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I'm among the proponents of a trade policy described within Wikipedia's “Import Certificates” article. The Import Certificate trade policy would have no problem with USA's new tax laws.
Respectfully, Supposn
Under the new law, income made by American companies’ overseas subsidiaries will face United States taxes that are half the rate applied to their domestic income, 10.5 percent compared with the new top corporate rate of 21 percent.
Yikes, I hadn't heard that. A 10.5% corporate tax rate abroad? That's a massive incentive for corporations to ship (or keep) factories and jobs abroad.
You cannot trust a con man people, all you low-income Trump voters have been duped.
That's already going to happen. How do you expect American workers to compete with much lower paid foreign workers in developing countries?
Additionally, human labor capital will continuously be replaced with technology.
What could Hillary do to stop this?
I'm not a fan of any politician, but I'm getting tired of the media acting so smug when it comes to Trump. Explain to me what the last administration did in the previous 8 years.
What did they do to make things better?
They didn't do anything. There isn't any foresight. All the previous administration did was lower interest rates to the point of creating an unsustainable and artificial economy, while simultaneously walking up the stock market with liquidity injections from various sovereign entities through their national banks.
Why wasn't infrastructure developed at the beginning of Obama's presidency? It was the opportune time to have a national agenda and come together as a nation to build a sustainable economic system, but instead, we continued with the status quo.
Now, we are in a situation where oil prices will sky rocket within the next 3-5 years and the US is in a proxy war with Russia, ultimately because of natural resources, when Russia has approximately 60 years of oil and the US has about 5 years.
People are so complacent.
I can't stand the press. Trump this Trump that. Yes, the Trump administration is terrible, but how is it any different than his predecessors? What long term, multi-generational problem did the last administration solve?
I don't think people will realize the situation we're in until it finally happens. Personally, I think oil prices will be the catalyst because oil is part of the REAL economy, not the fake artificial stock market that makes people believe they are wealthy.
However, I don't know. There are many risks. Consumer credit is at the highest level it's ever been at. The crypto market is completely irrational. I don't understand how people think things are great when they consider the next generation.
Sure, there are many wonderful things associated with modern technology that makes are lives much more livable than even 50 years ago, but we have not created solutions for things that we are dependent on, that we are running out of rapidly.
Your summary of the article isn’t accurate, and the article is wrong to begin with.
Prior to this system, if a tax rate was extremely low in a foreign country, there would be no us taxes because of the permanently reinvested assertion. That money would have only been taxed if it was brought back into the United States. Essentially, locking the money out of the country since it would be cheaper to borrow new money than pay tax in the money a second time at a high us marginal tax rate of 35%.
After the one time toll charge (forced repatriation), that’s essentially a one time tax on cash balances and earnings and profits previously earned abroad, there is no restriction keeping money out of the us on future earnings (or past earnings after the toll charge)
The 10.5 percent tax rate is a new, additional tax that would have never been previously collected under the previous worldwide taxation system.
It’s trying to STOP companies from going to a super low taxation area simply for the low tax rate by saying....if you don’t pay at least 10.5 percent in the foreign country after the 80% FTC, we are going to hit you with a 10.5 percent minimum tax here in the us.
It’s the opposite of incentivizing then to go overseas simply because a tax rate is super low in a particular country.
In fact, now the marginal rate in the us will drop to 21 percent from the old 35 percent. The new law essentially will take 10.5 percent from foreign income (if your foreign tax rate falls below that rate) that would not have been collected before because it was permanently reinvested and only subject to tax if returned to the us.
Rather than thinking of it as a cut from 21 percent to 10.5....think of it as an increase from ZERO to 10.5 percent.
The corporate rate cuts came with numerous ways to broaden the tax base.
Last edited by Thatsright19; 01-09-2018 at 10:48 AM..
It's just hard in general for companies to stay 100% Made in the USA anymore. It's expensive and if products are towards a niche group of people that business will have a very hard time staying afloat. It sucks but for companies, it's a smart business decisions and easy to make.
That's already going to happen. How do you expect American workers to compete with much lower paid foreign workers in developing countries?
Most developed countries have a neutral or positive trade balance. It isn't that hard. The US used to do this also (40+ years ago).
There is a lot of money to be made in supporting the development of production in poor countries and providing a ready place for the sale of that production. That's why it's been happening.
It's just hard in general for companies to stay 100% Made in the USA anymore. It's expensive and if products are towards a niche group of people that business will have a very hard time staying afloat. It sucks but for companies, it's a smart business decisions and easy to make.
Jobster & Muevelos, annual trade deficits are always net detrimental to their nation's GDP. They're reflected by their nation's lesser number of jobs than otherwise. If the USA adopted the Import Certificate policy described within Wikipedia's “Import Certificates” article, it would increase our GDP and numbers of jobs more than otherwise.
Individual purchasers seek the best values for their money. Within an Import Certificate policy, what's to the purchasers' individual interests would also be to their nation's immediate and long-term economic best interests.
Most developed countries have a neutral or positive trade balance. It isn't that hard. The US used to do this also (40+ years ago).
There is a lot of money to be made in supporting the development of production in poor countries and providing a ready place for the sale of that production. That's why it's been happening.
RRuff, there's more money to be made by exporting from low-wage, trade surplus nations. That's why USA's chronically annual trade deficits are happening.
If there's an effective USA demand for any item, Import Certificate policy cannot prevent it from being imported.
I'm among the proponents of a trade policy described within Wikipedia's “Import Certificates” article. The Import Certificate trade policy would have no problem with USA's new tax laws.
Respectfully, Supposn
Under the new law, income made by American companies’ overseas subsidiaries will face United States taxes that are half the rate applied to their domestic income, 10.5 percent compared with the new top corporate rate of 21 percent.
No Trump supporter here, but the NYT also was opining that the tax cut would not result in pay raises or capital investment once the new rates took effect. Yet there are already a ton of new capital investments and evidence that wages are rising. As someone who consults for a number of companies that specialize in equipment and other items sensitive to capital purchases, I can tell you that they report that their order books began filling up within days of tax reform being passed.
In other words, perhaps the NYT should stop with agenda-driven journalism and report facts, not hoist the bogeyman on an hourly basis. Some corporations might indeed do this. But the article, obviously written by someone who has never actually run a business, doesn't understand the intrinsic advantages of domestic manufacturing if the tax code doesn't punish it.
The former CEO of Intel gave an eye-opening speech around 2010 about this very subject. He pointed out that if you built two identical factories, one in Asia and one in the United States, the costs would be roughly twice the cost in the United States. Only 10% of the difference would be in higher salaries. The remainder would be in higher taxes and regulations. Further, the article doesn't seem to understand the salutary effect tax reform would have on tens of thousands of manufacturers who simply lack the resources or desire to site overseas.
Most developed countries have a neutral or positive trade balance. It isn't that hard. The US used to do this also (40+ years ago).
There is a lot of money to be made in supporting the development of production in poor countries and providing a ready place for the sale of that production. That's why it's been happening.
I disagree about that's why it's happening.
It's international competition.
If a company can pay its labor force $1.5/hr to produce the same product that someone in the US is being paid $30/hr plus benefits, it will have lower costs.
What that said company could do is eventually purchase up shares of its US counterpart, and eventually purchase 50% and put all of it's American workers out of business.
It's happened before.
Remember Zenith?
Didn't think so. It's LG now.
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