Slashdot Mirror
US' Proposed China Tariffs Would Target Robotics, Satellites (engadget.com)
An anonymous reader quotes a report from Engadget: The U.S. Trade Representative has published the list of Chinese products that would be subject to its proposed tech tariffs, and there are a few clear themes. The move would hike the costs of about 1,300 products, including industrial robots, communication satellites, spacecraft and a slew of semiconductors.The aim, as before, is to punish China for allegedly goading American companies into transferring their patents and technology to Chinese firms for the sake of claiming economic superiority. The USTR claimed the proposed tariffs would stymie Chinese plans while "minimizing the impact" on the American economy. The tariffs are still subject to a 60-day notice process that would include public comments until May 11th and a public hearing on May 15th.
Even those it's arguably unconstitutional, machine guns have been banned among the US citizenry for a very long time.
Also, last I checked, the US Government is supposed to be a government of the people, by the people, and for the people; so, the people do indeed need guns. The 2nd Amendment makes this very clear: "A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed."
In those days, "well regulated" meant "armed with equipment of regular and high quality", and "militia" still means "group of patriots".
Importing cheap semiconductors to the EU, designing and assembling my technology in Romania and then selling the finished product to the US could well be cheaper and more profitable than producing it in China and importing it directly from China to the US because the tariffs are going to even out the cents I have to pay the Romanians more? And all that without risking having my designs stolen so the Chinese could crank out cheap knockoffs?
On behalf of the EU, I wish to express my gratitude towards dear leader across the pond.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!
When you’re already $500 Billion DOWN, you can’t lose!
And this folks, is what leadership has come to mean today.
I am Slashdot. Are you Slashdot as well?
The US has a trade imbalance with China... that means the US imports more from China than China does from the US. Therefore, quid pro quo... the US can deny China more revenue than China can deny the US.
Sure, the US can hurt ITSELF by denying ITSELF Chinese goods which the US ITSELF makes more expensive in the US through tariffs. However, with really no exceptions there are comparable trade partners that can offer the same good at either the same or very similar price point.
What is more, there really isn't anything China produces that has to come from China. They don't own any IP that anyone cares about. The only reason anyone does anything in China is mostly due to low labor costs which are less relevant now for two reasons. First, Chinese labor costs have been going up such that labor costs are often cheaper somewhere else if that is important. And second, the rise of automation is rendering the relevance of labor costs of that type... less relevant.
Will tariffs help US producers? Maybe. They can and they sometimes don't. It is complicated. There are countries with very high tariffs that have absolutely flat-lined manufacturing... which results in things being more expensive for consumers without any pay off in terms of domestic production. Then there are places where tariffs are hugely helpful to domestic production.
A big part of the controversy so far as I can see if that there is a myth about "free trade"... that it is "the american way" and that "it actually exists anywhere". Historically, the US Federal Government funded itself principally from tariffs. This didn't really stop until the Cold War when very generous trade deals were offered as an inducement for fence sitting nations to join the "first world". For reference, first world during the Cold War referred to any nation allied with the US. Second world referred to any nation allied with the Soviet Union. Third world referred to any nation not allied with either the US or Soviet Union. Regardless, "free trade" was a marketing term the US used to brand its trade deals. The US was branding everything it did as "free" something. Freedom fighters, Free World, Free Trade etc. US Free Trade doctrine was only created to put pressure on the Soviets and has really no purpose in the 21st century unless again applied to serve some kind of geopolitical agenda. Instead, the US is applying the concept mindlessly with no particular purpose. Its cited as "the american way" like its something essential to American values when any fool that looks at history can see when it came around and why. Second, ACTUAL free trade only exists domestically within certain nations and doesn't really exist in any international context and never did. Trade is conditional. The US doesn't have free trade with Mexico and Canada through NAFTA much less with anyone else. And neither does any other country.
China has higher tariffs on US goods into China than the US does on Chinese goods into the US... and that was before Trump or any of this current bullshit.
Restrictions are happening everywhere all the time for various reasons. Some of the restrictions are a matter of law and policy and some are a subtle consequence of process or relationship. The net effect either way is that goods don't flow freely. They're restricted and regulated and taxed and have quotas applied etc.
US goods when they go nearly anywhere are limited in some way. US goods to Japan for example sometimes ROT on the pier because the Japanese want to protect their domestic market by limiting US trade. Countries come up with all sorts of pretexts to do it. Health and safety is a popular one. Differing regulatory standards which are approved at time X and then suddenly are questioned at X+1 at the worst possible time fucking over who ever chanced the market.
As regards China specifically, their fast and loose treatment of trade agreements, business agreements, licensing, intellectual property... etc is well known at this point. We're due a big shift in trade relationships with
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Importing cheap semiconductors to the EU, designing and assembling my technology in Romania and then selling the finished product to the US could well be cheaper and more profitable than producing it in China and importing it directly from China to the US because the tariffs are going to even out the cents I have to pay the Romanians more? And all that without risking having my designs stolen so the Chinese could crank out cheap knockoffs?
On behalf of the EU, I wish to express my gratitude towards dear leader across the pond.
Don't discount the economic damage done by the cheap knockoff process - it's so common that it's become a meme. It's nigh impossible for anyone to make electronics in China any more, even small hobbyist designers (think Adafruit and Sparkfun) get their products copied and sold for pennies.
Then there's the direct theft of IP (trade secrets, business practices, and such) that the FBI estimates at $600B/year.
Then there's selling steel and aluminum at below-market prices until our domestic producers go out of business (at last count, we had one steel foundry left that was capable of making the steel plates needed for military hardware).
Then there's the lack of IP enforcement, so that lots of Chinese run pirated code and view bootleg media without paying for it.
Then there's "thousand grains of sand", where Chinese students and scientists (in the US) coming back to their country are encouraged to bring one or two small pieces of technological or scientific information.
Then there's keeping their currency artificially low, so that we always have a trade deficit with them (they end up getting more and more of our money).
China has consistently violated their trade agreement in every possible way, and has done so for decades.
We're *already* in a trade war, it's only just now that we're doing something about it.
WTF? Troll? This speaks to the heart of the problem, which is our taxes. We've been damaging ourselves with income taxes for over 100 years. We need to stop, and gain great advantage over our international trading partners.
Yes, let's be like Nazi Germany, Stalinist Russia, Marxist China, Pol Pot Cambodia. Let's take away everyone's ability to defend themselves from government overreach. Then we'll only have millions killed! Yay!
This is not about a "trade war". This is about China using economic warfare to destroy our manufacturing capability. This is not a "trade war", this is a maneuver in blatant economic warfare. If we have no steel or aluminum manufacturing, we have no control of our economy and we have no ability to sustain open warfare against a nation-state.
Consider WWII. While Russia supplied most of the manpower to defeat the Nazi armies, almost all of the manufacturing for the war effort was in the United States. The Chinese see this and have been paying the investment bankers quite handsomly to sell out our manufacturing capability.
Yet the Vietnamese and Afghanists suited fine despite being against those technologies..
Making things more-expensive by producing them domestically when it's cheaper to do so abroad always hurts the poor and middle-class by reducing their purchasing power (making them more-poor).
Let me introduce you to the difference between linear functions and curves.
Assume you eliminate one job at $40,000 per year, but make widgets cheaper by $.02.
If there are enough widget sales across the country, the aggregate savings can add up to much more than the $40,000 lost domestically. One person has to find a new job, but millions of dollars can be saved overall.
The problem is that "one person has to find a new job" isn't free. It puts stress on the job market, driving down salaries, and incrementally increases the chances of someone turning to crime and welfare.
For each case of producing something cheaper abroad, there's a corresponding *rise* in expenses associated by having an extra person out of work. The 2nd person has a higher social cost than the 1st person.
So there's a tradeoff. The first couple of people out of work is probably a net win for the country overall, but you quickly reach a point where domestic jobs are hard to get, and the curve becomes flat. When there are more people than there are jobs, the social cost greatly outweighs the financial benefit.
Being unable to find work hurts the poor much more than reducing their purchasing power.
You're assuming a linear relationship to a curved function.
According to your sig, you're running for office as a representative from Maryland.
Good on you, we need more smart people in congress!
Please be aware that most economics is based on measures of corporate profits that ignores the human condition. It's *entirely* possible to have a healthy economy, by those measures, up to the point where your country falls to civil war.
As a representative, please consider that the welfare of the people is paramount to the stability of the country. It does no good to have healthy businesses and a good looking economy if the people are miserable.
Taxes are not the problem. The problem is spending. Government spend must be reined in, particularly spending which is not for the common good, i.e. entitlements.
If spending is reduced, the taxes and borrowing will take care of themselves.
Prove anything by multiplying Huge Number times Tiny Number
Taxes are the problem because the promote the offshoring of US jobs. Eliminating income taxes would cause the world's manufacturers to stampede to build factories here, in a no-income-tax environment, and quickly employ everyone who ever thought that he might, maybe, someday want a job. Prosperity would return to the USA if we got rid of income taxes. The FairTax would let us get rid of income taxes.
> The move would hike the costs of about 1,300 products, including industrial robots
So the solution to China taking all the jobs because of low labor costs is to increase the cost of robots? Yeah, that'll fix 'er.
Abolishing income taxes would put virtually everyone back to work again, and "entitlements", which is a code word for welfare, would plummet. There wouldn't be many people left that actually need assistance, because they would have good jobs in factories or mines or in farming, and would be producing the world's goods, raw materials, and foods. The USA would become the major manufacturer of the world, have full employment, with wages spiraling up as the supply of jobs exceeded availability of workers. We might be able to tolerate open borders again - think Ellis Island - and accommodate anyone willing to work. Abolishing income taxes would make the USA insanely rich. The income taxes are suppressing that now.
China already retaliated and published a list of 106 articles, Soy, Corn, Beef, Orange juice...almost all the things that Trumps deplorables produce.
It will be fun to watch how the 'winning' will be going.
Tiger Blood!
Far from it. But he reminds me of the routine of a well known local comedy duo:
A: Are you so dumb or are you just faking it?
B: Why should I fake being dumb?
What is the non-dumb move that fixes the problem then?
Come on, tell us! If the president's move is so obviously dumb, what *should* we be doing to fix the litany of problems?
Your post implies that you're much smarter than him.
Don't hold back, tell us please!
> Except the income taxes are not progressive, they're highly regressive. :rolleyes:
They are not. Please read the definition before posting about it.
> Since the payroll taxes are part of the income taxes
Payroll taxes are NOT part of "the income taxes". Have you ever filed a tax return? Did you understand why you were entering those numbers?
> they tax rates were increased for the jump to the next bracket
And he still made more money. It appears you are unaware of the definition of "marginal tax rate" as well.
Utopia with unicorns does not exist
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
Payroll taxes are earned income taxes, and go away upon the repeal of the 16th amendment, which enables them. The payroll taxes, individual income taxes, capital gains taxes, gift taxes, self-employment taxes, corporate income taxes, inheritance (estate) taxes, are all taxes on income, and would be abolished under the Fair Tax.
And since the payroll taxes tax the poor at 15.3% (the poor are actually paying them "employer's share" of the payroll taxes whether they know it or not, because the employer simply lowers their wages to make up for the money he has to cough up to Washington for the payroll taxes he sends in) while those making millions are taxed at insignificant rates - 15.3% of $130K (approx where they payroll taxes stop taxing) would be $19,890 which would be all that the rich guy would ever have to pay. Donald Trump was making $400,000,000 a year before he became President, so his payroll tax rate was 19,890 / 400,000,000 X 100 = 0.0049725%. 15.3% vs 0.0049725%. How's that for regressive?
"You don't get to make up your personal definitions for words while expecting others to understand. Regressive taxation is explicitly taxing the poor more than the rich. That's it."
Yep, and the payroll taxes, enabled under the 16th Amendment and which vary at the rate of earnings of the taxed labor, are definitely income taxes and definitely regressive. As I stated in another post here, the poor sot making $12K a year is getting taxed at 15.3%, while Donald Trump, making $400,000,000 a year before he became President, was being taxed at 0.0049725% by the payroll taxes. So, the poor person was getting taxed at a rate 15.3 / 0.0049725 = 3076.92 times as much as Donald. That's regressive.
You might want to note that China rejected Marxism after the disastrous Cultural Revolution. Nowadays, they are capitalist -- perhaps more so than the US. What they aren't is a representative democracy. But then neither, in practice is the US which is more of a two party oligarchy Hard to think of a country that actually is a representative democracy .... Iceland maybe. Switzerland somewhat I'm told
You can't see ANYTHING from a car, You've got to get out of the goddamned contraption and walk...Edward Abbey
the poor are actually paying them "employer's share" of the payroll taxes whether they know it or not, because the employer simply lowers their wages to make up for the money he has to cough up to Washington for the payroll taxes he sends in
If you believe that, you must also believe that if employers were relieved of the requirement to pay their share of payroll taxes, the savings would be passed on to the employees. Right?
By the way, Social Security benefits are capped just like the tax is. When you stop contributing, your benefit stops growing.
UBI is sort of the progressive tax taken to extreme such that it goes negative. I think some form of UBI could work, but it would have to be highly limited. You want to live like a priest, with very few worldly possessions other than basic meals and health care?.
Like prison? at least there you can get cable tv and some free college also the health care covers more then ER
"If you believe that, you must also believe that if employers were relieved of the requirement to pay their share of payroll taxes, the savings would be passed on to the employees. Right?"
They might be used to lower the price of the product, they might be used to increase wages, they might be used to increase dividends of their stock. In each case, the beneficiaries of this is us, us, and us. We're the consumers, we're the employees, we're the stockholders assuming we have retirement savings, which many do.
The thing that controls wages is supply and demand. If the demand for labor exceeds the supply, which is almost certain under the Fair Tax because of the dramatically increased business opportunities in the USA, then the labor pay rates will rise as employers compete for people. If an employer doesn't raise his wages, and the factory down the street is paying $2 / hr more for the same job, then his employee is liable to walk. If he doesn't want that to happen, especially if the job has a learning curve at all, he's going to want to retain the employee so he doesn't have to do a training thing all over again, and will raise that wage in order to ensure his employee is happily compensated. Supply and demand, its simple, and works in the labor market too.
That number is 23% of the $1000 a month that a guy making $12K a year receives. The guy would thus be receiving $230 from the gov't every month. The FairTax rate is 23% inclusive, or 30% exclusive, but either way, the $230 will make sure that the guy making the $12K a year pays no FairTax. At the end of the month, if the guy buys new good and services with the entire $1000 he's making, he'll have paid $0 FairTax because he's using the money the gov't gave him to pay the FairTax charged on his purchases. If he's found a way to spend below the poverty line without starving, such as buddying-up with a bunch of people to rent a house and split the rent down to $100 a month each, he might actually make a few bucks off the check from the gov't. But no, it ain't UBI.
Australia has a huge trade Surplus with China, and a huge deficit with the USA. So the money goes around in a circle.
And if one focuses on the goods, rather than the money, China is supplementing US incomes, which is silly.
However, there is a good non-macro economic reason to restrict some things like robots. The US did well historically by supporting its inefficient watch making industry against the Swiss. When war came, they could make instruments.
But I think that the USA will do what it does best -- large scale farming. And China will do what it does best -- manufacturing and technology.
Nobody wins a trade war. Everybody loses.
A trade war is not capitalistic. It is not free market. It is crony capitalism; managed trade designed to benefit favored companies at the expense of the consumer. I'm a Republican (not happily; more for practicality), and this trade war is the dumbest thing Trump has done.
American and Chinese consumers alike will suffer because of this.
The USA was financed by consumption taxes before the 1913 passage of the income taxes, and had roads, libraries, fired departments, etc. The FairTax is just another way to collect the same amount of taxes as before (until the economy expands dramatically from all the new business opportunity) so revenues will remain the same until the economy expands, and then will exceed present day tax collection.
Yes, let's be like Nazi Germany, Stalinist Russia, Marxist China, Pol Pot Cambodia. Let's take away everyone's ability to defend themselves from government overreach. Then we'll only have millions killed! Yay!
Hitler did zillions of bad things, you can't use his choices as a childish negative reason just because he did it. Hitler built up industry, supported engineering, so we shouldn't do those things? Hitler & his generals were pretty good at tactics, they used tanks well for a time, should we not use tanks? There are endless things like this. Hitler was an almost beyond belief evil leader, who was able to motivate an entire country to do horrible things together. But he brushed his teeth occasionally, don't make idiotic comments that just because he did something we shouldn't. It's like saying "socialism is bad", I am calling X socialism, so it's bad.
You might want to note that China rejected Marxism after the disastrous Cultural Revolution. Nowadays, they are capitalist -- perhaps more so than the US. What they aren't is a representative democracy. But then neither, in practice is the US which is more of a two party oligarchy Hard to think of a country that actually is a representative democracy .... Iceland maybe. Switzerland somewhat I'm told
China is not really captialist. The govt can step in and change things whenever it suits them, and they do it all the time, like restrictions on money, propping up failing govt loans and real estate overbuilding. They blocked cryptocurrency.
The us is a democracy, we do have real third parties that sometimes win elections. Not much, but the main reason is the vast majority of people vote for one of the candidates they know. And of course dem and rep don't exatly encourage the rise of third parties, plus our govt system kind of accidentally discouraged third parties with winner take all style congress. We have a lot of problems like too much influence by rich people, the attacks of rich people have been winning for a while but it's not as bad as you say. We aren't quite living in idiocracy but we are moving that way. If we have another president like trump it might be that we are doomed. following the roman empire decline of a series of bad leaders.
The 15% - 19% over 65 are existing on pensions, 401K's, social security (SS is NOT welfare, people paid into that their whole lives and now they are withdrawing), and indeed SOME will probably deem that they are able to do some basic things in a factory in order to draw the kind of wages that factory work will spiral up to. Can an over-65 be climbing up and down ladders all day, repairing plumbing, compressed air, and sprinkler pipes, as well as laying electrical conduit, repairing electrical faults, and drawing wire thru the conduits? Probably not. But they can probably sweep up, they can do office-style work, etc., and some may decide that more money at a job is better than living on SS while sitting home alone.
I'm 70. I think had I not gone into software and engineering, my other ideal job would have been railway engineer, as in locomotive driver. Could I do software and engineering yet? Yep. Could I do locomotive driving as a new career? I think my less-strong state of existence now would probably have me missing or losing a grip on a handhold on a railway car or engine and slipping under the wheels for a final slice and dice. While that job would seem to still be a great adventure and a lot of fun, I don't think I could do it any more and stand a good chance to survive it.
The savings of actual welfare will come from no longer having to shell out for unemployment, "disability" payments to working-age people that took that fraudulent route in order to avoid both starving and being a "welfare recipient" with the accompanying shame that goes with it amongst a lot of people. I mean, you can have a bad back and get "disability" and people won't think you're a lazy-ass lowlife like they will if you're on welfare, even if you've looked like crazy to find a job and just can't. And of course the actual welfare system will experience a great shrinkage as those people find they can make far more money building widgets in a factory than they can staying home and collecting what we pay for welfare now. Yeah, it can be pretty good, but factory work will be excellent once the proliferation of factories and the supporting businesses suck up all the labor and create a labor shortage. Wages spiral up during a labor shortage.
The opinion of a guy who does not really know the various names of taxes (hint: a company/corporation does not pay "income tax") is most likely not very trusted in the merits of his opinions.
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
The more likely result would be a decade long recession where very few people had jobs.
Look, it's just a fact that even the lowest paid worker in the u.s. needs about $18,000 a year to survive.
You can survive in china for $3000 a year. You can survive in India for about $1800 a year (and many get by on $720 but with a very low standard of living and reduced lifespan).
A tax cut isn't going to cut it. High inflation in china and india are fixing the problem but it's going to be 2045 and 2055 before they approach wage parity (and that's assuming the inflation rate doesn't drop).
Meanwhile, automated factories are destroying even those low paid jobs in china and india.
Your view is unrealistic, simplistic, and naive.
You are a good example of the Dunning Krueger effect. You don't know much so it seems easy. But it's not. It's very hard and it's going to get harder as more automation replaces more jobs. Humans can't afford to retrain for a new career every 5 years. At a minimum, we need to have health care independent of companies (it's a big incentive to fire older and less healthy people and dump them on public assistance) and we need free education for adults. It doesn't have to be harvard level. But we can't put people into unforgivable debt and get thru this. Once they are in debt, they can't retrain any more. And instead of producing resources, they consume resources.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
The 16th Amendment authorizes the income taxes and the payroll taxes are enabled by the 16th Amendment, therefore the payroll taxes are the identical form of government stealing as are the personal income taxes. Capital gains, alternative minimum, corporate, inheritance, gift self-employment are also all income taxes and should be abolished just on moral grounds, as well as to eliminate the damage to prosperity that they cause.
That's funny... why did they start the income taxes? Because the rich were paying almost all of them, where tired of it, and acted to be able to steal it from the average American instead of them paying almost all of it, that's why. And if you're of the persuasion that the rich are in control of everything as some are, and we still have the income taxes, then you have to ask yourself why that is. Its because the rich get to skate on the income taxes, with guys like Warren Buffet bragging that he pays less income taxes than his secretary. Its true, of course, because his secretary is paying payroll taxes that account for a much higher percentage of her earnings that they do for WB's earnings. But... it was a plot of the rich, over 100 years ago, that got the government stealing directly from us. That's why.
There are a lot of optimistic assumptions wrapped up in that post.
They might be used to lower the price of the product
This assumes that the cost of labor is a significant driver for price, which it isn't for low-paying jobs.
they might be used to increase wages
This assumes that competitors are willing to pay your low-paid workers more than you are. Again, not really true for low-paying jobs.
they might be used to increase dividends of their stock
This assumes that the employer is a public corporation that actually pays dividends. Demonstrably untrue for most jobs in the US. Anyway, you missed a significant "might": They might be used automate production so the business owner doesn't have so many unreliable human workers that don't show up every day, get injured on the job, and otherwise drive up costs.
If the demand for labor exceeds the supply, which is almost certain under the Fair Tax because of the dramatically increased business opportunities in the USA
Unless you can cite a reputable study, the proposition that the Fair Tax drives "dramatically increased business opportunities in the USA" is opinion stated as fact. Your passionate belief doesn't make it true.
if the job has a learning curve at all
One of the major factors making low-paying jobs low paying, is that they don't have much of a learning curve. That's why there's a bountiful supply of qualified workers.
In the US, cheap foreign manufacturing has done more to improve the lives of the poor than any govt policy. Sure, it might have taken a load of jobs, but look at all those cheap tellies and PS4s that even the jobless can afford. Mild /s
Its not the wages, its the taxes making our stuff expensive.
For instance, cars. It takes about 30 - 33 hours of labor to build each car in the USA. The auto companies claim $78 / hr for labor, the unions say less but lets go with the auto companies, and multiplying that out gives us about $2,500 worth of labor expense to build a car.
The research into the FairTax has yielded a figure that, on average, 22% of the price of goods manufactured in the USA are composed of the effects of embedded income taxes. So, if those workers assemble a $40K SUV, their expense in labor is still $2,500, but the expense in taxes is about $8,800. Not all of that expense is recoverable even if the incomet taxes go away, because the company can't access the worker's individual income taxes which belong to them if the income tax collection goes away, but it is expected by some economists that about 14% will go away. So $5,600 would be the decrease in the price of the SUV from losing the income taxes. That's way more than if you decided to pay the workers $0, made them slaves and chained them to the machines to work for free. You could only recover their costs to the company, the $2,500, but the tax cost recovered could be around $5,600.
That's what I mean about taxes being the big driving force in our disadvantage with overseas competition. Foreign factories don't work under the same high tax rates Americans do, or at least they didn't until the Trump tax cuts. While corporate taxes were cut under the Trump tax cuts, there's still a whale of a lot of other income tax based taxes that harm American companies and that foreign manufacturers avoid. Additionally, taking Trump's 21% down to 0% would have a great effect too, if the FairTax were passed and all Federal income taxes eliminated.
But as JFK said way back when the income taxes were only 50 years old:
"“The largest single barrier to full employment of our manpower and resources and to a higher rate of economic growth is the unrealistically heavy drag of federal income taxes on private purchasing power, initiative and incentive.” John F. Kennedy, Jan. 24, 1963 "
He cut taxes and pretty wild prosperity ensued. If we eliminated income taxes, the boost would be tremendous.
"Unless you can cite a reputable study, the proposition that the Fair Tax drives "dramatically increased business opportunities in the USA" is opinion stated as fact. Your passionate belief doesn't make it true."
https://fairtax-structure-psyc...
Page 28 chart is supportive:
https://fairtax-structure-psyc...
Hey, I've seen accounts of the situation where there are pretty much hordes of people that are perfectly healthy, but have faked disabilities in order to qualify for enough money so they're not living in a refrigerator carton under a bridge, nor actually going to the welfare office and getting handouts. You see it every now and then on the news, some guy on disability gets filmed dancing up a storm, and is then either cut off from disability payments or prosecuted for fraud or both. I wasn't talking about people with ACTUAL disabilities.
Those are very interesting, though I noticed that almost all of the citations are over 20 years old, which makes me wonder why more recent data is absent.
One thing I'm left to wonder about: the studies say the Fair Tax is revenue neutral. Under the current system, nearly half of American workers pay zero income tax, and the overwhelming majority of them are not below poverty level and hence would not be exempt from consumption tax. On the surface, it appears that those workers would face a large increase in Federal taxation.
Yes, the studies are old because the initial proposal for the income tax was about 20 years ago and financed by a group of businessmen who wanted to change the tax system to promote prosperity for everyone. Since then, money to redo the studies for more modern times has not been available. Maybe we could talk Donald into financing it?
It is not true that half of American workers do not pay income taxes because those so stating wish to ignore the payroll taxes as income taxes. Authorized under the 16th Amendment, and abolished by the FairTax if passed, the payroll taxes actually place a tremendous burden on the poor and those others that supposedly don't pay income taxes.
Those not paying income tax are still paying the 22% embedded taxes of anything they buy new that is made in America, and those prices would expected to be reduced by about 14% of the income tax expense to American manufacturers that can actually be recovered by them. So, while the not-poor but otherwise no-individual-income-taxes-owed person loses the actual tax burden of the payroll taxes he's been paying, he can expect a moderate rise in the new goods and services that he purchases from American manufacturers. Foreign manufacturers stuff would go up about 30%, but that's just a nice incentive to buy American and promote American jobs.
Which brings us to the jobs. There will be vastly more jobs available under the FairTax because of being able to manufacture without companies having to pay income taxes. Bill Archer, former chair of the house ways and means committee, conducted a survey of 500 foreign CEO's and asked them what they would do if America passed the FairTax. 400 of them said they would build their next factory in the USA, and 100 of them said they would move their headquarters to the USA. That seems pretty definitive of what to expect out of the manufacturing sector under the FairTax. So, with good manufacturing jobs becomnig plentiful, a worker shortage will almost certainly be created, so manufacturers will have to boost wages to keep their people from walking out to the next factory paying more money, as well as enabling those who are currently sitting at home with insufficient academic skills to support child care for multiple offspring and be able to make enough to live well on, so they just stay home and either live off a spouse or welfare. Those people would be able to afford the child care, which would open 1000's of new jobs in child care while they work in a factory to achieve prosperity.
I grew up in a family where money was not the sort of plentiful it is now for me as a retired engineer, and I can tell you that the FairTax would work to the advantage of the not-well-to-do. Why? Because those working in factories and just making ends meet typically don't buy new cars, they buy used. Used items for sale are not taxed by the FairTax. They also typically don't commission general contractors to build them houses, they find one already on the market, that is also considered used and not taxable under the FairTax. Dad repaired our cars himself in most cases, and sometimes with parts from junkyards, which would also be untaxed by the FairTax. Mom shopped at thrift and 2nd hand stores for used things that were cheaper than new, and those things also would be untaxed under the FairTax. Dad installed things like our whole-house air conditioner, and built things such as a detached garage, and of course only the materials would be taxed. I doubt if any workman made a dime off doing things around our place, as Dad was a journeyman workman in a local factory and capable of doing most everything that was considered maintenance. Our FairTax hit would have been extremely low. Dad never bought a new car until retirement.
And taxes would be lower for most everyone except the rich because the tax burden is spread out to many that really aren't paying these taxes now, those that are working "under the table" and those working illegally such as the illegal aliens. Those in the count
If you eliminate all taxes (on what ever ground), how would you run a government?
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
The FairTax. We're eliminating all INCOME taxes. Tax consumption instead. Read back thru this thread.
I read most of your posts, but no idea what FairTax would be.
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
That's understandable, I forgot how difficult it is to understand this otherwise extremely simple tax system. It took me about 3 months to really get my mind around what it actually was, and that was just basically.
The best thing to do is to read the book, "The Fair Tax Book: Saying Goodbye to the Income Tax and the IRS." Don't know whether it is available at libraries or not, but is extremely cheap otherwise, $4.95 used at Amazon right now.
https://www.amazon.com/Fair-Ta...
Basically, the FairTax completely replaces all income taxes, including personal, corporate, capital gains, payroll, gift, self employment, inheritance, alternative minimum, and maybe 1 or 2 others I may be forgetting, there's lots of them. The FairTax, as described in House Bill HR25 and Senate bill S18, replaces all these income taxes with a simpler tax on new goods and services sold at retail. Tuition is exempt because it is treated as an investment. It takes a while to realize what is and what is not taxed - medical services received and paid for by your insurance is not taxed because that is not "retail", but a business-to-business transaction between the medical people and the insurance company. Your premiums to the insurance company are what is taxed. Things that are bought to conduct business are not taxed - the airlines' aircraft are not taxed because when being sold to the airlines, they are not sold at retail, but in a business-to-business transaction. If that airliner is ever sold to private parties, then that is a "conversion" from business to private use, and that sale is taxed at the market value of the airliner at the time of sale. One of the most significant features of the FairTax is the "prebate" that send, each month, a check from the federal government to each legal resident of the USA that is just large enough to pay the FairTax on spending up to the poverty level. The amount of the check is keyed to the size of the family - a single person would get 23% (the FairTax's inclusive rate of taxation) of the poverty level spending as defined by the government for a single person (around $12K right now, or $1K / month so the check would be $230 / month for a single person) and increases for marrieds, marrieds with X dependents, and so forth. I think the poverty level for a family of 4 is somewhere around $24K right now, so their monthly check would be $460.
There are many subtlities of the FairTax that take a while to realize. One is that, since businesses no longer pay corporate taxes, their costs to manufacture things in the USA goes down fairly dramatically. The FairTax book relates that 22% of the price of domestically manufactured goods is composed of income taxes at all levels, including increased costs of labor due to the individual's expense of personal income taxes and the "employee's share" of the payroll taxes. And a bit more obviously, the "employer's share" of the payroll taxes goes away too, so that frees up money for the business to use to lower prices or raise wages or raise dividends on their stocks. Fortunately, recipients of those benefits are US as consumers, US as employees, and US as stockholders.
Significantly, foreign manufacturers who manufacture goods outside the USA receive no such benefit when the income taxes go away, since they aren't paying US income taxes. So, while the prices of US goods are expected to fall by 10% - 20%, foreign manufactured goods will not fall in price at all, giving an advantage to US manufacturing. It is a great incentive for foreign companies to manufacture in the USA, which should skyrocket the number of jobs available and probably create a labor shortage which would create an upwardly spiraling wage rate.
There are websites for the FairTax, but the book is a basic read that explains things better for someone starting out learning the FairTax. One of the better websotes is:
https://fairtax.org/
There is much information there. Hope this helps.
One is that, since businesses no longer pay corporate taxes, their costs to manufacture things in the USA goes down fairly dramatically.
That is nonsense. The taxes you pay on your earnings/income have nothing to do with the cost of production.
If you want to say: workers are cheaper because a corporation has not to pay the "extra part" the worker will pay as tax, then you have a point.
But I don't see how you would have a country where the state has a tax income and can pay things with that income.
Your summary sounds as if you want to replace taxes on earnings with VAT ... could make sense. Most certainly it would simplify tax filings and put many tax accountants out of business :)
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
"That is nonsense. The taxes you pay on your earnings/income have nothing to do with the cost of production."
Yes, the businesses are not going to benefit from the taxes going away for employees' personal income tax. However, technically, that income tax makes labor more expensive. The employees who cease to pay individual income taxes will benefit from the income taxes being abolished.
"But I don't see how you would have a country where the state has a tax income and can pay things with that income."
I don't know how to parse that statement.
The country would run on the proceeds of the FairTax equally well with the proceeds of the income taxes it uses now. The FairTax is designed to generate the same amount of revenue.
"Your summary sounds as if you want to replace taxes on earnings with VAT .."
Nooooo.... I don't want to burden US businesses (since you can't do a VAT on overseas factories) with another tax to make our products more expensive. I want to replace ALL the income taxes with taxes on new goods at retail and services, and give everyone in the country enough money each month so they don't pay FairTax on basic living expenses up to the poverty level. That's all we need. We don't need to burden our industries. Our industries are our weapons in internation trade (a competition) so everything we do to damage them, like taxes, hampers our side, allowing foreigners to capture more of the market. I want American business to capture as much of the market as it possibly can, so jobs are created HERE, not in China and Mexico and Canada an Korea and Europe.
Like I said, the FairTax is an extremely simple tax that is devilishly difficut to understand. Took me 3 months just to realize the major benefits. I keep finding small ones even yet, and it's been 10 years of reading / contemplating it.
"One is that, since businesses no longer pay corporate taxes, their costs to manufacture things in the USA goes down fairly dramatically. "
This part, however, is true. Corporations used to pay 35% on their business profits, now it's 21% due to the Trump tax cuts. If either of these numbers were to be reduced to 0, then the corporation would benefit greatly.
want to replace ALL the income taxes with taxes on new goods at retail and services ...
That is exactly how VAT works
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
No, VATs are generally done IN ADDITION to income taxes. The FairTax totally replaces the income taxes. VAT doesn't do a thing for removing individual income taxes, payroll taxes, capital gains taxes, gift taxes, self-employment taxes, alternative minimum taxes, inheritance taxes, and so forth.
Also VAT isn't typically forgiven for business-to-business purchases. If VAT is applied to a Boeing 757, it doesn't matter whether Donald buys it or American Airlines buys it, the tax hurts American Airlines by increasing their costs, and hurts Boeing by making them less competitive in the marketplace when compared to, say, Airbus where the VAT _is_ forgiven for export items from France. This isn't what we want. We want American Airlines to do better and expand, hiring more people and we want Boeing to do better and expand, and hire more people. We especially want them to hire people HERE in the USA, rather than some other country. Boeing has some composite wing parts coming from Italy. Really think the Italians can make wing parts that much better than Americans? I don't, I think its the Federal corporate income taxes (and all those other income taxes) that cost Boeing money only if they build that wing part in the USA. If the build it in Italy, none of those income taxes from the Feds apply, but the Italian gov't removes VAT from their exports, so the Italian stuff is simply cheaper.
VAT is also a bookeeping nightmare, costing lots of money simply to keep track off how much tax is applied at each "value added" operation. The FairTax, by contrast, simply taxes all products, both foreign and domestic, at the same rate over the counter and is applied at the cash register. The big difference is that the American-manufactured thing arrives at the cash register without any manufacturing income taxes having been charged to it, so it is suddenly somewhere between 10% and 20% less expensive than it used to be, while the foreign-manufactured stuff arrives at the cash register at its old price. It is blindingly simple to charge them both the same sales tax rate under the Fair Tax, but the American stuff comes out much cheaper than it used to be.
Also, unlike VAT, thee tax rate is starkly visible to the purchaser. Its right there on the sales receipt, and not buried in the multiple applications of VAT along the manfacturing process. Sure, the Europeans can see that final number, but they don't know where it came from what the tax rates were at each stage, and so forth.
And will the bonehead US gov't remove a VAT for our export market? They don't do it for the embedded income taxes that the American manufacturers endure, so will they do it for the VAT? Its not an issue under the FairTax, since no additional tax is added at the factory, it is added at the cash register. Shouldn't be a problem, and so our exports get cheaper as well.
No, VATs are generally done IN ADDITION to income taxes.
No, they are not. You pay them on the bill when you buy a product or a service.
Your proposal is the exact same thing as VAT.
The FairTax, by contrast, simply taxes all products, both foreign and domestic, at the same rate over the counter and is applied at the cash register. ...
That is exactly how VAT works
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
You are simply wrong. Europe is riddled with both VAT taxes and income taxes. United Kingdom as 19% corporate income tax rate, 20% personal income tax rate, 45% high-end personal income tax rate, and a 20% VAT tax rate with a discounted 5% VAT tax rate for home energy and renovations while life necessities such as food, medicine, etc have no VAT at all. See:
https://en.wikipedia.org/wiki/...
All those European countries all have VAT and income taxes together.
The FairTax totally abolishes Federal income taxes, and runs the country strictly on the consumption tax that is the FairTax.