Some conversation and a post by Libertarian Republican as well as news about Sweden trying to pass a law to reduce CEO pay got me thinking (at 3am in the morning, aaargh!). I pointed out to Mark that when a corporation is taxed more… in order to stay competitive, they a) either raise the cost of what they sell to soak up the rising taxes against them, or b) cut fat (jobs, outsource, etc), or c) both.

The conversation focused around medical giant, Stryker, who has stated that due to the 2.3% medical device tax it will be forced to lay people off. In fact, the company has already tried to streamline its operations over the past few years in preperation for it:

….Executives for Stryker have placed the blame squarely on the coming tax ever since it gained more steam in Washington.

“Here we are, one of the greatest industries in the country, and we’re staring down on Jan. 1, 2013 and the addition of a 2.3 percent excise tax, while meanwhile on the other side all the discussion in Washington is about creating jobs,” Stryker President and CEO Stephen McMillian said during a national conference of medical device manufacturers in Washington, D.C. last September.

Positions within the company were eliminated altogether after the announcement and have since contracted out many of their current roster of employees to keep costs down, an employee with Stryker, who spoke to FoxNews.com under the condition of anonymity, said.

“They really trimmed the fat with the last layoffs in 2009 and the year after which is probably why we are finally on budget for the first time since 1999,” the employee added…. (Fox)

But in our conversation Mark said the following:

Sean, there are several other options you are ignoring that a corp has to manage increased expenses like taxes. This is what they call a False Dilemma; they could innovate, reduce CEO pay, etc. c) reduce profits and make less money for shareholders. Why didn’t you think of that? Are corporate profits sacred to you Sean?

To which I simply respond:

So, Mark, you are saying that someone you know who owns a business (I know many) will choose your option c? Please, ask a friend of yours who owns a business… especially shareholders who are mainly people with investment packages who have worked hard their whole lives and are looking forward to retiring or are retired (e.g., the older folk of our nation — my wife for instance has a 401K plan that invests partly in stock) if they would lower profits for themselves and their investors and shareholders (if a small business, the nest-egg they were or are planning on leaving their children and grandchildren). Why would they want to be in business, to be a great person? Profit motivates and allows the market (people) to choose what they want. If you have a centrally planned choice you end up with warehouses full of useless gadgets, like in the USSR.

“Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. Their very kindness stings with intolerable insult. To be ‘cured’ against one’s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.” ~ C. S. Lewis

Then a day or two after I posted the above, I read from Libertarian Republican (LR) a small piece about Sweden passing a law so intrusive that it will stymy and business sense left in that country. Here is part of the story:

 

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The left has discovered that popular initiative can be used to advance some of their more wacky ideas. This November, they will vote on the so-called “1-to-12” initiative and at later date, not yet determined, on the so-called “basic income” initiative. Here in the United States, a comparable wackiness is initiatives to raise the minimum wage. 

On November 27, the Swiss will vote on an initiative to limit the compensation of any employee to twelve times the compensation of the lowest paid worker for the company. The argument is either that corporate executives aren’t worth what they’re paid or that it’s not fair. As to why corporate executives are singled out for this treatment, I don’t know. As compared to the elite performers in the entertainment industry and professional athletes, corporate executives are paid rather modestly. Here are some representative figures: Median average salaries of selected corporate executives in the U.S.:

⚑ Chief Executive Officer – $754,972 

⚑ Chief Operating Officer – $433,325 

⚑ Chief Financial Officer – $307,129 from Salary.com

Average salaries of major league sports players:

⚑ National Basketball Association – $5.15 million 

⚑ Major League Baseball – $3.31 million 

⚑ National Hockey League – $2.4 million 

⚑ National Football League – $1.9 million from Yahoo Sports

Without knowing the fine print of the Swiss proposal, it would seem to me rather easy to work around a 12-to-1 rule. Outsource work both at the top and the bottom. A financial institution would, for example, contract for janitorial services; and also would relocate its global headquarters to a bank haven, leaving only mezzanine-level managers in Switzerland. The funny thing about such a consequence (corporate headquarters moving out of Switzerland) is that Switzerland became wealthy being a bank haven. If the 12-to-1 initiative isn’t wacky enough, another initiative has just been approved (although a date has not yet been set). It is to guarantee every adult citizen and legal resident of the country an unconditional income of $33,600 per year.

…read more…

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LR also notes that — supporting my past few days of listening to people calling into radio talk shows saying under the exchanges their out of pocket AND premium costs are up via “Covered California” — even those who do not support Republicans are coming to our side after seeing that their hard-earned money is being taken at even a higher percentage. Which, I think, officially will put many in California firmly over the 50% mark in money taken for taxes.

From the  San Jose Mercury News, Obamacare’s winners and losers in Bay Area:

People like Marilynn Gray-Raine. The 64-year-old Danville artist, who survived breast cancer, has purchased health insurance for herself for decades. She watched her Anthem Blue Cross monthly premiums rise from $317 in 2005 to $1,298 in 2013. But she found out last week from the Covered California site that her payments will drop to about $795 a month. 

But people with no pre-existing conditions like Vinson, a 60-year-old retired teacher, and Waschura, a 52-year-old self-employed engineer, are making up the difference. 

“I was laughing at Boehner — until the mail came today,” Waschura said, referring to House Speaker John Boehner, who is leading the Republican charge to defund Obamacare. “I really don’t like the Republican tactics, but at least now I can understand why they are so pissed about this. When you take $10,000 out of my family’s pocket each year, that’s otherwise disposable income or retirement savings that will not be going into our local economy.”

Lady Margaret Thatcher,  in a television interview for Thames TV This Week on February 5, 1976, said,

“…and Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people’s money. It’s quite a characteristic of them.”

A government that can tell private persons how much they should make, what insurance coverage they must have, and which light bulbs you should use, is not a free-market, capitalist country. I make this point with a young man that is helping at work… who parroted something I am sure he heard either from his professor or fellow students who heard it from a professor — at any rate, I mentioned this in the post:

So if you have a professor who is harping on Capitalism, Bush, Republicans, Reagan, Newt, Ted Cruz, whomever…, you just need to point out that since  FDR’s “New Deal“ and Johnson’s “Great Society” all they are really criticizing is regulation and redistribution. Because we are far from a truly free-market.

Oh how the bell tolls. One would think compassion lays at the center of these peoples plans… but that is never the case: