The Democrats have it wrong

So why don't we compete, if its so simple?
It seems to me that neither Gov nor the private sector has any intentions of making it work.

 

Fair enough, seems we agree on most.
As for GW, perhaps he wanted to finish what Papa Bush wasn't able to, just to show him off? Also, R Paul has some interesting info on the matter, which came to light after the wiki leak.
Tax system and bureaucracy are what is holding us back, that and just too much Gov involvement in general, with all its well intentioned oversight.
For what its worth, since you and I are privy to only the information we are provided with by whatever source, yours and mine are both nothing but opinions, equal in worth.

 

Actually it is not taxes but health care costs that US manufacturers point to as the greatest impediment to US manufacturing competitiveness in international markets. For many US manufacturers health care expenses are between a quarter and a third of total employee compensation, more than twice what competitors in developed nations pay.

US manufacturing wages are lower than in the EU and the total US tax burden is less than in the EU but US manufacturers are unable to compete with their EU rivals because US manufacturers pay an average of about 80% of their employees health care while EU manufacturers pay only 30-40%.

If the US is to be competitive in manufacturing all it needs to do is replace its dysfunctional high cost private health care system with a low cost government run single payer system supported by taxes from a wide base like that of competing manufacturing nations.

There is reason why The US Manufacturing Association supports health care reform but is ambivalent about tax cuts. Real health care reform could reduce their cost of labor by 20-30% in just a few years. Drastic tax change proposals would just drag on for years and bring dubious benefits while not addressing the primary impediment to international competitiveness.

 

Germany and Canada have private health care. Germany even uses private, but non-profit insurance providers.

If public / private isn't the cost difference, what is?

As best I can tell very small pool of medical insurers (by government regulation), with no incentive to drive for low cost medical care.

 

The US does a lot of manufacturing, up until 2 or 3 years ago, we were #1 in the world. But, that manufacturing was primarily automated.

China started out using manual labor, but in the last 10 years have shifted to much more automation. Partially to reduce cost, mostly for quality control (the rest of the world is not "happy with crappy").

In general, automation doesn't care where it is built. But, China has another advantage, "Chinese copy" is alive and well. Buy one automation machine, take it apart and copy it. In time, that will change.

As fuel cost becomes more significant, it will offset the cost of local assembly.

Automation equipment is becoming more general purpose, and easier to program. Both necessary, as low volume (local) manufacturing requires it.

As, China becomes more affluent, the wage benefit will lessen, and the Chinese consumers intolerance for pollution will put China on more level footing with the Western world.

This will take a decade or two, but is will happen.

 

Agreed but outsourcing to China still means outsourcing slave labor as China subcontracts with many poorer asian countries such as indonesia for slaves.

Automation is very expensive and still many jobs cannot be done with it that is why American companies still rely on slave labor overseas.

Lowering taxes on American companies to bring back labor jobs to the United States will remain a Republican and business elite myth and they are not ready to shell out billions in investment capital for automation technology expenses.

 

The US is still the second largest manufacturer in the world. The long term problem is not labor costs but willingness to reinvest profits in productivity gains in order to remain competitive. Those manufacturers who survive and compete internationally spend a lot of their gross profits on R&D and increased productivity despite investor demands for maximum short term profits.

On order to encourage increased manufacturing competitiveness, US investors should be compelled to make longer term investments. The way to do this is to change the income tax so short term investing is discouraged and profits gained from longer term investment rewarded. A consumption tax would accomplish the exact opposite by not taxing short term investment at all.

The US can never win the race to the bottom through the lower taxes and wages that the republicans clamor for. The only thing that will bring about is a spiral to third world status. It seems they are all admirers of Argentina and want the US to follow in the footsteps of Argentina's long and painful decline from the ranks of the developed nations.

 

agreed the system under republicans is setup to reward short term investors or get rich quick advocates which is more risky and that is why the markets almost crashed in 2008.

 

This is merely a delusional partisan rant that is unsupported by any facts.

 

With a billion Chinese yet to employ? Poorer than westerns China?

Like everything else, automation costs falls with volume, China and India provide that volume.

Lowering taxes on corporations will increase employment, but not unskilled labor jobs. Those that aren't automated, are being done by illegals (There won't be a "path to citizenship". That increases labor costs too much - legals would have to be replaced by new illegals or automation).

The path from unskilled to skilled labor jobs was killed by minimum wage laws.

 

Sorry dude but in some respects are we ARE exceptional and we will never be a 3rd world status. To even suggest it is seditious.

 

Not even close.

The markets (almost?) crashed because high risk investments were combined in a way that reduced risk (derivitives), providing the housing market remained healthy. Just in case, companies bought insurance policies, backed by shorting the stock on the companies holding derivatives. When the housing market crashed, derivatives became worth much less. Stock prices fell so fast, that shorted stocks provided minimal "insurance".

TARP didn't bail out the companies, it bailed out the investors in the companies, at 100 cents on the dollar! Investors weren't careless, the knew from history, they would profit on the upside, and be bailed out by government on the downside. High reward, no punishment.

Greed, or really stupid government policy?

 

It is true that the problem is not labor costs and manufacturing industries in the United States retain competiveness through innovation which reduces non-value added costs to production. The problem is that the largest single non-value added costs to manufacturing are the taxes and related adminstrative (overhead) costs which accounts for over 20% of the retail cost of the commodities being produced. Technology can reduce the costs but it cannot overcome the burdensome costs of taxation and the related overhead expenses to it impose upon industry.

People confuse investing with production. Most of the stock sales have little to do with production. Only initial IPO's provide revenue to the enterprise and all other stock transactions are merely a change of ownership related to the enterprise. Who owns a corporation has little to do with the productivity of the corporation and the costs of the goods and/or services it provides.

A consumption tax encourages investment which is good for the economy and good for the average American that could afford to invest because they would have more money to do so.

It doesn't reduce the tax burden of the American People by even a dime. Only reducing or increasing government expendatures reduce or increase the tax burden. What is does do is remove the non-value added costs to manufacturing and instead collects the tax at the consumption level. All corporate taxes and related overhead expendatures are transferred to the consumer today and this merely changes where the taxes are imposed and removes the huge adminstrative costs that currently exist for the enterprise.

 

There's a few ways to promote job growth. The first thing to do is to get the 8 million EMPLOYED illegal aliens out of the country, thereby opening up 8 million jobs (that's more than half of the government's estimated unemployment). This would also keep tens of Billion$ in the country, which routinely leaves the economy in remittance$$$$. ($25 Billion/year to Mexico alone).

Second thing is to stop issuing work visas to foreigners, to do jobs that Americans could/should be doing. Million$$ more remittance$$$ are being lost from America this way. Just by doing these 2 things, unemployment could be reduced to less than what it was during the Clinton economy boom years. Plus, more money would be retained in the US economy, since work visa foreigners also send money out of the USA.

This probably won't happen because Obama has been trading this for Hispanic votes, which he probably needs more than ever right now. Maybe we need to ban everyone with a Hispanic surname from voting. Seriously. One wonders why American Hispanics would care about immigration. How would it help them by having more Hispanics in the country, or even in the government (Congress/Presidency) ? Mexico's government is filled with Hispanics. It hasn't done much for the people there, has it ?

 

And places it right in the lap of the average working American who can't afford one dime of additional cost to him. Better to tax the very wealthy.
Multibillionaires are scarcely affected by even a huge increase in taxes to them. For example if Mark Zuckerberg's (Facebook CEO) taxes went to 99% on his $2 Billion/year income, he'd still net $20 Million/year, an income that almost every American would love to have, and far more than anyone, in any way, really needs.

 

What part of the average American worker is already paying the embedded taxes and related adminstrative costs in the form of higher product prices do people fail to understand. These embedded costs have been calculated to equal 20% or more of the cost of a product. Try following the math when these costs are removed:

A product costs $100 but because of the elimination of embedded taxation and adminstrative expenses (which equal an average of 3.84 times the cost of the tax for 80% of all American businesses) the cost is reduced to $80 for the product. If a 25% consumption tax is added to the $80 then it is a $20 tax and the cost of the product is $100. There was no net increase cost to the consumer and yet more taxes were generated.

With a "prebate" the cost of the tax itself is offset for basic necessities so low income workers pay zero net as it is offset by the prebate. Average workers also receives the same prebate so their overall tax burden is significantly decreased. The effects of the prebate are directly related to how much spending on new goods and services the person makes. For a wealthy person that percentage is virtually insiginificant so they basically pay the entire consumption tax on virtually everything they purchase.

If Mark Zuckerberg was taxed at 99% of his net income he would simply move Facebook to the Bahama's or some other foreign location and the US would receive ZERO dollars in tax revenue from him. What part of "you can't over-tax the wealthy" do some people fail to understand? There is a point at which they simply say "(*)(*)(*)(*) this (*)(*)(*)(*)" and pack up and move and they take their businesses and investments with them.

 

So the better question would be " how do we change our tax code"?
What would be fair to all? Seems that the burden is on some more than others, while perhaps an overall consumption tax would distribute the burden a bit more fairly?

 

That would be a great idea, if your idea of "fair" would be for the wealthiest to pay a smaller percentage of their income in tax than the poorest.

 

What is clear is that we can't have both an income tax and a consumption tax. It introduces double taxation on the same goods and services and while it has been promoted by some politicans it was expressly about increasing tax revenues without providing the benefits of a pure consumption tax. There is no reason for a consumption tax if the income tax also exists.

 

Income does not reflect wealth. This has been repeatedly pointed out. Wealth is the difference between assets and liabilities. Just because a person has a high income does not imply that their assets exceed their liabilities and in many cases they don't.

 

That's why we need a complete tax overhaul such that its fair for all. People buy, and as it stands, some pay income taxes, others don't. Also, what we consume in luxury items funds more overseas and ultra rich profits.
A consumption tax would keep more money in country.
Lets face it, taxing the rich, as so many are for, may just give the rich more incentives to move their wealth to off shore accounts.
I am not a CPA, or a tax attorney, so mine are just ideas.

 

I thought one of the big campaign promises of Obama was to close those offshore accounts. This is one of the things we're paying him and the Congress for. Maye it partially our fault. We need to hold their feet to the fire a little more.

 

Overall consumption tax disproportionately taxes the poor and middle class more than the rich. Graduated income tax is more fair as long as the rates are what they should be (restored to 1950s/60s levels).

 

Then:

"That would be a great idea, if your idea of "fair" would be for the greatest income earners to pay a smaller percentage of their income in tax than the poorest."

For the hyper-technical out there.

 

LMAO are you gonna report him to the Feds for treason?