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As an increasing number of jobs � both blue and
white-collar alike � are outsourced to China, Mexico, India, Taiwan and
Malaysia, a �multiplier effect� is producing dire effects for the everyday
American citizen. In particular, while multi-national corporations
continue to rake in huge profits due to the exploitation of overseas slave
labor (i.e. lower costs); U.S. workers get hit with a two-pronged negative
backlash. On the one hand, they suffer the immediate consequences of lower
wages when moving from higher paying jobs to those that are increasingly
service-industry related. Thus, with their disposable income lowered, they
are less able to spend money here in America, resulting in an enduring
stagnant economy.
![]() The second effect of outsourcing � a
lowered tax base � is more subtle, yet every bit as dangerous to American
citizens. The reasons are obvious. If U.S. workers make less money as a
whole, and there are fewer jobs available (due to outsourcing), it is
logical to conclude that our government is taking in less tax revenue. Yet
President Bush, a man who has yet to veto even one spending bill in 3�
years, is increasing our federal deficit to record-breaking levels. In
fact, in the first six months of this fiscal year, our deficit stands at
$299.5 billion dollars � double that of revenues. Plus, with a perpetual
war that requires billions dollars each month, our deficit will continue
to grow by leaps and bounds. As it does so, interest payments will
increasingly consume a larger piece of the overall pie, leaving less money
for social programs, the war machine, and daily governmental operations.
Finally, add to this equation the fact that offshore profits derived from
outsourced jobs are not getting directed into the already depleted Social
Security fund.
Where does this scenario leave us � the American
laborer and consumer? First, with less money in our pockets, we can�t buy
as much at home, thus our economy continues to suffer. Secondly, according
to Timothy McCormally, executive director of the Tax Executives Institute,
�All the people who are now in Bombay or Bangalore instead of Berkeley or
Boston are not paying taxes to Uncle Sam, and they�re not buying items
here, so there�s a cascading effect.�
Or, as Dan Spillane of
Citizens for Corporate Accountability writes, a �divider effect� kicks in
where every position lost in the U.S. results in (a) subsequent job losses
due to a domino effect, and (b) a decrease in IRS tax revenue. With this
scenario in mind, the big question is � who do you think is going to make
up this �lost� tax revenue? Here are the possible answers:
1)
Foreign workers � No, they are going to pay taxes to their own government,
not ours.
2) Corporate America � Wrong again, for, as David Teather
writes in the April 7, 2004 edition of The Guardian, �Almost
two-thirds of American companies paid no tax between 1996 and 2000,
even as the economy was booming and corporate profits were reaching an
all-time high.� He added, �Corporate dollars have fallen dramatically as a
percentage of the overall tax base in the U.S., accounting for 7.4% of
federal tax receipts in 2003.� Worse, as companies hide more profits
overseas, or cook their books ala Enron (who reported $2.3 billion in
profits over a four-year span, yet claimed a $3 billion loss to the IRS),
it leaves less money for the Treasury Department�s coffers.
3)
Foreign corporations in the U.S. � Fat chance � 70% of them didn�t pay a
cent in taxes over the past five years.
4) American citizens �
Jackpot! Yup, the everyday worker is going to keep getting gouged even
worse than they already are, and pay an even higher percentage of the
�lost� revenue.
So, on Tax Day 2004, folks, there you have it.
Remember this article; for it�s a certainty that next year, and every year
thereafter, your taxes will be higher than they are right now. But hey,
what more could we expect from our fine upstanding political and corporate
leaders and their glorious New World Order goals?
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