3M chief warns Obama over business regulation

By Hal Weitzman in Chicago

Published: February 27 2011 19:27 | Last updated: February 27 2011 19:27

The head of one of the US’s biggest industrial groups has launched a scathing attack on Barack Obama’s attempts to repair relations with companies, dubbing him “anti-business”.

Manufacturers could shift production out of the US to Canada or Mexico as a result, warned George Buckley, chief executive and chairman of 3M.

So who demands more taxes from business? The US or other countries? (Go here for a photographic presentation of same.) Forbes.com answers:

But it’s the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us. It only makes sense that multinationals “put costs in high-tax countries and profits in low-tax countries,” says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. “When you add in state taxes, the U.S. has the highest tax burden among industrialized countries,” says Hodge. In contrast, China’s rate is just 25%; Ireland’s is 12.5%.

Corporations are getting smarter, not just about doing more business in low-tax countries, but in moving their more valuable assets there as well. That means setting up overseas subsidiaries, then transferring to them ownership of long-lived, often intangible but highly profitable assets, like patents and software.

Mr Obama and other like-minded Leftists seem to think that it’s a private company’s duty to lose money specifically so the US government can disburse it to pet political projects, more entitlements for cronies, do-nothing welfare types, illegal immigrants who will vote for them, and for themselves, of course. Everyone knows the laws Congress makes for others and, for themselves, exempted, yes?

On the other hand, I have said and will continue to emphasize that with fewer taxes and regulations, corporations are on their own. There should never have been any bailouts for businesses perceived as “too big to fail” (a political phrase if ever there was one). GM and Chrysler should never have been bailed out; GM failed anyway. The money to banks and other financial institutions? Never. They should all have been allowed to fail completely. That is true freedom.

Now look where we are.

Still and all, 3M Chairman Buckley makes some more excellent points:

Mr Buckley, who has run the diversified manufacturer since 2005, said: “There is a sense among companies that this is a difficult place to do business. It is about regulation, taxation, seemingly anti-business policies in Washington, attitudes towards science.”

He added: “Politicians forget that business has choice. We’re not indentured servants and we will do business where it’s good and friendly. If it’s hostile, incrementally, things will slip away. We’ve got a real choice between manufacturing in Canada and Mexico – which tend to be pro-business – or America.”

Precisely. American businesses, simply by dint of being in America, are not and won’t be held hostage under indentured servitude. They have choices. I suspect they truly would prefer to stay right where they are but larger ones have sufficient capital to move, lock, stock and balance sheet.

Further, we have all spoken about illegal immigration repeatedly. Isn’t it about time we give priority to those who actually have something positive to bring to America — like their education or their dollars — such as Canada does? Buckley continues:

The 3M chief also criticised US immigration policy, saying the difficulty of obtaining visas was forcing companies to move research and development overseas. “About 68 per cent of our science PhD candidates are from outside the US,” he said. “Many want to stay here afterwards but we’re not allowed as many visas as we would like.”

“We are now exporting science overseas to China, India, Germany, building labs there. There’s a good strategic reason for it, but we also have no choice – if we can’t get the people here and we’re competing with the people there, we have no choice but to do it locally.”

America’s predominant Urban Thug Environment (honed and polished by America’s young black males) in school makes it, ahem, “unfashionable” and in many instances, unwise to succeed in learning, to even want to learn. That attitude and purposely-defeatist lifestyle has now run rampant through not just the black community but a good portion of the Mexican, Asian and Caucasoid young communities as well. Kids wish to be basketball players, tattooed “celebrities” or nothing at all. What they fail to realize is that, at this point, America is basketball-player’ed and celebrity-player’ed out. The Inn is beyond full and space was limited anyway.

Other countries have been lowering their tax rates, but not America. Continuing, from Forbes.com:

Naturally the Obama administration has proposed doing away with tax deferrals on overseas income. If the plan passes, a U.S. company that pays a 25% tax on profits in China would have to pay an additional 10% income tax to Uncle Sam to bring it up to the 35% corporate rate. “Eliminating deferrals would put U.S. companies on an unlevel playing field,” says the Tax Foundation’s Hodge, “especially if competing with the likes of Germany, which only taxes companies on domestic operations.”

So: let’s kill America’s ability to compete globally. Isn’t it the hallmark cry of the Leftist to “think and act globally”? Apparently, not if it involves business.

What most Americans forget to consider is this:

Would no more tax holiday for GE really end up helping Mr. and Mrs. Taxpayer? Doubtful. “The average Joe should be in favor of lower corporate taxes,” says Hodge, “because ultimately they are paying the corporate income tax. Either as workers, getting lower wages and fewer jobs, or as consumers, paying higher prices, or as retirees, getting lower dividends and earnings on their investments.”

Because:

In the same vein, JPMorgan Chase ( JPM – news – people ) Chief Executive Jamie Dimon has spoken out against an Obama proposal to levy a special tax on banks to recoup bailout costs. “Using tax policy to punish people is a bad idea,” said Dimon. “All businesses tend to pass costs on to customers.”

I redundantly state the obvious: it is not the duty of businesses to lose money so that DC can piss it away for themselves, cronies, and those segments of society perceived to vote Leftist — such as illegal invaders, prisoners, non-producers and parasites.

The hosts, at this point, are truly beginning to wither on the vine.