Knowledge is Power: Capitalism, Jobs, Gold Standard Edition

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Old model of capitalism is ‘coming to an end’, says top economist

Why the jobs problem is not going away

India’s politics rule – economy be damned

Germany’s ‘post-growth’ movement

Dividend investing: A portfolio built to last

Don’t laugh: Here’s how the gold standard could actually work in today’s economy

How Many Jobs Are Needed to Keep Up with Population Growth?

Nation of shirkers: British workers among the least productive in the developed world

WORLD’S 50 BIGGEST BANKS 2012

Beware of the dangerous emerging markets ‘grand narrative’

 

Chart: Capital Gains Tax Rate Since 1929

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Capital gains are taxed at a lower rate than ordinary income such as salary and wages. Currently the top rate on most capital gains is 15% while the top rate on salary and wages is 35%, according to a research report by the Center on Budget and Policy Priorities. In addition taxes on capital gains are due only when the gains are realized and hence they can be postponed as long as necessary. But this is not possible with ordinary income since taxes are paid when income is earned.

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From the report:

Capital gains on assets that have been held for more than one year are generally taxed at a substantially reduced rate when the gain is realized: currently a 15 percent tax rate for taxpayers in an income tax bracket above the 15 percent bracket. (People in or below the 15 percent bracket owe no capital gains tax.) This is far below the top marginal tax rate on ordinary income — currently 35 percent — and is the lowest rate on long-term capital gains since the Great Depression. (See Figure 10.)

Source:  Raising Today’s Low Capital Gains Tax Rates Could Promote Economic Efficiency and Fairness, While Helping Reduce Deficits by Chye-Ching Huang and Chuck Marr, Center on Budget and Policy Priorities

The Marginal Effective Tax Rate on Capital Investment in OECD Countries 2012

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Canada has the most competitive corporate tax rate now among the G-7 countries. The marginal effective tax rate in Canada at 19.9% is now the lowest among the G-7 countries and the 20th most tax-competitive in the 34-member OECD, according to a research report by Duanjie Chen and Jack Mintz of The School of Public Policy, University of Calgary, Canada.

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Source:

2012 Annual global Tax Competitive  Ranking – A Canadian Good News Story

Duanjie Chen and Jack Mintz of The School of Public Policy, University of Calgary, Canada

The authors note that in addition to Canada, Japan and the UK reduced the marginal effective tax rates in 2012 as part of the pro-growth agenda. The U.S. has the highest tax rate at 35.6% which is much higher than the OECD average of 19.4%.

Top 50 German Companies in the U.S.

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One of the major impacts of Globalization in the past few decades is that large companies have become truly global and no longer depend on one country or territory to do business.The strong growth of Multi-National Companies (MNCs) confirms this phenomenon. American MNCs, for example, have established production facilities overseas and employ millions of workers there to meet the rising demand for their products and services. Similarly MNCs from other countries employ thousands of workers in the U.S. in order to cater to the U.S. market.

Traditionally European firms have been some of the largest investors in the U.S. contributing for a sizable chunk of the Foreign Direct Investment (FDI) coming into the country. Among European companies, German companies have a strong presence in the U.S. market.These German multinationals not only employ thousands of workers directly but also help create many more jobs indirectly.The contribution of these companies’ to the individual U.S. states where they have production facilities and to the overall U.S. economy in general is significant.

With 12.5 million people unemployed in the country as of August and most American firms still reluctant to hire, some of the German companies operating in the U.S. are actually expanding and adding workers. In fact, the top 50 German firms now create 461,000 jobs compared to 427,000 jobs in 2010. The sales performance of the companies also increased from $295 billion in 2010 to $318 billion last year.

The following table lists the top 50 German employers in the U.S. based on number of employees:

[TABLE=1068]

Source: German American Trade, May/June 2012, German American Chambers of Commerce

Due to the strong growth in the automotive industry, Daimler Group ranked the highest in the U.S. followed by Volkwagen Group based on sales. Siemens (SI) is the largest employer in the  U.S. with over 60,000 employees followed by Fresenius Medical Care(FSNUY), the world’s largest dialysis services provider with over 45,000 people. Some of the large German chemical firms such as BASF AG(BASFY), Linde (LNEGY), etc. also have a strong presence in the U.S.

Disclosure:  Long EONGY, HENKY