car idling at a stop sign in Spokane and noticed the electric plug that came out from the front to power the small electric heater.

“Is that one of them new electric cars?”

I explained it wasn’t and gave it some gas to prove it when the light turned green. Yet the truth was that what I was driving was much more practical than any electric car built during that era.

I know this because my dad — an oil man, of all things — was pretty sure that gasoline costs were going to soar. In the late 1970s, he almost bought a pure electric car from American Motors Corporation: the Electron. The car was extremely expensive. As I recall, it cost more than $20,000, which is $60,000 in today’s dollars. Worst of all, round trip from where my dad lived to his office in downtown Spokane was 30 miles. The extended range on the Electron was about 30 miles. My dad didn’t have to be a genius to know that he would have to push his car home some nights.

More than four decades later, the public is still a long way from embracing the electric car, despite how many tax credits Obama throws at it. Electric-vehicle sales since 2011 totaled fewer than 50,000 through last fall, only 5 percent of Obama’s target.

Bloomberg reported: “The reality is: that business model isn’t there yet,” said Brett Smith, co-director of manufacturing, engineering and technology at the Center for Automotive Research in Ann Arbor, Michigan. “It isn’t there yet for volume. It isn’t there yet for reaching the mass consumer.

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The Great Internet Blackout

by Daniel Greenfield on Monday, January 23rd, 2012

This is article 22 of 45 in the topic Cyber space

“This is our world now… the world of the electron and the switch, the beauty of the baud.” For people who grew up at a certain time with a thick glowing monitor casting light on their faces these were the closing words of their own Declaration of Independence. For those people the internet was not a layout of graphics and flash videos blaring from every website, but amalgams of text. The internet before the internet was an elitist place, like Linux, it was part puzzle and part love of taking intangible things apart and putting them back together again.

Like most revolutionaries they were doomed to be made irrelevant by the consequences of the forces that they had set in motion. The curiosity that was their code of honor has been overtaken by the world that they helped open up. And that world is an amazing place.

Freedom of information is no longer an idealistic slogan, it’s a commonplace reality. So commonplace that it’s hardly worth mentioning. People once fought and died to protect libraries. Now you can take every single library within a hundred miles of where you live, whether it’s a metropolis or a small town, and dangle it from the end of your keychain as a flash drive. Books, articles, vast troves of information, even classified diplomatic cables. Everything is available.

While the back ends of the system have become more complex, the end user experience has become trivially simple. With the iPad and the Kindle Fire, and Android and Windows 8 spreading the experience across generic tablets, the user experience comes down to touching the screen of a locked down system which is actually a disguised storefront to sell the user content through a carefully controlled, but fun to use environment. That is an overstatement, but it’s also the trend. It has been a long journey, but we finally have the technology that movies told us to expect wrapped in a simple package without any of the depth or complexity. Without most of the freedom that was at the core of how the technology got started.

The economics of the internet are based around it as a vehicle for the delivery of goods and services. That transformation is slowly destroying American retail, it is doing so at a snail’s place as big box retailers struggle to adapt, but the shopping mall and the big box store are still dinosaurs and their day is swiftly coming. Retailers who sold anything that can be digitized and delivered over the internet are already gone. Music stories, video rental places and now bookstores are vanishing into the past. An era when we get many of our goods out of CAD/CAM printers is not entirely inconceivable.

Virgin, Blockbuster and Borders have been sucked into the vortex as the middlemen in the marketplace that the marketplace no longer needed. The megacorporations which actually produce the songs, movies and books have been making their last stand since the nineties and their last stand invariably involves lawyers and lobbyists, rather than intelligently adapting to the marketplace. It is hard to feel sorry for these massive behemoths stomping and roaring about, bellowing about thievery everywhere.

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