Cost of tax breaks

[The Rabbi]

I'd like to see it myself. I just refuse to allow the premise that tax cuts cost the government money to stand unchallenged.

Some do, some don't. The cap gains tax cut always brings in more revenue than was supposedly lost. Tax credits for cash for clunkers and the like always end up costing more and do nothing to aid the economy.

Always ignores some simple facts like in the 1980's most people had 100% of their portfolio invested in domestic stocks and bonds. It would be fair to say historically it has generated more revenue than it cost. It would be foolish to ignore the globalization of investing and corporations and assume the same would be true going forward.

Except the last time the rate was cut was in 2002 or so and it had the same effect. Globalization wouldn't affect it much because cap gains are cap gains, whether generated here or overseas.

 

[flacaltenn]

From the OP:

Further, 17 percent of the total benefits would go to the top 1 percent of income earners -- families earning roughly $450,000 or more. The same group that was hit with a tax rate hike in January.

The benefits of preferential tax rates on capital gains and dividends, a break worth $161 billion this year, go almost entirely to the wealthy, including 68 percent to the top one percent of earners.

:yawn: :bigyawn:

I really don't care that some folks (not many) have bigger houses than me. When I lived in Cali and bought a new house (because of Prop 13) I had to pay $7200 a year and my neighbor (almost identical house) next door was only paying $1800 a year in property taxes, did I contemplate "fairness"? You bet.. But did I want the old codger to be priced out of his house by taxes? No way...

Do I care that Warren Buffet gets a Social Security check like the rest of us? Nawww....

What I DO care about is why we can't all agree to end CORPORATE welfare in the form of tax breaks that caused GE to pay no net taxes? All because they get $75 bucks back on their tax bill for every dishwasher they sell. And a couple hundred for every wind turbine they produce.

...............Oh, you say those are GREEN tax breaks?? Good for the Planet??? Get off my cloud with the rest of your partisian hack clowns.

Stop subsidizing stuff that is already in the marketplace. The fact we can't fix THAT --- explains why everyone on the LEFT and RIGHT wants to whine about class envy....

Are you willing to end oil and gas exploration subsidies as well or just the ones you politically don't like?

If the tax break is for a particular product being produced and that product is a commodity item already existing in the marketplace ---- it needs to go... So yes..

HOWEVER..

If that exploration is on GOVT LEASED LAND --- the Govt (owner) of that property gets a benefit from the exploration of that lease.. Therefore I wouldn't be opposed to a tax break in that case.

You know darn well that MOST of what the left bitches about in oil subsidies is faulty. The leftist litany includes the cost of road maintenance as "an oil company subsidy"...

 

[flacaltenn]

Deductions, credits, and exclusions keep money circulating in the economy and it gets reinvested back into business activity.

What the fuck would the government do with all that money anyway?

Really? What percentage of those capital gains tax breaks and corporate tax breaks are for investments overseas? I can tell you well over half my portfolio is invested overseas and not doing a damn thing for the US economy. Pretty sure I am not alone. But if Repulican Congressmen supported by simple minded people like yourself want to keep giving me a tax break I am happy to keep it.

Perhaps if the South invested a little money in educating their populace they would understand the fallacy of statements like yours.

Got to give you cred for recognizing that the game has changed. That Foreign manufacturers with factories in the US employ almost as many Americans as "american manufacturers".. Really no distinction in terms of investment anymore. And certainly, there should be no moral taint in holding shares of Toyota or Nestle or Shell..

Where the money ends up is more complex than you make out to be. I think you know better than to say it's lost to our interests if GE opens a plant to serve the Far East. We are not the only overstimulated consumers on the planet anymore.

I've been trying to explain to Paleolithic Leftists for a long time now why Keynesian policies don't work anymore.. Same kind of global redistributional change...

You can sprinkle as many bucks of "stimulus from heaven" into the hands of CONSUMERS, and that USED to crank up the economy.. But now, all it does is summon vast fleets of containers ships from the Far East to dock in Long Beach..

We have to live with this and understand the textbooks are obsolete... There is no tax (or other) policy, short of isolationism and Kim Jun style governance that will get us back to the 60s or 70s when China was a starving basketcase..

 

[jasonnfree]

CBO: Tax Breaks Cost $12 Trillion Over Decade, Benefit Most Wealthy

Top 20 pct of earners get half the benefit of top breaks

* Tax breaks on capital gains favor the wealthy

* Study favors Obama's approach to tax reform -Democrats

The top ten U.S. tax deductions, credits and exclusions will keep $12 trillion out of federal government coffers over the next decade, and several of them mainly benefit the wealthiest Americans, a new study from the Congressional Budget Office shows.

The top 20 percent of income earners will reap more than half of the $900 billion in benefits from these tax breaks that will accrue in 2013, the non-partisan CBO said on Wednesday.

Further, 17 percent of the total benefits would go to the top 1 percent of income earners -- families earning roughly $450,000 or more. The same group that was hit with a tax rate hike in January.

The benefits of preferential tax rates on capital gains and dividends, a break worth $161 billion this year, go almost entirely to the wealthy, including 68 percent to the top one percent of earners.

Why don't tax payers demand change from their congress person? Why do we keep re-electing the same Republican congress people that rob us?

You do realize that it isn't the government's money, it belongs to the person(s) that earned it, right?

Actually I think you're wrong about it being all your money. 16th Amendment says government can levy taxes from any source.

 

[Quantum Windbag]

It seems to obvious that some, if not most, deductions and tax breaks in our ridiculously bloated tax code were put in place to help some small segment of the population with good lobbying support. A lot of different 'corporate welfare' types of things, ways to avoid paying taxes by shuffling money around, things that can only be done when a person or business has enough money.

I often think people try to oversimplify political issues, but in the case of our tax system, I really think we would be much better served to simplify it. It's not a partisan issue; neither Democrats nor Republicans have done anything to simplify the tax code that I'm aware of, just the opposite in fact. It's not a current issue; this has been an ongoing process for many years. It has nothing to do with a specific administration or congress. It's just part of the corrupt, you-scratch-my-back cesspool that is politics.

I'd like to see the tax code simplified, but I don't expect it.

I'd like to see it myself. I just refuse to allow the premise that tax cuts cost the government money to stand unchallenged.

Some do, some don't. The cap gains tax cut always brings in more revenue than was supposedly lost. Tax credits for cash for clunkers and the like always end up costing more and do nothing to aid the economy.

Tax credits are not tax cuts, they are wealth transfer.

 

[Sactowndog]

It seems to obvious that some, if not most, deductions and tax breaks in our ridiculously bloated tax code were put in place to help some small segment of the population with good lobbying support. A lot of different 'corporate welfare' types of things, ways to avoid paying taxes by shuffling money around, things that can only be done when a person or business has enough money.

I often think people try to oversimplify political issues, but in the case of our tax system, I really think we would be much better served to simplify it. It's not a partisan issue; neither Democrats nor Republicans have done anything to simplify the tax code that I'm aware of, just the opposite in fact. It's not a current issue; this has been an ongoing process for many years. It has nothing to do with a specific administration or congress. It's just part of the corrupt, you-scratch-my-back cesspool that is politics.

I'd like to see the tax code simplified, but I don't expect it.

I'd like to see it myself. I just refuse to allow the premise that tax cuts cost the government money to stand unchallenged.

Do you think all tax cuts are equal and do you accept some may cost the government money?

 

[Quantum Windbag]

It seems to obvious that some, if not most, deductions and tax breaks in our ridiculously bloated tax code were put in place to help some small segment of the population with good lobbying support. A lot of different 'corporate welfare' types of things, ways to avoid paying taxes by shuffling money around, things that can only be done when a person or business has enough money.

I often think people try to oversimplify political issues, but in the case of our tax system, I really think we would be much better served to simplify it. It's not a partisan issue; neither Democrats nor Republicans have done anything to simplify the tax code that I'm aware of, just the opposite in fact. It's not a current issue; this has been an ongoing process for many years. It has nothing to do with a specific administration or congress. It's just part of the corrupt, you-scratch-my-back cesspool that is politics.

I'd like to see the tax code simplified, but I don't expect it.

I'd like to see it myself. I just refuse to allow the premise that tax cuts cost the government money to stand unchallenged.

Do you think all tax cuts are equal and do you accept some may cost the government money?

Gee, I guess I wasn't clear.

Tax cuts do not cost the government anything.

Ever.

Under no circumstances.

Do you get the point, or does someone have to drop a tank on your head?

 

[The Rabbi]

CBO: Tax Breaks Cost $12 Trillion Over Decade, Benefit Most Wealthy



Why don't tax payers demand change from their congress person? Why do we keep re-electing the same Republican congress people that rob us?

You do realize that it isn't the government's money, it belongs to the person(s) that earned it, right?

Actually I think you're wrong about it being all your money. 16th Amendment says government can levy taxes from any source.

Wrong on two counts. First, just because the gov't can tax something doesnt maek the money theirs. In fact the opposite. Second, the 16th amendment is solely about taxing income, nothing else.

 

[Sactowndog]

Some do, some don't. The cap gains tax cut always brings in more revenue than was supposedly lost. Tax credits for cash for clunkers and the like always end up costing more and do nothing to aid the economy.

Always ignores some simple facts like in the 1980's most people had 100% of their portfolio invested in domestic stocks and bonds. It would be fair to say historically it has generated more revenue than it cost. It would be foolish to ignore the globalization of investing and corporations and assume the same would be true going forward.

Except the last time the rate was cut was in 2002 or so and it had the same effect. Globalization wouldn't affect it much because cap gains are cap gains, whether generated here or overseas.

The point of the capital gains tax cut is to encourage people to invest in their local economy. The effect is not the same if they invest it here or invest it overseas.

The economy grew in the 2000's due to easy credit and the resulting bubble. Once the derivatives mess came crashing down the economy cratered despite capital gains taxes remaining at historic lows. You would have a hard taking making the case capital gains cuts drove the 2000 expansion.

 

[Sactowndog]

I'd like to see it myself. I just refuse to allow the premise that tax cuts cost the government money to stand unchallenged.

Do you think all tax cuts are equal and do you accept some may cost the government money?

Gee, I guess I wasn't clear.

Tax cuts do not cost the government anything.

Ever.

Under no circumstances.

Do you get the point, or does someone have to drop a tank on your head?

Let me rephrase for the crotchety. Do you think all tax cuts result in less revenue to the government or do you believe tax cuts result in more revenue and is this true of all tax cuts in your mind.

 

[The Rabbi]

Always ignores some simple facts like in the 1980's most people had 100% of their portfolio invested in domestic stocks and bonds. It would be fair to say historically it has generated more revenue than it cost. It would be foolish to ignore the globalization of investing and corporations and assume the same would be true going forward.

Except the last time the rate was cut was in 2002 or so and it had the same effect. Globalization wouldn't affect it much because cap gains are cap gains, whether generated here or overseas.

The point of the capital gains tax cut is to encourage people to invest in their local economy. The effect is not the same if they invest it here or invest it overseas.

The economy grew in the 2000's due to easy credit and the resulting bubble. Once the derivatives mess came crashing down the economy cratered despite capital gains taxes remaining at historic lows. You would have a hard taking making the case capital gains cuts drove the 2000 expansion.

So many fallacies, so little time. The point of capital gains tax cuts is to produce more revenue for the Treasury. It also tends to make the economy run more efficiently but that isnt the purpose. Those cuts achieve their aim, regardless where the money is reinvested because the tax is paid by the taxpayer in the U.S.
No one is making the claim that reduced cap gains rates drove the economy. The economy is much bigger than that. But they did produce far more in revenue than the higher rates did. Even Obama acknowledged that.

 

[Sactowndog]

Deductions, credits, and exclusions keep money circulating in the economy and it gets reinvested back into business activity.

What the fuck would the government do with all that money anyway?

Really? What percentage of those capital gains tax breaks and corporate tax breaks are for investments overseas? I can tell you well over half my portfolio is invested overseas and not doing a damn thing for the US economy. Pretty sure I am not alone. But if Repulican Congressmen supported by simple minded people like yourself want to keep giving me a tax break I am happy to keep it.

Perhaps if the South invested a little money in educating their populace they would understand the fallacy of statements like yours.

Got to give you cred for recognizing that the game has changed. That Foreign manufacturers with factories in the US employ almost as many Americans as "american manufacturers".. Really no distinction in terms of investment anymore. And certainly, there should be no moral taint in holding shares of Toyota or Nestle or Shell..

Where the money ends up is more complex than you make out to be. I think you know better than to say it's lost to our interests if GE opens a plant to serve the Far East. We are not the only overstimulated consumers on the planet anymore.

I've been trying to explain to Paleolithic Leftists for a long time now why Keynesian policies don't work anymore.. Same kind of global redistributional change...

You can sprinkle as many bucks of "stimulus from heaven" into the hands of CONSUMERS, and that USED to crank up the economy.. But now, all it does is summon vast fleets of containers ships from the Far East to dock in Long Beach..

We have to live with this and understand the textbooks are obsolete... There is no tax (or other) policy, short of isolationism and Kim Jun style governance that will get us back to the 60s or 70s when China was a starving basketcase..

You and I agree that the games has changed and that where someone resides no longer determines where they will invest. The text books that advocate supply-side stimulus and Keynesian theory both assume a link between local investors and jobs which no longer exists.

I disagree that nothing can be done about it however. Tax policy can be adjusted to account for this global reality and spur domestic growth. It requires 3 key changes to keep it revenue nuetral:

1) eliminate the corporate income tax. This change will direct investment into the United States

2) eliminate the delta between capital gains and income tax. The capital gains tax has become a worthless tool in a global market unless your goal as a US politician is to spur growth in Vietnam.

3) impose a 25% capital exportation tax on business that encourages revenue generated in the US to be invested in the US. Under this model, no matter where you company is headquartered they will be dissuaded from pulling capital out of the economy such as done by Apple.

These three things will go a long way to spurring growth in the US economy while operating in a global investment environment. It will also provide a dramatic spur to small business.

 

[Sactowndog]

Deductions, credits, and exclusions keep money circulating in the economy and it gets reinvested back into business activity.

What the fuck would the government do with all that money anyway?

Really? What percentage of those capital gains tax breaks and corporate tax breaks are for investments overseas? I can tell you well over half my portfolio is invested overseas and not doing a damn thing for the US economy. Pretty sure I am not alone. But if Repulican Congressmen supported by simple minded people like yourself want to keep giving me a tax break I am happy to keep it.

Perhaps if the South invested a little money in educating their populace they would understand the fallacy of statements like yours.

Got to give you cred for recognizing that the game has changed. That Foreign manufacturers with factories in the US employ almost as many Americans as "american manufacturers".. Really no distinction in terms of investment anymore. And certainly, there should be no moral taint in holding shares of Toyota or Nestle or Shell..

Where the money ends up is more complex than you make out to be. I think you know better than to say it's lost to our interests if GE opens a plant to serve the Far East. We are not the only overstimulated consumers on the planet anymore.

I've been trying to explain to Paleolithic Leftists for a long time now why Keynesian policies don't work anymore.. Same kind of global redistributional change...

You can sprinkle as many bucks of "stimulus from heaven" into the hands of CONSUMERS, and that USED to crank up the economy.. But now, all it does is summon vast fleets of containers ships from the Far East to dock in Long Beach..

We have to live with this and understand the textbooks are obsolete... There is no tax (or other) policy, short of isolationism and Kim Jun style governance that will get us back to the 60s or 70s when China was a starving basketcase..

Except the last time the rate was cut was in 2002 or so and it had the same effect. Globalization wouldn't affect it much because cap gains are cap gains, whether generated here or overseas.

The point of the capital gains tax cut is to encourage people to invest in their local economy. The effect is not the same if they invest it here or invest it overseas.

The economy grew in the 2000's due to easy credit and the resulting bubble. Once the derivatives mess came crashing down the economy cratered despite capital gains taxes remaining at historic lows. You would have a hard taking making the case capital gains cuts drove the 2000 expansion.

So many fallacies, so little time. The point of capital gains tax cuts is to produce more revenue for the Treasury. It also tends to make the economy run more efficiently but that isnt the purpose. Those cuts achieve their aim, regardless where the money is reinvested because the tax is paid by the taxpayer in the U.S.
No one is making the claim that reduced cap gains rates drove the economy. The economy is much bigger than that. But they did produce far more in revenue than the higher rates did. Even Obama acknowledged that.

They assumed that because the underlying assumption has been that investors invest locally. The point of capital gains tax cuts is to drive investment. Yes they can drive short term revenue gain if people sell assets to lock in profits at low rates but this is not the main driver of why rates are cut.

Given the significant shift of investments into overseas markets the benefit side of capital gains tax cuts are reduced significantly while the cost side stays the same. I have not seen a study on the effects of the 2000 cuts but I would bet my house they were a significant net loss for the treasury if their affects could be studied in isolation.

 

[flacaltenn]

Do you think all tax cuts are equal and do you accept some may cost the government money?

Gee, I guess I wasn't clear.

Tax cuts do not cost the government anything.

Ever.

Under no circumstances.

Do you get the point, or does someone have to drop a tank on your head?

Let me rephrase for the crotchety. Do you think all tax cuts result in less revenue to the government or do you believe tax cuts result in more revenue and is this true of all tax cuts in your mind.

Let's say GE has a legislated corporate tax bill of $26Bill this year. That's what any other company would pay on their adjusted income. But because you're greener than a tree frog and the GE lobbyist got you a good loan for your uncle's business with GE Capital --- you decide that they should continue to recieve $75 for every "energystar" dishwasher they sell and $2200 for every wind turbine they produce.. That's quite arbitrary and targeted tax policy as opposed the RATE STRUCTURE that exists across a level playing field.

So the tax bill for these clowns goes to zero and the greener tree frogs start wailing about GE "paying their fair share" . A more sick display of perversion has never been invented than when the frogs tell you they don't know WHY GE paid no taxes. They know.

As a CONSISTENT opponent of this form of cronyism, That arbitrary tax treatment DOES COST THE GOVERNMENT money. They are SPENDING tax income that is fair and across the board on their silly ass whims.. When at the same time, fiddling with the global tax rates for that entire sector --- does not...

Prove it to yourself.. Does subsidizing dishwashers GREATLY INCREASE the sale of dishwashers? Not a chance. Does subsidizing wind turbines LARGELY INCREASE the sum total of energy production.. Not in evidence.

However -- does getting rid of the sick corporate welfare special treatment while trimming the "across the board" corporate tax rates help the economy? You bet your froggy ass it does..

 

[Sactowndog]

From the OP:



:yawn: :bigyawn:

I really don't care that some folks (not many) have bigger houses than me. When I lived in Cali and bought a new house (because of Prop 13) I had to pay $7200 a year and my neighbor (almost identical house) next door was only paying $1800 a year in property taxes, did I contemplate "fairness"? You bet.. But did I want the old codger to be priced out of his house by taxes? No way...

Do I care that Warren Buffet gets a Social Security check like the rest of us? Nawww....

What I DO care about is why we can't all agree to end CORPORATE welfare in the form of tax breaks that caused GE to pay no net taxes? All because they get $75 bucks back on their tax bill for every dishwasher they sell. And a couple hundred for every wind turbine they produce.

...............Oh, you say those are GREEN tax breaks?? Good for the Planet??? Get off my cloud with the rest of your partisian hack clowns.

Stop subsidizing stuff that is already in the marketplace. The fact we can't fix THAT --- explains why everyone on the LEFT and RIGHT wants to whine about class envy....

Are you willing to end oil and gas exploration subsidies as well or just the ones you politically don't like?

If the tax break is for a particular product being produced and that product is a commodity item already existing in the marketplace ---- it needs to go... So yes..

HOWEVER..

If that exploration is on GOVT LEASED LAND --- the Govt (owner) of that property gets a benefit from the exploration of that lease.. Therefore I wouldn't be opposed to a tax break in that case.

You know darn well that MOST of what the left bitches about in oil subsidies is faulty. The leftist litany includes the cost of road maintenance as "an oil company subsidy"...

Actually most of the cost for oil exploration is written off. Oil gets far more subsidy than green energy does. If the road is a road to nowhere where they have an oil rig it pretty much is a public subsidy.

 

[Sactowndog]

Gee, I guess I wasn't clear.

Tax cuts do not cost the government anything.

Ever.

Under no circumstances.

Do you get the point, or does someone have to drop a tank on your head?

Let me rephrase for the crotchety. Do you think all tax cuts result in less revenue to the government or do you believe tax cuts result in more revenue and is this true of all tax cuts in your mind.

Let's say GE has a legislated corporate tax bill of $26Bill this year. That's what any other company would pay on their adjusted income. But because you're greener than a tree frog and the GE lobbyist got you a good loan for your uncle's business with GE Capital --- you decide that they should continue to recieve $75 for every "energystar" dishwasher they sell and $2200 for every wind turbine they produce.. That's quite arbitrary and targeted tax policy as opposed the RATE STRUCTURE that exists across a level playing field.

So the tax bill for these clowns goes to zero and the greener tree frogs start wailing about GE "paying their fair share" . A more sick display of perversion has never been invented than when the frogs tell you they don't know WHY GE paid no taxes. They know.

As a CONSISTENT opponent of this form of cronyism, That arbitrary tax treatment DOES COST THE GOVERNMENT money. They are SPENDING tax income that is fair and across the board on their silly ass whims.. When at the same time, fiddling with the global tax rates for that entire sector --- does not...

Prove it to yourself.. Does subsidizing dishwashers GREATLY INCREASE the sale of dishwashers? Not a chance. Does subsidizing wind turbines LARGELY INCREASE the sum total of energy production.. Not in evidence.

However -- does getting rid of the sick corporate welfare special treatment while trimming the "across the board" corporate tax rates help the economy? You bet your froggy ass it does..

No argument there. Just provide it consistently to all industries including those who are a favorite of the right like tobacco subsidies, clean coal and oil.

 

[The Rabbi]

Really? What percentage of those capital gains tax breaks and corporate tax breaks are for investments overseas? I can tell you well over half my portfolio is invested overseas and not doing a damn thing for the US economy. Pretty sure I am not alone. But if Repulican Congressmen supported by simple minded people like yourself want to keep giving me a tax break I am happy to keep it.

Perhaps if the South invested a little money in educating their populace they would understand the fallacy of statements like yours.

Got to give you cred for recognizing that the game has changed. That Foreign manufacturers with factories in the US employ almost as many Americans as "american manufacturers".. Really no distinction in terms of investment anymore. And certainly, there should be no moral taint in holding shares of Toyota or Nestle or Shell..

Where the money ends up is more complex than you make out to be. I think you know better than to say it's lost to our interests if GE opens a plant to serve the Far East. We are not the only overstimulated consumers on the planet anymore.

I've been trying to explain to Paleolithic Leftists for a long time now why Keynesian policies don't work anymore.. Same kind of global redistributional change...

You can sprinkle as many bucks of "stimulus from heaven" into the hands of CONSUMERS, and that USED to crank up the economy.. But now, all it does is summon vast fleets of containers ships from the Far East to dock in Long Beach..

We have to live with this and understand the textbooks are obsolete... There is no tax (or other) policy, short of isolationism and Kim Jun style governance that will get us back to the 60s or 70s when China was a starving basketcase..

The point of the capital gains tax cut is to encourage people to invest in their local economy. The effect is not the same if they invest it here or invest it overseas.

The economy grew in the 2000's due to easy credit and the resulting bubble. Once the derivatives mess came crashing down the economy cratered despite capital gains taxes remaining at historic lows. You would have a hard taking making the case capital gains cuts drove the 2000 expansion.

So many fallacies, so little time. The point of capital gains tax cuts is to produce more revenue for the Treasury. It also tends to make the economy run more efficiently but that isnt the purpose. Those cuts achieve their aim, regardless where the money is reinvested because the tax is paid by the taxpayer in the U.S.
No one is making the claim that reduced cap gains rates drove the economy. The economy is much bigger than that. But they did produce far more in revenue than the higher rates did. Even Obama acknowledged that.

They assumed that because the underlying assumption has been that investors invest locally. The point of capital gains tax cuts is to drive investment. Yes they can drive short term revenue gain if people sell assets to lock in profits at low rates but this is not the main driver of why rates are cut.

Given the significant shift of investments into overseas markets the benefit side of capital gains tax cuts are reduced significantly while the cost side stays the same. I have not seen a study on the effects of the 2000 cuts but I would bet my house they were a significant net loss for the treasury if their affects could be studied in isolation.

OK, let me know when you're ready to send the deed.

 

[flacaltenn]

Really? What percentage of those capital gains tax breaks and corporate tax breaks are for investments overseas? I can tell you well over half my portfolio is invested overseas and not doing a damn thing for the US economy. Pretty sure I am not alone. But if Repulican Congressmen supported by simple minded people like yourself want to keep giving me a tax break I am happy to keep it.

Perhaps if the South invested a little money in educating their populace they would understand the fallacy of statements like yours.

Got to give you cred for recognizing that the game has changed. That Foreign manufacturers with factories in the US employ almost as many Americans as "american manufacturers".. Really no distinction in terms of investment anymore. And certainly, there should be no moral taint in holding shares of Toyota or Nestle or Shell..

Where the money ends up is more complex than you make out to be. I think you know better than to say it's lost to our interests if GE opens a plant to serve the Far East. We are not the only overstimulated consumers on the planet anymore.

I've been trying to explain to Paleolithic Leftists for a long time now why Keynesian policies don't work anymore.. Same kind of global redistributional change...

You can sprinkle as many bucks of "stimulus from heaven" into the hands of CONSUMERS, and that USED to crank up the economy.. But now, all it does is summon vast fleets of containers ships from the Far East to dock in Long Beach..

We have to live with this and understand the textbooks are obsolete... There is no tax (or other) policy, short of isolationism and Kim Jun style governance that will get us back to the 60s or 70s when China was a starving basketcase..

You and I agree that the games has changed and that where someone resides no longer determines where they will invest. The text books that advocate supply-side stimulus and Keynesian theory both assume a link between local investors and jobs which no longer exists.

I disagree that nothing can be done about it however. Tax policy can be adjusted to account for this global reality and spur domestic growth. It requires 3 key changes to keep it revenue nuetral:

1) eliminate the corporate income tax. This change will direct investment into the United States

Even this Libertarian wouldn't go that far. I'd keep corporate rates in line and slightly better than my competitors. AND -- to do this -- you'd have to remove the blight of all those crony tax breaks BEFORE setting a better "across the board rate". That's a patronage power that NEITHER existing party will ever give up willingly.

2) eliminate the delta between capital gains and income tax. The capital gains tax has become a worthless tool in a global market unless your goal as a US politician is to spur growth in Vietnam.

Let's see. Do I want to buy a fancy yacht and forego that factory modernization? Hmmm. Same tax rate. You're dooming the stabilization of domestic business by removing the ability of an owner to transfer his business INTACT without selling it off for taxes. Because Cap Gains is not JUST for Wall Street. It hits Main Street as well. Perhaps if you limit the detriment to individual and small businesses -- you might have an argument.

3) impose a 25% capital exportation tax on business that encourages revenue generated in the US to be invested in the US. Under this model, no matter where you company is headquartered they will be dissuaded from pulling capital out of the economy such as done by Apple. If I HAVE to have an international market for my product -- or it's not economically feasible to develop it ----- then I won't develop it here. Because you're gonna punish me for distributing my product and properly servicing the markets overseas. We are NOT the only people buying Apple crap. And coordinating an entire WORLD full of app developers and 3rd party support is not done from PittsBurgh anymore. If I'm making heavy stuff like wind turbines and cars, I need foreign infrastructure. Just like BMW built here in America so that I can afford to have my Bimmer built in South Carolina.

These three things will go a long way to spurring growth in the US economy while operating in a global investment environment. It will also provide a dramatic spur to small business.

Progress.. At least we both agree, no one is modernizing economic theory fast enough to keep up. Especially politicians who apparently have no idea what's being off-shored and why...

But we still have miles between us on what can done about tax policy to encourage investment to stay home.. See the comments above...

 

[Luddly Neddite]

The tax code for the 98% is very straightforward and relatively simple.

The tax code for the wealthy is not.

Those who can afford an army of tax lawyers and tax preparers are the ones who own congress. And, of course, the teepubs (aka Koch's little minions) will always protect them.

Have you ever done taxes? Do you have any idea how complicated it is to figure your taxes if you actually do the math yourself?

Yeah, the OP is a dead giveaway that he's one of the 47% entitlement kids

I got my first job at 13. I'm now retired, living on my investments, savings and Soc Security. We travel (always pay cash), just bought a car (paid cash) and sold properties leaving us with three that are completely paid for. Edited to add, that I also have Medicare.

Yep. I am very proudly one of Mitten's 47%.

I really do consider that a compliment.

Thank you.

 

[Luddly Neddite]

The tax code for the 98% is very straightforward and relatively simple.

The tax code for the wealthy is not.

Those who can afford an army of tax lawyers and tax preparers are the ones who own congress. And, of course, the teepubs (aka Koch's little minions) will always protect them.

Never thought I'd hear you arguing for a Flat Tax. Welcome to the GOP!

Nope.

Nothing I have ever said even hints at that and I have no desire to support the 2% any more than I already do.