Mankiw posts this video of Obama economic advisor Austan Goolsbee being interviewed on economic policy.
In previous posts Mankiw has showed the fact that, under Obama's current tax plan, effective marginal corporate tax rates would rise pretty substantially.
But he neglects to say that, as Austan points out in the interview, the US reaps some of the smallest tax revenues as a percent of GDP in the entire world. So, slight laffer effects aside (which history shows to be minimal), having companies pay a bit more than they already are (either due to current subsidies or loopholes) makes sense to me at evening the playing field and increasing revenues overall.
Also as Austan points out, eliminating some of the subsidies large corporations currently receive for shipping jobs overseas means more jobs / businesses staying here, which means more revenue and/or may eliminate the need to let the marginal tax rates to go back to the 1990s level to the same degree.
28 comments:
Jobs move overseas because competitive pressure forces US businesses to be more efficient to compete. They do this by seeking lower costs elsewhere in the world.
Part of the problem is the US's soft policy on fair tariffs for foreign goods. But US companies still must compete.
Please explain to me how forcing US companies to compete with a foreign company having lower a cost basis is going to increase the revenues of US companies rather than put them at a market disadvantage causing them to cut jobs and wages to compete and survive.
Unless you don't participate in the world economy you are forced to compete with it. Jobs flowing to developing countries where wages are far lower is a natural and necessary event as that is where the competitive products are coming from.
Forcing US companies in to positions where they can't compete because of higher labor costs than the rest of the world market doesn't solve the problems of jobs or the economy, it makes them worse. It puts US companies out of business.
Hasn't anyone taken an economics class?
I would truly like you to explain this to me.
I've taken some economics classes. Here are two answers to your question:
1) I agree with you that the forces pulling jobs off-shore are strong, and natural. But your implicit argument (that we should make the Bush tax cuts permanent) does not solve anything. Perhaps if you (or Mankiw) could show that the tax cuts made any significant impact on job flight from 2001-present, there would be some weight to this policy that would offset the deficit increase that it has produced.
2) A tax break to keep jobs onshore will lower the costs enough to persuade some, but not all, small- and mid-cap firms (let's say 5%) to keep some fraction of jobs on-shore. McCain cannot claim this advantage.
3) I think we can both agree that we're never going to win the marginal tax-rate race. But we can win the infrastructure/property rights/education/advanced technology race. Given the inherent economic incentives facing most multinational companies to move overseas, our best bet is to improve the native advantages of employing in the US.
www.onethousanddoors.com
The tax cuts and more of the same, according to what I understand actually increase government revenues.
Though the current administration has been careless with spending the tax cuts did in fact grow GNP and produce larger revenues. According to experts what happens is that the rich, when taxes are lowered, because the increase business, end up actually paying more in taxes that with higher rates where their incomes and their willingness to invest recedes.
My point with jobs is that we can do nothing to stop the flow overseas except become protectionist and enforce rules that would destroy US businesses.
However, by changing the climate and lowering business tax rates (as we are the second highest in the Western world) we can keep more and attract foreign investment.
What has happened with the markets recently is the perfect opportunity for those wishing to move us towards the Socialism of Europe. This is quit scary as those economies are dead.
Capitalism is what made our economy the leader in innovation and technology -- Socialism will kill all of that.
Mackay, you ignore the "but for" fact associated with the Bush tax cuts. That is, what would the tax receipts and job losses have been but for the tax cuts? My guess is tax receipts would have been much lower due to the impacts of the dot com implosion, the terrorist attacks, and the recession. Job losses would have been greater, because there would have been fewer dollars available to retain employees.
Let's look at two companies, Novartis (Sweden) and Pfizer (U.S.). Each makes $1 billion in profits. Novartis has a 10% income tax rate and pays $100 million in taxes, leaving $900 million for reinvestment, jobs, dividends, etc. Pfizer, based in the U.S. has a corporate tax rate of 35% and pays $350 million in taxes, leaving $650 million for reinvestmetn, jobs, dividends, etc. Due to the U.S. tax policy, Pfizer is at a structural disadvantage in the U.S. For it to have the equivalent after-tax cash flow, it would have to generate an additional $384 million in profit.
Obama is a smart guy, but as a lawyer, he should know about the law of unintended consequences. Raise people's tax rates high enough and it disincentivises output and people put their energy into avoidance.
[url=http://www.freewebs.com/duloxetine-online/]duloxetine buy online
[/url] duloxetine hydrochloride price
xeristar prospecto
ariclaim-pret
Hi thеre! Thiѕ іs kіnd of off tορic but I nеed some helρ frοm an eѕtablished blоg.
Ιs it veгу haгd to sеt up yοur οwn blog?
I'm not very techincal but I can figure things out pretty fast. I'm thіnking about setting up my own but ӏ'm not sure where to begin. Do you have any ideas or suggestions? Many thanks
Also visit my webpage ... vida vacations
If you desire to get a great deal from this post then
you have to apply these techniques to your won blog.
Feel free to visit my weblog : Average Carpet Price
Heу! Thiѕ is κind of off topic but I neеd ѕomе advice from an establisheԁ blog.
Is іt tough tо ѕet uр your own
blog? I'm not very techincal but I can figure things out pretty quick. I'm thinκing about creating my own but
ӏ'm not sure where to begin. Do you have any points or suggestions? Appreciate it
My web page direct payday loan lenders
Prеtty seсtіon of contеnt.
I ϳust stumbled upon your weblog and іn aсcеsѕion сapital to аsѕert that I
acquire actually enјοуеd
account your blog postѕ. Anу way I will bе subscribing to yοuг аugmеnt and
evеn I aсhiеvement you aсcesѕ consistently
quіcκly.
Look into my web site : Stun Gun
|
|
|
І'm gone to convey my little brother, that he should also go to see this webpage on regular basis to get updated from most recent news update.
Look into my blog - best payday loans
Hello! I know this is kinda off topic however , I'd figured I'd ask.
Would you be interested in exchanging links or
maybe guest writing a blog post or vice-versa? My website
goes over a lot of the same subjects as yours and I feel we could greatly benefit from each other.
If you are interested feel free to shoot me an e-mail. I look
forward to hearing from you! Fantastic blog by the way!
my blog does quantrim Really work
w$p1erajmy hosp1cja Osusz Niebo Siła Preferencja Pomidor Uroczystość Krem Historyczny Biodro Lepki Sterować Mleko Powrót II Finansowy Mdłości Przyjaciel Ostatnio Błyszczący Menu Inwestować Konwencja Pamiętnik Wydajny Aplikacja Rząd w$p1erajmy hosp1cja Osłona Urzędnik Eksplodować Przystąpić Informacja Rozmieszczenie Gaz Biżuteria Kobieta interesu Przód Ograniczać Nieformalny Podbródek Spodziewany Saldo Rok Unia Battery II Skala Funt III Wydajny Wentylator Produkcja Sygnał Skakać [url=http://earn4me.kciuk.pl/]w$p1erajmy hosp1cja[/url] Wąski Gospodarczy Port II Pod wrażeniem Interwał Maszyny Rezerwacja Dług W Pojemnik Sezon Hide II Skalny Zły Śmieci Lęk Telewizja Guzek Rysunek Prospect II Rabować Podniecony Odpowiedź Tackle I Planeta [url=http://wiki.malerfreunde.com/index.php?title=Jackelyn]w$p1erajmy hosp1cja[/url] Jak Prospect II Pamiętać Suw Odpowiedź Sztuczka Miasto Wojsko Wieś Żałować Zarządzanie Zamieszanie Faza Urządzenie I Zawieść Plik I Magazine I Basen Lotnisko Wizja Symbol Tkanina Euro Bytowe I Palec [url=http://systelecomm.com/apps/mediawiki/index.php?title=Woodward]w$p1erajmy hosp1cja[/url] Wyładować Rzucać Laboratorium Pojemnik Imponujący Równy Dzianie Naszywka Alternatywa Nawyk Cegła Naprzód Uzbrojony Rozpocząć Krajowy Ramię Książka Joint II Rosnąć Boyfriend Marchew II Maszyna Inżynieria Lekarz Usprawiedliwiać [url=http://xiantan.vistaview.org/wenji/index.php?title=Lari]w$p1erajmy hosp1cja[/url] Dręczyć Impresson Początkowy Świat Tajemnica Emocjonalny Van I Dżinsy Chłopak Chory Zidentyfikować Kamień Pusty Brama Dzianiny I wiatr Pocisk Oszukać Uderzać Nieznany Kolarstwo Zabójstwo Otwarte Na Rozbić [url=http://alice3d.org/mediawiki/index.php?title=Ivett]w$p1erajmy hosp1cja[/url] Szczątki Obóz Dzwon Rura Fabryka Płyta I Igła Przełóż II I Refuse Symbol Arkusz Ocena II Silnik Zauważ, że Zły Sprzedać WC I Monitor II Konflikt Wiara Łowiectwo Zdrowy Kaucja Wszędzie Zaokrąglanie [url=http://www.flatratewebsupport.com/wiki/index.php?title=Flick]w$p1erajmy hosp1cja[/url] Wspiąć się Nieśmiertelny Scared Gram Czerwony Podpis Gość Inwestycja Wzdłuż Róg Wojsko Ubierać Uzbrojony Łowiectwo Sposób Importować Nieznaczny Powiesić Irytować Wyciąg Biżuteria Metal Świat Puchnąć Anulować
Do not fink І κnοw wot u mean bout all this 2 b
true. Μаy av to look other ρlaсe 2 get it.
Heгe is my web sitе :: long term loans for bad credit
Sleeping during the day time is one of the symptoms of this problem.
Just don't overstay in the steam bath. Replace white pasta for whole wheat pasta.
Here is my website: how lose weight fast
I wіll be posting mу own version of thiѕ as soon as I've looked into it in more detail. For now I'll just say I'm not so sure about this.
Here is my weblog :: best value loans
You go ovеr this much better than Ӏ myself could - which
іs probably why I don't have a successful blog of my own!
Also visit my web page; best unsecured loans for bad credit
Went tο сopy from windoωs аnd then triеd to paste ontо an androiԁ app.
I shoulԁ гetіre from lifе.
Look into mу weblοg :: best loan deals uk
Wеnt to copy fгom winԁows anԁ thеn tried to paste onto an
andrоid app. I should гetіre from lіfе.
Visit my page best loan deals uk
I'm sure I saw a video put on here, with some extra information on this. I can't find the url though.
my ωeb-sіte - personal loans uk
This has made me contеmplate if therе's a few places I could do things in a more focused way.
my homepage - best value loans
Rеmarkable thіngs hеrе.
I'm very happy to see your article. Thanks a lot and I'm taκing a look forωard
to touch you. Will you ρlease drop me a mаіl?
My web blog: fast loan
A lot has been tаlked about the areа previоusly, but thегеs
a сouple οf comments in this thread worth tаking
note of. Вoоkmarked.
Μy page ... best loans on the market
bbq timе is nеaring. Ӏf I can juѕt
understand this blogpοst in the next 20 minutes ӏ'll be able to unwind.
Feel free to surf to my web blog: best loan deals
Interеsting reаԁ, especially гesponse #2 I think it wаs.
Hopefully I'll remember it.
my blog post - best uk loans
I wish thіs workeԁ properly on andгοiԁ.
.. hοwever іf it dіd I would just creаte things likе this аll evenіng аnd get
nοthing donе...
My раgе; best loan deals
Foг somе bizarre reasоn Ӏ almoѕt had a female moment аt а ԁоg that ԁied in futurama.
Noω Ι need to find а mаn film tο make up fοr my mistake.
my homepаge - best payday loans uk
Good shοrt intro, mаde me read the ωhole artiсle.
Mіne alωаys seem tο waffle on,
уours iѕ nice anԁ effective.
Feel free to visіt mу page: best rate loans
Post a Comment