Tax Reform

[classhandicapper]

We don't need spending cuts just a spending freeze. Tax cuts do create more tax revenue through economic growth.

Agreed. I misused the term the way the media and liberals always do. What I meant was relative to what spending would be. Spending could still be growing. It would just have to grow at a slower rate that currently projected.

I would argue that your assumption that corporate taxes not collected would increase the deficit is wrong.

There may be some level at which a reduction in tax rates increases revenue enough to pay for them, but I'm not buying it as a prudent fiscally conservative assumption now. It should be a hope, not a plan.

Why is wealth creation always described as a zero sum game? If people are creating wealth and making money it doesn't mean that they are doing it at the expense of someone else creating wealth and making money.
Today 09:48 AM

I agree with this statement, but not in terms of free trade.

The net of free trade so far was to transfer jobs and wealth accumulation to foreign countries that offered a better deal to employers in terms of wages, taxation, regulation etc...

In return, those of us in the US that were employed in jobs that did not move got cheaper goods (a win) and stockholders got much higher profits and stock prices (a win). The rest of the people got crushed. (I was part of shareholder class and made out like a bandit).

I'm not buying the argument that there are always losers in business as we make progress. I agree with the statement, but the extent to which we gutted the middle class via free trade is a big part of the problem in the US and why Trump is president.

When standards of living, laws, wages, regulations, and government are similar, free trade works well. When they are not, it causes huge disruptions and creates large winners and losers. Eventually, another 50 years from now, when a lot of the losers are dead, it will all balance out and the world will be better off. But that's little consolation for the multiple generations that got screwed.

[AndyC]

Originally Posted by classhandicapper

...There may be some level at which a reduction in tax rates increases revenue enough to pay for them, but I'm not buying it as a prudent fiscally conservative assumption now. It should be a hope, not a plan.

Would a fiscal conservative believe that capital is better allocated through the private sector or through government spending? My view is that corporations will have more cash and will make decisions based on what is best for them. It might mean expansion of the business to increase profits, it may mean higher dividends which will increase tax revenue, it may be a stock buyback which might increase tax revenues from the sellers of stock, it might be a pay down of debt which will strengthen and or stabilize the business, or it might mean that it is invested whereby it helps others who are in need of capital.

Originally Posted by classhandicapper

I agree with this statement, but not in terms of free trade.

The net of free trade so far was to transfer jobs and wealth accumulation to foreign countries that offered a better deal to employers in terms of wages, taxation, regulation etc...

In return, those of us in the US that were employed in jobs that did not move got cheaper goods (a win) and stockholders got much higher profits and stock prices (a win). The rest of the people got crushed. (I was part of shareholder class and made out like a bandit).

I'm not buying the argument that there are always losers in business as we make progress. I agree with the statement, but the extent to which we gutted the middle class via free trade is a big part of the problem in the US and why Trump is president.

When standards of living, laws, wages, regulations, and government are similar, free trade works well. When they are not, it causes huge disruptions and creates large winners and losers. Eventually, another 50 years from now, when a lot of the losers are dead, it will all balance out and the world will be better off. But that's little consolation for the multiple generations that got screwed.

I believe that technology as much as free trade has caused problems for many workers. The emphasis on trade should be "fair" trade. There are losers everyday in business. Not necessarily a bad thing. Bad businesses or ones whose products are not wanted or needed should not be propped up.

[Clocker]

Originally Posted by classhandicapper

The net of free trade so far was to transfer jobs and wealth accumulation to foreign countries that offered a better deal to employers in terms of wages, taxation, regulation etc...

GDP consists of goods and services. Opponents of free trade tend to concentrate on the goods side. Even there, 80% of manufacturing jobs lost in recent years were lost to automation, only 20% were moved off-shore. Something like 50% of China's GDP is in manufacturing, while ours is only 20%.

Free trade also creates jobs here, like in your local imported car dealership or importers that distribute those goods or retailers that sell imported products. While an imbalance of goods results in an imbalance of money flowing out of the country, what doesn't come back in the form of purchases generally comes back as investment, either in the form of stocks and bonds or in direct investment such as Ikea stores or Toyota and Mercedes plants in the US. China can't just sit on our money, they have to do something with it, even if it is just buying our government bonds.

[classhandicapper]

Originally Posted by Clocker

GDP consists of goods and services. Opponents of free trade tend to concentrate on the goods side. Even there, 80% of manufacturing jobs lost in recent years were lost to automation, only 20% were moved off-shore. Something like 50% of China's GDP is in manufacturing, while ours is only 20%.

Free trade also creates jobs here, like in your local imported car dealership or importers that distribute those goods or retailers that sell imported products. While an imbalance of goods results in an imbalance of money flowing out of the country, what doesn't come back in the form of purchases generally comes back as investment, either in the form of stocks and bonds or in direct investment such as Ikea stores or Toyota and Mercedes plants in the US. China can't just sit on our money, they have to do something with it, even if it is just buying our government bonds.

I don't deny that automation matters. It always has. There are also clearly benefits to free trade long term. However, imo everyone that advocates free trade (and I used to be one of them) is in denial about the short term damage it has done to millions. They are intellectually invested in the theory or have benefited, so they don't see it.

As I said earlier, I realize there are always losers when it comes to economic progress, but imo the idea is to benefit many people and hurt only a few. It has been working the other way around. It has benefited a few a LOT and hurt many.

Trump explains it another way.

If we import 100 billion from country X and they import 50 billion from us, the gap is the trade deficit. They then take that extra 50 billion dollars and invest it in our stocks, bonds, and real estate to balance the capital account.

They get the extra jobs associated with that 50 billion and are getting richer on our assets and we get the cheaper depreciating cars, clothes, electronics etc..

That's not a good deal.

A good deal is where the trade is relatively balanced and the benefits are distributed fairly evenly between consumers, workers, and owners.

[classhandicapper]

Would a fiscal conservative believe that capital is better allocated through the private sector or through government spending? My view is that corporations will have more cash and will make decisions based on what is best for them. It might mean expansion of the business to increase profits, it may mean higher dividends which will increase tax revenue, it may be a stock buyback which might increase tax revenues from the sellers of stock, it might be a pay down of debt which will strengthen and or stabilize the business, or it might mean that it is invested whereby it helps others who are in need of capital.

My view (as a fiscal conservative) is that the private sector allocates capital way better than the public sector, but if I cut taxes and give an extra 100 billion (or whatever) to the private sector, I will get faster economic growth, but not enough to make up the full 100 billion. So I should slow the growth of spending to keep the budget in sync.

The left lives in the fantasy that you can keep increasing spending, raising taxes, lowering interest rates artificially, and printing money without any negative economic impact.

The right lives in the fantasy that tax cuts pay for themselves.

[FantasticDan]

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[Tom]

No problem - let Bitchy Mitchy and his ilk pay their own Viagra.
That should take care of at least half of it.

[Clocker]

Originally Posted by classhandicapper

A good deal is where the trade is relatively balanced and the benefits are distributed fairly evenly between consumers, workers, and owners.

And you think that the government can do a better job of that than the private sector? Why would you say that the private sector can do a better job of managing investment but not of managing trade? And trade restrictions result in higher prices and fewer choices for consumers.

Any government regulation or restriction on imports becomes a highly political issue, resulting in a stampede of affected US businesses to influence legislators and the executive branch. It inhibits innovation and inflates prices. But it would create jobs -- for lobbyists.

And where in the Constitution does it say that the federal government has the authority and duty to determine and enforce a "fair" distribution of benefits from commerce? "Fair" is an opinion, not an objective fact. How much sense did Obama make preaching that the rich weren't paying their fair share?

[OntheRail]

Originally Posted by Tom

No problem - let Bitchy Mitchy and his ilk pay their own Viagra.
That should take care of at least half of it.

And if we insist they pay for their own hookers and hooch that should cover the rest.

[classhandicapper]

Originally Posted by Clocker

And you think that the government can do a better job of that than the private sector? Why would you say that the private sector can do a better job of managing investment but not of managing trade? And trade restrictions result in higher prices and fewer choices for consumers.

Any government regulation or restriction on imports becomes a highly political issue, resulting in a stampede of affected US businesses to influence legislators and the executive branch. It inhibits innovation and inflates prices. But it would create jobs -- for lobbyists.

And where in the Constitution does it say that the federal government has the authority and duty to determine and enforce a "fair" distribution of benefits from commerce? "Fair" is an opinion, not an objective fact. How much sense did Obama make preaching that the rich weren't paying their fair share?

We already have a trade policy that was put together by the government.

Who do you think negotiated NAFTA and all the other trade deals around the world that shifted jobs and wealth and helped destroy the US middle class?

Who do you think lowers interest rates and prints money to weaken their currencies and gain a trade advantage?

Who do you think protects domestic industries so the the US and other countries can't export and compete?

It's a difficult situation, but one thing is certain. We can't continue doing what we are doing now. The deals have to be fair, we can't allow currency manipulation, and they have to produce balanced trade.

[Clocker]

Originally Posted by classhandicapper

We already have a trade policy that was put together by the government.

Who do you think negotiated NAFTA and all the other trade deals around the world that shifted jobs and wealth and helped destroy the US middle class?

We should not have a trade policy or NAFTA or anything else. Trying to fix them will just make them worse. Throw them all out and let the private sector businesses work out their own trade policies.

Who do you think lowers interest rates and prints money to weaken their currencies and gain a trade advantage?

You mean besides the Federal Reserve? Our government needs to stop doing it here. It is stealth taxation, done in part to make our deficit spending seems better than it really is. A stable dollar means even greater inflows of foreign investment.

Who cares if China does it. It just increases the buying power of American consumers and hurts the Chinese.

We can't continue doing what we are doing now. The deals have to be fair, we can't allow currency manipulation, and they have to produce balanced trade.

Who defines "fair"? The businesses with the most and best lobbyists? The unions with the most members and political contributions?

Let the consumers decide with their purchases.

Everything I said above is, of course, irrelevant and impractical, because there is no way the politicians feeding at the public trough are going to act in the general interests of the public. They are going to keep pandering to the special interests and to the people that can deliver the votes, and call it "fair".

[davew]

I hope the new postcard has a line for donations to national treasury so the libs who are complaining about not paying enough have a chance to pay more.

[Tom]

It's that WE don't pay enough, not THEM.

[chadk66]

The tax package that gets put together will fully determine the mid terms. I'm not sure the dips shits on the red side of the aisle are smart enough to figure that out.

[Clocker]

Originally Posted by chadk66

The tax package that gets put together will fully determine the mid terms.

I doubt that. Remember that 47% of the population do not pay any federal income tax. How many of the rest will be significantly affected by the tax bill? How many will forget about it by next November, and have other issues on their minds? How many will vote a straight party ticket for the same party they always do?