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Archive for April, 2011

Yes, it is true. You can make money online working from home and can actually make a lot of money if you work hard, stay focused and execute. You can build a home travel business and live the Internet lifestyle you always dreamed of by operating an online home travel business. This article will put to rest any misgivings you may have had about starting an online travel business. I will not sugar coat it. In fact much of what I have to say will probably cause an up-roar in some parts of the online travel industry. I am aiming to tell it like it is.

The TRUTH!
Who really Makes Money in Online Travel. The truth is that you can’t really make a lot of money reselling other businesses travel products. This statement is directed towards the home-based travel agent market. Yes, its easy to get started as a home-based travel agent and the online travel agencies can provide you with your own personalized white label branded website, including quality customer support but in the end you are NOT building a business, you are only paying yourself a salary.

Don’t be fooled.

I am amazed at the amount of junk that there is online out there catering to the make money online from home crowd, touting selling travel as the route to freedom and riches. This truth is probably the most important fact anyone will ever tell you if you are just thinking about entering the online travel business. Let me repeat this for you one more time.

It is difficult to become rich and build a company reselling other companies travel products. You can become rich over time by building a business that sells your own uniquely branded travel products. You can get rich and build a business if you “own the travel product.”

Owning the travel product means that you are contracting directly with travel suppliers under your company’s own contracts, you are not just reselling a travel product owned by another travel business, tour operator, travel agency or travel consolidator. Your business creates the travel product by doing deals directly with travel suppliers. Your contracts with the travel suppliers become your businesses own unique inventory for the travel products you will be selling. The new travel product becomes your own brand. Your online travel business sells the travel product directly to consumers online or wholesales it too other travel agencies, travel agents, tour operators and resellers.

The Home based Travel Agent Dilemma.
I know I am opening up a can of worms here by disclosing this information but it’s really the truth. My intent is not to knock anyone down but to provide insight into how the online travel business really works and to show you WHO is really making the money and how you can make real money by deciding from the get go to actually build a business.

Yes, if you want to make $20,000-$50,000 working from home then reselling cruises or popular travel products will be the best option for you but if you want to make real money, six or seven figures and you want to build a business that has real tangible value and can be sold later then you need to develop and sell your own travel products.

The Internet is NOT causing Travel Agencies too shut down.
I believe that the main reason that brick and mortar travel agencies are closing is not because of the Internet but because all they are really doing is reselling other companies travel products. The Internet contributed to the destruction of the traditional brick and mortar travel agency but the biggest factor in the down fall of travel agencies and travel agents in the travel industry is due to the fact that they are not selling anything unique or different from anyone else. It’s really a business model established to fail in the long run.

How do you own your own travel product? You can own your own travel product in two different ways.

1. Your business acts as a travel supplier providing tours, guiding, travel and tourism related activities or you own a lodging property.
2. Your business partners with two or more travel suppliers to resell their individual travel products under a unique package that you own.

What type of Online Travel Business do I need to start where I can own my own travel product, sell packages and build a real business?

-Online Travel Agency
-Online Tour Operator
-Online Tour Guide
-Online Travel Broker
-Receptive Tour Operator
-the Hybrid

Let’s discuss a little about each type. There are many directions you can go.

OTAs or Online Travel Agencies traditionally sell everything underneath the sun; including lodging, air, cars, vacation packages, and much more. On a hierarchy level of all online travel businesses, this would be the most expensive and most challenging type of online business to start. It’s doable don’t get me wrong it would just take much longer and be more expensive to startup.

If you second tier niche and focus on contracting your own lodging deals and contracting with activity suppliers you could easily build a smaller more focused OTA. Another option would be for you to utilize the Global Distribution System (GDS) for air, car and for lodging that you could not contract yourself. I don’t recommend this last option as you’ll be just reselling product you don’t own but as long as you can combine the non-owned GDS products with your own contracted travel products you could create a nice win-win for the bottom line.

Online Tour Operator’s sell dynamically packaged trips and pre-packaged trips to vacationers. I believe building an online tour operator business is your best option at building a successful online travel business.

Now let me first state that the name is a little miss conceiving because of the word “Tour.” There is a big difference from a tour and a trip. On a tour there usually is a tour guide or person leading the tour with the travel participants. On a trip the traveler is traveling by themselves or with other people but there is no tour guide involved. In the travel business they call this a FIT trip, Drive vacation or Fly-Drive package.

I favor selling trips, where the traveler buys a tour or trip product then attends the trip by themselves on their own time. The reason being for this is two parts.

1. You don’t have to be the tour guide and you don’t have to hire one either.
2. You have 100% more freedom by not actually participating in the tour itself. Just think of the time involved of actually going on a tour with a group or individual people.

We operated tours when my wife and I owned the Yellow Breeches House Fly Fishing Lodge and B&B. We ran fly fishing excursions with lodging and guiding. Guess who was one of the guides? Yes, you got it. Yours truly. I would not change the past for anything. I learned so much from being a fly fishing guide and owning a lodging property. I just wouldn’t want to run that type of business again. There are much better travel business models out there. That’s part of the beauty about this report is that I am able to share some true life, realities for you.

Sell Trips not Tours. This is the most important thing I can tell you regarding wanting to live the Internet life style and working from home enjoying the freedom that comes from owning your own online travel company. You won’t be living any Internet lifestyle if every week you are giving tours.

Online Tour Guide’s provide tours to individuals and or groups. If I didn’t scare you off from above that’s ok, the tour guide business is a great business and it’s easy to get started with limited investment. This is a great business to enter the travel business and starting learning about how to build a business.

If you love dealing with people and spending much of your time outside then this is probably the best travel business for you. This is serious work, day-in-and-day-out, as you are always outside in the elements. This travel business could be a stepping-stone for you to then go ahead and build an online tour operator business. I have a really good friend that owns a kayaking guide service. He runs eco-adventures that include island hoping for three to five nights. He just loves it.

Let me share a little strategy with you that will totally change the way you build or grow your existing tour guide business. Hopefully by now you’ll already see it and be way ahead of me but if not here it is.

Create packages for your tour guide business that includes lodging, meals and your guide or tour service. You probably sell trips, guiding and or tours as an hourly or day product. Take the next step and package in lodging and meals and maybe a third activity. Sell packages to your clients and you will super-charge your revenue in a very big way.

Example:
Take an existing kayak guide that sells day trips for $250 for 2 people. Now create overnight packages. Create a new product line for your business.

1. Contract with a lodging supplier to buy lodging for your kayak packages.
2. Contract with two local restaurants to buy dinners for your kayak packages.
3. Sell a 2 night, 1-day kayak excursion, with 2-dinners. Make money off the lodging, dinners and a 3rd activity and you can seriously start adding more profits to your business.

Online Travel Broker – this is a new business category I stumbled upon. I believe this is a type of business you could start with literally no money. It’s just a matter of understanding the travel business. Here is how an online travel broker operates.

Every travel supplier needs sales representatives. Your travel broker business contracts with travel suppliers to represent their business and help them sell more of their travel products. Many smaller travel businesses don’t have sales representatives. This may be your entry into the online travel business industry.

Let’s say you live in a resort town or area and there are 4 golf courses nearby or 3 ski resorts. You represent the travel supplier’s products, finding larger partners and or resellers that would resell or distribute your client’s products. This business is just a matter of finding other travel suppliers that need sales representatives and finding larger companies looking for new travel products to sell and distribute. You make money by earning a percentage of all future sales booked or earn a flat fee per contract you sign. This would be a great way to enter the travel business as a part-time business. You could start with not much investment and build out slowly.

Receptive Tour Operators receive inbound travelers from foreign countries. This is a B2B business (business-to-business). You build an Online Tour Operator business but you don’t sell your travel products directly to consumers or vacationers online, you sell your owned travel products to wholesalers or other tour operators in foreign countries that then resell them directly to travel agencies and the consumers in their country. If you live in a world- renowned destination area or region where foreigners come visit you can build a successful receptive tour operator business. The receptive tour operator business takes longer to develop as the buyers of your travel products will be other travel companies, tour operators and seasoned travel business won’t necessarily want to do business with a company that is new or just in startup mode. Adversity can be overcome though, through focus, determination and having an owned travel product that a wholesaler or foreign tour operator believes he can sell and make money.

The Hybrid – build an Online Tour Operator business that caters to individual vacation travelers. After the business starts selling trips and or tours, start building a Receptive Tour Operator business component.

I hope you have enjoyed a little insight into the world and possibilities of the online travel business and what it will take to start a home travel business.

The year may be different, but some things about the music business are still the same. One must find the right door to make it in successfully. You may be a singer, songwriter, dancer, or a music technician. Getting your start in the music industry can be a matter of being in the right place at the right time.

If you have followed the music industry over the years, then this is no secret. In certain circumstances, it is as much who you know as it is what you know. That is the “mystique” of the music business.

The entertainment business has changed. There are more ways for musical artists to break into the biz. They seem to be springing up from everywhere. Shows like “American Idol” started the reality show craze to find new talent. It’s like “Star Search” gone wild.

Technology has advanced as well. Music used to be available on vinyl records or eight-track tapes. Now, there are CD’s, mp3 players, cell phones with music capabilities, and other electronic ways to hear and capture music. With new advances come more jobs for technicians who want to try their hand at laying tracks and creating new sounds.

Even with all of this, one has to be creative to break into the music business. It is a challenge but if music is in your blood, you will find a way. Start with your education.

No one wants to hear that an education is important. We all heard that speech in high school. Well, it’s true. And, education in the arts is more sophisticated than you think. You won’t be sitting in a stuffy classroom all day listening to a Ben Stein-esque teacher quote music theory.

To get the most from your college education, you need to be sure that the professors have had practical experience in the music industry and that they keep current with music trends. The class sizes are small enough that you get hands-on time with the equipment. Both of these things will benefit you when you look for a job.

Beyond education, get your name out there. Free Internet sites like MySpace and YouTube can be used to your advantage. Create a page and upload videos of your work. If you are a sound mixer, broadcast new sounds. Copyright your work so that no one can steal it from you. Millions of people surf the net so you never know who might discover your talent.

Everyone wants a permanent job over temporary work. It is steady income that puts food on the table and pays the bills. But, consider contract work as a way to gain experience and make industry contacts. Music videos are staffed on a job by job basis. You can get work on one of these productions.

Treat your contract work as a once in a lifetime shot. You will be there for the duration of the job, so make every moment count. Show them what you can do. Follow all instructions to the letter and, if there is an opportunity to make a suggestion, offer a bit of your artistic creativity. Grandstanding is not necessary. In fact, it may get you booted out. Your bosses want to see that you work hard and know how to do the job efficiently.

Gain more experience through your church. Yes, I said church. Many churches these days are high tech. They record their services including the musical worship for sale to members and on the Internet. Music technicians are needed to facilitate the production and to create the multimedia output. The gospel music industry is booming, too.

Don’t sell yourself short. Use all avenues to gain experience for that ultimate music job that you seek. A resume filled with a variety of work experience is a plus.

Introduction

“High performing HR function affects bottom line nearly 10%”- A survey

Competencies have become integral part of HR field. In the last 25+ years, the competency approach has emerged from being a specialized and narrow application to being a leading method for diagnosing, framing and improving most aspects of Human Resource Management. Changes to business practice have forced HR professionals to adjust their role and the contributions they make as well as to obtain new skills and competencies to meet these demands.

In a survey conducted in USA the following were the observations: (Source Internet)

1) HR professionals from high-performing companies are shifting their focus from internal to external customers.

2) HR professionals are taking greater responsibility for disseminating cultural underpinning throughout their organizations.

3) HR professionals are emerging as strategic partners who identify problems, provide alternative insights and raise the standards “Intellectual rigor”, for business decision making

Understanding Competencies

Competencies are those behaviors or sets of behaviors that describe excellence in performance within a particular work context. They can be useful in clarifying work standards and expectations, help focus appraisal and reward systems, and align individuals with the institutional or department mission. We have identified a number of topical areas and competencies we believe to be the building blocks and requisite skills needed to be successful as a human resource professional. While specialists may be highly skilled in a relatively narrow field, generalists, by their very nature must have a broader base from which to operate. They must have a wider perspective on the issues and the workplace environment.

A typical professional career pattern would see the development of the novice into a fully skilled staff practitioner within a career specialty or family of specialties. Through maturity, experience and professional development, individuals would broaden their professional perspective and understanding of the human resources profession. Due to the nature of the range of demands placed upon HR departments, smaller organizational units tend to develop “generalists”, while larger departments have the need and resources to develop “specialists”.

Basic competencies required for any professional…to excel in any profession

Job Knowledge/Competency: Demonstrates the knowledge and skills necessary to perform the job effectively. Understands the expectations of the job and remains current regarding new developments in areas of responsibility. Performs responsibilities in accordance with job procedures and policies. Acts as a resource person upon whom others rely for assistance.

Quality/Quantity of Work: Completes assignments in a thorough, accurate, and timely manner that achieves expected outcomes. Exhibits concern for the goals and needs of the department and others that depend upon services and work products. Handles multiple responsibilities in an effective manner. Uses work time productively.

Planning/Organization: Establishes clear objectives and organizes duties for self, based on the goals of the department, division, or management center. Identifies resources required to meet goals and objectives. Seeks guidance when goals or priorities are unclear.

Initiative/Commitment: Demonstrates personal responsibility when performing duties. Offers assistance to support the goals and objectives of the department and division. Performs with minimal supervision. Meets work schedule/attendance expectations for the position.

Problem Solving/Creativity: Identifies and analyzes problems. Formulates alternative solutions. Takes or recommends appropriate actions. Follows up to ensure problems are resolved.

Teamwork and Cooperation: Maintains harmonious and effective work relationships with coworkers and constituents. Adapts to changing priorities and demands. Shares information and resources with others to promote positive and collaborative work relationships.

Interpersonal Skills: Deals positively and effectively with coworkers and constituents. Demonstrates respect for all individuals.

Communication (Oral and Written): Effectively conveys information and ideas both orally and in writing. Listens carefully and seeks clarification to ensure understanding.

Basic Competencies for a HR Professional…irrespective of his/her designation

Relationship Focused: approachable; relates easily to diverse groups and individuals; builds and develops relationships.

Customer Focused: focused on all aspects of service and product delivery; always knows the customer comes first.

Organizational Skills: able to set priorities; time and meeting management skills; able to delegate.

Problem Solving: ability to weave through necessary channels to accomplish outcomes in complex settings; understanding of processes and quality improvement.

Assessment of Talent: ability to judge and assess talent, recruit and select staff appropriate to current and future organizational needs; appreciation for and emphasis on developing a diverse workforce.

Integrity: forthright; direct; widely trusted.

Intelligence: ability to grasp complex concepts and determine courses of action.

Energetic: action oriented; hard working; likes challenges.

Active Listening: ability to absorb and translate others’ statements into objective responses and actions; ability to give and receive feedback in an appropriate manner.

Composure and Professionalism: ability to maintain professional demeanor in difficult or stressful situations; patience with customers; ability to diffuse anger and deal with difficult
customers.

Presentation Skills: ability to present and convey information in a wide variety of settings.

Flexibility: ability to cope effectively with change and uncertainty; ability to reprioritize quickly; ability to maintain a balanced perspective and see all sides of an issue.

Vision: ability to see the ‘big picture’ within the industry, the organization and the function now, and in the future; ability to translate a future state for others and instill a sense of vision in them; ability to motivate others.

Political Awareness: sensitive to political situations; able to assess political climate and how it affects responsibilities.

Competencies required in knowledge based industry (IT, ITES-BPO, Service Industry)

As per a survey done in US of A, the following competencies are required for a HR Professional in excel in “Knowledge Based Industry”…

1. Understanding the business of the Company. To become key players in the organization, HR Professionals must understand their organizations and the industry in which they work. However, knowing business is not enough. It has been proved in various studies conducted all over the world that HR professionals in high-performing organizations know as much about the business as their counterparts in the low-performing organizations. The difference lies in the usage of that knowledge. The HR professionals of high-performing organizations use their knowledge to make strategic contribution.

2. Personal Credibility. HR professionals must be credible to both their colleagues and the employees they serve and hence they must-

A) Possess a track record of success and have earned trust.

B) Instill confidence in others.

C) Demonstrate integrity.

D) Ask important questions.

E) Frame complex ideas in useful ways.

F) Take appropriate risks

G) Provide candid observations and

H) Offer alternative perspectives on business issues.

3) Knowledge of best practices. The HR professional must

A) Be an effective verbal communicator

B) Work with management to send clear and consistent messages.

C) Be an effective communicator in writing.

D) Facilitate organizational restructuring

E) Design programs that drive change

F) Facilitate design of internal communication processes

G) Attract the appropriate talent to the organization

H) Design compensation System

I) Facilitate dissemination of Customer information.

4) Ability of Manage Change. With regards to Change, the HR professional must

A) Establish trust in relationships with others

B) Be a visionary.

C) Take a proactive role in bringing about change

D) Build supportive relationships with others

E) Encourage others to be creative and

F) Identify problems critical to business success.

5) Ability to manage Culture. The culture of any organization is an important aspect and hence HR professionals must

A) Share knowledge with units/departments/divisions throughout the organization

B) Champion culture transformation

C) Translate the desired culture into specific behaviors

D) Challenge the status quo

E) Identify the culture required to foster the organizations business strategies and

F) Frame the culture in a way that excites employees.

6) Implementation of technology. Technology is increasingly used as a delivery vehicle for HR services. HR professionals need to be able to use HR Technology and web-based channels to deliver services to employees.

7) HR & Delivery. This competency encompasses the HR activities that are traditionally associated with HR function. There are six major factors within this domain- Staffing, development, organizational structure, HR measurement, and legal compliance and performance management.

HR Professionals in India

To start with, let me illustrate one case, it is from one Multi-National, IT company (Sorry, I am not suppose to mention the name of the company). In India they are having offices in two cities…Pune and Hyderabad. They are having manpower of 2,750 (Approx); to manage this manpower they have a HR-Team of 28 people (12 in Recruitment; 9 in HR-Operations and 7 in employee relations). Now, look at these statistics:

Attrition rate in the above-mentioned company is as high as 32 %
Every month they pay 300,000 – 500,000 INR to recruitment vendors.
Every month they get 15-20 % salary related queries (Attendance, Leaves etc)
HR people in most of the ITES-BPO companies are busy only in recruitment, settling full-and-finals and to some extent database management.

Now look at this, as per a survey done by, Virgin Management Consultants;

A. 77-84 % HR professional don’t know the business of company

B. More than 92% HR professionals are novice to economic reforms and economic growth of the country

C. 69-76% HR professionals are even aware of role and expectations of a HR.

D. 86% of HR Professionals are not aware of the business model of their organization

E. As much as 89% HR professionals are not aware of the effect of Financial Bills of their salary.

This is alarming.

Now, also analyze this, traditionally HR meant to be…Recruitment, Training and development, Compensation and Benefits, Performance Management, Payroll, Behavioral Scientists, Human Psychologist, Employee relations (in manufacturing sector we have Industrial Relations Expert, and Welfare officer), Employee related strategies and planning.

In present scenario,

Training and Development is a separate department;

Recruitment and payroll can be outsourced;

Strategies and Planning is a role of senior profile

People are not grown-up enough to understand human-behavior and hence they are not fit to be in employee-relations.

We have very few experts as Compensation and Benefits Analyst and most of the time this activity can be outsourced.

Now, you list out what are the activities that a HR Professional can do?

My take:

It is a well-known fact that most of the HR professionals are not good with numbers, they are not experts in statistics or taxation or economics; they are also not so good in “Human behavior” or “Human Psychology”…but most of them are too good in “internal politics”…making an issue out of nothing.

1) HR professionals as a taxman. A big portion in Direct Tax is “Salary”…components of salary…affect of tax on each component. A HR Professional can analyze this and restructure the “Salary Structure” of the company. This will also help in Compensation and benefits analysis. They can also take-up a role of “internal tax advisor” to employees.

2) HR Professional as a Strategist and a Policy-maker. To perform this activity, they must have good knowledge about business, industry, and best practices in the industry and best global practices.

3) HR Professional as a Coach, mentor and guide. In order to take-up this role, HR professionals must be empathetic, high on emotional quotient, expert in Human Behavior and Human Psychology.

4) HR Professional as a Business and Industry expert. As mentioned above, here also they need to have good knowledge about the business and industry.

Conclusion

These are some of the activities that I feel can change a face of this profession…called “Human Resource Management”. The path ahead is difficult to walk-on but it is not challenging. I know there are many HR-Heads and VP-HR, working in ITES-BPO industry or Service industry, drawing a salary as high as 60-75 lakh INR PA, but I doubt, if they can justify their salary with their work. As I have mentioned in the beginning, for HR-Professionals to be a Strategic Partner…Delhi Abhi Door Hai.

Looking forward to your comments and Feedback.

Regards

As a small business owner, your most difficult task is finding the money to control your business. Taking the necessary steps to prepare for small business loans can minimize the difficulty.

Banks and other lending institutions estimate the risk involved, thus turning down these funds requests from startup businesses. Yet, you can still get this finance for your business by proper preparation.

Avoid the common mistake of thinking you can start with grants from the government and community agencies. It is even more unlikely than getting the money from your own savings, family, friends, or a bank.

The main requirements of attaining these finances are your personal credit history, business plan, experience, education, and feasibility of the business you are starting or expanding.

The most important task to obtain this scheme is preparing a business plan. The business plan needs to show the lender that providing you with finance is a low-risk proposition. Your business plan must answer the questions a lending institution would ask.

These questions usually are:

How much money do you need?
If you are starting a business, this should be included at least in the start-up capital estimate. Accuracy is important, so request enough money to invest wisely.

What are you going to do with the money?
You will have to provide, in detail, the selected use of every pound requested. These finances are often needed for: operations (new employees, marketing), assets (equipment, real estate,), or to pay off business debts.

When will you repay the money?
Explain in detail how these funds will serve as a stepping-stone for your business. You will need to convince the lender that you are able to repay through the expected long-term profitability of your business.

You can apply for these finances through the easy available mode of communication, the internet. You just have to fill in an application form and the lender will get back to you if your form is approved.

The construction industry is a big market that where you must make your brand popular. The best way to do this is to give them items that represents your brand and at the same time would answer for all your marketing needs. Promote your business to the construction industry using promotional products and you will not only make a good impression on your clients, but you will also bring popularity into your business.

Using promotional products in advertising your business comes with a lot of advantages. First of all, these items come in the widest range of options that you can imagine. You will be able to enjoy enough elbow room in picking what you think would be best to represent your business to the market.

Another edge that these personalized items have is that they can be easily produced. In a matter of days, you can have your chosen products delivered to your address. Many online suppliers out there promise to do this, along with some other perks. Aside from on time delivery, there are suppliers that even offer free artwork enhancement. These will ensure that you can make your business known to your customers without the usual hassles that are associated with advertising a business.

Aside from that, these custom printed products are generally cheap and do not need a big budget. Big and small companies can really make the most out of these cheap items by making an imprint of a stylish business name or logo design. Marketing your brand must not make you spend a hefty amount of money.

A thing to remember when it comes to promoting your business to the construction industry with customized products is that you should select items which are somehow related to the business. You could try to make handy items that will surely be used by your customers. This will increase the chances that they appreciate your product and thus would remember your brand positively.

Go online and find the supplier that can provide you these materials at very affordable costs and the best of services. Make your business popular in the market without experiencing the worries that are common to advertising a business.

Globalization can be defined as the process of increasing connectivity and uniting the worlds markets and businesses. Globalization has emerged the last couple decades as the internet has emerged, making it easier for people to travel, communicate, and do business internationally. When economies become more connected to other economies, they have increased opportunity but also increased competition. With Globalization evolving, more and more pro globalization and anti globalization lobbies have arisen. The pro globalization party argues that globalization brings about much increased opportunities for almost everyone, where the anti-globalization parties argue that certain groups of people who are deprived in terms of resources are not currently capable of functioning within the increased competitive pressure.

The Problem we face is that Globalization links the world’s major companies together and makes it more of a universal world. This may dramatically impact the majority of populations around the world because of the fact that many of these major companies find loopholes in the system and can hire accountants and lawyers and scheme their way around paying enormous amounts of tax whereas the average person is deprived of fair tax laws and the burden is placed on them to make up for the chunk of loss tax money. Multinational companies are well placed to exploit tax havens and hide true profits thereby avoiding tax. Through offshore tax havens and fraud, and through transfer pricing, billions of dollars go untaxed. Estimates range from $50 billion to $200 billion of revenue losses worldwide. These corporations use transfer pricing to make up for missing tax money by saying the revenues were utilized in selling a good or service to another company or subsidiary. It’s kind of compared to money laundering where criminals open business to say they make revenue through a good or service but in turn they are operating an illegal business but can tell the IRS they have made profit from something legal.

Many people wonder why taxation is so important. For rich countries like the United States, one main reason is that the less tax paid to the government means more for individuals, who are best placed to contribute to the economy. For poor countries it means they can determine their own route out of poverty. It’s also the way they can begin to free themselves from dependence on handouts and the punitive conditions attached to aid. Faced with the pressures of Globalization and the threat that companies will relocate unless given lower taxes, governments have responded by engaging in tax competition to attract and retain investment capital. In the US there is little evidence that state and local tax cuts when paid for by reducing public services stimulate economic activity or create jobs. Yet there is evidence that increases in taxes, when used to expand the quantity and quality of public services, can promote economic development and employment growth.

Globalization is thought to reduce the ability of governments to collect taxes. If labor and capital can move between jurisdictions, then attempts to tax these factors will lead to a vanishing taxpayer as factors flee from high to low tax regions. Most economists support globalization because it raises the incomes of peoples worldwide through a one world economy and a competitive business market from the richest to the poorest countries. In other words it creates a one world economy where not just four or five countries rein supreme it creates more balance to try and help the poorer countries prosper. Globalization has been happening for decades. The US government has already surrendered massive amounts of power political and economic power to global organizations such as the United Nations and the World Bank. Our economy has been emerging into a one world economy. If you look inside the United States many of our products sold in our stores are made from the other side of the world. Some people see globalization as sending millions of our jobs overseas and it is destroying the standard of living of America’s middle class. In the new global system, multinational corporations can shop for labor almost anywhere they want. So why should they give American workers good wages and good benefits when they can legally pay large numbers of workers on the other side of the globe slave labor wages and get away with it? For blue collar American workers, globalization has turned out to be a very, very bad deal as you can see with Detroit, Pittsburgh and many other manufacturing cities across the United States. Now since they must compete with slave labor in other countries, the labor of these blue collar workers has become greatly devalued. This is having a devastating impact on manufacturing in the United States.

Much of the jobs and industries that have been outsourced have gone to nations such as China. So what is the impact of Globalization on taxation and America? As capital and labor become more mobile and internationally dependent, international tax competition increases. With more jobs being shipped overseas and more and more Americans out of work and taxes increasing, it seems like our country has shifted their focus towards a Wal-mart state of mind. Sustainability is the plan for the our country and as far as tax competition it should bring more companies to poorer nations and leave Americans with fast food chains, Universal Health care and Wal-Mart. Globalization makes it harder for countries to tax at high rates because people and capital will flow out. As labor and capital become more mobile, international tax competition increases. With tax competition individuals and businesses gain the freedom to take advantage of low tax rates abroad. On the other side, Globalization could mean more trading and therefore more jobs created because more and different resources will be available to Americans. This could in turn open all types of new markets for Americans, which would create a new era of jobs for many unemployed Americans. Only the future will tell what the impact of globalization means to tax rates and American business. Until then, it seems sustainability may be the key to reviving a down-spiraling economy.