(01-03-2017 02:33 PM)MplsBison Wrote: (01-03-2017 02:26 PM)Owl 69/70/75 Wrote: comprehensive policies to make it more attractive to do business here than elsewhere.
Raising import tariffs achieves this
No. That's the myth, not the reality.
Tariffs may help an industry that is not price-competitive with the rest of the world. May, I said, that's the operative world. But two things:
1) That high tariff makes everybody's cost of living go up, and it increases the cost of doing business for everyone, including those businesses that were cost competitive before the tariff was imposed. So now we have a new round of businesses that can't compete, a new round of tariffs, and more cost increases for the remainder.
2) And this is the biggie. All you've done with a tariff is make that US company competitive in the US domestic market. It still is at a huge cost disadvantage in exporting to third countries, and that limits its market share drastically. The foreign competitor can sell anywhere, and can kick the crap out of the US company everywhere else in the world. Guess who ends up with more worldwide market share? Guess who gets more money for R&D and can therefore improve its product faster? Guess who gets more money for marketing and can therefore take sales away even in the US where costs are equalized? Guess who drives whom out of business over time?
Quote: (01-03-2017 02:26 PM)Owl 69/70/75 Wrote: Because they knocked out a bunch of loopholes at the same time
I'm all for knocking out loopholes. We could even discuss bringing the rates down a bit, if models suggested that total federal tax revenue would not decrease.
If we don't bring them down to a level competitive with the rest of the world (say 20-25% or less) why bother? That's the problem that the left doesn't seem to get. If I can pay 22% tax in Sweden or 39% in the US, I'm going to make my profits in Sweden and keep the money there. And Sweden is just one of about 50 countries where that argument works, I just use Sweden because it is regarded as such a socialist paradise (as in, "Even Sweden has lower corporate taxes"). If socialist paradises have lower corporate tax rates than we do, then something is seriously wrong with our corporate tax rates.
That was what was wrong with the "Bush tax cuts." They didn't address the corporate disadvantage at all, and they didn't change the individual rates enough to push us past more than 3-4 countries when it comes to favorability of investments. So they didn't impact the economy the way they would have if they had been more focused on growth (such as drastically lowering rates and eliminating deductions and exclusions and adding a consumption tax to offset the revenue impact).
Look at it this way. Through most of the 20th century we had the lowest corporate and top individual tax rates in the developed world. We had an average annual growth rate of 3.5% for the century (including the Great Depression years). Since 2000 or thereabouts, we've had among the highest corporate (#2 or now #1) and top individual (about #10 of the 30 OECD members) tax rates in the developed world, and our growth rate has been 1.6%. I'm not saying it's the only factor, no way to know for sure, but it is certainly a prime candidate.
And don't give me that "effective rate" BS. The reason effective rates are lower is because people are choosing to make money elsewhere, where tax rates are lower. You want them to bring a plant home from Sweden? Make our taxes competitive with Sweden's.
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