Where is the US economy headed?

@georgeob1,

I didn't say that: I am saying that even with the high cost of living in Silicon Valley, the talent is here, and more people moving here to work for those high tech companies. All businesses were affected by the Great Recession; it doesn't matter whether they were high tax areas or not. Companies in Silicon Valley are hiring again, and home sales are again picking up.

Your list of those companies that moved or went bankrupt were just a few of the many that still has strong businesses here. Apple Computer's market value is now number one. As in any industry that has competition, it's up to the management to do what is necessary to survive during hard times. The following list is from Wiki, and most of these companies are still growing.

Quote:

Thousands of high technology companies are headquartered in Silicon Valley. Among those, the following are in the Fortune 1000:

Adobe Systems
Advanced Micro Devices (AMD)
Apple Inc.
Cisco Systems
eBay
Facebook
Google
Hewlett-Packard
Intel
Intuit
Nvidia
Oracle
Sun Microsystems
VMware
Yahoo!
YouTube
Adobe Systems
Advanced Micro Devices
Agilent Technologies
Apple Inc.
Applied Materials
Cisco Systems
eBay
Google
Hewlett-Packard
Intel
Intuit
Juniper Networks
KLA Tencor
LSI Logic
Marvell Semiconductors
Maxim Integrated Products
National Semiconductor
NetApp
Nvidia
Oracle Corporation
Salesforce.com
SanDisk
Sanmina-SCI
Symantec
Yahoo!

Additional notable companies headquartered (or with a significant presence) in Silicon Valley include (some defunct or subsumed):
3Com (acquired by HP)
A10 Networks
Actel
Actuate Corporation
Adaptec
Aeria Games and Entertainment
Akamai Technologies (HQ in Cambridge, Massachusetts)
Altera
Amazon.com's A9.com
Amazon.com's Lab126.com
Amdahl
Ampex
Antibody Solutions
Aricent
Asus
Atari
Atmel
Broadcom
Brocade Communications Systems
BEA Systems (acquired by Oracle Corporation)
Business Objects (acquired by SAP)
Cypress Semiconductor
Electronic Arts
EMC Corporation (headquartered in Hopkinton, Massachusetts)
E*TRADE (headquartered in New York, NY)
Facebook
Fairchild Semiconductor
Force10
Foundry Networks
Fujitsu (headquartered in Tokyo, Japan)
Hitachi Data Systems
Hitachi Global Storage Technologies
IBM Almaden Research Center (headquartered in Armonk, New York)
IDEO
Intuitive Surgical
LinkedIn
Logitech
LynuxWorks
Maxtor (acquired by Seagate)
McAfee (acquired by Intel)
Memorex (acquired by Imation and moved to Cerritos, California)
Micron Technology (headquartered in Boise, Idaho)
Microsoft (headquartered in Redmond, Washington)
Mozilla Foundation
Nokia (headquartered in Espoo, Finland)
Netflix
Netscape (acquired by AOL)
NeXT Computer, Inc. (acquired by Apple)
Ning
NXP Semiconductors
Olivetti (headquartered in Ivrea, Italy)
Opera Software (headquartered in Oslo, Norway)
OPPO
Palm, Inc. (acquired by HP)
PalmSource, Inc. (acquired by ACCESS)
PayPal (now part of eBay)
Philips Lumileds Lighting Company
Playdom
PlayPhone
Qualcomm, Inc. (HQ in San Diego, CA)
Quanta Computer
Quantcast
Rambus
Riverbed Technology
ROBLOX
RSA (acquired by EMC)
Redback Networks (acquired by Ericsson)
Salesforce.com
SAP AG (headquartered in Walldorf, Germany)
Siemens (headquartered in Berlin and Munich, Germany)
Silicon Graphics
Silicon Image
Solectron (acquired by Flextronics)
Sony (headquartered in Tokyo, Japan)
Sony Ericsson
SRI International
Sun Microsystems (acquired by Oracle Corporation)
SunPower
Tata Consultancy Services
Tibco Software
Tesla Motors
TWiT
Tellme Networks (acquired by Microsoft)
TiVo
VA Software (Slashdot)
WebEx (acquired by Cisco Systems)
Western Digital
VeriSign
Veritas Software (acquired by Symantec)
VMware
Vocera
Xilinx
YouTube (acquired by Google)
Zoran Corporation

1 Reply

@Thomas,

I don't argue with that. However with a 39% marginal federal tax and a 10.5 % state income tax on all earned income, dividends and capital gains in California, I believe the perceptions of the relative advantages of moving to the east shore of Lake Tahoe would attract many more millionaires if the federal tax were raised to 70% in both places. The difference would become a much larger fraction of the remainder.

1 Reply

You know, of course, that anyone who actually pays 39.5% or 35% is completely incompetent financially. There are so many tax loopholes and the tax system is so skewed to help out the vary rich that the ACTUAL tax rate, i.e. what they really end up paying, is within a couple percent of the average taxpayer. Or, in Mitt Romney's case, about half what an average taxpayer might pay.

0 Replies

@cicerone imposter,

I'm not arguing that Silicon Valley doesn't have some enduring features, the main one being the current concentration of high skill level people there. This, of course could change as cuch concentrations have changed in other places. Unusually high taxes and local cost of operations is a very common cause for such changes.

The more central point is that the economy of California is already suffering relative to many other places precisely because of its high costs and tax rates. For those unfortunate enough not to have the skills in demand in Silicon Valley, economic conditions are getting tougher. Even in Silicon valley the manufacturing operations that were once located there are long gone. People with low skill levels are finding it harder every year to find jobs here.

1 Reply

@georgeob1,

It's not only Silicon Valley that off-shored its factories; even other developed countries did the same to take advantage of the much lower labor costs in China and India. That's to be expected in a world economy where competition is fierce. Smart management has a way to overcome most handicaps; that's the reason why so many old name tech companies are still established here. I doubt that'll change any time soon - although there will be movement both in and out of the area.

Apple has opened offices in Sunnyvale, and their expansion in Cupertino on the HP campus will house 13,000 employees when finished. They're also planning a new campus in Texas to house over 3,000 employees.

Those "new" jobs are going to create more demand for other businesses that will result in more jobs and more taxes for all levels of government. That's economic growth at its best.

1 Reply

@cicerone imposter,

You are apparently unaware of the results of the last census and the well documented exodus of people from the state, as well as the seriously declining tasx revenues of the state, and of its enormous debts.

1 Reply

@georgeob1,

Oh, I'm intimately aware of all that! However, as I've said, people are moving back to this area, because many tech companies are hiring again. Home prices and sales are showing improvement this year; a good sign that Silicon Valley is on the right path.

Silicon Valley real estate stats:

Quote:

Trends At a Glance....... Feb 2012..... Previous Month... Year-over Year
Median Price.................... $541,000 $485,000 (+11.5%) $520,400 (+4.0%)
Average Price................... $741,125 $642,128 (+15.4%) $662,529 (+11.9%)
No. of Sales...................... 654 649 (+0.8%) 677 (-3.4%)
Pending Properties.................. 1,899 1,678 (+13.2%) 1,545 (+22.9%)
Active....................................... 1,389 1,466 (-5.3%) 1,812 (-23.3%)
Sale vs. List Price 99.5% 99.0% (+0.5%) 99.0% (+0.4%)
Days on Market 60 66 (-9.8%) 68 (-12.4%)

1 Reply

@cicerone imposter,

Given interest rates there is a lot of money looking for a place to park, an everyone dreams of investing in the next Google or Apple. You live in an unsustainable bubble that does not make sense and does not represent the reality that your countrymen face.

1 Reply

@Thomas,

Quote:

I wouldn't limit them. I would merely tax all income after the 1,000,000th annual dollar at the top of the Laffer curve. That would be about 70%, according to current research into the matter.

And how would those dollars be spent?

Investing in a green energy future for America?

EnerDel
$118.5 million taxpayer (not Obama) loan
Toured and touted by Joe Biden in Jan 2011
Two months later, 3 executives were awarded $750,000 in bonuses
A year later filed for bankruptcy

Beacon Power$43 million taxpayer (not Democrat Party) loan
In 2010 paid cash bonuses of $259,285 to 3 executives
198 months later it filed for bankruptcy

Solyndra$527 million taxpayer (not Tree Hugger) loan
Received a $25 million taxbreak from the taxpayers of California
Toured and touted by president Obama
Filed for bankruptcy in September 2011 and laid off 1,100 workers.
Paid hundreds of thousands in executives bonuses prior to bankruptcy
Sought to pay hundreds of thousands in executive bonuses after bankruptcy

Fisker & Tesla
$1 billion in taxpayer (not Sec Chu) loans
"Green" car models cost in excess of $100,000
Fisker cars are manufactured in Finland which DOE knew before granting the loan.
Tesla's new model that will,supposedly target Middle America will cost $57,000

Quote:

The nonprofit Citizens Against Government Waste counts nearly 20 energy companies that have gotten federal loan guarantees or grants that have run into financial trouble ranging from layoffs to losses to bankruptcies

Source:http://abcnews.go.com/Blotter/green-firms-fed-cash-give-execs-bonuses-fail/story?id=15851653

And this is just the green energy loan debacle the government has given us. Taking away 70% or more of a CEO's compensation in taxes would just about pay for the paper work involved in these loans, not to mention the DOE revising past bulletins to try and hide SunPower (a 1.2 billion loan guarantee recipient at the same time it announce it was building a manufacturing plant in Mexico) from notice.

Now add the trillion or so spent on wars you and most liberals adamantly oppose.

Yep, the government can better enrich the economy with $24,500,000 than can the CEO of Starbucks.

1 Reply

@hawkeye10,

You're wrong; investors from around the world are putting their money in American investment funds.

I sold half my intermediate bond fund on June 30, 2011, and transferred that to equities. My YTD gain thus far is almost 8%. I don't see much negatives in how our economy is growing (slowly) in both job growth, spending, and home buying. Apple Computer is building a new campus a few blocks from where we live to add 13,000 jobs. Other tech companies in our area are also hiring.

I have confidence in the US economy; always have, always will. It's provided me with enough spending money to travel the world - even during the 2008 crash (traveled to 10 countries, and one to Hawaii). Also invested $100,000 to upgrade our home.

0 Replies

@Thomas,

Even more importantly, Nevada is a shithole and anyone who thinks that extremely wealthy people are going to migrate there en masse is absolutely kidding themselves.

The reason that the most desirable areas can afford to charge higher taxes, and not worry about businesses fleeing, lies in the fact that wealthy people want to live in desirable areas. Nobody made a fortune and voluntarily moved to Nevada.

Cycloptichorn

0 Replies

I'm still waiting for any Conservative to explain to us why we didn't see any massive capital flight or exodus of millionaires during times in which taxes were actually AT the levels they current warn us about.

Cycloptichorn

0 Replies

@Finn dAbuzz,

Under Bush's term, they couldn't account for over 9 Billion dollars spent 'rebuilding' Iraq. That's not even the money that they spent that COULD be accounted for; that's money that was 'lost.' Money handed out to 'contractors,' many of whom were GOP donors, and then never accounted for again.

You are arguing over peanuts for political reasons; not truly concerned about waste. You've never said a single word here on A2K about the waste under GOP administrations.

Cycloptichorn

1 Reply

@georgeob1,

Oh boy.. math is hard when it comes to taxes.

The 10.5% state tax reduces the federal because it is deducted from income. You can't add the 2 together george. And then you are off on the SS and Medicare as well since it only applies to wages and not all CEO compensation.

A 70% Fed rate and a 10.5% state rate would only result in a total rate of 73% taxation or less depending on how the state factors income.

1 Reply

@georgeob1,

Quote:

, I believe the perceptions of the relative advantages of moving to the east shore of Lake Tahoe would attract many more millionaires if the federal tax were raised to 70% in both places.

Mathematically, it would make less sense if the Fed rate went to 70%.

At 39% rate with 10.5% rate vs zero
the rates would be 45.4 vs 39

At 70% with 10.5 vs 0
the rates would be 73 vs 70%

So, millionaires won't move to save 6% of their income but would flee in droves to save 3%?

But maybe I'm missing something and it isn't dollars that is the issue. Maybe it's percentage of after tax income.
Assuming $1million taxable income at the highest bracket
Scenario 1. 546,000 vs 610,000
Scenario 2 270,000 vs 300,000
Hmm.. as a percentage of income they are almost identical.

I guess, unlike george, I assume millionaires have some brains.

2 Replies

@parados,

His point isn't intended to be factual - it's an ideological exhortation. The fact that it belies a tremendous ignorance regarding human nature (not to mention basic facts regarding mathematics and taxes) is immaterial to his argument; as it's not factual it can never be disproven, so he can go on feeling that he's right, no matter what.

Cycloptichorn

1 Reply

@Cycloptichorn,

Ah yes. Like the argument that only people that work hard and are smart get rich and if you didn't get rich then you just weren't smart and didn't work hard.

0 Replies

@parados,

It depends upon each individual's situation. My wife and I are both retired living on social security and our IRA. Our taxable income as reported to IRS, I would say, was the "median income for our area," and our CA state tax rate was tw0-tenth of one percent.

0 Replies

@parados,

parados wrote:

Quote:
, I believe the perceptions of the relative advantages of moving to the east shore of Lake Tahoe would attract many more millionaires if the federal tax were raised to 70% in both places.

Mathematically, it would make less sense if the Fed rate went to 70%.

At 39% rate with 10.5% rate vs zero
the rates would be 45.4 vs 39

At 70% with 10.5 vs 0
the rates would be 73 vs 70%

So, millionaires won't move to save 6% of their income but would flee in droves to save 3%?

Poor parados. The combination of zealotry and pedantry involves risks and limitations, - also new opportunities for stupidity. While state taxes paid ARE a deduction on Federal Taxable income, Federal taxes paid ARE NOT deductable in determining state income tax liability. That means the real tax rates are approximately additive. Thus the marginal rates he calculated above are dead wrong. In California marginal tax rates in the top brackets are 39% + 10.5% = 49.5%. With a 70% Federal tax rate that goes to 70% + 10.5% = 80.5%. So the difference is 31% of income !!!!!

Who does your taxes???

The essential point I was making was that the percent drop in after tax income (what our assumed millionaire actualy gets to spend after the tax bite - subjectlivly the real significant number) is truly enormous. I'll leave it to parados to calculate that value as an exercise in remedial algebra.

Thinking is harder than looking stuff up on the web or rattling off one's prejudicial beliefs. Still, it is useful.

Cyclo's self proclaimed factual obsessions don't appear evident in his slavish applause to this nonsense.

3 Replies

@georgeob1,

Actually, state taxes is a deduction on the federal taxes for those filing itemized deductions, so the net taxable income for federal tax would be a little lower. If one pays 10.5% state tax, that becomes a deduction on the federal return, and the federal income tax is lowered.

2 Replies

Where is the US economy headed?

Related Topics

Quick Links

My Account

able2know