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Re: Outsourcing issue flares up at Stanford chip conference

From: Tim Jowers
Subject: Re: Outsourcing issue flares up at Stanford chip conference
Date: 8 Sep 2004 14:04:05 -0700 (Kamal R. Prasad) wrote in message 
> (Tim Jowers) wrote in message 
> news:<>...
> > ajv2003 <> wrote in message 
> > news:<>...
> > > threeseas wrote:
> > > 
> > > > ziliath wrote:
> > > >
> > > > if you have a problem with that, then its clear what kind of person 
> > > > you really are.
> > > 
> > > Oh, t'is so nice to make your home in Disneyland.
> > > 
> > > --
> > 
> > Tax and Withholding
> > 
> > USA worker: $50k
> At 30-35% tax rate, you need an income of $150,000 p.a to pay income
> tax totalling $50,000. Why on earth are you complaining with that kind
> of salary?
> > China worker: $2.5K
> > India worker: $3K
> > 
> Tax is levied as a percentage of income. And it turns out that even if
> we wearn 1/5th US incomes -we pay the same tax rate as in US (approx
> 30-35%).

Kamal, I replied to you on this elsewhere but here's the quickie.
AMOUNT is meaningFUL. Rate has less usefulness. The Amount is what a
company calculates into its decision to Offshore.

Say you make $10k. Then you pay $5k tax. You take home $5k.
Now say I make $50k. And I pay $30k tax. Now I take home $20k.

  The tax and witholding load is about 60% but that's probably quite
conservative. A business will surely go to you since you cost 1/5th.
Of course, with $5k house property tax and $1k car property tax then I
really have $14k to spend. With the cost of goods and services being
much higher in the USA, probably living in India gives a better
quality of life.
  The USA is caught in a trap - either cut spending and taxes or cut
job loss and pay decreases. So far, the US people are being squeezed
in this trap. What they are doing is foregoing health insurance (1.4M
more this year) etc. This is why the dem.s are pushing for government
funded health insurance. The health insurance companies see the
writing on the wall. Increased poverty amongst Americans spells a
slowing economy. Records profits with absolutely no jobs recovery and
a steady fall in income for those employed may mean corporate profits
have topped.
  BTW, I estimate the cost of a worker in India to be twice that of
the international lowest rate. India has a great headstart but may
soon find itself in the same situation as America. People in Nigeria
can answer the phone even cheaper! At some point, the savings have to
be passed on through lower product prices and lower taxes. In the case
of Autos and Housing, these have doubled relative to salaries in the
last 50 years in the USA. Offshoring brings profits but not better
product costs. Innovation has not improved the quality of life of the
average person as much as it could.

Thanks Kamal,

> regards
> -kamal
> > Jobs gone. Pay rates gone. Tax revenues gone.
> > 
> > Tax and spend government fails. Smart US citizens see the writing on the 
> > wall. 
> > 
> > TimJowers

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