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Author Topic: Tax Code That Encourages Manufacturing and Savings  (Read 4857 times)
Frodo
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« on: December 30, 2011, 06:06:01 pm »
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Let's try again (and this time, without party-line spambot answers):

If you were to design a tax code for the United States that would encourage manufacturing and producing exports, as well as encouraging savings over credit-driven consumption, how would you do it?  
« Last Edit: December 30, 2011, 06:17:52 pm by Frodo »Logged

Politico
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« Reply #1 on: December 30, 2011, 07:52:10 pm »
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No government can determine what consumers want and what firms have a comparative advantage in, especially within the context of the global economy. As a result, the best policy, the one that promotes the greatest level of economic freedom and growth prospects, is to allow consumers/firms to pursue their separate self-interests without excessive state interference. This implies having the state completely embrace free trade, and to be concerned in good times with collecting roughly enough tax revenue to ensure law/order, national defense and basic infrastructure (i.e., "public goods" with positive spillover effects such as interstate highways, certain types of R&D that are not prevalent in the private sector, etc.). Deficit spending is a fine policy only during downturns in the business cycle, but only if the deficit spending focuses on these three spheres and does not descend into areas the government has no business being involved in. Furthermore, whenever possible government responsibilities should be transferred from the federal level to the state level, and from the state level to the local level.

This broad philosophy will ensure the highest level of economic freedom and growth prospects, not to mention the greatest degree of government of the people, by the people, and for the people.
« Last Edit: December 30, 2011, 07:57:43 pm by Politico »Logged

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« Reply #2 on: December 31, 2011, 03:08:39 pm »
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High taxes on the rich, no taxes on the working class, Frodo.

Anyway, savings are not something we need to encourage.
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« Reply #3 on: January 01, 2012, 06:50:24 pm »
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Abolish taxes on investments and increase them on consumption.
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« Reply #4 on: January 01, 2012, 07:34:15 pm »
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Put in place a flat tax. Make the flat tax rate really low - like a 5% income tax. Yeah.
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« Reply #5 on: January 02, 2012, 12:47:22 am »
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Put in place a flat tax. Make the flat tax rate really low - like a 5% income tax. Yeah.

Manufacturing cannot thrive without infrastructure or well trained slaves, Zsach.  Those things alone require a 20% tax rate at the very least.
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« Reply #6 on: January 02, 2012, 03:34:13 pm »
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High taxes on the rich, no taxes on the working class, Frodo.

Anyway, savings are not something we need to encourage.

Correct as usual.
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« Reply #7 on: January 04, 2012, 09:59:13 pm »
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Simplifying the tax code (by which I mean eliminating most, if not all, of the various loopholes, deductions, and exceptions, not a flat rate on what does get taxed) needs to be the first priority.  Business income taxes need to shift from a tax on net income which can be easily fudged accounting wise by siphoning off income to various "expenses" to a tax on gross income for which such shenanigans are impossible.  Also the various IRA's, MSA's 527's and other special purpose savings accounts should just be merged into a single purpose ISA (Individual Savings Account) where it doesn't matter what or when you use the money.  It just gets deducted from income when it goes in, and gets counted as income when it comes out.

That would be a rough start.
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« Reply #8 on: January 04, 2012, 10:44:53 pm »
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End corporate tax breaks for companies that outsource, increased tariffs on China and India.
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« Reply #9 on: January 05, 2012, 10:46:07 am »
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If you want to encourage manufacturing, you're going to have to increase tariffs substantially. You can cut taxes all you want, but we're still not going to be anywhere close to competitive on costs versus places like India, Mexico, and China. You may as well offer a repeal of the Clean Air Act as a solution. All you'd get is a dirty country that can't afford to maintain its infrastructure. We'd also need to crack down on all the cheating China does. From currency manipulation to illegal dumping to turning a blind eye to fake merchandise, the Chinese are the kings of cheating. And it's sucking us dry.
Regarding saving, we need to teach people that saving money is important. In school. In families. Everywhere. But we have this stupid money taboo, where nobody is allowed to talk about money. And we also have super slick advertising and retail geniuses working round the clock to suck every penny out of us. The result is predictable.
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« Reply #10 on: January 05, 2012, 01:58:30 pm »
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Manufacturing is doing fine. Human labor employed in manufacturing isn't. Hopefully lower-level manufacturing can be eliminated through 3D Printing.
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« Reply #11 on: January 05, 2012, 07:28:50 pm »
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Abolish taxes on investments and increase them on consumption.
the poors!!!
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« Reply #12 on: January 06, 2012, 10:31:18 am »
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To encourage thrift:

1. Abolish income taxes on interest income on bank deposits, certificates of deposit, insurance policies, corporate bonds, and domestic government bonds. (Not from consumer loans, though!)

2. Make interest a non-deductible item (that includes abolition of the mortgage interest deduction).

3. Push savings bonds as a long-term investment.

4. Go to a gold standard that makes the printing of fiat currency for expansionary purposes impossible.

I'm not saying that the fourth item would all be good for manufacturing. 

For manufacturing --

Tariffs have been mentioned.

1. Have a national health care system, basically Medicare for all funded with a combination of income taxes and consumption taxes (federal sales tax), and maybe some 'sin taxes' (alcohol content, cancerweed products, and a federal tax upon fines for moving violations). As it is consumers get an effective subsidy from patronizing a business entity that does not have health insurance for its workers, so push the cost to the consumer. Add to that, the system that we have imposes costs on any exports and effectively subsidizes any import from companies that have less-costly systems.

2. Return to the graduated income tax so that small-scale manufacturing (and retailing and banking, different stories in themselves) no longer gets the disadvantage of facing the advantage of economies of scale that giant entities have in marketing, financing, employee benefits, information technology, vertical integration, buying politicians, and tax compliance. The nearly-flat tax code for large-scale investors and corporations effectively allows them to out-compete small business.  Make payments to lobbyists, directly or otherwise, non-deductible.

Small business is where the innovations and good service come from.

 
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« Reply #13 on: January 08, 2012, 10:52:02 pm »
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You want to encourage savings for the poor/working class.  You want to encourage consumption for the rich.  Consumption taxes are bad for that. 
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« Reply #14 on: January 11, 2012, 12:00:33 am »
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I personally would couple the replacement of private health insurance by Medicare(since health insurance significantly increases the cost of employment) with the replacement of all taxes with a VAT(since income taxes increase the cost of employment to an even greater extent). Additionally a VAT would fall on both imports and domestically produced goods equally(whereas corporate/income/cap gains taxes fall only on american produced goods and services).

I would also acknowledge that the manufacturing industry is shifting away from human labour towards mechanization and work to subsidize the development and adoption of technologies that enable that.

Given the substantial harm done to the poor by these policies, I would also create a negative income tax(or something comparable) to eliminate poverty and stimulate the economy through increased demand.

As for the savings side of things, the shift from income taxes to a VAT would encourage savings among the middle/upper class  while the NIT would enable savings by the poor.
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« Reply #15 on: January 12, 2012, 08:23:29 pm »
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I personally would couple the replacement of private health insurance by Medicare(since health insurance significantly increases the cost of employment) with the replacement of all taxes with a VAT(since income taxes increase the cost of employment to an even greater extent).

Sounds like Europe.

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I would also create a negative income tax(or something comparable) to eliminate poverty and stimulate the economy through increased demand.

How could you start off with such a bad idea and end with such a good idea? A negative income tax would not eliminate poverty, but it would help alleviate it. I am not sure it would have much of an impact upon stimulating the economy, though.

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As for the savings side of things, the shift from income taxes to a VAT would encourage savings among the middle/upper class  while the NIT would enable savings by the poor.

You don't really believe politicians would do away with income taxes forever, do you? I cannot think of a single place on the planet that has VAT but no income taxes. It's always VAT and income taxes.
« Last Edit: January 12, 2012, 08:26:00 pm by Politico »Logged

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« Reply #16 on: January 13, 2012, 08:52:02 pm »
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Sounds like Europe.
Not really. Europe has plenty of taxes on top of the VAT.... whereas I'd want to get rid of all other taxes(other then property taxes on a local and maybe state level, which I'd reform into Land Value taxes instead).

And my vision for a superior healthcare system is closer to Singapore's(the most efficient in the whole developed world at 4% of GDP) then Europe's.

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I would also create a negative income tax(or something comparable) to eliminate poverty and stimulate the economy through increased demand.

How could you start off with such a bad idea and end with such a good idea? A negative income tax would not eliminate poverty, but it would help alleviate it. I am not sure it would have much of an impact upon stimulating the economy, though.
By definition a NIT set at the poverty line or above it would eliminate poverty. Of course this ignores the fact that cost of living varies from place to place(so a NIT set at the poverty line wouldn't lift the poor in New York out of poverty, but it would push those in suburban Utah quite far beyond poverty)... but I consider this a good thing because it would trigger the revival of the cities as the lumpenproletariat would flee urban areas for low CoL suburbs, thus triggering white flight from the suburbs into what were previously urban ghettos.

As for stimulating the economy? I'm a believer that the present economic problems can substantially be explained as a problem of insufficient demand. You presumably reject Keynesianism, so I don't think theirs much point continuing this dispute since neither of us will convince the other.

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You don't really believe politicians would do away with income taxes forever, do you? I cannot think of a single place on the planet that has VAT but no income taxes. It's always VAT and income taxes.
This is my ideal, but yes I have serious doubts that anyone other then a dictator could implement it.

While we're talking my ideal it would also involve the purging of various forms of rentseeking: professional licenses, agricultural subsidies and tariffs most obviously.

Of course with the corporate tax abolished the whole "corporate personhood" idea falls apart, thus they can be stripped of their capacity to coopt and corrupt politics. And with the corporations kicked out of politics the unions can be kicked out as well(their presence only justified as a counterbalance against corporations.

While we're at it it might not be a half bad idea to obliterate the unions altogether, since with NIT and UHC they're no longer needed as a safeguard against poverty. The unions dismantled should be a major boon to industry.

Then their's the matter of education... I'd try to reverse the shift towards university degrees for jobs/fields that don't really need them; thus ending the qualification inflation throughout the econony and it's attendant consequences of increased student debt, lost years of productivity and declining quality of students on campuses

I'd also make a serious move towards upgrading the nations infrastructure.
« Last Edit: January 13, 2012, 09:13:37 pm by Kyro sayz »Logged
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« Reply #17 on: January 14, 2012, 02:46:20 pm »
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Simplifying the tax code (by which I mean eliminating most, if not all, of the various loopholes, deductions, and exceptions, not a flat rate on what does get taxed) needs to be the first priority.  Business income taxes need to shift from a tax on net income which can be easily fudged accounting wise by siphoning off income to various "expenses" to a tax on gross income for which such shenanigans are impossible.  Also the various IRA's, MSA's 527's and other special purpose savings accounts should just be merged into a single purpose ISA (Individual Savings Account) where it doesn't matter what or when you use the money.  It just gets deducted from income when it goes in, and gets counted as income when it comes out.

That would be a rough start.

Absolutely not!!! So as an average over the entire economy 35% net income tax equals about 1-2% of gross revenue tax. And you want to systematically kill the largest commodity based industries(a huge chunk of the economy) in the United States by making them bankrupt and watch as a very high margin company like Apple sees probably a 95% decrease in their tax liability. Yeah that makes a lot of sense.

Besides the obvious "Why tax employment, capital investment, etc.", the most valuable thing about taxing net income is unlike gross, units, etc. at least it standardizes down to exactly why businesses are formed. Their economic reason is to produce net income to owners/shareholders. Revenue is meaningless. If the tax on revenue outstrips their slim margins they shut down operations because it doesn't produce net income.

If your going to tax business you need to tax the value that keeps them existing otherwise you unnecessarily just kill a ton by taxing the value that doesn't keep them in existence.
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« Reply #18 on: January 14, 2012, 03:33:24 pm »
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Sounds like Europe.
Not really. Europe has plenty of taxes on top of the VAT.... whereas I'd want to get rid of all other taxes(other then property taxes on a local and maybe state level, which I'd reform into Land Value taxes instead).

And my vision for a superior healthcare system is closer to Singapore's(the most efficient in the whole developed world at 4% of GDP) then Europe's.

Quote
Quote
I would also create a negative income tax(or something comparable) to eliminate poverty and stimulate the economy through increased demand.

How could you start off with such a bad idea and end with such a good idea? A negative income tax would not eliminate poverty, but it would help alleviate it. I am not sure it would have much of an impact upon stimulating the economy, though.
By definition a NIT set at the poverty line or above it would eliminate poverty. Of course this ignores the fact that cost of living varies from place to place(so a NIT set at the poverty line wouldn't lift the poor in New York out of poverty, but it would push those in suburban Utah quite far beyond poverty)... but I consider this a good thing because it would trigger the revival of the cities as the lumpenproletariat would flee urban areas for low CoL suburbs, thus triggering white flight from the suburbs into what were previously urban ghettos.

As for stimulating the economy? I'm a believer that the present economic problems can substantially be explained as a problem of insufficient demand. You presumably reject Keynesianism, so I don't think theirs much point continuing this dispute since neither of us will convince the other.

Quote
You don't really believe politicians would do away with income taxes forever, do you? I cannot think of a single place on the planet that has VAT but no income taxes. It's always VAT and income taxes.
This is my ideal, but yes I have serious doubts that anyone other then a dictator could implement it.

While we're talking my ideal it would also involve the purging of various forms of rentseeking: professional licenses, agricultural subsidies and tariffs most obviously.

Of course with the corporate tax abolished the whole "corporate personhood" idea falls apart, thus they can be stripped of their capacity to coopt and corrupt politics. And with the corporations kicked out of politics the unions can be kicked out as well(their presence only justified as a counterbalance against corporations.

While we're at it it might not be a half bad idea to obliterate the unions altogether, since with NIT and UHC they're no longer needed as a safeguard against poverty. The unions dismantled should be a major boon to industry.

Then their's the matter of education... I'd try to reverse the shift towards university degrees for jobs/fields that don't really need them; thus ending the qualification inflation throughout the econony and it's attendant consequences of increased student debt, lost years of productivity and declining quality of students on campuses

I'd also make a serious move towards upgrading the nations infrastructure.

How should I put this. I like the way you think, but you have a couple of (probably ideological) hold ups that seem to prevent you from just jumping both feet into the mindset I think your brain and research are telling is the right way to go.

To start I too think that the Singapore system is the greatest healthcare system in the world. By any objective measure its not even close and completely trounces the one we have in the US and even more so most of Europe, but... its most definitely not Medicare taking over our healthcare system. Actually its what I call Medicare inverted because they don't have an equivalent in Singapore. Older age health costs are paid almost 100% through private money. Its young 18-20s or 30s(depending on your wealth/income) that is paid for by the government.

I too share the same concerns about VAT/National Sales and the ability to keep the income tax from showing back up again(also the issue of how to transition) and so I've concluded that we've essentially gone to far in the income tax world for there to ever be a switch. But its not as big of an improvement as fair taxers think it is so I'm content with that.

The NIT is a good proposal and you've nailed all of the nice benefits that come with it. Unionization becomes less desirable. It also can kill the minimum wage allowing for people to develop advantageous work histories, experience, etc. for career choices that would otherwise not be available. Also, you cease to have much in the way of unemployment issues and the focus shifts to income. Also, currently the federal government is on the hook for all of cost of unemployed individual and a NIT allows the federal government to only be on the hook for some of it because the rest is picked up by real income. Essentially the end of the "either, or" system and allowance of partial support.

Agree with you on the end of *forced* professional licensing. Keep in mind they'll still exist though because people will choose to business with folks their carry various non forced professional designations. For example in my industry, CFA, CFP, CAIA, CLU, ChFC, MSFS, CRA, etc.

But the one that bothers me: you subscribe to Keynesian beliefs in regards to the lack of aggregate demand in the economy as always 100% of the problem no matter what. You are so close. Why not just drop that last bucket of water your carrying and jump all the way in. I mean you already proposed what is sacrosanct to Keynesians anyway... a shift from taxation of income to taxation of spending. Keynesianism is hell bent on making the case that the solution to every problem is just the lack of buying even if the individual/entity doesn't have the balance sheet to support it(cough new debt cough). Krugman and Stiglitz wouldn't even want a consumption taxer even calling himself a Keynesian anyway so its not like they would want you. Plus its the perfect time to give them them the finger and ditch given how their ideas and predictions are getting basically a daily beating in Europe. They told you there was no such thing as the "Keynesian endpoint" ever and now they got a whole mouth full of foot. You've got to at least admit that it is enticing to ditch the school that doesn't leave you out to dry to defend against things they said would never happen, right?
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« Reply #19 on: January 15, 2012, 12:21:10 am »
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To start I too think that the Singapore system is the greatest healthcare system in the world. By any objective measure its not even close and completely trounces the one we have in the US and even more so most of Europe, but... its most definitely not Medicare taking over our healthcare system. Actually its what I call Medicare inverted because they don't have an equivalent in Singapore. Older age health costs are paid almost 100% through private money. Its young 18-20s or 30s(depending on your wealth/income) that is paid for by the government.
I agree that Singapore has the greatest healthcare system in the world. My reason for specifying Medicare is that the Singaporean method isn't even on the radar anywhere in the West while the single payer health model is, and I think that single payer is at least better then what America has now.

Also if you have the impression that Singapore's system is laissez-faire you're quite wrong. Singapore's hospitals are predominantly "government-owned corporations"(they service 70/80% of Singaporean patients) and since Singapore tightly contains their costs they function as a "public option" thats keeps the private 20/30% lean through competition.

Quote
I too share the same concerns about VAT/National Sales and the ability to keep the income tax from showing back up again(also the issue of how to transition) and so I've concluded that we've essentially gone to far in the income tax world for there to ever be a switch. But its not as big of an improvement as fair taxers think it is so I'm content with that.
Yes it is: "Bill Archer, former head of the House Ways and Means Committee, asked Princeton University econometricists to survey 500 European and Asian companies regarding the impact on their business decisions if the United States enacted the FairTax. Of these companies, 400 responded that they would build their next plant in the United States while the remaining 100 companies said they would move their corporate headquarters to the United States". A VAT would of course be even better then the "Fair tax"

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But the one that bothers me: you subscribe to Keynesian beliefs in regards to the lack of aggregate demand in the economy as always 100% of the problem no matter what. .... I mean you already proposed what is sacrosanct to Keynesians anyway... a shift from taxation of income to taxation of spending.
I'm not an ideological Keynesian, which is to say I don't think it's 100% or even 50% of the problem... I think the best strategy is a combination of supply side and demand side strategies(coupled with methods that don't fit in either category).

Are you suggesting that lack of demand isn't a negative impact on the economy? Polls taken of American businessmen show a substantial number(can't remember the exact number but it was something like 30% or 40%) consider the no 1 problem for the businesses the fallen demand for the goods and services.

 
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Plus its the perfect time to give them them the finger and ditch given how their ideas and predictions are getting basically a daily beating in Europe. They told you there was no such thing as the "Keynesian endpoint" ever and now they got a whole mouth full of foot. You've got to at least admit that it is enticing to ditch the school that doesn't leave you out to dry to defend against things they said would never happen, right?
I wouldn't say they're getting a "daily beating" considering how Greece's austerity strategy seems to be making it's economy weaker... my general impression is that the austerity states are getting hurt badly, while Iceland(which didn't go down the austerity root) has more or less recovered.
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« Reply #20 on: January 15, 2012, 09:22:53 am »
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To start I too think that the Singapore system is the greatest healthcare system in the world. By any objective measure its not even close and completely trounces the one we have in the US and even more so most of Europe, but... its most definitely not Medicare taking over our healthcare system. Actually its what I call Medicare inverted because they don't have an equivalent in Singapore. Older age health costs are paid almost 100% through private money. Its young 18-20s or 30s(depending on your wealth/income) that is paid for by the government.
I agree that Singapore has the greatest healthcare system in the world. My reason for specifying Medicare is that the Singaporean method isn't even on the radar anywhere in the West while the single payer health model is, and I think that single payer is at least better then what America has now.

Also if you have the impression that Singapore's system is laissez-faire you're quite wrong. Singapore's hospitals are predominantly "government-owned corporations"(they service 70/80% of Singaporean patients) and since Singapore tightly contains their costs they function as a "public option" thats keeps the private 20/30% lean through competition.

Quote
I too share the same concerns about VAT/National Sales and the ability to keep the income tax from showing back up again(also the issue of how to transition) and so I've concluded that we've essentially gone to far in the income tax world for there to ever be a switch. But its not as big of an improvement as fair taxers think it is so I'm content with that.
Yes it is: "Bill Archer, former head of the House Ways and Means Committee, asked Princeton University econometricists to survey 500 European and Asian companies regarding the impact on their business decisions if the United States enacted the FairTax. Of these companies, 400 responded that they would build their next plant in the United States while the remaining 100 companies said they would move their corporate headquarters to the United States". A VAT would of course be even better then the "Fair tax"

Quote
But the one that bothers me: you subscribe to Keynesian beliefs in regards to the lack of aggregate demand in the economy as always 100% of the problem no matter what. .... I mean you already proposed what is sacrosanct to Keynesians anyway... a shift from taxation of income to taxation of spending.
I'm not an ideological Keynesian, which is to say I don't think it's 100% or even 50% of the problem... I think the best strategy is a combination of supply side and demand side strategies(coupled with methods that don't fit in either category).

Are you suggesting that lack of demand isn't a negative impact on the economy? Polls taken of American businessmen show a substantial number(can't remember the exact number but it was something like 30% or 40%) consider the no 1 problem for the businesses the fallen demand for the goods and services.

 
Quote
Plus its the perfect time to give them them the finger and ditch given how their ideas and predictions are getting basically a daily beating in Europe. They told you there was no such thing as the "Keynesian endpoint" ever and now they got a whole mouth full of foot. You've got to at least admit that it is enticing to ditch the school that doesn't leave you out to dry to defend against things they said would never happen, right?
I wouldn't say they're getting a "daily beating" considering how Greece's austerity strategy seems to be making it's economy weaker... my general impression is that the austerity states are getting hurt badly, while Iceland(which didn't go down the austerity root) has more or less recovered.

Your focusing on the providing of healthcare at location. If you look at healthcare payment the Singapore system is more private than ours. I.E. a larger percentage of the population(and especially a larger percentage of cost--elderly) is paid by private insurance instead of a public plan. And single payer is worse than what we have now because what you don't get is that Americans will not tolerate the end of lavish benefits by fiat and the amount of supply shrinkage to transition to single payer makes it near impossible to do. You end up with the expense and the lower quality and system desperately trying to bankrupt some part of itself all at the same time. That is before you get into a conversation about it being bad policy in general.

Well no $hit European and Asian companies would move factories here if you implemented the fair tax here, but ask any company in retail for example who are reliant on American consumer spending and they'll tell you that it would be the single toughest challenge their company would ever see. Its of course a mix bag. I would prefer it, but the amount of political capital spent to get it and the risk of ending up with both income and sales taxes just points to me saying their are better things to spend that political capital on. For example private accounts in social security I think is the single greatest return on political capital you could ever see in government legislation today.

Well you do realize that demand in the absence of cost is near infinite right? People want to buy things and you don't have to stimulate the desire to do so they will eventually do it anyway. Plus the vast majority of consumption is ongoing regardless of how the economy is doing. So you have to eat. You have to have a place over your head. You can delay the fixing of a problem on your car or some maintenance, but eventually your stupid not to spend on it if you have the money. Same for replacing your roof. Same for eventually replacing broken appliances, cars, etc. The list goes on and on. So when a demand site Keynesian says he wants to stimulate demand what he is really saying is that he wants to accelerate the purchasing of luxury items when a normal individual/entity given their current balance sheet finds it not ideal yet. And how they do it is through the stimulation of debt...personal, corporate, and public. The problem is that encouraging of debt to purchase things that don't have an adequate return on capital either by lowering interest rates to an artificially low level or by directing public entities to spend more money just adds more risk into the system and (in the case of public spending) removes other capital from the system that would have been used on better risk vs. return spending that grew the economy more. I'm in a hurry so I made this short and sweet and come back later if you have comments or ?s.

Well keep in mind that Greece's austerity is almost entirely more taxation and has little spending cuts by comparison. Ireland on the other hand is doing the opposite. And I find it interesting to see the differences in success. Furthermore its the Keynesians that said Greece, Italy, Portugal, etc. would never be at risk of not making interest payments. People like Krugman and Stiglitz said this as little far back as even a 18 months ago. So yeah they ate foot. For them they always thought that the stimulation of government spending out performed the new debt so there was never a reason to be concerned about the burden of public debt. Well so much for that idea, right...?

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They call me PR
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« Reply #21 on: January 17, 2012, 12:15:48 pm »
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The reason that so many Americans have fallen prey to credit-driven consumption is because real wages have stagnated and have not kept pace with the rate of inflation. So I would look at a tax code that is most conducive, first and foremost, to higher real wage growth.
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Wonkish1
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« Reply #22 on: January 17, 2012, 12:24:28 pm »
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The reason that so many Americans have fallen prey to credit-driven consumption is because real wages have stagnated and have not kept pace with the rate of inflation. So I would look at a tax code that is most conducive, first and foremost, to higher real wage growth.

That is just incorrect. Credit driven consumption is almost entirely driven by low interest rates on debt and also low interest rates on time deposits. It removes the high incentive to save and gives a high incentive to borrow.

The financing of basic need consumption by credit wasn't an issue at all in the last decade. It was the homes, cars, computers, tvs, etc. that were all taken out on credit and all of which these people could have easily done with a much less expensive alternative or with exception of housing and transportation could have easily done without.

Interesting statistic prior to the crash. The average young graduate prior to 2008 took about 15 years to reach his parents income level, but it only took him about 5 years to reach his parents standard of living. Guess what made up the difference?
« Last Edit: January 17, 2012, 12:27:41 pm by Wonkish1 »Logged
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« Reply #23 on: January 17, 2012, 12:30:10 pm »
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Interesting statistic prior to the crash. The average young graduate prior to 2008 took about 15 years to reach his parents income level, but it only took him about 5 years to reach his parents standard of living. Guess what made up the difference?

Dubious right-wing definitions of 'standard of living'?
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Wonkish1
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« Reply #24 on: January 17, 2012, 12:47:06 pm »
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Interesting statistic prior to the crash. The average young graduate prior to 2008 took about 15 years to reach his parents income level, but it only took him about 5 years to reach his parents standard of living. Guess what made up the difference?

Dubious right-wing definitions of 'standard of living'?

How about someone that doesn't live in some Robespierrean la la land?
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