Saturday, November 06, 2004

A Dirty Secret About Offshoring

So let me ask you this, when you buy a car that was imported or a shirt from the Gap (yuk!), do you know that you pay some import duties indirectly because the goods were taxed on their way into North America? The same goes for anything you might buy from the US that was made in China, you will pay some duties of up to 20%. You don't pay any duties on American and soon South American goods due to NAFTA.

So my point is that when the big software companies have their products built offshore, why is it that you don't pay duties on the software? Duties and excise taxes are meant to protect local industry from dumping and unfair offshore competition. What about offshore IT work? Does Microsoft or Sun pay duties every time they sell you software? Probably not, it seems un-enforceable. While IT offshore outsourcing is a natural extension of manual labor outsourcing (sweatshops), it just isn't fair that it isn't taxed in the same way as tangible goods. What's worse is that it seems to be encouraged both by governments and Wall Street. This seems strange given that Americans are so patriotic but not patriotic enough to protect the jobs of the weak against the greed of the powerful.

For the record, I stand to gain the most from the status quo but I still think that it is unfair and will come back to bite us all in the ass. Unfortunately, politicians and the common folk won't react to this probably until its too late.

Thomas Jefferson said that people who expect to be ignorant and free expect what never was and never will be. True dat.

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