Software Tariffs and US IT Outsourcing? 670
HeelToe asks: "A while back I worked with someone who thought the US should simply impose tariffs on imported products to adjust their price to equalize foreign labor rates to the US minimum wage. I was laid off and my position moved to Canada last year. Since then, I've thought a lot about his ideas, as well as one of our topics of conversation a while back: Why doesn't the US tax the import of software? It seems to me like they should. It's not a "tangible" product (same reason used to deny my co-workers and me NAFTA and Trade Act benefits), but when someone outsources to another country with cheap labor for any other industry, there are usually import tariffs. Why is software different, and how would this change the climate of US IT jobs leaving for other parts of the world if we did tax software imports? I've done some looking on the web, but can find nothing in the Harmonized Tariff Schedule of the United States. I did find this thread from a few months back on informationweek.com's Career Development Forum, but not much else. What does Slashdot think?"
Depends on the situation (Score:5, Insightful)
Otherwise, it could be similar to the issue of the "Made in America" labels that can be put on any product partially constucted within the United States. So if a widget is manufactured in Mexico, but put together in the US it can still bare the label, exempting it from some tariffs. So for coding and other computer style products, this can be worked around by doing the majority of the work outside the country with the cheaper labor, then wrapping it all up within the borders.
Re:Depends on the situation (Score:5, Funny)
Re:Depends on the situation (Score:4, Interesting)
The entire western economic system is going to implode, just as Japan has done (partly saved by its wildly different culture and huge farming protection rules). The same process - the innovators dilemma - works for countries too. We are inefficient, we are expensive, we lose the layers of industry just as the model says. Soon all that will be viable is lawyers and finance houses, then the whole pile collapses.
Ironically the USA and EU had the power to stop this - they could have imposed taxes on incoming goods. They could have ringfenced that money to go back to workers in those countries, creating ecomic growth,. driving up demand for luxury goods and creating markets, instead they signed GATT and NAFTA and other treaties that drive work to the poorest without rewarding them. When there is no work left in the EU/USA who will buy the cars, the tv sets, the dvd players ?
Re:Depends on the situation (Score:3, Informative)
Application of NAFTA rules to items with foreign content involves breaking the item apart into it's constituents and assigning values to each part based on cost, labor, and country of origin for that part. Then if enough is NAFTA made, no duty (simplified version). So while, Mexico and Canada wouldn't get hit, India, Singapore etc. could potentially be tariffed. Packaging is usually not a significant cost factor
Re:Depends on the situation (Score:5, Interesting)
But all of this is just hearsay.
The world is changing (Score:5, Insightful)
If you run a company that only needs small easily defined utilities to automate tasks and don't need them done immediately, outsourcing works very well.
However, if you run a company that needs to turn on a dime to enter new markets, exploit existing ones, handle complex B2B integration issues or have vague software requirements, outsourcing falls flat. Even if you are dealing with a company 20 miles away, the simple fact that the programmers there don't understand your business leads to design mistakes and missing features that a dedicated well trained programmer that spends his time thinking how to improve your business should have caught.
As businesses face stiffer competition in the world market and the complexity of the software systems they run increases, I believe they will find it harder and harder not to justify hiring local talent they can train to understand their business.
If anything, I believe the US needs to do two things to help slow the departure of development jobs:
First, we need to better educate programmers to make them more rounded. The better they understand the complexities of specific industries, the better they can anticipate the needs of their employeers. A developer should be positioned in a company to understand how it can improve, not be a monkey that hammers out what the business side of the company thinks it wants.
Second, we need to sell the benefits of hiring in-house programmers over outsourcing. Marketing is really something developers aren't particularly good at, but has to change.
Now this won't stop the migration of jobs to foreign countries, but it will assure that it is relegated only to simple grunt work keeping the highest paying skilled work at home.
Bad Idea (Score:5, Insightful)
This tax will do three things:
I'm just starting out in this career field but I can see the writing on the wall, alot of programming is going to go the way of manufactring, overseas.
Re:Bad Idea (Score:3, Insightful)
Re:Bad Idea (Score:2)
So if an infinite number of monkeys on an infinite number of typewriters will eventually bang out the complete works of Shakespeare, what would an infinite number of code monkeys on an infinite number of boxes crank out?
Re:Bad Idea (Score:4, Funny)
Re:Bad Idea (Score:4, Insightful)
The "move up" argument made perfect sense back when blue-collar, unskilled manufacturing jobs were exported. It provided more incentive for people to learn a trade, go back to school, get a college degree, etc. so they could get a better job. But if the college degree-requiring jobs are moving out of the country, the "move up" argument simply doesn't hold any more. There's only two ways to move up; into management (I explained why that won't work above), and into more advanced degrees. Well, a PhD in CS might be interested, but there's not a lot of jobs out there suited for that, except maybe in research. And there's nowhere near enough research jobs out there to support that many programmers.
I'm starting to come to the conclusion that, for some, the answer may be to "move up" (or move out) to a country that has a healthier economy, and a better focus on things that are really important, like education, research, science, technology, etc. instead of how to make the most short-term profit at all costs.
Re:Bad Idea (Score:3, Insightful)
It's your wits, experience, technology exposure, past and present learning appetite, critical mind, well-presented opinions and IT culture that will get you the job.
Well, you don't need all that, but you do definitely need a sane mix of some of them.
Re:Bad Idea (Score:3, Insightful)
And the ability to work for US$5,000 - US$10,000 dollars a year. If you can't do that, skill mixes and experience won't count for much. It's the bottom line that counts.
Re:Bad Idea (Score:4, Interesting)
What's the deal? You spent 4 years in an expensive College that gave you a Bachelor degree and all you care about is your bumper stickers? Darn. ... but I was so wrong.
I thought the American IT guys were mostly people from MIT, Stanford, Berkeley, [INSERT_BIG_NAME_HERE], etc
During the last 2 years, I interviewed close to 30 people for a couple of Software Architect position sin Atlanta. Most people who were remotely qualified were H1 guys from India. The few Americans that were actually good enough on paper went back home wondering what the hell happened during the interview. Shit, I ended up sending them the questions beforehand and they still got surprised by what hit them.
But then, when I look at what is actually taught in some of those overhyped colleges, maybe the only value is in that bumper sticker... It is definitely time to "move up" to more advanced qualifications.
Comment removed (Score:5, Insightful)
Re:Bad Idea (Score:3, Insightful)
I think my best asset is the huge problem solving base I developed (really, learned how to develop) while at university. I went to Virginia Tech, which at the time, had a reasonably known program, but the basic philosophy was to teach us by forcing us to use unix for all our coursework. I had seen it in high school CS classes and knew it was better than butter on bread, but this didn't keep me from experiencing all manners of problems with it. It helped me by showing me I must learn to recog
Re:Bad Idea (Score:4, Insightful)
Re:How? (Score:5, Insightful)
Why? Divine right?
This is what globalisation is all about; well, that and ensuring that the people at the very top of the heap don't lose out in the process.
If you're not competitive (or don't want to compete), drop out of the race. Live your life by your own standards, not someone else's.
Re:Globalism should be done properly (Score:3, Insightful)
We do have a national economy, your dollar is worth the same in New York as it is in Florida.
"
Not true - New York, Utah and South Carolina and California all use the same currency. Look where companies like Novell, RedHat and Caldera started up. It wasn't in Boston or New York. Guess why? "
Thats not the point, in New York you make money in dollars, in California you make money in dollars, everywhere you go your dollars are worth the same, the cost of living might vary but your money is worth the same fo
Re:Bad Idea (Score:3, Insightful)
Re:Bad Idea (Score:2, Interesting)
From economics, we know that both the supplier and consumer bear the costs of a tarriff. The elasticity of the demand curve determine the distribution of these costs.
That being said, im not sure i completely buy into all this economic mumbo-jumbo, especially as I am out of work and am happy to lay the blame on
Re:Bad Idea (Score:5, Insightful)
Tariffs could have negative effects not directly but indirectly. Take sugar for instance. Odd example, but hear me out. Sugar has an import tariff to protect the US sugar manufacturers. It protected the manufacturers but it had a huge indirect effect. Since the sugar prices were cheaper (especially in Canada), all the candy manufacturers moved up to Canada.
Now think software. If software tariffs indeed is feasible and succeed, sure it might protect software manufacturers, but what about those who depend on them? If a software for factories (robots, assembly line etc) is imposed tariffs, where would the factories stand? What about consulting? Tax software? Could see CPA's opening up offices in canada just to avoid the massive software prices...
Rather than protectionism, I think more effort should be put towards innovation. Anyway, that is my 2 cents.
Re:Bad Idea (Score:4, Informative)
Re:Bad Idea (Score:2)
1.)Software Will Cost More"
Bull. Since this fiasco started software prices have remained the same or even went up while labor has been exported. This is a false argument by lobbiest looking for cheap labor. The CEO's pocket the difference.
"2.)The Governemt Will Never Give Up This Tax (In 25 years great software may come from many nations, think about the future)"
This is a good thing since it will protect innovation and American jobs. If a taiwanese company came in and sol
Re:Bad Idea (Score:3, Insightful)
Tarriff Law (Score:4, Insightful)
Re:Tarriff Law (Score:2)
resons we might not have them. (Score:3, Interesting)
So is there an answer, there will be much opposition to tariffs, companies will not want this because it will cut into their bottom line. So are we going to get tariffs, do we want tariffs? Tariffs will raise the price of software (not like the companies do not make a lot of money on software as it is and probably could absorb the cost of tariffs with out raising prices, but they would rather not)
Re:resons we might not have them. (Score:3, Informative)
If it goes up then yes it will be bad for some CEO's and a few consumers if the price actually goes up but we can save our jobs and help our economy.
The idea of wealth trickly down is that if companies make money they in turn hire more people which in turn they buy more products and the cycle increases. Republicans love this
Dumb idea regardless of market, commodity (Score:2, Insightful)
Iraq: It's not about Oil! (Score:5, Funny)
It must be those damn software tarrifs!
Re:Dumb idea regardless of market, commodity (Score:3, Insightful)
Trade Barriers cost US citizens $50 billion/year (Score:3, Informative)
Seems tough to enforce (Score:2)
Re:Seems tough to enforce (Score:2)
Because they can't (Score:2)
Nooooo! (Score:3, Insightful)
I am a soon to be CS grad, and I am scared of the current job market. But if software can be produced better and cheaper elsewhere, oh well. Tariff are just crutch.
Re:Nooooo! (Score:3, Insightful)
Good McDonalds wants you! Please clean the grill and cover for the drive thru window. Thank you.
Ha, you wanted cheaper software right? You got it!
Your too expensive and can not work for minimal wage.
Now how do you feel? Tarrifs are part of standard imports on goods for the last century. When you buy sneakers, they are tarrified, when you buy a foreign car its tarrified. If not then American would look more
Re:Nooooo! (Score:3, Insightful)
It sucks. I'd like to have job doing what I want. But I am not so arrogant to think that my industry should be protected at the detriment of the rest of the country. This same arguement, that we should have tariffs, leads to protectionism. Why should we allow immigration, they'll just take our jobs right? Tariff and other protectionist measures help a few, but do great harm to many.
I'm against it... (Score:4, Funny)
Re: I'm a Canadian! :) (Score:2)
So employers can hire healthier people, not worrying about catastrophic health-insurance bills, which makes everything a bit cheaper to make up here.
If the US wanted to reduce its' corporate costs and make business more cost-competitive, instead
Re:who cares (Score:2)
really? [wired.com] for a country that doesn't care, you sure have a thin skin [www.cbc.ca]
Re:who cares (Score:3, Funny)
Yeah, it's been made pretty clear, especially by your current government. Actually, your government doesn't seem to care what anyone thinks... not Canadians, nor Europeans, nor even Americans.
Well, I don't think my karma's gonna be "Excellent" anymore...
Very bad idea, what about open source? (Score:5, Insightful)
Re:Very bad idea, what about open source? (Score:2)
hmmmm
seems to make open source stronger.
tarif the money that is spent, that is where the problem is. so you pay an indian company 5 dolars an hour + a tarif that brings the cost of developers in line with the national average.
Tariffs (Score:2)
it's kind of ironic (Score:5, Insightful)
Yet, when other countries get their labor costs to be lower than those of the US, then Americans start complaining and want to impose taxes. Well, which is it? If the US can impose tariffs on Indian computer products, is the US willing to have tariffs imposed on US computer products by Europeans, whose labor costs are higher because of better social services?
I think this Onion article [onion.com] points out what really is going on: many Americans just can't deal with the fact that the rest of the world is different and actually likes is that way.
Re:it's kind of ironic (Score:2)
This comment is utterly preposterous on the face of it. The US has the lowest unemployment rates and highest per capita income of any developed country.
Re:it's kind of ironic (Score:4, Interesting)
You make the mistake to think that the stats you are reading are actually the same.
The way they are gathered between the US and Europe for example is completly different.
Unofficial it is said the US has an unemployment rate of 10% and that is roughly the same ballpark the EU has.
Re:it's kind of ironic (Score:4, Informative)
Really? The BBC seems to think they are comparable.
http://news.bbc.co.uk/2/hi/europe/687918.stm
Then we have longer term studies that show that the US has far stronger job creation than Europe, and in fact the unemployment measurements in Europe are artificially low because of training programs, early retirement, workweeks limited to 35 hours, etc.
http://www.epf.org/labor99/intrncontx.htm
Re:it's kind of ironic (Score:3, Interesting)
This comment is utterly preposterous on the face of it. The US has the lowest unemployment rates and highest per capita income of any developed country.
Of course, unemployment only counts those still on unemployment. It neglects those who've been unemployed too long and those who don't qualify for unemployment.
Re:it's kind of ironic (Score:4, Informative)
Lowest unemployment rates? Not true in January 2003, at least, according to this table from the OECD [oecd.org] - the US rate was 5.7%, whereas Austria had 4.1% and Sweden had 5.3%, for example.
Re:it's kind of ironic (Score:4, Insightful)
History demonstrates that this is not the case.
Re:it's kind of ironic (Score:3, Interesting)
And for years, US politicians have made fun of Europeans because their labor costs were "too high".
And how, exactly, is this terribly ironic? The jobs aren't going to Europe; they're going to India, Taiwan, China, and other places that lack the benefits (costs) of the US, and particularly Europe.
If anything, this is proof that the politicians were right: our high labor costs are driving labor demand to other places. Whether the benefits (better standard of living) are worth the costs (more and more out
Taxes and Foreign labor (Score:2)
On top of all that, MS and other big software companies wou
Tough cookies (Score:2)
Taxing software (Score:2)
Taxing software seems impossible. What exactly is importing software? Sending code over FTP? Sending the finished product? If its compiled in the US and developed elsewhere is that still imported?? Maybe taxing the actual labor that would make more sense.
US National Security Considerations (Score:2)
Re:US National Security Considerations (Score:2)
Tangible? (Score:5, Insightful)
Software in an intangible form is basically just an idea. Can we tax ideas now? How can you regulate its importation to begin with if it doesn't exist in any physical way? Are we going to prohibit foreigners from coming into the country on vacation now, lest they write a piece of code, and in effect, import software?
What about all the software that hasn't been written yet? Maybe we should start taxing foreigners on the basis of software they might potentially create in the future, since the software really exists in his mind, just waiting to be written down...
Re:Tangible? (Score:3, Insightful)
If the only way I can seem productive enough to warrant hiring/buying from is by artificially inflating the prices of others I'm in the wrong business, plain and simple.
Lies, Damn Lies, And... (Score:5, Insightful)
First, as someone who works a lot in both the USA and Canada, I can guarantee you that living costs in Canada are, on average, HIGHER than the USA. If your job was moved to Montana (which has lower living costs than where you are now) would you be asking Montana for import tariffs? Of course not; so please, drop this argument.
Second, I see a lot of Slashdot posts discussing the movement of I.T. jobs to "cheaper" locales. A lot of the arguments made against this move are the same arguments that were lodged against Japanese auto companies in the 1970's. North American IT workers may be in denial now, but the offshore trend will continue to deteriorate the IT job markets of both the USA and Canada.
So what is the solution? Just as the auto-workers realized in the 1970's, the successful worker will be one who not only performs menial tasks (i.e. programming) well, but also adds significant value to their position. For example, if you are a good communicator AND understand technology you will have no problem finding a job. If you prefer to lock yourself in the back room and code (and complain to Slashdot) then you are going to be in for some tough times. Keep in mind that times now, on average, are good. Use this time to retrain and expand your skillset, not reading up on arcane NAFTA regulations.
Re:Lies, Damn Lies, And... (Score:2)
So here's the question - the American auto industry was crippled in the 70s and took years to recover. It's still pitifully weak compared the Japanese companies. So how does the US IT industry avoid this, remembering in particular that in the auto industry, there were only a few big auto manufacturers, whereas IT has many more players, and the players are part of the problem since they ca
Re:Lies, Damn Lies, And... (Score:5, Insightful)
Similarly, if a bunch of people Someplace Else can write the same software cheaper than Americans can, then good for them! They deserve to get that software writing business.
I've seen a lot of whining about standards or costs of living, and clamouring for tarriffs, but why exactly is it that it's okay for US workers to earn vastly more than third world workers for doing essentially the same job? Why should a US worker have some divine right to be protected by tarriffs against his more economically efficient competitors in foreign lands?
Let the free market do its thing.
So you want worse software as long as its US made? (Score:2)
Most Software is Developed "Internally" (Score:2)
It would be "tricky" to manage what a large multi-national does for offshore programming.
Global Minimum Wage (Score:2)
What you didn't mention: (Score:5, Interesting)
So really, Canada should be charging a tarrif on that software because they lost that job to the states for 4-5 years...
In other words, "Bugger you jack, I'm all right." (Score:2)
> the US should simply impose tariffs on imported
> products to adjust their price to equalize
> foreign labor rates to the US minimum wage.
Better yet, outlaw all imports. I'm sure that would create lots of jobs.
Trade is a positive-sum game.
Four problems with this. (Score:3, Insightful)
Stupid (Score:2)
Jason
ProfQuotes [profquotes.com]
Sure, we need a recession! (Score:3, Interesting)
ttyl
Farrell
Its been tried before and it doesn't work (Score:5, Insightful)
The UK tried this when other countries semiconductor capabilities exceeded their own - tariffs were impose on imported components. It was meant to protect the UK computer industry - but it backfired badly. Unable to compete in the manufacture of ICs, UK companies couldn't even import components and produce full systems competitively. The policy led to the death of systems manufacturing without benefitting the component producers.
The same thing happened to the UK film industry. In order to fight against films produced in Hollywood, a law was passed requiring a certain percentage of all films to be produced in the UK. Since the general public wanted Hollywood films, the only way to comply was to show supporting features produced in the UK. Since this was more profitable than producing feature films, the UK film industry ended up producing supporting features about candlemaking in Birmingham. So it died. We are now seeing some recovery, but only after at least two decades of decline.
As has been seen in the automotive industry, protection of national producers in this manner only leeds to apathy within the domestic industry. Protected from outside innovation and competition there is no reason to improve, instead the industry will settle into a cosy cabal with domestic producers. When, eventually, the import duty is removed the existing industries are far behind their foreign competitors. This is detrimental not only to the industry long-term but also to the domestic consumer.
Eventually, for the reasons outlined above, domestic producers will not be able to export - for two reasons. Lack of competition will lead to an atrophying of the state-of-the-art within the country and hence be behind other counties producers that are open to a free market. Also profit from export will be much lower than domestically. These factors will produce an inward facing industry which does nothing to help the balance of trade.
Lastly, those countries who have tariffs levied against them, may retaliate with equivalent tariffs or legislation against the import of other goods and services from the tariff imposing country which will hurt the countries export marketing and thier domestic industry as a whole.
For better or worse (and I believe better) we all operate in a global market. This drives competition and innovation and in the longer term will bring benefit to all. Protectionism only serves to kill those it seeks to protect.
Better for Micro$oft... (Score:2)
that is until you want a Linux distro made outside the US like say SUSE...
What we _do_ need is a control on our US population other than corporations and the government that _teach_ people rather than prefer them stupid. The jobs aren't just going away because of money. Some of them, no flame intended, are going aways because the IT market is glutted with a lot of paper people that never are up to snuff. The good ones get drowned or hang onto small lifeboats to survive while t
A bad idea for so many reasons... (Score:5, Insightful)
2. Racism. Why is it that people have so much trouble with the idea of competing with poor people for work? Do you think they aren't hungry enough already? Does the idea of them actually developing some sort of economy disturb you? After all they have to compete with cheap mass produced products from industrialized nations, and massively subsidised food. Why shouldn't we have to compete with them for work?
3. Self-interest. Why the hell would any country want to encourage their best and brightest to waste their talent doing work that could be done for a fraction of the price by cheap labor in other countries? For that matter why would you want to waste your life doing something that is not economically productive? Find something worthwhile to do with you life, instead of trying to strong-arm your customers into paying artificially inflated prices for skills that are not needed.
4. Freedom. It isn't just good for software. When ever you see someone who is trying to shut out the competition you can be pretty sure he is trying to get a free ride by screwing everyone else.
You don't want free software? (Score:3, Interesting)
Because it's bits and bytes, and can be replicated infinitely. So a programmer makes a program in 40 hours, and it's taxed forever, even if the programmer isn't continuing to work on it.
and how would this change...if we did tax software imports?
It would legitimize software as a 'thing', which has the same copyright, property, IP, patent, etc protections as things that exist physically and can't be duplicated for free.
If software is ever to be free, programmers need to be free. For programmers to be free, we must invent real jobs that pay well that a real programmer can do for only a few hours a day. Then it won't matter if your job is shipped out, since your job simply won't exist anymore.
Oh, wait, software will never be free. Sorry, guess you're screwed...
-Adam
Yeah, this will work... (Score:2)
I think that you are being too accomodating. (Score:2)
How to maintain a wage differential (Score:5, Insightful)
A much better approach is to find a way to justify the higher wages of American works. In order to not get outsourced, find a way to prove you're worth the money. Is that sheer code productivity, product insights, or what? There needs to be an angle. If you look at laptop manufacture, while most of the work is done around the South China Sea, product management, marketing, sales, etcetera all happens in the US. And while it sucks to be a laid off engineer, it certainly rocks to be able to buy an excellent laptop for half would an equivalent product would have cost a few years ago.
The thing about free trade is that its benefits are diffusely spread, but those it hurts are highly concentrated. So, even though steel tariffs cost more American jobs than they save, the steel industries and unions are more concentrated and vocal than the broader steel consumer industries, which is everyone from car manufacturers to can makers to appliance builders, or whatever. Higher steel costs might have saved a job in Pennsylvania, but they probably cost twice that many jobs in lots of other places. People were laid off from car dealerships because of them, even if the person laid off didn't know that was the root cause.
I've worked with several engineering projects where components were outsourced to India. The Indian engineers were are talented and motivated, and wrote good code. And, honestly, I can't say they need the money any less than "native" programmers. Our long term national interest is certainly aligned with India developming a modern, integrated economy! And I'm happy to be able to pay less for software, or buy packages that otherwise wouldn't have been written, than if all software had to be authored in the USA.
Re:How to maintain a wage differential (Score:3, Insightful)
Dell needs to stop lying. (Score:3, Informative)
It makes me sick everytime I see that Dell Intern "Who turned out the lights in tech support?" commercial knowing that what they portray on TV doesn't resemble reality at all.
Dell cannot draw me into it's delusion of an american company anymore. I still love their service contracts though
Taxing ousourced labor (Score:3, Insightful)
The same for production of goods, like computers, TVs, cars, clothes, etc... but there should be a clause that says that the burden must be absorbed by the corporation, and not passed onto the consumers.
Conversely, companies who produce goods in the USA using US labor and US parts should be given tax breaks.
Our problem is that since the 80s we've moved out of being a "production-based economy" - and we've become a "service-based economy"... and it's cheaper for US corporations to exploit workers overseas to produce our goods rather than pay US workers an honest wage. Now that most of our goods are made overseas, we're moving our service-oriented jobs there, too.
Notice that the "american dream of being middle class" is now pretty much a fantasy. (one parent works, the other stays home and raises kids, 3 bedroom home 2 car garage - nice suburban neighborhood). Now it takes 2 incomes to make ends meet in this scenario - and barely...
fairness (Score:2, Insightful)
This is a question that anti-globalization people need to ask themselves. If somebody in mexico can turn screws for $1.24 an hour, it makes sense that you would use that labor source before using a $38 an hour source in Michigan. That $38 figure only because so obnoxiously high because of some tortured sens
What goes around comes around (Score:2)
Thos Evil Canadians... (Score:2, Insightful)
....are already subject to enough punitive measures by Americans who don't want competition, even in spite of NAFTA. Ask a BC logger or a Saskatchewan wheat farmer.
Why is an American programmer any more entitled to a job than one in Calgary? It's not like you can claim that the Canadian is working for ten dollars a week like one in India.
This is typical of the American attitude towards international trade: other countries exist to serve as markets, not sources of competition. Buying things from Americans
Impossible to enforce and assess taxable value (Score:3, Informative)
Then even if they detect it, how do they decide a value on which the tax will be applied? A piece of software can cost anywhere from $0 to a over a billion dollars. The IRS will always end up undervaluing or overvaluing it.
Some countries are actually retarded enough to impose import duties on software; anything downloaded off the Internet gets in duty-free because they can't catch it, while anything physically brought in on CDs or diskettes gets taxed based on a value that the customs officer pulls out of their ass. I recently sent my brother 2 CDs with Linux and other free software because broadband is not widely available in his country, and they slapped on US$50 duty, ignoring the $2 value I put on the customs form (for the cost of the media) and the glaring FREE SOFTWARE label on the CDs.
Then there is the consideration that software can be duplicated infinitely. Someone can import a single copy of a software package that is worth $200 by itself, then get it installed on 10,000 machines.
And how would you assess the foreign value component of software that was developed by teams in the US collobarating with overseas developers?
tangible, from dictionary.com (Score:3, Insightful)
adj.
1.
1. Discernible by the touch; palpable: a tangible roughness of the skin.
2. Possible to touch.
3. Possible to be treated as fact; real or concrete: tangible evidence.
2. Possible to understand or realize: the tangible benefits of the plan.
3. Law. That can be valued monetarily: tangible property.
some people don't seem to know the context of tangible in this instance.
I think the poster wants to tarrif the money paid to outside vendors.
If it is done as a percentage, then free software would be free. however if you paid someone to write software, free or otherwise, that would get tarrifed
Tit for Tat (Score:2, Insightful)
Tarrifs will never be placed on software (Score:3, Insightful)
Can you really picture the American government taking an altruistic stand to preserve our domestic software developers?
I thought not.
Our government will sell out cheap (sorry, have sold out cheap) to the big indistry consortia that stands to benefit from that particular kind of cheap labor. This is old news.
Taking the long view on "cheap foreign competition" over the years, the lesson of history is that labor always loses.
Fans of capitalism will announce that even though you're out of work, the economy benefits because as goods (and now services) are cheaper, everyone (businesses and individuals) can afford more, and be more productive, etc. Theoretically you'll get another job doing something else and progress marches on.
Globalization as a whole is tricky, though... simplistic thinking like this doesn't take into account the vagaries of currency markets and national conditions. I'm not qualified to really get into currency and other macroeconomic games, but as for the other... overseas software shops may never be as bad as it is in the garment industry (though I won't bet on it), but generally speaking "free trade" is often just code for "legal loophole" - it allows one to shop around for a "friendly" environment (child labor, inhuman work weeks, totalitarian security, exploitive wages and contracts, "flexible" legal system, no environmental regulations, and even the occasional ability to "disappear troublemakers without too much fuss"). They could never get away with this stuff in America - we have (or had) decent public education and functioning democracy. So they shield themselves in the complexities of trade to do it elsewhere.
Ultimately I think favorably of globalization only as long as there are enormous punitive tarrifs to correct for legal imbalances, and a very healthy reexamination of global economic (and especially currency) policy to insure that games aren't being played. But I am always learning more about the topic and I would love to hear other opinions about this.
Nope! (Score:3, Insightful)
The reason I can do this is because the first time I went to Romania, the exchange rate was 17000 Romanian Lei to $1. The second time I went it was 19000 Romanian Lei to $1. In a word, the exchange rate favors me.
SO... obviously what you need to do is devalue the dollar against the world economy to the point where a dollar is roughly in line with the Romanian Lei. And the only way to do that is to have rampant inflation. The easiest way to do THAT is to get the Fed to print more money. Lots more money. While this WILL cause a massive devaluation of your savings, if you are like most Americans, you won't have a lot of savings to devalue in any event.
Once we've persuaded the Fed to print a few extra trillion dollars a year, we can start working on repealing some of those pesky workplace safetey laws. My company just had to spend a lot of money to remove some asbestos and really, was that asbetos really bothering ANYONE? I submit that it was NOT! If it weren't for some goddamn hippie worried that someone might get cancer, that stuff could have stayed up there forever.
Once our population becomes one of the poorest and least safe workforces in the world, there should be no further problem with overseas IT outsourcing.
Tariffs are a bad idea (Score:5, Insightful)
Let's say the U.S can produce a widget for $2 and Third-World country X can produce it for $1. Any reasonable business person (and many consumers) would save 50% and buy the $1 widget. Of course, the American Widget Workers will scream bloody murder, and ask for some government protection.
So the U.S. puts a 100% tariff on widgets, so that the U.S. companies can compete. Great for the widget makers, but everyone that uses widgets is paying a dollar more than they would have to. Any product that uses widgets is that much more expensive. Companies that use widget-based products need more money for inventory and can spend less on salaries, so there are less total jobs in the economy. The only people that benefit are the American Widget Workers. And even they don't benefit as much as they think they do - the tariff works it's way invisibly through the economy, making the goods they buy more expensive than they would normally be. Plus, the third-world manufacturer can still sell widgets to other countries, whose products will have an advantage over the U.S., since they'll be using half-price widgets! There goes the exchange rate on a dollar...
Now replace widgets with software, and it gets a whole lot worse. What business doesn't use software? What sector of the economy wouldn't be helped by having to pay much less for software?
If job security really bothers you, there are some software jobs that can't be outsourced. Most U.S. military projects go to American companies, for reasons of security. It's even better if you can get security clearance.
It's not easy to be a worker in a fast-paced economy, where the skill sets are changing and job security is non-existant. But it's a lot better than the alternative, a broken economy where the government protects the jobs of a few privilidged workers at the expense of everyone else.
I am opposed to tariffs (Score:3, Funny)
We need to do more business with countries where child labor is encouraged, and where prisoners provide more skilled work for free. The United States needs to take the lead in encouraging nations to avoid imposing socialist employee safety laws on employers.
America! Of corporations! By corporations! For corporations!
Sincerely,
Fascistus Maximus
CEO, Omni Consumer Products
The usual reason (Score:5, Insightful)
The first solution is the beloved H1 (amongst others) Visa. This was designed to reduce teh so called "tech labor shortage" (read: high salary) of the high-tech sector. When this failed to increase corporate margins, companies were forced to make prfound sectors about the bold new global economy (read: outsource work to places labor is cheap). I have watched a number of projects get outsourced to the 3rd world for exactly this reason.
So when I think back to those years when mom was telling me that all I needed was a good education, work hard in school, etc. I get sad. I should have tried to be a football player like those "losers" I figured would work a check out counter. I was right of course, they are working the check out counter, but the business world won't stop until my salary is reduced to the level of a check out clerk, but those football players sure got laid more.
hmph.
Software is no different; wrong problem. (Score:3, Insightful)
By imposing tariffs on products made in poorer countries, you are essentially forcing them to lower their prices even more (to stay competitive). Result? USA workers lose (because tariffs are never enough to really offset the lower initial cost), foreign workers lose (because tariffs are never low enough to let them really raise their standard of living), US state wins. In a country with good welfare / unemployment funds / etc., this could be a good thing. In the US system it's not. The money ends up being spent on obscure government and defence projects, and the programmers remain unemployed and broke.
Capitalism can be a reasonably fair system if all markets are open. Tariffs screw everything up, for everyone. If there are no tariffs, the tendency is for all markets to become level. A poorer country may have an initial advantage (lower wages), but as it becomes richer, its workers will want higher wages, until it has reached the same level as richer, more developed countries, which means workers in those richer countries become an economically viable option again.
And everyone lives happily ever after. As it is, you have a lot of unemployment at home, a lot of people that hardly make enough to eat abroad, and a cowboy that spends hundreds of bilions of dollars in toys that go "boom" on other people's homes.
RMN
~~~
What does /. think? (Score:3, Insightful)
No, don't just take the jobs oversees, take the companies that use foreign labor overseas as well. Look, there's no solution to the 'problem' of foreign labor. Adapt, overcome, and continue to innovate and you'll be fine.
If programming really is so easy that anyone can do it, why should you get a premium for being an American?
Goose, meet gander... (Score:3, Insightful)
Because if they did, then other countries might do a similar thing and start taxing the import of software from the US. As the US is the largest producer of commercial software, and is in an economic hole, this would hurt the US more than it would any other country.
It might have worked a few years ago, before there were viable options to Windows and (low- to mid-range) Solaris and HP systems, but now Linux and BSD make it viable to run companies without US-produced commercial software.
shift the problem around (Score:3, Insightful)
If that's the only change made, then those companies would open IT shops here and staff them with imported workers on H1B visas. If the desired outcome is to employ more native born US citizens, imposing a tariff isn't sufficient by itself.
Implementation/Technical Challenges Staggering (Score:5, Insightful)
Re:Tax IMPORTS of software? (Score:4, Insightful)
Re:R&D Tax Credits (Score:2)
Look, the only 'software' your idea would affect would be imported games. Do you really want to pay $100.00 for Mario Brothers?