Having grown up during the Cold War, I never though I would write a sentence like the title of this blog post, but there have been lots of firsts during the reign of Obama.
When the head of a major multinational company says the American tax system is worse than the policy of a nation that is nominally still communist, that’s a remarkable – and worrisome – development.
Here’s an excerpt from a story in the UK-based Financial Times.
Coca-Cola now sees the US becoming a less friendly business environment than China, its chief executive has revealed, citing political gridlock and an antiquated tax structure as reasons its home market has become less competitive. Muhtar Kent, Coke’s chief executive, said “in many respects” it was easier doing business in China, which he likened to a well-managed company. “You have a one-stop shop in terms of the Chinese foreign investment agency and local governments are fighting for investment with each other,” he told the Financial Times. Mr Kent also pointed to Brazil as an example of an emerging economy that is making itself attractive to investment in ways that the US once did.
As much as I criticize the U.S. tax system and notwithstanding the passage you just read, I wouldn’t want anyone to conclude that China has better economic policy. The United States may have become more statist in the past decade, dropping from 3rd to 10th in the Economic Freedom of the World rankings, but 10th place is still a heck of a lot better than 92nd place, which is where China currently ranks.
And I also think it’s important to draw a distinction between a nation being “business friendly” and “market friendly.” I strongly prefer the latter. I want small government and laissez-faire markets, not policies that cater to big business. And some of China’s development is based on special deals for large companies.
This is not a big knock on China, which has improved. It used to rank as one of the 10th-worst nations, so gradual economic liberalization is boosting its economy and has lifted hundreds of millions out of absolute poverty (as compared to the relatively benign poverty found in the U.S.).
But even with those caveats, it’s not a good thing that America’s corporate tax system is so unfriendly. And it’s not a good thing that investors, entrepreneurs, CEOs, and others have a perception that it’s better to produce outside of America.
For more information, here are two of my videos. This one (my very first effort, so forgive the lack of polish) discusses the overall issue of corporate taxation.
And here’s a video that looks at the critical issue of international corporate taxation. You won’t be surprised to learn that America probably has the most unfriendly regime in the world.
One last thing worth mentioning is that most European governments have territorial tax systems and the average corporate tax rate in “socialist” Europe is down to 23 percent.
[…] Some business leaders say China is now more business-friendly than the United States. That’s probably not good news for America, but my goal is to have a […]
[…] not China, which is nominally still a communist nation (though apparently with more of a pro-business mentality than the United […]
[…] not China, which is nominally still a communist nation (though apparently with more of a pro-business mentality than the United […]
And now we see the Republican model for the good ole USA, we must become more “business friendly” is something I have heard a thousand times from Republicans. Often this is said in conjunction with discussing Communist China, but the Republicans carefully avoid being too explicit about the goal – of remaking us into anothe slave state where profits are guaranteed and lives are meaningless.
[…] and social burdens that it causes in almost every area of our daily lives (drugs, food, trade, communications, energy, etc.) and one can see the dual threat that regulation imposes on the […]
[…] even offered a small bit of praise for China’s shift to a more business-friendly environment, and I was greatly amused when the […]
[…] Coca-Cola CEO Says China Now More “Business Friendly” than the United States Share this:EmailPrintFacebook […]
[…] previously posted about the communist government of Cuba cutting taxes and the CEO of Coca-Cola saying that communist China has a more business-friendly climate than the United […]
[…] time that a captain of industry in the country has shouted toward the Obama White House with an ominous message regarding the administration’s reluctance to get on the stick. Only the dynamic duo of […]
It’s always “business friendly” to have slave-workers.
Here in Sweden our government are inspired by these. (please note the IRONY)
[…] #split {}#single {}#splitalign {margin-left: auto; margin-right: auto;}#singlealign {margin-left: auto; margin-right: auto;}.linkboxtext {line-height: 1.4em;}.linkboxcontainer {padding: 7px 7px 7px 7px;background-color:#eeeeee;border-color:#000000;border-width:0px; border-style:solid;}.linkboxdisplay {padding: 7px 7px 7px 7px;}.linkboxdisplay td {text-align: center;}.linkboxdisplay a:link {text-decoration: none;}.linkboxdisplay a:hover {text-decoration: underline;} function opensingledropdown() { document.getElementById('singletablelinks').style.display = ''; document.getElementById('singlemouse').style.display = 'none'; } function closesingledropdown() { document.getElementById('singletablelinks').style.display = 'none'; document.getElementById('singlemouse').style.display = ''; } Is Secretary of HUD, Shaun Donovan, Pressuring NY State Attorney General Schneiderman on Behalf of Wall Street Banks?Wall Street banks face broader New York probeFED Bails Out EU Again !A Dubious Settlement With Wall StreetMisplaced loyalty to corrupt political parties rather than issues : Dangerous IntersectionReal Consultants and Real Analysts Take a Hit : Beyond SearchCoca-Cola CEO Says China Now More “Business Friendly” than the United States […]
[…] ($KO) CEO likes China better than the US for […]
In the overall picture, tho, America needs it’s American companies to remain loyal to the country that helped them thrive and grow in the first place. They need to speak before Congress and try to make our policies more “friendly”. I’m not talking about lobbying just saying Congress will listen to business owners and try to work with them. That’s the American way. Obama has over-regulated, EPA has over-regulated, and gov’t is interfering in how we conduct our business. Congress needs to hear these remarks. If none of our business owners express their problems of operation then how can we improve their situations? Don’t give up on America.
[…] COMPETITIVENESS: Coca-Cola CEO Says China Now More “Business Friendly” than the United States. […]
Also how “business friendly” is China with routinely violating patents, copyright laws and all of the corporate theft,hacking,internet attacks they have been engaged in? How friendly when you question the government in China? This is what happens when you are myopic and you only see things via the lens of the “bottom line” or profit. Also funny this is listed under International liberty…LOL.
Of course they seem more business friendly, the United States is giving them all this money to make all these products we buy from them and at the same time we are keeping the people of China employed ! What about the United States of America, we keep buying these products and keeping our citizens unemployed !! Shame on our government for doing this !! We, as U.S. citizens , have got to start reading where products are made and take a stand !!
Great comments! Shows “regular” people of more sense than so called leadership. Trade and economic issues are the one are of the Republican party where I most disagree with them, I am no Liberal but a moderate and the Libertarian voice outways everything else in the Conservative media. There are other things to consider than just what makes corporate America happy. Lou Dobbs and Pat Buchanan are right. I know we all dont like Obama but cheering some overpaid corporate CEO who is cheering a regime like China is just irrational. Slavery was business friendly to the cotton industry too. Great insight Hortonin. I also think the Republican stance on rejecting unemployment benefits during these times is just plain asinine. It’s not the American workers fault the economy is crap. These same people have an issue spending billions on nation building but balk at unemployment benefits and it’s the American workers tax money!!! Idiots!
Wait, you’ve been eating a lunch out of a box that has said “Made in China” for years, AND NOW they’re more business friendly? Cripes, what would the U.S. have to do to be more business friendly than that, make companies people and let them run for president?
“And I also think it’s important to draw a distinction between a nation being “business friendly” and “market friendly.””
+ a million.
This is something that often needs to be emphasized in Republican circles. Business types who use their media cache as an inference of better economic policy are just about the bottom line. They’re equally happy getting a taxpayer-funded “investment” as they are selling another ten thousand units.
Tax “rebates” at the federal and state level, like those mentioned approvingly by Coca-Cola, are the problem, not the solution. Just because the winners are still around to tell you how good tax favoritism is doesn’t mean it’s good for business for the government to be picking winners and losers.
This extends into immigration, too, where the people in a position cut their labor costs in half by hiring illegals will line up to tell you how “good for business” amnesty would be.
The US is friendly to Wall Street banks, and that’s about it. China abuses not only its workers but its environment as well, with thousands of toxic dump sites that the Chinese live with and smell every day. And that ‘business friendly’ attitude is akin to being invited to play in a poker game with the Mafia.
Sorry this is complete nonsense. They are “business friendly” in the sense they dont give a crap about human rights and their workers work for feudal wages and some companies the workers have to live on premise. I guess that is friendly to the business owners but what about the workers who work in crap conditions and for low wages?
[…] CATO: Having grown up during the Cold War, I never though I would write a sentence like the title of this blog post, but there have been lots of firsts during the reign of Obama. […]
Thats just media drama… try to deal with chinese government and see how you going to end. They want your money but they have no intentions on giving it back, they sell nightmares for dreams. Although China seems to be a bigger market because of its population you have to check numbers when it comes to income for each person, and in China thats really low.
That might be true when you are coca-cola but ask the small or midsize companies or entrepenuers;)
Nonwithstanding Mr. Mitchell’s last paragraphs which I tend to agree with,… the larger issue is Competitiveness.
So, Yep! A country with 4 times the population of the US is already on the verge of being more competitive than the United States – and fundamental, structurally pernicious to competitiveness entitlements (like ObamaCare) have not even quite kicked in yet!!
Not to worry though, we have the coercive power of our superb military (a net consumer of business produced wealth), momentum, history, and some yet undefined mystical forces on our side. Thus America is destined to remain the dominant economic force in the world. So, move on folks, nothing to see here, return to HopeNChange.
Bailouts, monetary policies, QE1,2,…i,i 1,…, jobs programs that destroy three jobs to create one for which government can take credit, and other macroeconomic gimmicks may have some limited and ephemeral effect, but they are simply sandbags trying to paper over and delay revealing the true source of America’s decline: An American competitiveness which Americans have long taken for granted, whose margin of advantage has been eroded, and is now finally dangerously close to parity with the rest of the world. Once water from that huge dam reaches the crest, it’s all over — decline will become irreversible. Worst yet, America may have already crossed that point.
So for those who are willing to see the forest for the trees the longer and terminal prosperity prospects of this country hinge on one thing: Loss of Competitiveness on the World Stage.
Has anything been done to increase American competitiveness (ie. offer a better product quality / price ratio) in the past three years? The simple answer is a resounding NO. Just structurally pernicious fundamental changes that flatten the effort reward curve. Thus Americans are firmly setting the stage for their own decline. Tea parties will not save America. They are simply the predictable scream of a minority that has seen the writing on the wall. But, alas, mandatory collectivism and delusional attempts to enslave the individual to serve the common good are intoxicating, inescapable, like the song of the sirens… Can we bring America down to parity with the rest of the world? YES WE CAN!
So, to conclude, Americans can increase Competitiveness two ways: Either by lowering their compensation, or, by adopting freer economic policies that lead to higher value work. Since freer economic policies are nowhere in the horizon, one way or another compensation will come down (in relative terms compared to the rest of the world).
I think you’re missing the point, Cindy.
Let them have the diabetes in a can in China. America certainly doesn’t need it!!!!!