Wednesday, March 2, 2016

What To Do When Trump Becomes President


  1. Trump will probably build a golf course there.

  2. Meh, I'll go about my life like when Bush was POTUS and hope for the best. I found it interesting the other day that when I listened to Trump give a victory speech, he's basically promising to go the opposite direction the Republicans have been going for awhile. He's certainly not a free trader if he's talking tariffs. He's not denouncing every fiber of being of Planned Parenthood. And there are other things as well.

    Lou should like this one, Trump promises he's going to negotiate a deal to bring back all the money being held outside the country because of corporate taxes. If he does bring it back, we will be able to see the obvious that promises of that money going into the economy are a pure crock of shit, and there won't be any more money invested here because taxes aren't the issue because no matter what our corporate rate is, there is not a single multinational that pays that rate.

    But, for me, probably little will change. I have plenty of work to invest myself into.

    1. there is not a single multinational that pays that rate.

      There is not a single company that pays a dime. Surprise, business adds the taxes it pays like labor into the cost of sale and you pay it in the price of goods and services.

    2. So if we took away all taxes, prices of ALL goods would fall sharply?

    3. And you know it would not. However raise taxes and magic things happen.
      1. Prices rise.
      2. If foreign competition doesn't allow for higher prices, expenses are cut. (people)
      3. Off shoring.
      4. Tax inversions become more common.

      Perhaps it's time to revisit our corporate tax structure and join the civilized world and convert to the territorial tax system.

      The president’s proposal would essentially institute a fully worldwide corporate tax system that subjects foreign income of corporations to domestic taxation without deferral and other slight alterations. Specifically, foreign income would be subject to a minimum tax of 19 percent on a current basis (no deferral), which is slightly lower than the proposed 28 percent domestic rate. It would limit the foreign tax credit to 85 percent of the taxes paid overseas. Finally, it would create an “allowance for corporate equity,” which would exempt a predetermined amount of foreign income from domestic taxation.

      Moving to a full worldwide system would put U.S. corporations at a further competitive disadvantage. Taxing foreign income penalizes expanding both foreign and domestic investment, which are compliments (making foreign consumers rich enough to buy our stuff can only be a good thing). This plan would also introduce more rules and complexity to an already burdensome system.

      Not only is this proposal poor policy, a worldwide international tax system such as this is pretty rare throughout the world. Over the last 100 years, developed countries have been moving away from worldwide taxation of corporate income towards a more superior territorial system. A territorial tax system exempts a domestic multinational corporation’s foreign income from domestic taxation.

      At the beginning of the 20th century, 33 countries had a worldwide tax system. That number slowly dropped to 24 countries by the 1980s. By the 2000s, the number of countries switching to territorial systems accelerated, with more than 10 countries switching in 10 short years. Nearly all developed countries have moved to the superior territorial tax system. Today there are only 6 countries that tax corporations on their worldwide income.

    4. Max still thinks that if enough baby boomers die that this will open up the labor market for young people. Static closed loop thinking at its finest. With this logic he must endorse the recent lower average age of death among white males. Same thinking also approves of the abortion of millions of babies. Less people around will enhance the labor market.

      This logic Max is like pushing on the end of a string.

  3. I'm not necessarily opposed to the territorial system you have talked about before Lou. but my cynicism remains. I used to fervently believe in the tax theories that everyone talked about in the 80's, basically supply side theory. And I've read enough since then to change my mind. Particularly books by David Johnston. What hypes my cynicism is that so many people lay out these elaborate theories, and then basically make a claim that if we just take it away, everything will suddenly change and be good for everyone. It starts to sound no different than leftist, utopian thinking wherein all problems can be solved by just raising taxes. Basically, I reject both ends of these argument.

    No matter what theory we spouse, there is a bottom line which is that no one wants to pay taxes. Period. No matter what system we put in place, no matter what loopholes we close, those who make a lot of money will hire an army of accountants to find ways to dodge tax. We did this under Reagan. We completely reworked the code and as conservatives always say, the rich did pay more. And then we promptly set out to restore loop hole after loop hole after loop hole. I think you believe it's all about systems, and I'll concede some truth to that. But for me, it's always about the reality that no matter what we do, people will always attempt to dodge paying tax. If there was an offer on the table that people like yourself and corporations could have any tax law they wanted, but then would be punished very heavily if caught cheating, would you accept that? Maybe you would, but those who would get what they want would then promptly ensure that laws are changed so that penalties would not hurt.

    We go round and round on this. I William, and you to a lesser extent want to keep seeing me as some kind of shake down artist who lives to find ways to soak the rich and give it to poor slackers. It's not true. What I do have is a view that everyone should play by the same rules, and that doesn't happen. Rich people seldom go to jail. They pay way less taxes as a percentage of their income. Big corporations use their size to thwart competition and on and on. I don't resent their wealth, I resent their fucking arrogance and the reality that they don't have play the rules the rest of us do.

    William, do you think the retiring of boomers will really have no effect on the labor market?

    1. No matter what theory we spouse, there is a bottom line which is that no one wants to pay taxes. Period.

      The difference between the individual and business is taxes hit the individual, with business it still hits the individual.

    2. Retired boomers are still consuming boomers. Kill them off quicker and less is consumed therefore less labor to support this consumerism is required.

      My belief is that exceptional people create oportunities for millions. Killing off old people or aborting new people cuts down on the odds that these exceptional people exist at all.

      One hundred millions monkeys don't equal one Edison.

    3. Your ability to completely twist what I say into some death comment remains unequalled William. Objectively, the retiring of the boomers is going to send many ripples through the economy. The boomers who have saved enough and are comfortable will continue to consume. What I worry about for that Demo though is that I think many of them are going to be stuck in a spot of spending money just to get by. Put another way, instead of spending money on hobbies, they will be spending money on having people take care of them. That will create more service jobs I guess and admittedly, I believe caring for aging boomers is going to be a substantial part of what I do as Nurse Practitioner. I really don't quibble with your second para, but would add that tolerating increasing poverty has the same effect. Your seem a little pre-occupied with the death aspect, I'm worried about the people who could do important things but never get the chance because they had the misfortune of being born to poor parents and growing up in a shitty neighborhood with equally shitty schools. Sending our young people to die in stupid wars doesn't help either, but in some political circles, there is still plenty of support for that.

      "The difference between the individual and business is taxes hit the individual, with business it still hits the individual."

      Well, this is the premise that every ounce of tax levied on a corporation is passed on to the consumer. I don't buy it because as you mentioned in response above, taking away all corporate taxation will not suddenly causes prices to plummet. All businesses will price their goods at the precise highest priced the market will bear. Taxation doesn't change this reality. Corporations want personhood. They want protection in our courts. They want protection of their physical properties. They want protection of their intellectual property. And they want someone else to pay the bill for that. Your premise seems to be that we should give this to them free because after all, if we ask them to pay something for this out of their profit, they will precisely pass off every dime of of tax through higher prices, so we are essentially double taxing ourselves. This is a popular theory for calling for an end to taxing corporations.

    4. My opinion Max is that those who create extrodinary levels of wealth have a much better idea about how to invest it then a bunch of career statists in DC. I don't hold the opinion that piles of cash are held in coffee cans under the back yard garden plot. These people invest to make future returns, they are smart in what they invest in, and these investments drive the economy and benefit everyone. In general they don't go around buying $800 hammers.

    5. I don't buy it because as you mentioned in response above, taking away all corporate taxation will not suddenly causes prices to plummet.

      Max. Business will make a profit. The profit is what attracts investors. Profits to low, investors go other places.
      When government raises taxes, business has a choice, eat the tax increase, lower profits and risk loss of investment.
      Pass the tax to the consumer in higher prices which risks the ability to compete with overseas competition. How to maintain the necessary profitability, reduce expense (people), off shore, move the business, close the business.
      I personally chose to downsize the business lay off everyone but myself. I make more and have far less stress. Not an option for most business but several people like myself with small business have chose that route. All continue to be successful.

    6. What I hear you saying Lou is that we should just give everything to businesses and corporations free that the rest of us have to pay taxes for. Employees? Let them pay the tax of building roads and other infrastructure. Let them pay the salaries of judges, police and fireman and so on. No argument makes this okay to me, sorry.

    7. In that case, as the international corporations profits from overseas do not use fire, police, infrastructure as the profits are made overseas your comment would assume they should be allowed to bring their overseas profits back to the US tax free.

      It would make far more sense to lower the tax rate to a revenue neutral position and then tax all profits overseas/US and put US companies that only do business in the USon the same playing field as international companies.

      Perhaps you like it when Businesses move overseas to avoid the higher US taxes. Get use to it as it will continue to happen and likely accelerate.

    8. "Perhaps you like it when Businesses move overseas to avoid the higher US taxes. Get use to it as it will continue to happen and likely accelerate."

      yeah, wages and complete lack of any environmental laws couple with freedoms to abuse human beings at will has nothing to do with it. You've turned me around Lou. There should be NO taxes on corporations. No taxes on anyone making MORE than 100k, better still, we should all go to worship halls everyweek where business owners and CEO's stand in front while we all get on our knees and worship their greatness. We would be nothing without their greatness.

      I'm glad you helped me see the light. Have a nice day.

    9. Yeah when Burger King moved to Canada they sure got a break in environmental laws. All the recent moves to Ireland where they are totally lawless.
      The key pieces of recent environmental legislation in Ireland are:
      Environmental Protection Agency Act (1992).
      Protection of the Environment Act (2003).
      Environmental (Miscellaneous Provisions) Act (2011).
      Waste Management Acts (1996 to 2011).
      Air Pollution Acts (1987 and 2011).
      European Communities (Environmental Liability)
      Regulations (2008 – 2011) (Environmental Liability
      European Communities (Control of Major Accident
      Hazards Involving Dangerous Substances) Regulations
      (2000 – 2006).
      Local Government (Water Pollution) Acts (1977 – 1990).
      Water Services Acts (2007 – 2012).
      Dangerous Substances Acts (1972 – 1979).
      Fisheries (Consolidation) Acts (1959 – 2003).

      2012 Eaton/Cooper Power Management
      2012 Endo Health Solutions Pharmaceuticals
      2008 Covidien Healthcare Ireland
      2010 Global Indemnity Insurance
      2011 Alkermes, Inc. Biopharmaceutical
      2012 Jazz Pharma/Azur Pharma Pharma
      2013 Liberty Global PLC Cable Company
      2013 Actavis / Warner Chilcott Pharma
      2013 Perrigo/Elan pharmaceuticals
      2013 Cadence Pharmaceuticals Pharmaceuticals
      2014 Mallinckrodt Pharmaceuticals
      2014 Chiquita Brands Produce Ireland
      2014 Medtronic

      Yes it's much better to continue with the migration of corporations to countries that have a territorial tax approach than address Tax reform.

      The Worldwide system worked well when we were the big Kahuna, now we are competing with the world who uses a territorial system.

      Last time I checked corporations do not move to countries with human abuse issues excluding Canada of course.

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    11. Ah, I gotta concede, my mind jumped totally to something else, namely manufacturing and you are correct, the things that I mentioned only apply to those who move their manufacturing, those are the assholes who are looking for the breaks I mentioned.

      As you mentioned, quite correctly, what you are talking about cheap fucking leeches who don't want to pay tax. You have now written about this as romantically as Ayn Rand about Capitalism, so I have just one question. If the tax system you want became law, would you agree to ending Cayman Island mailbox "headquarters" and would you agree to passing a law that negated inversion moves?

    12. Government acts, business and people react.

      How do you tell a business they cannot move where ever they want? Would people that want to leave the US be also prohibited form moving or if they did still taxed?

      An interesting thought isn't it. Government telling businesses and people where they can and cannot live and the penalties should they chose to move.

      I would love to see a flat business tax across the board on all business profits for all profits revenue neutral to today worldwide. International companies would pay more. Companies doing business in the US exclusively would pay less. Foreign companies doing business in the US would have a separate tax which would be higher on US profits. Foreign companies setting up a US subsidiary would also pay the higher tax.

      The higher tax paid for foreign companies in the US would end the inversion issue as well as the Cayman's mailbox.

      As far as the off shore manufacturing, We need to end the not so free trade agreements. New fair trade agreements should be negotiated where imports equal exports or tariffs apply the following quarter. It would make retailing crazy but it would level the manufacturing playing field as well as fix the trade imbalance we carry with the world.

    13. Lincoln proved that States could not secede.

      The Roberts court backed Obama and proved that the government can make you buy something.

      Why can't the government tell you where to run your business Iou?

    14. New Jersey has an exit tax Iou.

    15. N.J.'s exit tax: So baffling, even officials can't explain it

  4. You didn't really answer the question I asked though Lou, if we adopted the tax system you want, would you agree then to laws to make inversions and Cayman Island mail box fraud's illegal?

    1. Foreign companies doing business in the US would have a separate tax which would be higher on US profits. Foreign companies setting up a US subsidiary would also pay the higher tax.

      A US business moving to Canada i.e. Burger King would be a foreign company.

    2. So this would magically end the need for inversions and for headquartering in a Cayman mailbox? I envision that there would promptly be tweaks made via lobbyists for a company like Burger King who would probably say, "We have so many employees in the US, how bout giving us some kind of tax break for that" and like always, the whole dream starts to unwind.

    3. Should a business choose to transfer their headquarters to a foreign nation, they would be charged a higher tax than a US based company. Burger King would pay a higher tax rate than McD's.

      And yes nothing is static when it comes to freebies, tax cuts etc. Politicians need to be re-elected and best way to do that is by freebies and tax cuts, personal and business.

    4. So Max, better to do nothing???

    5. Well, doing nothing seems to be moving the ball in the direction that most on the right want, which is a world where businesses and multinationals pay no taxes. Your side is doing much better than mine.

    6. Sorry but I like my solution better.
      The advantages:
      1. Business doing only business in the US pay less.
      2. International companies pay more.
      3. All profits are taxes. After deducting taxes already paid in other countries. The question you have to ash, of a business pays taxes on profits earned overseas should they also have to pay more taxes in the US on the same money?
      4. Corporations that chose another country to operate in pay more.

      Not going to happen so it looks like you win.

    7. I say winning because they aren't paying the taxes. You've made the plan look appealing and I'd support it, though I know it would be just another step to ensuring that business eventually pays no taxes. If this was something businesses really wanted, I'm hard pressed to believe they couldn't get it through congress as currently configured. Makes me wonder why I'm not hearing more people push for it

    8. Nothing s moving in this country.

      If it passes in the House it can be fillabustered in the Senate. Then it has to be signed buy the prez which likely wouldn't happen unless there is a tax increase involved.

    9. If what you are saying is true, it IS a tax increase for all the asshole corporations who are currently employing inversion schemes or Cayman Island mail boxes. I would think you would get some support from Dems for that. If this is truly going to end the benefit of those scams, I could see a lot of businesses not being vey happy with that.

    10. Some would be happy others not so much.

      like everyone else of the end results would be you pay more they would be pissed.