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Who really believes tariffs are good business


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4 minutes ago, Raz'r said:

Well, the point is that prices will rise to a point where manufacturing location isn’t determined by the differences in regulations. Tom will say “but then consumers pay more”

that’s kinda the point. We’ve determined we will make it more expensive to produce goods in the US because we feel that cost is a net positive

Yeah, that logic works. I actually agree with you - the extra costs of higher standards have to be paid by the end user.

Until you get to deal with companies which are already profitable and selling everything they make, then raise prices because their competition get tariffed for no good reason.

Canadian aluminium is a classic example. The USA tariffed that for no good reason at all. Domestic costs went up as well - I hang out on a manufacturing/machining forum.

Ditto for sugar imports from Australia.

So this is why I end up cynical about tariffs. They are ALWAYS gamed.

Now if we were going to ONLY tariffs and abolish quotas, with tariffs set purely on the basis of environmental and social (labour rates, public medical et al) coverage, that would be interesting. We already have a sorta-kinda mechanism for these sorts of adjustments with the anti-dumping provisions of the WTO. China is using those as a figleaf to tariff Australian wines & foodstuffs. Which is truly excellent, we find other markets and get more of the good stuff available on the domestic market as well.

But you guys would run a mile. Your medical social net sucks dogballs. Your general labour market ditto compared with here & the EU. Everyone in every other 1st World country could justifiably tariff against US goods on those grounds. A number of your industries would have to get way, way more efficient or cease to exist. And those businesses make massive political donations (see sugar once again).

FKT

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My biggest and quite real complaints about China are: their own protectionism their rampant IP theft As for globalism itself, that ship sailed quite awhile ago. The invention of

Agreed - the corporations probably didn't expect to get ripped off as they did, and no argument the Chinese have engaged in industrial espionage on a huge scale. Tariffing their products incorpor

Wrong! Guess who's price went up? BOTH! I had a $10k budget.  the import was $7500, the domestic were $10k, so, I was going to buy domestic. The DOMESTIC is going up, estimate is 1

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5 hours ago, Excoded Tom said:

"I'm all about the bullshit...."

 

Thanks for changing my quote. I don't actually give a shit about regulations in China. If they choose to pollute, employ slaves or kids, all we can do is stop exporting our jobs to them if that's the only reason they're cheaper.  

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These are tired old bromide-type arguments . . 

Fact: Every economically powerful country became that way by protecting its nascent industries with tariff walls.  

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42 minutes ago, AJ Oliver said:

These are tired old bromide-type arguments . . 

Fact: Every economically powerful country became that way by protecting its nascent industries with tariff walls.  

yes, but this isn't about protecting nascent industries. It's about a country exporting it's pollution and labor atrocities, and watching it's own working class die due to that.

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56 minutes ago, Raz'r said:

It's about a country exporting it's pollution and labor atrocities, and watching it's own working class die due to that.

I'm with you on that. 

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  • 3 weeks later...

Solar Panel Manufacturer That Hasn't Produced Solar Panels Since 2017 Seeks Extension of Solar Panel Tariffs
 

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...

In short, about the only thing that Suniva seems to be doing these days is manufacturing requests for additional tariffs. The company, which was already in bankruptcy, was one of the prime advocates for Trump's solar panel tariffs in 2018. Most of the American solar panel industry opposed that effort at the time, due to fears that tariffs would hike prices and slash demand.

That's still true. The Solar Energy Industries Association (SEIA), a trade association, is asking the ITC to put an end to what it calls "job-killing" tariffs that have been "a multibillion-dollar drag on industry growth."

...

This is exactly the sort of thing that happens when governments start trying to pick winners and losers with protectionist trade policies. Rather than competing in the marketplace—a competition that Suniva has clearly lost, despite lots of help from taxpayers—some businesses will try to destroy their competition by influencing government policy.

...

 

The main answer to the topic question remains: cronies.

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  • 1 month later...

Tariffs on Chinese Imports Have Accomplished Approximately Nothing
 

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At the core of former President Donald Trump's aggressive trade policies was a relatively simple—perhaps overly simplified—promise: Tariffs on Chinese-made products would drive manufacturers out of China.

"Many tariffed companies will be leaving China for Vietnam and other such countries in Asia," Trump claimed in May 2019, about a year after his tariffs were first imposed. "China wants to make a deal so badly. Thousands of companies are leaving because of the Tariffs," he tweeted a few months later, suggesting that the outflow was already underway. "If you want certainty, bring your plants back to America," Robert Lighthizer, Trump's U.S. trade representative, lightly threatened in a New York Times op-ed in May 2020, as the trade war's second anniversary arrived.

But the tariffs failed to achieve that primary policy aim, according to a new paper published by researchers at the University of Kansas and the University of California, Irvine. Roughly 11 percent of multinational companies exited China in 2019, the first full year in which tariffs were in place—a significant increase from previous years. But the overall number of multinational firms operating in China actually increased during that same year, as foreign investment continued to flow into China even as the trade war ratcheted up costs.

...

Trump is no longer running U.S. trade policy, but his failed tariffs on Chinese imports are still in force. Lighthizer's replacement in the Biden administration, U.S. Trade Representative Katherine Tai, has said the tariffs provide "leverage" over China.

But that perspective is no more grounded in reality than Trump's promises that his tariffs would cause companies to flee China. American consumers are bearing nearly 93 percent of the costs of the tariffs applied to Chinese goods, according to a recent report from Moody's Investors Service. How is this giving the White House leverage over China?

...

 

Sorry as usual about the Koch-$pon$ored Trump/Biden cheerleading.

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6 hours ago, Steam Flyer said:

Why?

- DSK

For several reasons. First, because Tariffs on Chinese Imports Have Accomplished Approximately Nothing.

Second, because to the extent they've accomplished any results, they've mostly been bad.

Third because of cronies getting exemptions.

Last but not least because our bloated government spends too much. A good start would be to set the example that Trump called on NATO to follow and spend 2% of GDP on "defense." And any dime spent on the stupid drug war.

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23 hours ago, Excoded Tom said:

Tariffs on Chinese Imports Have Accomplished Approximately Nothing
 

Sorry as usual about the Koch-$pon$ored Trump/Biden cheerleading.

I downloaded the source paper (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3916186) to see what they were actually getting at.  The tariff question is a subset of their overall work.  What they were actually getting at was overall political climate. 

In essence, tariffs are a 'known risk' in practice and its impacts were essentially offset by the existing risk-mitigation infrastructure that exists in the global markets.  The resolution to Evergrande may be a much larger impact, depending on how it goes down, in terms of the metrics they used - companies actually leaving China.

Domestically, tariffs are a backdoor into raising broad based taxes.  That of course, is considered political suicide.  If you're following the Democrats internal debate right now, that's one of the big problems - how do you raise taxes in such a complicated way that you can say "I didn't raise taxes on anyone making less than 400K" - even if you do.  But now that the door is open, it won't be shut again.  Its too useful and Americans don't seem to mind.

FWIW, I think the 'raise taxes is suicide' isn't true - people will pay taxes if they see results.

I know that's not the point of your post.  Some more ideological progressives put down "Reason" as a Republican propaganda rag, even though there are years of articles supporting Democratic talking points.  I don't think the binaryists will ever capitulate - but I commend your dedication :).

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1 hour ago, BeSafe said:

I downloaded the source paper (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3916186) to see what they were actually getting at.  The tariff question is a subset of their overall work.  What they were actually getting at was overall political climate. 

In essence, tariffs are a 'known risk' in practice and its impacts were essentially offset by the existing risk-mitigation infrastructure that exists in the global markets.  The resolution to Evergrande may be a much larger impact, depending on how it goes down, in terms of the metrics they used - companies actually leaving China.

Domestically, tariffs are a backdoor into raising broad based taxes.  That of course, is considered political suicide.  If you're following the Democrats internal debate right now, that's one of the big problems - how do you raise taxes in such a complicated way that you can say "I didn't raise taxes on anyone making less than 400K" - even if you do.  But now that the door is open, it won't be shut again.  Its too useful and Americans don't seem to mind.

FWIW, I think the 'raise taxes is suicide' isn't true - people will pay taxes if they see results.

I know that's not the point of your post.  Some more ideological progressives put down "Reason" as a Republican propaganda rag, even though there are years of articles supporting Democratic talking points.  I don't think the binaryists will ever capitulate - but I commend your dedication :).

 

"Why is cutting spending better than raising taxes" is a rather fundamental question, worthy of intelligent discussion. A glib diversion into the futility of tariffs isn't even approaching an answer. I'm disappointed in Tommygun but then you're right, he is dedicated.

FWIW I'd agree that tariffs in general are not an effective form of taxation; by "effective" I mean generating operating funds for the government with minimal disruption of the productive economy. OTOH targeting specific items for tariff is a very effective way for government to influence both microeconomy and it's citizens behavior, and THAT is what the fakebertarian brethren hate-hate-hate so much about tariffs that they can't talk about taxes without uncorking a rant about tariffs first.

Of course, they hate-hate-hate taxes too. And they refuse to move to Somalia.

- DSK

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23 minutes ago, Steam Flyer said:

 

"Why is cutting spending better than raising taxes" is a rather fundamental question, worthy of intelligent discussion.   Truth

The fakebertarian brethren hate-hate-hate so much about tariffs that they can't talk about taxes...

 

As someone who's repeatedly and vigorously accused of being a fakebertarian, I can say that PA isn't much of a forum for conversations in general :)

 

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3 hours ago, BeSafe said:

As someone who's repeatedly and vigorously accused of being a fakebertarian, I can say that PA isn't much of a forum for conversations in general :)

 

Ok, where's a better place for conversations?

As a matter of personal opinion, I find some of the ideals of libertarianism appealing. However as a group, libertarians who make pronouncements... or actually get into political office... tend to be among the worst ignorance-mongering fascists I've ever encountered.

Hate taxes? Hate government? Think democracy is a sham? That's not libertarianism, that's nihilism. Those guys should take their guns and their regressivism and move to Somalia where they won't be troubled by the rest of us.

- DSK

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We can try but I suspect it'll get hijacked pretty quick :)

First is to decide on why you're raising taxes in the first place.  There's three primary reasons - raise revenue for services, use taxes as a stick against behavior that's deemed undesirable to reduce participation (i.e., sin taxes), or as a more broad means of social justice to reverse some collective wrong.  Each has a different strategy and potential outcome.  The generic libertarian response is 1 is ok, 2 is less ok, 3 is not ok unless its narrowly defined. But libertarian is pretty much the political equivalent of cats - lots of shades and colors and frankly, they don't get along that well.  That's why there never will be a 'libertarian' president and never more than a couple of libertarian congress-critters at a time.

As you said, people who are totally against taxes tend to be either nihilists or true anarchists.  The latter has a point, the former just wants to watch the world burn.

My general feeling is that any use of the general tax code for anything OTHER than general revenue is likely a foolish misuse of a blunt tool.  I CAN knock down a tree with a sledge hammer - but it's not ideal.  I think we've resorted to that approach because we can't agree on any other - not because it's a good idea.  The concept of 'negative tax rates' is about as sensible as 'negative interest rates' - you can do it, but its a sign of dysfunction, not success.

As far as 1 goes, I'm in favor of a 4% real estate tax, assessed annually, and collected quarterly.  That will generate approximately 1.5 trillion dollars, through existing tax infrastructure.  I believe those revenues should be directly tied to Military and Medicare spending.   If you want lower taxes, spend less on those services.  If you want better services, raise taxes to pay for them.  To me, those services (military and medicare) are as fundamental as government services can be - defend the nation, defend it's people.  Makes sense real estate should pay for it.  I'd start there on general taxes.

This also addresses #3, if that's the goal.  If 'wealth distribution' is the problem and the highest concentration of 'wealth' is tied up either directly or indirectly in real estate, then that's the place to start.  Not income.

Personally, I find 'sin taxes' to be pretty regressive and am not sure why they're so popular in general except they serve as an outlet for our more puritanical roots. 

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1 hour ago, Borracho said:

Yikes! A 4% wealth tax on real estate. Nothing on other assets? That would be disruptive. 

I assume it would be part of a general strategy.  There is more than just Medicare and defense.  For the most part, I'm always in favor of simpler, fewer exceptions, and broad based when it comes to taxes

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1 hour ago, Borracho said:

Yikes! A 4% wealth tax on real estate. Nothing on other assets? That would be disruptive. 

Very hard to avoid though.

In fact you could make it 6% for foreign domiciled companies or those with their share register comprising more than 50% foreign ownership.

FKT

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53 minutes ago, Fah Kiew Tu said:

Very hard to avoid though.

In fact you could make it 6% for foreign domiciled companies or those with their share register comprising more than 50% foreign ownership.

FKT

I'm not against 'foreign' domicile companies - they've been buying up and driving up prices as an investment hedge.   When you have a prime rate around 1% and no relative pain, sinking money into real estate makes a lot of sense.  Even at 4% tax rate, they're going to 'make money' - just not as much. Folks want to hide money from their authoritarian regimes?  Fine - you get to pay for the army that's defending your financial hedge against your own leaders.

Point 1 matters to me - 'hard to avoid'.  I believe taxes should be simple and broad.  I'm not a big fan of sin taxes but at least they have a goal that's easily articulated and easily understood.  I live with that.

But the byzantine bullshit of the US tax code is a fortress used by scoundrels to keep the status quo of special interests alive and strong.  That I'd like to see crumble.

 

 

 

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1 hour ago, BeSafe said:

I'm not against 'foreign' domicile companies - they've been buying up and driving up prices as an investment hedge.   When you have a prime rate around 1% and no relative pain, sinking money into real estate makes a lot of sense.  Even at 4% tax rate, they're going to 'make money' - just not as much. Folks want to hide money from their authoritarian regimes?  Fine - you get to pay for the army that's defending your financial hedge against your own leaders.

Point 1 matters to me - 'hard to avoid'.  I believe taxes should be simple and broad.  I'm not a big fan of sin taxes but at least they have a goal that's easily articulated and easily understood.  I live with that.

But the byzantine bullshit of the US tax code is a fortress used by scoundrels to keep the status quo of special interests alive and strong.  That I'd like to see crumble.

WRT foreign owned entities, you may not have experienced the phenomenon of seeing yourself or your children priced out of the real estate market where you were born due to foreign ownership. I've no qualms at all at taxing them quite heavily. Think of it as a cost of hedging your money in a politically safe haven.

I agree on 'sin taxes' on principle. There's a balancing act there too - jack the taxes high enough and you're guaranteed to grow a black market in the targeted commodities. We see that in Aus WRT tobacco.

I wasn't a fan of it initially but our GST is broad based and except at the local tradesman to customer level, very hard to avoid/evade. Business to business, the paper trail always exists if anyone wants to check. Much simpler than the previous sales tax regime with its complications.

The tax systems will never be reformed though until they collapse under their internal contradictions.

FKT

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12 minutes ago, Fah Kiew Tu said:

WRT foreign owned entities, you may not have experienced the phenomenon of seeing yourself or your children priced out of the real estate market where you were born due to foreign ownership. I've no qualms at all at taxing them quite heavily. Think of it as a cost of hedging your money in a politically safe haven.

I actually have and am dealing with it right now.  In the US, its as much domestic piracy as foreign - they are gleeful co-conspirators.  Anyone who invests their 401(k) in a REIT then complains about housing costs has a black belt in hypocrisy.  Real estate is the only thing big enough and not 'seizable' enough to eat the global glut of printed wealth.

I'm generally not a fan of punitive taxes but I'm also not self-deluded enough to pretend I'd push back very hard against that kind of plan :)  To me, the answer to real estate is taxes + build more or taxes + build better transportation.  In the US, I don't see either variation coming soon.  A quick google search gives you PAGES of discussions of why - Most boils down to the fact that the status quo LIKES the current system.  They benefit from it.  And don't want to change.

And you're right about the black market effect.  I think a lot of it depends on what you're trying to control.  Cigarettes are the obvious 'big one' in the US (and it sounds like it is in Australia too?).

My wife is a social worker and has occasionally bought cigarettes for her clients.  At that point, the price was $4-ish a pack?  If you went to the gas stations near the subsidized housing, you could get some sketchy off brand version for below tax - like $1.50 a pack?  I didn't ask - and they didn't explain - how that was the case.  But we'd buy 2-3 packs a week for her to give out to some of the folks.  They always took em and seemed to appreciate the effort.

But that's not about Taxes or Tariffs.  At least not directly.

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5 hours ago, BeSafe said:

We can try but I suspect it'll get hijacked pretty quick :)

First is to decide on why you're raising taxes in the first place.  There's three primary reasons - raise revenue for services, use taxes as a stick against behavior that's deemed undesirable to reduce participation (i.e., sin taxes), or as a more broad means of social justice to reverse some collective wrong.  Each has a different strategy and potential outcome.  The generic libertarian response is 1 is ok, 2 is less ok, 3 is not ok unless its narrowly defined. But libertarian is pretty much the political equivalent of cats - lots of shades and colors and frankly, they don't get along that well.  That's why there never will be a 'libertarian' president and never more than a couple of libertarian congress-critters at a time.

As you said, people who are totally against taxes tend to be either nihilists or true anarchists.  The latter has a point, the former just wants to watch the world burn.

My general feeling is that any use of the general tax code for anything OTHER than general revenue is likely a foolish misuse of a blunt tool.  I CAN knock down a tree with a sledge hammer - but it's not ideal.  I think we've resorted to that approach because we can't agree on any other - not because it's a good idea.  The concept of 'negative tax rates' is about as sensible as 'negative interest rates' - you can do it, but its a sign of dysfunction, not success.

As far as 1 goes, I'm in favor of a 4% real estate tax, assessed annually, and collected quarterly.  That will generate approximately 1.5 trillion dollars, through existing tax infrastructure.  I believe those revenues should be directly tied to Military and Medicare spending.   If you want lower taxes, spend less on those services.  If you want better services, raise taxes to pay for them.  To me, those services (military and medicare) are as fundamental as government services can be - defend the nation, defend it's people.  Makes sense real estate should pay for it.  I'd start there on general taxes.

This also addresses #3, if that's the goal.  If 'wealth distribution' is the problem and the highest concentration of 'wealth' is tied up either directly or indirectly in real estate, then that's the place to start.  Not income.

Personally, I find 'sin taxes' to be pretty regressive and am not sure why they're so popular in general except they serve as an outlet for our more puritanical roots. 

Well, in general, the general tax code is a poor proxy, but it's a starting place. The power to tax is the power to destroy, so I think we want to be careful and specific with it. But we agree that 1- we need a government (partly because if we don't have one, some mean & greedy bastards are going to set themselves up to rule over us for the purpose of slaving for them), and 2- that government needs money (for weapons, if nothing else).

A tax on real estate as the basic, mainstay support for the gov't, tax is an interesting idea. A few minutes googling came up with the numbers that residential real estate in the USA is worth $33.6 trillion as of 2020, and commercial real estate is worth $15.2 trillion. So our tax base is $48.8 trillion rather than the $21.4 trillion of GDP.

4% of all real estate yields approx $1.87 trillion. The Congressional Budget Office says the USA Federal Gov't spent $6.6 trillion in 2020, while raking in $3.4 trillion via out antiquated, maligned, and apparently easy-to-evade, tax system. https://www.cbo.gov/publication/57170

So unless we figure out a way to chop more than 2/3 of the Federal budget, this proposal isn't going to get us there. In fact, it's not even going to cover but slightly more than half the annual defecit. And it strikes me that asking everybody across the land to cough up the money to buy their real estate all over again, every 25 years, is likely to produce howls of outrage.

I'd consider a wealth tax if it covered both residential and business property, and included churches. Every square inch. It would be a considerable "leveller" of the tax burden. So would actually enforcing the income tax on those who have thier own personal accounting departments; so would treating ALL employment-provided benefits as income, and all investment gains as income.

We are very much overdue for a reform of our tax code. But IMHO the progressive income tax is a great tax tool that distributes the burden fairly. Would you consider making your real estate tax progressive in nature, ie the more one owns, the higher a rate one pays?

- DSK

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5 minutes ago, Steam Flyer said:

Well, in general, the general tax code is a poor proxy, but it's a starting place. The power to tax is the power to destroy, so I think we want to be careful and specific with it. But we agree that 1- we need a government (partly because if we don't have one, some mean & greedy bastards are going to set themselves up to rule over us for the purpose of slaving for them), and 2- that government needs money (for weapons, if nothing else).

A tax on real estate as the basic, mainstay support for the gov't, tax is an interesting idea. A few minutes googling came up with the numbers that residential real estate in the USA is worth $33.6 trillion as of 2020, and commercial real estate is worth $15.2 trillion. So our tax base is $48.8 trillion rather than the $21.4 trillion of GDP.

4% of all real estate yields approx $1.87 trillion. The Congressional Budget Office says the USA Federal Gov't spent $6.6 trillion in 2020, while raking in $3.4 trillion via out antiquated, maligned, and apparently easy-to-evade, tax system. https://www.cbo.gov/publication/57170

So unless we figure out a way to chop more than 2/3 of the Federal budget, this proposal isn't going to get us there. In fact, it's not even going to cover but slightly more than half the annual defecit. And it strikes me that asking everybody across the land to cough up the money to buy their real estate all over again, every 25 years, is likely to produce howls of outrage.

I'd consider a wealth tax if it covered both residential and business property, and included churches. Every square inch. It would be a considerable "leveller" of the tax burden. So would actually enforcing the income tax on those who have thier own personal accounting departments; so would treating ALL employment-provided benefits as income, and all investment gains as income.

We are very much overdue for a reform of our tax code. But IMHO the progressive income tax is a great tax tool that distributes the burden fairly. Would you consider making your real estate tax progressive in nature, ie the more one owns, the higher a rate one pays?

- DSK

That's an interesting question. I'd have to come back and ask what you were trying to achieve by that. And 'the more one owns' - does that just apply to real estate or every personal possession?

And - there are a few different approaches. For example, assuming 4% base:

Own 1 property which is your residence, pay 4%.

Own 2 properties, pay 6% on each.

Own 2 properties, pay 4% on No 1, 6% on No 2.

Etc...

FWIW in Australia there IS no personal property tax the way a lot of you guys have and there'd likely be a revolution if anyone tried to introduce that particular idea. Boats for example - I pay registration on mine, that's it.

FKT

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17 minutes ago, Steam Flyer said:

A tax on real estate as the basic, mainstay support for the gov't, tax is an interesting idea. A few minutes googling came up with the numbers that residential real estate in the USA is worth $33.6 trillion as of 2020, and commercial real estate is worth $15.2 trillion. So our tax base is $48.8 trillion rather than the $21.4 trillion of GDP.

4% of all real estate yields approx $1.87 trillion. The Congressional Budget Office says the USA Federal Gov't spent $6.6 trillion in 2020, while raking in $3.4 trillion via out antiquated, maligned, and apparently easy-to-evade, tax system. https://www.cbo.gov/publication/57170

When I looked a couple of months ago, the numbers I saw were about $30 trillion total so 4% was 1.2 trillion-ish. I'll take a look at your numbers and follow the links.  If that's a low ball estimate, then fine, the raised revenues go up!

The real estate tax isn't the only tax :)  its the tax that directly pays for Military and Medicare specifically.  I'm fully expecting there to be other taxes to pay for other services.  As I said above, I'm in favor of broad, mostly flat, and difficult to avoid taxes.  That means things like a generic sales tax.  Those are already collected so slapping a Federal one on top is easy and doesn't create more bureaucracy.

I'm not generally a fan of capital gains taxes because they're so easily gamed.  I'm REALLY against the step-up basis calculation - that's boondogglery of the highest order.  But I'd like to be semi-realistic - those aren't going away.

 

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I'd consider a wealth tax if it covered both residential and business property, and included churches. Every square inch. It would be a considerable "leveller" of the tax burden.

Great! 

 

Quote

We are very much overdue for a reform of our tax code. But IMHO the progressive income tax is a great tax tool that distributes the burden fairly. Would you consider making your real estate tax progressive in nature, ie the more one owns, the higher a rate one pays?

- DSK

I'm fine with a graded scale tied to the value of the asset.   What I don't want is the tax tied to some concept of the 'owner' themselves.  If you own a million dollar house, it's a million dollar house, whether you own one of them or 100 of them.  The tax is on the house.  That's one area where FKT and I appear to be diverging.

But that's why we vote :)  We can have different ideas.  I appreciate what he's responding to.

 

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11 minutes ago, BeSafe said:

When I looked a couple of months ago, the numbers I saw were about $30 trillion total so 4% was 1.2 trillion-ish. I'll take a look at your numbers and follow the links.  If that's a low ball estimate, then fine, the raised revenues go up!

The real estate tax isn't the only tax :)  its the tax that directly pays for Military and Medicare specifically.  I'm fully expecting there to be other taxes to pay for other services.  As I said above, I'm in favor of broad, mostly flat, and difficult to avoid taxes.  That means things like a generic sales tax.  Those are already collected so slapping a Federal one on top is easy and doesn't create more bureaucracy.

I'm not generally a fan of capital gains taxes because they're so easily gamed.  I'm REALLY against the step-up basis calculation - that's boondogglery of the highest order.  But I'd like to be semi-realistic - those aren't going away.

 

Great! 

 

I'm fine with a graded scale tied to the value of the asset.   What I don't want is the tax tied to some concept of the 'owner' themselves.  If you own a million dollar house, it's a million dollar house, whether you own one of them or 100 of them.  The tax is on the house.  That's one area where FKT and I appear to be diverging.

But that's why we vote :)  We can have different ideas.  I appreciate what he's responding to.

 

Not necessarily - I was after clarity on what Doug posted.

I like exploring ideas. Often it's instructive to push them to extremes to ascertain more of what someone is thinking.

The conflation of desired outcomes is always an issue. Like land taxes. A flat one as you support isn't a brake on massive accumulations of RE by a small subset of the population with the capital - they can jack up rents to pay the tax. A progressive to punitive tax *might* result in a more horizontal distribution of holdings.

Also might not -  hence exploring variations AFTER agreeing on the goal(s).

I try to keep in mind the law of unanticipated consequences.

FKT

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Dat 4% idea cannot operate, as it is in effect confiscatory.

Average annual running yields on real estate globally are in the range 3 - 6%.

The proposal would eliminate yield for a significant proportion of the affected estate and smash the capital values commensurately.

It might be viable at around 1% per annum on improved value?

 

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11 minutes ago, Frogman56 said:

Dat 4% idea cannot operate, as it is in effect confiscatory.

Average annual running yields on real estate globally are in the range 3 - 6%.

The proposal would eliminate yield for a significant proportion of the affected estate and smash the capital values commensurately.

It might be viable at around 1% per annum on improved value?

 

That's a feature not a bug IMO.

I live in my house. It's immaterial to me whether the theoretical capital value is $1,500,000, 10X that or 1/10 of that.

It doesn't change its actual utility to my one iota.

One of the problems with the 4% annual land tax idea is - who sets the valuation and what appeal mechanisms are there if its thought to be excessive?

IIRC California capped land tax and that's caused all sorts of issues/anomalies.

FKT

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21 minutes ago, Frogman56 said:

Dat 4% idea cannot operate, as it is in effect confiscatory.

Average annual running yields on real estate globally are in the range 3 - 6%.

The proposal would eliminate yield for a significant proportion of the affected estate and smash the capital values commensurately.

It might be viable at around 1% per annum on improved value?

 

The 4% could work with adjustments to the income tax. For the poorer renters the money saved on income tax would flow to the landlord and then to the government, for example. 
 

However out here in the mountains the assessors never visit. The number of households must be five times the number of legal houses. Not even inspected or resolved during a sale. Nutty. 
 

Better to tax every imaginable thing at very low rates. Food, fuel, highway tolls, churches … how about a tax on political fund raising and other grifting?

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2 hours ago, Borracho said:

Better to tax every imaginable thing at very low rates. Food, fuel, highway tolls, churches … how about a tax on political fund raising and other grifting?

Financial transactions 

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24 minutes ago, AJ Oliver said:

Financial transactions 

Yeah. Exactly. There are around a Trillion individual taxable sales transactions each year in the USA. Each one carefully calculated and accounted for by law. 5 to 10 percent each. But a minuscule financial transaction tax is overly burdensome and will wreck the economy.  :roll eyes:

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6 minutes ago, Borracho said:

. But a minuscule financial transaction tax is overly burdensome and will wreck the economy. 

FIFY - You meant the purple, right ?? 

Such a tax will only affect the high speed trading predators. 

Read Mike Lewis "Flash Boys".. 

@Burning Man   this is my second trick, right ?  

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2 minutes ago, AJ Oliver said:

FIFY - You meant the purple, right ?? 

Such a tax will only affect the high speed trading predators. 

Read Mike Lewis "Flash Boys".. 

@Burning Man   this is my second trick, right ?  

Yup. Thanks. It would help matters if the transaction tax was enough to even to cool the jets of the day traders and speculators. Favoring thoughtful application of capital. 

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20 hours ago, Steam Flyer said:

"Why is cutting spending better than raising taxes" is a rather fundamental question, worthy of intelligent discussion. A glib diversion into the futility of tariffs isn't even approaching an answer. I'm disappointed in Tommygun but then you're right, he is dedicated.

FWIW I'd agree that tariffs in general are not an effective form of taxation; by "effective" I mean generating operating funds for the government with minimal disruption of the productive economy.

That last sentence is a pretty good summary of the article I linked explaining what's wrong with tariffs.

20 hours ago, Steam Flyer said:

OTOH targeting specific items for tariff is a very effective way for government to influence both microeconomy and it's citizens behavior, and THAT is what the fakebertarian brethren hate-hate-hate so much about tariffs that they can't talk about taxes without uncorking a rant about tariffs first.

Of course, they hate-hate-hate taxes too. And they refuse to move to Somalia.

I also mentioned the crony capitalist/influence peddling aspects of tariffs. If that's what you meant by "influence." You're correct that the influence peddling is one of the things to which my elk object.

If you have an example of a "good" tariff, I'd be interested in seeing it. Without one, my answer to the topic question continues to be, "not me."

By the way, moving to Somalia is a lot of work and we can just turn America into Somalia instead. There's a whole thread where my elk have been working to achieve that outcome. Oddly, you've never dropped by to say what's wrong with any of it.

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2 hours ago, Excoded Tom said:
23 hours ago, Steam Flyer said:

FWIW I'd agree that tariffs in general are not an effective form of taxation; by "effective" I mean generating operating funds for the government with minimal disruption of the productive economy.

That last sentence is a pretty good summary of the article I linked explaining what's wrong with tariffs.

I skip your articles, got a good education in economics instead.

Tariffs are always good for -some-body; they increase profits of the tariffed goods produced domestically.

- DSK

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4 minutes ago, Steam Flyer said:

Tariffs are always good for -some-body; they increase profits of the tariffed goods produced domestically.

I know they're always good for $omebody. We have a whole $ugar industry built around that fact.

But I was asking for an example of a good tariff.

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Just now, Excoded Tom said:

...

But I was asking for an example of a good tariff.

One that is critical to national defense; or some other very broad national interest like medicine; or one that cascades benefits thru the rest of the economy because of the required technology or education.

Or one that inhibits harmful behavior, like heroin.

And of course, as I tried to point out and you refuse to grasp, "good" is a term that needs to be defined carefully in order to be meaningful.

- DSK

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11 hours ago, BeSafe said:

When I looked a couple of months ago, the numbers I saw were about $30 trillion total so 4% was 1.2 trillion-ish. I'll take a look at your numbers and follow the links.  If that's a low ball estimate, then fine, the raised revenues go up!

The real estate tax isn't the only tax :)  its the tax that directly pays for Military and Medicare specifically.  I'm fully expecting there to be other taxes to pay for other services.  As I said above, I'm in favor of broad, mostly flat, and difficult to avoid taxes.  That means things like a generic sales tax.  Those are already collected so slapping a Federal one on top is easy and doesn't create more bureaucracy.

I'm not generally a fan of capital gains taxes because they're so easily gamed.  I'm REALLY against the step-up basis calculation - that's boondogglery of the highest order.  But I'd like to be semi-realistic - those aren't going away.

 

Great! 

 

I'm fine with a graded scale tied to the value of the asset.   What I don't want is the tax tied to some concept of the 'owner' themselves.  If you own a million dollar house, it's a million dollar house, whether you own one of them or 100 of them.  The tax is on the house.  That's one area where FKT and I appear to be diverging.

But that's why we vote :)  We can have different ideas.  I appreciate what he's responding to.

 

Good discussion. But now I'm curious why you're against progressive taxation.

As for real estate tax, in the US it's levied locally and pays for schools and some infrastructure like water works. We live in a relatively low-tax area and pay less than 1% annually, and that's with our rate tripled for being "desirable waterfront."  So it's arguable that layering a federal tax over this could be viable.

Progressive taxation- the basic concept is fair IMHO. Wealthy individuals both gain more from our organized socio-economic system, and they have more at stake. They should support it more. 2nd, a cheeseburger or a pair of jeans costs the same for a poor person or rich.

The look at results. 35 years of flattening the tax curve in the US has resulted in the most lopsided wealth distribution in history, with more than half the wealth & income held by ~ 5% of the people (and it gets worse as you looks closer https://www.lcurve.org). the USA has declining standards of living, declining life expectancy, increasing infant mortality, decreasing education, etc etc.

I'm not sure where the push against progressive taxation, as a concept, is coming from, but they're winning. 25 years ago it was almost universally accepted as fair and desirable. As it gets more obvious that it -is- not just fair and desirable but a less-dysfunctional way to order our socio-economic system, the more adamant voices seem to be raised that increasing taxes on the wealthy is SO-O unfair!

- DSK

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6 hours ago, Excoded Tom said:

That last sentence is a pretty good summary of the article I linked explaining what's wrong with tariffs.

I also mentioned the crony capitalist/influence peddling aspects of tariffs. If that's what you meant by "influence." You're correct that the influence peddling is one of the things to which my elk object.

If you have an example of a "good" tariff, I'd be interested in seeing it. Without one, my answer to the topic question continues to be, "not me."

By the way, moving to Somalia is a lot of work and we can just turn America into Somalia instead. There's a whole thread where my elk have been working to achieve that outcome. Oddly, you've never dropped by to say what's wrong with any of it.

I would say Florida is starting to resemble Somalia. At least in Covid outcomes

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2 hours ago, Steam Flyer said:

Progressive taxation- the basic concept is fair IMHO. Wealthy individuals both gain more from our organized socio-economic system, and they have more at stake. They should support it more. 2nd, a cheeseburger or a pair of jeans costs the same for a poor person or rich.

I'm not generically against progressive taxation.

I would agree that the first $10 means more than the 1000th $10 dollars.  Taking 10% of that first $10 dollars has a different impact than taking 10% from that 1000th $10 dollars.  I'm fine with that. 

I'm against the concept of using the tax code as a tool for 'fairness'.  I want a tax code that is clean and largely unambiguous.  That's because I don't trust people. I can trust individuals.  But I have very serious doubts about 'people' supposedly acting in my best interests. 

I find that power attracts people who want power, not people who want goodness.  They sometimes coincide, but that seems to be an accident, not an intent.  The more the power is concentrated, the more this tendency seems to manifest.  Power in Taxation doesn't come from the collection or distribution.  That's the tool.  Power resides in 'who decides' who gets taxed.  That choice is then backed up by 'rule of law' and all that.  That's one of the most direct manifestations of my 'libertarian' bend.  I don't trust concentrated power because I don't trust the people that wield concentrated power to be just and fair.   Since I can't vet the individuals, I have to rely on systems that are transparent and difficult to manipulate instead.

So, I prefer systems that are pretty much 'just math' when it comes to my taxes.  I'm fine with a progressive system - what I don't want is carve outs, complex deductions, and punitive measures.  That's the root of the divergence between FKT's vision and mine.  He sees a real estate tax as a potential tool against abusive practices by people trying to skirt authoritarians.  I'm totally sympathetic and if that's what happened overall, I wouldn't complain too much.  Personally, I'd rather just tax property based on its value and then call out and directly penalize the foreign powers for what they're doing.  Which is why I'll never be a politician :)

I appreciate the arguments in favor of a progressive tax curve.  Again, in principle, I'm not against progressive taxation.   Relative to the 'L-Curve' reference, my counter argument is that we've HAD progressive taxes over the last 30 years.  Would Amazon, Apple, Facebook, etc be even MORE trillionaire-ish without what we've had?  Would our massive wealth imbalance be LESS bad if we'd increased the top marginal rate from 39.2% to 45% instead of dropping it to 37%?  I don't think those numbers mean much unless you've got a very simple, flattish system to begin with.    I also disagree fundamentally that 'wealth inequality' is best tackled by 'income tax'.  I think that's like Dick Cheney's famous "Iran's the problem, lets invade iraq' strategy.  Yea, it 'kinda works' but .... really?  That's what we're going with?

My belief is that the massive increase in wealth disparity has more to due with the implications of money printing and 'fiscal policy' and less to do with marginal income rate.  I think we're stuck in a status quo land where the people in charge are doing everything they can to keep the people that put them there happy until the clock runs out, regardless of future consequences.

To unravel that system, I think we need to reduce the complexity of the tax code first.  The rates don't matter if that's not what the powerful pay anyway. 

 

 

 

 

Fred.png

Fred2.png

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6 minutes ago, BeSafe said:

I'm not generically against progressive taxation.

I would agree that the first $10 means more than the 1000th $10 dollars.  Taking 10% of that first $10 dollars has a different impact than taking 10% from that 1000th $10 dollars.  I'm fine with that. 

I'm against the concept of using the tax code as a tool for 'fairness'.  I want a tax code that is clean and largely unambiguous.  That's because I don't trust people. I can trust individuals.  But I have very serious doubts about 'people' supposedly acting in my best interests. 

I find that power attracts people who want power, not people who want goodness.  They sometimes coincide, but that seems to be an accident, not an intent.  The more the power is concentrated, the more this tendency seems to manifest.  Power in Taxation doesn't come from the collection or distribution.  That's the tool.  Power resides in 'who decides' who gets taxed.  That choice is then backed up by 'rule of law' and all that.  That's one of the most direct manifestations of my 'libertarian' bend.  I don't trust concentrated power because I don't trust the people that wield concentrated power to be just and fair.   Since I can't vet the individuals, I have to rely on systems that are transparent and difficult to manipulate instead.

So, I prefer systems that are pretty much 'just math' when it comes to my taxes.  I'm fine with a progressive system - what I don't want is carve outs and punitive measures.  That's the root of the divergence between FKT's vision and mine.  He sees a real estate tax as a potential tool against abusive practices by people trying to skirt authoritarians.  I'm totally sympathetic and if that's what happened overall, I wouldn't complain too much.  Personally, I'd rather just tax property based on its value and then call out and directly penalize the foreign powers for what they're doing.  Which is why I'll never be a politician :)

I appreciate the arguments in favor of a progressive tax curve.  Again, in principle, I'm not against progressive taxation.   Relative to the 'L-Curve' reference, my counter argument is that we've HAD progressive taxes over the last 30 years.  Would Amazon, Apple, Facebook, etc be even MORE trillionaire-ish without what we've had?  Would our massive wealth imbalance be LESS bad if we'd increased the rate from 39.2% to 45% instead of dropping it to 37%?  I don't think those numbers mean much unless you've got a very simple, flattish system to begin with.    I also disagree fundamentally that 'wealth inequality' is best tackled by 'income tax'.  I think that's like Dick Cheney's famous "Iran's the problem, lets invade iraq' strategy.  Yea, it 'kinda works' but .... really?  That's what we're going with?

My belief is that the massive increase in wealth disparity has more to due with the implications of money printing and 'fiscal policy' and less to do with marginal income rate.  I think we're stuck in a status quo land where the people in charge are doing everything the can to keep the people that put them there happy until the clock runs out, regardless of future consequences.

To unravel that system, I think we need to reduce the complexity of the tax code first.  The rates don't matter if that's not what the powerful pay anyway. 

 

 

 

 

Fred.png

Fred2.png

Focusing just on income taxes plays into that wealth disparity. Bigly.

 

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54 minutes ago, BeSafe said:

....

I appreciate the arguments in favor of a progressive tax curve.  Again, in principle, I'm not against progressive taxation.   Relative to the 'L-Curve' reference, my counter argument is that we've HAD progressive taxes over the last 30 years.  ...

This specific point is easiest to answer... we (the USA) has had DECREASINGLY progressive taxation over the past 35 years. If you look at 1970 and further back, the top tax rates were far higher. During the "Golden Age" of the 1950s, the top income tax rate was 94% and that applied on income over (inflation adjusted) $2 1/2 million.

This produced an economy that was stable, invested in infrastructure and education, and eventually put a man on the moon. Not the only factor of course, but now we have individuals who can afford their own private space programs, and a country that cannot.

Another short answer, I completely agree with you that simplifying the tax code is imperative. More later, thank you for a well thought out and well written post.

- DSK

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4 hours ago, Steam Flyer said:

This specific point is easiest to answer... we (the USA) has had DECREASINGLY progressive taxation over the past 35 years. If you look at 1970 and further back, the top tax rates were far higher. During the "Golden Age" of the 1950s, the top income tax rate was 94% and that applied on income over (inflation adjusted) $2 1/2 million.

This produced an economy that was stable, invested in infrastructure and education, and eventually put a man on the moon. Not the only factor of course, but now we have individuals who can afford their own private space programs, and a country that cannot.

Another short answer, I completely agree with you that simplifying the tax code is imperative. More later, thank you for a well thought out and well written post.

- DSK

Life was so much better in the 1970s.  So says the dipshit.

 

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Speaking purely from an Australian POV, one of the big problems with progressive taxation *in practice* as opposed to theory is what we call 'bracket creep'.

Basically, the thresholds for a percentage increase rarely or never get raised by the amount of official inflation, let alone the actual underlying inflation. This rapidly pushes people into higher tax brackets. For the Govt of the day, it's 'free money' as they don't have to raise tax thresholds, just let inflation rip.

So, here there's been a reduction in the number of tax percentage increases and an increase in the range of income in each bracket. Now you have to earn quite a bit to get into the top bracket, which is as it should be.

I've no philosophical problem at all with progressive taxation, but automatic indexation of thresholds HAS to be part of the deal to stop creeping tax increases. And by some independent body, not a Govt committee - we know how that works out.

Land tax is interesting and exists in Australia in some jurisdictions, in various forms. There's a shitload of exemptions of course.

FKT

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22 hours ago, Steam Flyer said:

One that is critical to national defense; or some other very broad national interest like medicine; or one that cascades benefits thru the rest of the economy because of the required technology or education.

Or one that inhibits harmful behavior, like heroin.

And of course, as I tried to point out and you refuse to grasp, "good" is a term that needs to be defined carefully in order to be meaningful.

- DSK

There are examples of each of those in this thread. Well, except using taxes to fight the stupid drug war. I talk about that in the stupid drug war thread.

As you have already observed, I've been cheering Trump's tariffs in this thread for some time now because

On 4/21/2021 at 11:39 AM, Steam Flyer said:

In Tomworld, as in 99% of RWNJ-la-la-land, any slight endorsement of -any- Democrat any time any where, or any action taken by any Democrat, means total full-throated approval of ALL Democratic policy decisions. That's why he and his fellow Libertarians are just Republican fascist tools... anybody who isn't a fellow deluded fascist tool is their avowed ENEMY.

So we can agree that in a fact-based world, I've been a staunch defender of Trump's useful tariffs, just as I have with his wall, his impeachment, his election lawsuits, and every other issue. Or something. (Readers, if any, please don't spoil my fun.)

Solar Panel Manufacturer That Hasn't Produced Solar Panels Since 2017 Seeks Extension of Solar Panel Tariffs

Trump's Tariffs Are Still Enhanding America's Coronavirus Response

Trump's New Tariffs on Canadian Aluminum Are Justifiable

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58 minutes ago, Excoded Tom said:

There are examples of each of those in this thread. Well, except using taxes to fight the stupid drug war. I talk about that in the stupid drug war thread.

As you have already observed, I've been cheering Trump's tariffs in this thread for some time now because

So we can agree that in a fact-based world, I've been a staunch defender of Trump's useful tariffs, just as I have with his wall, his impeachment, his election lawsuits, and every other issue. Or something. (Readers, if any, please don't spoil my fun.)

I won't.  

This place really is just Gestalt Anarchy most of the time.

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There was a time, not so long ago, when the main proponent of the stupid trade war would tweet incoherently about it in the wee hours.

Now we have more eloquent defenders of the same stupid trade war.
 

Quote

 

...

There's plenty of evidence to show that Trump's approach failed, but what Tai outlined was more of a shift in style than in substance. Rather than all-caps tweets about China stealing jobs, the Biden administration is pushing what Tai described as "a worker-centric trade policy" that will include "smart domestic investments"—Washington-speak for giving unions more influence over policy and for lots of new industrial subsidies.

The few concrete steps included in Tai's remarks are tightly linked to the previous president's agenda. They include a promise to "discuss with China" its failure to deliver on promises made in the so-called "Phase One" trade deal inked in 2020, and a rejiggering of the flawed tariff exclusion process—one that allows federal bureaucrats to decide which American businesses have to pay tariffs and which do not—set up by the Trump administration. Rather than charting a new course, those agenda items merely refine and entrench the protectionist impulses of Biden's predecessor.

The tariffs are the most obvious part of that. More than half of the goods traded between the world's two largest economies are now subject to tariffs, according to data from the Peterson Institute of International Economics—up from less than 1 percent before the trade war began. And there should no longer be any doubt that American businesses and consumers are paying the vast majority of those added costs. Less than 8 percent of the tariff costs are falling on China, according to one recent study by Moody's Investment Service. The tariffs have also failed to drive international investment away from China, as Trump often claimed they would.

Reforming the tariff exclusion process won't fix any of that. But Tai said Monday that the Biden administration continues to view tariffs as "a very important tool" in enforcing trade agreements. In an interview with Politico last week, Tai was even more direct, saying she views Trump's China tariffs as "something for us to build on and to use in terms of defending to the hilt the interests of the American economy, the American worker and American businesses and our farmers, too."

That's a long way from Biden's pointed criticisms during last year's campaign of how Trump's tariffs had failed to achieve their goals.

...

 

The answer to the topic question seems more and more to be: almost everyone.

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Katherine Tai was on NPR yesterday trying to explain how THESE tariffs aren't really THOSE tariffs.  To NPRs credit, they just parroted back the earlier anti-trump talking points, and let her talk.  It was painful.  But that's why Ms. Tai gets paid the big bucks.

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12 minutes ago, Raz'r said:

Gotta pay for those tax cuts somehow. 

One way would be to significantly reduce spending.  We already have a crazy progressive tax system - more progressive than the model Nordic countries.  

244396646_10226444484528041_4916281119929910863_n.jpg

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4 minutes ago, jzk said:

One way would be to significantly reduce spending.  We already have a crazy progressive tax system - more progressive than the model Nordic countries.  

244396646_10226444484528041_4916281119929910863_n.jpg

Oh good, a cite from Heritage Foundation... you just -know- that is completely truthful and unbiased.

- DSK

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2 minutes ago, Steam Flyer said:

Oh good, a cite from Heritage Foundation... you just -know- that is completely truthful and unbiased.

- DSK

Do you dispute any of the information presented, or are you just the same old dipshit that you have always been?

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On 10/7/2021 at 10:15 AM, jzk said:
On 10/7/2021 at 10:00 AM, Raz'r said:

Gotta pay for those tax cuts somehow. 

One way would be to significantly reduce spending. 

I agree, but that's never a popular answer.

But another good answer would be: a tax enacted by Congress instead of one imposed by one man.

Recalling the Sematech debacle...

The First Semiconductor Trade War
 

Quote

 

Faced with the prospect of an Asian nation overtaking the United States as the world's preeminent manufacturer of vital technology, the president struck a nationalist pose. "The health and vitality of the U.S. semiconductor industry are essential to America's future competitiveness," he said, announcing huge new tariffs and setting the stage for subsidies to domestic microchip makers. "We cannot allow it to be jeopardized by unfair trading practices."

This was not President Joe Biden or former President Donald Trump taking a stand against China. It was President Ronald Reagan responding to the growing technological prowess of Japan in 1987.

A year earlier, the Reagan administration had reached a deal that was supposed to limit Japanese companies' sales of computer chips to America. Unsatisfied with the results, Reagan decided to escalate the trade war in 1987 by slapping 100 percent tariffs on all semiconductors imported from Japan. One year later, Congress approved a $500 million industrial policy to subsidize American chipmakers, but the effort largely fell flat.

...

 

 

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  • 4 weeks later...

Protectionism: Rotten from the Core
 

Quote

 

...

Protectionism produces political corruption, economic stagnation, and international conflict. Yet many people will insist that even though protectionism hinders a nation's ability to feed, clothe, and house itself, the moral gains from protectionism are greater than the economic losses. But what is the moral core of protectionism? What is the ethical basis for fair trade as it is practiced?

American trade law is dedicated to the pursuit of the just price—but only for imports. Medieval theologian Duns Scotus declared that a price was just when "the owners of things…. preserve equality of value in the things exchanged, according to right reason judging of the nature of the thing exchanged in relation to its human use." US trade law assumes that imported goods have an objective value in themselves which can be determined in a bureaucratic vacuum thousands of miles from the market where the product is exchanged. The soul of American trade law is that bureaucrats and politicians, not buyers and sellers, are the proper judges of fair value. All the absurdities, biases, and scholastic methods of the US dumping law follow from this principle.

All trade barriers rest upon the moral premise that it is fairer for the US government to effectively force an American citizen to buy from an American company than to allow him to voluntarily make a purchase from a foreign company. US trade policy assumes that the moral difference between an American company and a foreign company is greater than the difference between coercion and voluntary agreement. The choice of fair trade versus free trade is largely one of When is coercion fairer than voluntary agreement?

...

 

The question leads to Hayek's information problem, as intractable as ever.

But it also ignores the incentives for and the reality of corruption in trade policy decisions. When we put one man in charge of tax policy, as we have on trade, that's almost guaranteed, especially if the man is Trump. But not much less so when the man is Biden.

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3 minutes ago, Excoded Tom said:

The choice of fair trade versus free trade is largely one of When is coercion fairer than voluntary agreement?

I agree. It's far cheaper to manufacture in third world counties where the peasants are more than willing to work for peanuts and under conditions that would be illegal in the US and then import the goods back into US.

Nobody is arguing that point.  :ph34r:

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The answer to the topic question continues to be Trump and Biden. In the latest round, Biden works to stop the steel.
 

Quote

 

The Biden administration has reached a deal with the European Union to withdraw tariffs imposed by President Donald Trump on European-made steel. Unfortunately, the agreement likely won't translate into lower costs for American manufacturers and consumers.

That's because the Biden administration is replacing Trump's tariffs with a new form of protectionism that will continue to artificially inflate the cost of steel imported from Europe. Instead of charging 25 percent tariffs on all steel imports, as Trump did, Biden's deal includes a so-called "tariff-rate quota" that will allow 3.3 million metric tons of steel to be imported annually without tariffs. Once that threshold is met, the 25 percent tariffs will apply to subsequent imports. For reference, the U.S. imported nearly 5 million metric tons of steel from Europe in 2017—the last full year before Trump's tariffs caused imports to fall sharply.

While the lifting of Trump's tariffs is good news for some steel-consuming businesses in the United States that are struggling with high prices and supply shortages, "it is disappointing that the agreement will not completely terminate these unnecessary trade restrictions on our allies," the Coalition of American Metal Manufacturers and Users, an industry group, said in a statement. "The U.S. domestic steel sector does not need protection from competition and the U.S. should immediately begin negotiations to lift these damaging tariffs on our other close allies and trading partners."

...

 

There's still no winning a foot-shooting contest.

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  • 3 weeks later...

Trump and Biden may agree that they're a good idea, but at least one judge thinks some of the Trump/Biden tariffs are unconstitutional.
 

Quote

 

...

In October 2020, Trump issued a proclamation that imposed new tariffs on some crystalline silicon photovoltaic cells (CSPV), a specific type of solar panel component which had been exempted from Trump's 2018 order imposing tariffs on a wide range of solar panels and parts. At the same time, Trump made changes to those previously imposed solar panel tariffs so that they would decline from 20 percent to 18 percent in February of this year, rather than to 15 percent as originally intended.

Revoking the exemption for CSPV cells, the Trump administration said at the time, was necessary because allowing those parts to be imported tariff-free had "impaired and is likely to continue to impair the effectiveness of" the other solar panel tariffs. Competition from "low-priced imports," the Trump administration said, would limit the growth of America's own solar panel manufacturing industry.

In court documents, the Biden administration defended Trump's actions on the grounds that the previous administration was merely trying to close a "loophole" in the earlier tariff rule.

Katzmann ruled against both Trump and Biden on Tuesday. By adding new tariffs and changing the scheduled tariff rates established in 2018, the judge said, Trump's October 2020 proclamation "constituted both a clear misconstruction of the statute and action outside the President's delegated authority."

The technical violation that Trump committed has to do with Section 201 of the Trade Act of 1974, which gives presidents the unilateral authority to impose tariffs for explicitly protectionist reasons. But once tariffs are imposed, presidents are not allowed to hike those tariffs for at least three years—though there is some wiggle room for presidents to reduce them within the three-year window. That provision seems specifically crafted to prevent presidents from using tariffs as a sort of negotiating threat in the way that Trump often did, and it is also meant to provide some stability to businesses affected by the new import duties.

Trump's October 2020 order plainly violated that part of the 1974 law. "Neither the statute nor the statutory scheme supports interpreting Section 204…to permit increased restrictions on trade," Katzmann wrote in his ruling. As a result, the changes Trump ordered in October 2020 have to go, but the underlying 15 percent tariffs will remain in place.

...

 

So most of the tax will remain and it will not be long before the three year time window expires and Biden can follow through on Trump's idea.

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  • 4 weeks later...

Who really believes tariffs are good business?

The answer continues to be: Trump and Biden.
 

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Those tariffs, which Biden has been stubbornly unwilling to reverse during his first year in office, are adding roughly 0.5 percent to annual inflation across the economy. That's the conclusion drawn by Ed Gresser, a former assistant U.S. Trade Representative who is currently the vice president and director for trade and global markets at the Progressive Policy Institute, a center-left think tank. Trump's tariffs on washing machines, solar panels, steel, aluminum, and a host of Chinese-made goods are a "secondary but noticeable contribution" to overall inflation right now, Gresser writes.

That's pretty much in line with what four economists at the San Francisco Federal Reserve warned in February 2019, shortly after Trump began slapping tariffs on various goods. "Imports from China are an important part of overall U.S. imports of consumer and investment goods," they wrote. "Thus, tariffs on these imports are likely to have sizable effects on consumer, producer, and investment prices in this country."

Unlike other policies that could help slow inflation, like raising interest rates, Biden could cut tariffs without having to wait for Congress or the Federal Reserve to act. Similarly, cutting tariffs would not come with some of the negative tradeoffs that other actions might. Raising interest rates will harm the economy in other ways (for example, by making it more expensive to borrow). Lifting tariffs will ease inflation and provide a tax cut to many American businesses. It is quite literally a win-win.

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2 hours ago, Raz'r said:

Politics must suck for you. 

Well, the awkward facts for the free traders are that every single one of the industrialized nations built their industrial base behind tariff walls.  US, UK, Germany, Japan, Russia, all of them. 

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2 hours ago, AJ Oliver said:

Well, the awkward facts for the free traders are that every single one of the industrialized nations built their industrial base behind tariff walls.  US, UK, Germany, Japan, Russia, all of them. 

It must be tough for Tom as he’s the professed smartest guy in the room. Yet, no one listens…

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I've been wondering why the softwood Tariff against Canada hasn't been eased.   I read somewhere (financial, not political) it was adding 9% to lumber prices. 

Edit.  It looks like Biden actually raised it to 18%, as part of his pro inflation policy to achieve a $15 minimum wage.   

A trade war with Canada was one of the more stupid things Trump did, especially claiming our friend and ally since the war of the pigs days was a security threat.   I can understand Biden keeping sanctions against China until they stop stealing our intellectual property.   

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9 hours ago, Lark said:

A trade war with Canada was one of the more stupid things Trump did, especially claiming our friend and ally since the war of the pigs days was a security threat. 

But tariffs are smart! Trump and AJ Oliver agree! What more do you need?

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10 hours ago, Lark said:

I've been wondering why the softwood Tariff against Canada hasn't been eased.   I read somewhere (financial, not political) it was adding 9% to lumber prices. 

Edit.  It looks like Biden actually raised it to 18%, as part of his pro inflation policy to achieve a $15 minimum wage.   

A trade war with Canada was one of the more stupid things Trump did, especially claiming our friend and ally since the war of the pigs days was a security threat.   I can understand Biden keeping sanctions against China until they stop stealing our intellectual property.   

 

I don't think Biden is actually pro-inflation.  That's kind of a 'tier 2' level of economic diabolicalnessness.  There are probably people in his administration that would take that position but I doubt he does.  I think the government likes money and tariffs are a handy way to raise taxes without having to be on record as voting to raise taxes. 

 

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Just now, BeSafe said:

I think the government likes money and tariffs are a handy way to raise taxes without having to be on record as voting to raise taxes. 

I don't agree with that. Trump and Biden are both definitely on record.

I think it's about the Duopoly desire to concentrate the power to tax in one person and then use it for crony advancement when their Team takes power.

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13 minutes ago, Lochnerian Tom said:

I don't agree with that. Trump and Biden are both definitely on record.

I think it's about the Duopoly desire to concentrate the power to tax in one person and then use it for crony advancement when their Team takes power.

That's a good point.

Except I don't think the average American follows the ebbs and flows of Tariff policy.  I would be curious to see if the average voter - democrat or republican - even remembers that they still exist.  I'm betting that most people thought it was a 'one time thing' and are gone now.  Wars are temporary right?  Not eternal?  :)  I doubt any democrat or republican would vote on that issue.  PAC money will be extracted - I think that's very likely - but I'm not sure it goes any further relative to actual votes.

The big win for the duopoly was getting them restarted.  Once that occurred, tariffs settled comfortably back into the drawer along side the other tools of executive proclivity.

 

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9 hours ago, BeSafe said:
20 hours ago, Lark said:

I've been wondering why the softwood Tariff against Canada hasn't been eased.   I read somewhere (financial, not political) it was adding 9% to lumber prices. 

Edit.  It looks like Biden actually raised it to 18%, as part of his pro inflation policy to achieve a $15 minimum wage.   

A trade war with Canada was one of the more stupid things Trump did, especially claiming our friend and ally since the war of the pigs days was a security threat.   I can understand Biden keeping sanctions against China until they stop stealing our intellectual property.   

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I don't think Biden is actually pro-inflation.  That's kind of a 'tier 2' level of economic diabolicalnessness.  There are probably people in his administration that would take that position but I doubt he does.  I think the government likes money and tariffs are a handy way to raise taxes without having to be on record as voting to raise taxes. 

The Canadian softwood lumber issue has reached institutional status. It's been going on for so long that it "just is" now. The US puts 18% tariffs on, Canada takes it to the WTO and wins, the US winds them back a bit. Rinse and repeat. It's an industry on its own.

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