29 Sep 15
Originally posted by PhrannyYou are on the right track talking about "deductions" which are really bribes to various constituency groups.
It is an appealing idea. He would not eliminate the mortgage tax deduction. Of course the difficult part is eliminating the numerous tax deductions that go to the wealthiest. In theory, I do believe this could work but in truth, I am not optimistic that enough deductions could be eliminated due to the political influence the 1% have purchased from both sides of the aisle.
Why though the notion that some 50% of Americans ought to be immune to income taxes? That still is a pandering to a constituency group.
Every group will fight for and insist that their deduction (bribe) is necessary and good. A pure flat tax, or a consumption tax eliminates all that whining. If you buy you pay. Buy more, pay more.
30 Sep 15
Originally posted by utherpendragonMoving headquarters can only work if less than a certain percentage of the company's business is done in the US. In general, moving operations offshore to avoid income tax can be and is done by companies from time to time (movement between states is done for similar reasons) but not all companies can simply move offshore. It's a little more complex than it sounds.
Honestly, I am far from a expert myself. Its very confusing to most americans.
It is deliberate. To be as confusing as possible to the common man.
But to answer your question I don't believe moving your headquarters will do it.
sh76 I am sure is more knowledgeable on this than I am. Maybe he will chime in.
I am not endorsing this Trump plan. ...[text shortened]... l its a "pie in the sky" sort of thing.
I am just curious what others like you think about it.
It does seem that Trump's tax proposal (or at least this aspect of it) is quite "liberal" on its face. I'm not inherently opposed to those ideas, but I'm not sure the Republican establishment will be too enthralled.
30 Sep 15
Originally posted by normbenignTrump's idea of giving the lowest earners more money in their pocket to spend will stimulate the economy. Businesses do not create jobs. People with money to spend on goods and services create jobs.
You are on the right track talking about "deductions" which are really bribes to various constituency groups.
Why though the notion that some 50% of Americans ought to be immune to income taxes? That still is a pandering to a constituency group.
Every group will fight for and insist that their deduction (bribe) is necessary and good. A pure flat tax, or a consumption tax eliminates all that whining. If you buy you pay. Buy more, pay more.
30 Sep 15
Originally posted by sh76Thanks for the input sh76.
Moving headquarters can only work if less than a certain percentage of the company's business is done in the US. In general, moving operations offshore to avoid income tax can be and is done by companies from time to time (movement between states is done for similar reasons) but not all companies can simply move offshore. It's a little more complex than it soun ...[text shortened]... ly opposed to those ideas, but I'm not sure the Republican establishment will be too enthralled.
Originally posted by sh76It is not an income tax that is proposed for corporations' overseas earnings.
Moving headquarters can only work if less than a certain percentage of the company's business is done in the US. In general, moving operations offshore to avoid income tax can be and is done by companies from time to time (movement between states is done for similar reasons) but not all companies can simply move offshore. It's a little more complex than it soun ...[text shortened]... ly opposed to those ideas, but I'm not sure the Republican establishment will be too enthralled.
In general, a multinational can shift its earnings, profits, losses, revenues, cashflows anywhere it likes in the supply chain without moving any tangible assets whatever. The amount of economic activity in places like the Irish Republic, the Cayman Islands or the Bahamas (for example) bears no relation whatever to the reported earnings of the corporations having a pretend head office the size of a paper file at the back of a cabinet.
Regrettably for the corporations, they have accumulated immense financial assets in places where they can get no value from it. At some point, if they are unable to bring their cash mountain back "onshore" then it is going to sit idle.
The reality is that corporations have huge cash surpluses which are not circulating productively in our global economy, but instead supporting a casino economy that is destabilising everything. If a proportion of that were drawn back into the economy through taxation, it would support the kind of public investment that can revive our economies.
The Tea Party Taliban in the USA has the idiotic notion that Government deficits and taxation are the problem but that is nonsense. The heyday of Laissez Faire and balanced budgets in the US and Britain was the 19th Century and culminated in huge instability, a fearful pattern of false booms and fearful crashes. The UK saw depressed economic activity for much of the century because of its determination to fully pay back national debt after the Napoleonic wars. There was not much of a middle class then and the middle class is again dying under neoliberal economic policies today.
The problem is the failure to tax wealth and the failure to invest in infrastructure. That creates an increasingly unequal society that is not really functional, so it induces social dislocation on a grand scale. The American economy worked best under progressive taxation and expansive public spending policies, albeit it has always excluded up to 50% of the people from full participation.
But the US will not crawl back to its heyday, because the corporations that have owned US politics since perhaps the 1870s are slipping quietly out the free trade back door. The American voters have come to the point where they squeal anxiously for the protection of the one force that will eat them alive - the very corporations that decline to contribute while taking most of the benefit from the modern state. Far from investing in the good American people, the corporations prefer to promote slave conditions in less developed countries, and American jobs will continue to slip overseas. Free trade means the Anglo-Saxon economies are up for sale and the money is not going to the people. The American workforce, like the British, has been starved of a pay rise since the end of the Seventies in the interest of greater corporate profitability. Instead, they have been tricked into levels of personal debt that were once inconceivable and that debt chokes productive economic activity today. Corporate tax reliefs, escalating wealth for the 1%, all that is nonsensical.
Listen carefully. The wealthy and the corporations are cash rich. They do not have a productive use for the additional cash the Tea Party wants them to be given through reduced taxation. The more governments move to a balanced budget or even a surplus, the worse things will get for everyone. The Tea Party Taliban have a death wish.
30 Sep 15
Originally posted by normbenignA pure flat tax, or a consumption tax eliminates all that whining. If you buy you pay. Buy more, pay more.
You are on the right track talking about "deductions" which are really bribes to various constituency groups.
Why though the notion that some 50% of Americans ought to be immune to income taxes? That still is a pandering to a constituency group.
Every group will fight for and insist that their deduction (bribe) is necessary and good. A pure flat tax, or a consumption tax eliminates all that whining. If you buy you pay. Buy more, pay more.
From first principles, if you impose a consumption tax then people will buy less. Your proposal would impose a severe impediment to much consumer spending and I am not clear why you imagine that will be economically healthy.
Also from first principles, a flat tax will increase the spending power of the wealthy (they will save more on the removal of progressive income taxes) and reduce the spending power of the poor (who are only marginal income tax payers in many cases). Your proposal makes no sense unless it puts an end to progressive taxation, which is its purpose of course.
Tax reductions will not benefit the poor beyind marginal, trivial gains. Reduced spending power will not only deprive many of the necessitites of decent life, but also exclude more people from the consumer economy that is the engine of modern economic activity. Your proposal will destroy decent and productive public sector jobs - from engineers to teachers - and the private sector will only replce these jobs with insecure, low paid and low skilled work. That is what is actually happening already of course under neoliberalism but your proposal aggravates the problem immensely. In other words, your proposals, taken together, will suck life out of the economy.
The wealthy already have a cash surplus and their enhanced spending power will not produce additional spending in the economy as a whole (how much can they really eat for example?), but instead divert spending towards prestige goods that serve to display wealth, producing meaningless speculative bubbles for example in the value of property. Otherwise, it will divert cash from the real economy into savings where it will support, with multiplier effects, the casino economy of unproductive speculation. In any case, the return to the wealthy of unproductive savings (cash sitting in safe bets instead of supporting genuine risk taking) is already greater than the return to work in its many forms, so the age of unearned, inherited wealth will return to dominate again. In other words, shifting cash to the rich increases instability in the economy and destroys the basis on which most people enjoy decent lives in modern, western economies.
The American Taliban is suicidal.
Originally posted by finneganI'll (as usual) ignore most of your typical anti-US rant because I just want to make two points:
It is not an income tax that is proposed for corporations' overseas earnings.
In general, a multinational can shift its earnings, profits, losses, revenues, cashflows anywhere it likes in the supply chain without moving any tangible assets whatever. The amount of economic activity in places like the Irish Republic, the Cayman Islands or the Bahamas (f ...[text shortened]... en a surplus, the worse things will get for everyone. The Tea Party Taliban have a death wish.
1. The US (and, I imagine, most countries) have rules requiring companies (and individuals) to pay US income tax regardless of where they are located or incorporated if they do a certain amount of business in the US. When I was at the US Attorney's office, I saw a British citizen convicted of tax evasion when virtually all of his money was made overseas because he lived in New York for more than half the year. That's all it takes for an individual and there are similar rules for corporations. (The fact that the gentleman didn't pay taxes in the UK either didn't help him, of course.) Shifting assets or incorporating in the Bahamas of whatever is not a foolproof strategy to avoid US income tax.
2. Second, while a small government deficit is not necessarily a terrible thing, it's ridiculous to assert or think that the mammoth deficits run by the US (and many other countries) are not going to be a long term problem. The US national debt is now about 120% of GDP and is almost 5 times the annual budget.and six times total revenue. When and if interest rates ever do rise to historical levels, just servicing the interest on the debt is going to start eating a quarter of the budget or more. To simply ignore this problem and to continue to run up huge deficits is irresponsible in the extreme. To some extent, I'm a Keynesian. Keynes advocated government contraction in good times as much as he advocated expansion in bad times. That's the part the Paul Krugmans of the world so conveniently forget.
Originally posted by sh76I asked Russ to remove the post, he did. Just my emotions showing.
I'll (as usual) ignore most of your typical anti-US rant because I just want to make two points:
1. The US (and, I imagine, most countries) have rules requiring companies (and individuals) to pay US income tax regardless of where they are located or incorporated if they do a certain amount of business in the US. When I was at the US Attorney's office, I saw ...[text shortened]... d expansion in bad times. That's the part the Paul Krugmans of the world so conveniently forget.
30 Sep 15
If anything, corporate taxes are too low. As a share of GDP, they are presently at a level comparable to the 1930s and approximately a 1/3 to a 1/2 of what they were in the 25 years after WWII when high growth rates and growing real incomes for workers were the norm.http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205