Your new economic theory, for lack of a better term, is crap.
This is what happens when you run a prolonged trade deficit:
Posted on 10/20/2004 2:40:59 PM PDT by Willie Green
US subsidiaries do not pay tax on foreign income if that income is not "effectively connected" to the parent company's operations. Those that do, receive a Foreign Tax Credit for that portion of their tax liability that is equal to the tax they owe to the foreign jurisdiction. Foreign companies pay tax on their earnings in the U.S., period.
I have long thought that, but never could quite form the logic to make the argument. It makes sense, though.
The "external" debt (debt owed to foreign countries) is extremely troubling.
As a US citizen, it means that your tax dollars will go to make interest payment to those foreign countries before supporting out own government.
"Think what you do when you run into debt;
you give another power over your liberty."-- Benjamin Franklin (1706 - 1790)
Your new economic theory, for lack of a better term, is crap.
This is what happens when you run a prolonged trade deficit:
Wow, the economy is tanking faster then a pat buchanan for president effort. Terrible, terrible, terrible.
I heard this same crap when Reagan was President and Bush I was President.
And when Carter was president, and Ford, and Nixon, and Johnson, and JFK, and Eisenhower, and Truman and FDR.....
I am not a CPA or tax lawyer, and I certainly don't practice in international taxes, but I believe that all of your points are all correct: (1) U.S. subsidiaries do not pay tax on foreign income that is largely unconnected and is not repatriated (2) U.S. entities, both corporate and personal, receive a foreign tax credit on taxes paid to foreign governments, and may be eligible for other types of tax benefits (for instance, if I remember the details, U.S. citizens who are domiciled outside of the U.S. for 330 days in a year do not have to pay any U.S. taxes on something like the first $80,000 of international income) (3) Foreign companies pay taxes in the U.S.
I am not sure how (2) and (3) are germane to my mention of the "Invest in the USA Act" which affects the repatriation of profits that were previously untaxed by the U.S. government, but this is out of my area and I am missing something obvious, which has certainly been known to happen.
(1) is clearly germane, but appears to me to have left out the additional caveat that profits not be repatriated, which was central to my point about repatriation.
It appears that we will get to find out the effect of the act; I checked, and apparently the legislation passed as part of the "American Jobs Creation Act of 2004" just this month. The expectation is that hundreds of billions of profits will be repatriated due to the much lowered tax rate (I believe that the original proposal was to drop it to 5% as opposed to the usual corporate rate of 35%); it appears that we will soon get to see the results.
Assuming that this is correct, then I think it would be great if the Republicans hold it up high as another tax cut that should have great promise to stimulate the economy. The nice thing is that while it is technically a tax cut, in actuality we would not have any expectation of seeing any tax dollars at all since those profits would have most likely continued to stay overseas. Accepting a reduced rate in order to get them to come back at all seems to me to be a good move.
Funny it was quiet under slick...
Papa Bush rejected the Gipper's leadership on this issue, and got tossed out of office on his butt.
He started the credit bubble as part of his 1995 re-election effort. The first phase of inflation is fun...the later phases are not.
Very convenient charts. How about showing the period when we had increasing trade deficits while the dollar was strong and oil was dropping.
Wait a minute. I thought the trade deficit was going to kill us during the Reagan era. Now, all of a sudden, he's a protectionist? He did a mighty poor job, then.
Funny, it's from the same libertarian source as yours.
Bush I called Reagan's good economic plan "voodoo economics" but the voodoo economic plan gave us prosperity all the way up to the early 90's which is when this poor economy began.
Reagan's voodoo economics (trickle-down economics) was about giving American businesses some good tax cuts and the prosperity would trickle down to all Americans through increased hiring and better pay --- now the prosperity can't trickle down to Americans, it trickles over to China instead.
Right. Personal Wealth: all time high. Home Ownership: all time high. Employment: at or below historical average. My fingers tire.
Oh, come on Willie. Do you honestly think we should be concerned about how many US government bonds foreign governments own? Those bonds have no indentures or leins. What would you do? Prohibit them from owning them? You are mister nut case. Not one part of this post is legitimate. Go away and may you lick the chains that bind you. Good grief!
Imagine if tomorrow the government cut back welfare program and other handout programs to pre 1960's rates. I think we'd immediately know how disguised downward social mobility really is. Imagine the housing market if government housing subsidies were not $400 to $700 a month.
Oh my. We have a liberal here. "Voodoo economics." "Trickle down economics." Shuuuuuudddddeeerr! How would you propose to create jobs? Government?
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