Posted on 10/19/2011 9:35:02 PM PDT by sickoflibs
Very good advice I think
Help
Employers deduct the payroll taxes they pay today is that correct.
He saying because they can no longer deduct this it's a new 9% tax on them. is that correct?
But today if you paid $100 in payroll tax, you could deduct that $100 from your Fed taxes, say $1000.00 owed would then be $900.00. In the end you still paid $100.00 in taxes. Not sure how a tax deduction for taxes paid in the end is a tax deduction, just seems like your paying taxes in two different streams to me.
Under 999 you never pay the $100 in payroll tax, so now in the end you have 1,100.00. you pay 9% on that.
Where is the additional 9%
I don't get it??? help
Oh I get it.
He’s talking about how business are deducting wages and salary now, 999 they wont so they pay more.
But I think 999 may deduct wages, 9% is on Corporate profits, profits is Income - Cost. I would think Wages and salary would be a cost.
I don’t care about any of the other, I am ready to sacrifice for the country.
Just don’t tax food.
After this is written into law and the required votes are bought to pass it and the POTUS gives it his blessing I expect the only thing sales taxed will be cigarettes and that will raise the price to about $300 per pack in Maryland.
what about cars? soda? the sales tax just shouldn’t apply to food and essential services.
Kill the tax deduction for health care and other things but for the poor not having essential items taxed will save them a ton of money in the long run.
I think he is taxing 'essential services' so people can't avoid paying the tax. Taxing cigarettes is >100X more popular (as is taxing the rich) but brings in little revenue.
Want to cut spending? Pass a flat tax that everyone must pay visibly and then have the rates go up and down with spending. That would change attitudes fast.
Instead now congress/Obama cuts FICA(Social Security) taxes creating a deficit yet social security is still paying full benefits. And why not?? Just borrow the money and claim it comes from a non-existing trust fund. Everybody is happy till gas prices go up to $10 per gallon with inflation then the finger pointing starts again.
The establishment cannot have that, Romney derailed. He IS the chosen won to go up against Obama and lose, in this charade every four years.
Therefore, CAIN must be destroyed by an avalanche of news articles, pile on journalism, discord amongst conservatives, and then only Romeny left standing.
Just wonderful.
We are SOOOOO stupid every...single....election....cycle. Get ready for another RINO-Marxist match up. Hold your nose. Slow death vs. a fast one. Sad.
A so-called "trade deficit" is nothing but an accounting fiction; it's the way certain books are kept regarding international trade. The technical name for it is a Current Accounts deficit, which is -- and must be -- exactly balanced by a Capital Accounts surplus. When you plot the data from the two accounts as a graph, you get two lines -- one above the X-axis, the other below it -- that are exact mirror-images of each other. When you add the corresponding points together, you get "0" -- proving that trade is balanced (as it must be, unless one party to the trade is taking or losing something by dint of physical force).
A Capital Accounts surplus means that foreigners are taking the U.S. dollars they hold from the sale of their consumer items in the U.S., and returning them to the U.S. in the form of investments (i.e., "capital accounts"): buying real estate, or factories, or stocks, or bonds. Is it good to have foreigners investing in the U.S.? Yes, it is good. It's called "FDI", or "Foreign Direct Investment", and the U.S. has the highest FDI in the world . . . meaning, lots of foreigners who hold U.S. dollars regard the U.S. as a good place to invest (and which fact also proves the lie that investment dollars necessarily flow to countries with low wages -- they don't. Investment dollars flow to countries with high productivity; mainly because the investor wants to get his money back with interest!).
Here's a schematic of two kinds of trades, showing that a "trade deficit" is an accounting, bookkeeping fiction, and a complete economic myth:
Scenario 1) U.S. consumers purchase Chinese-made textiles for $1 million. The Chinese now hold $1 million dollars -- they can't spend them in China, so if they are to be spent at all, they have to be spent back in the U.S. They reciprocate the trade and purchase $1 million of U.S.-made pharmaceuticals. International accounting practice would call this a "balanced trade": consumer good for consumer good. The "Current Account" side of the ledger is "0".
But suppose the trade happens like this:
Scenario 2) U.S. consumers purchase $1 million worth of Chinese textiles. The Chinese now hold that million dollars. In return, they purchase some land in the U.S. for $1 million. The American seller of the land now has that million dollars and uses it to purchase $1 million U.S.-made pharmaceuticals -- he has entrepreneurial plans to start a chain of drug stores. The trade is still clearly balanced: we gave China a million dollars; China re-spent it back in the U.S., just as it did in the other trade example. But international accounting practice would now claim that we have a million-dollar trade deficit: the Chinese used the million dollars to buy a capital good -- land -- so the "Capital Accounts" side of the ledger now reads "+$1million"; and since the U.S. spent a million dollars on a Chinese-made consumer good (textiles), the "Current Accounts" side of the ledger now reads "-$1 million". Have we lost anything from this kind of trade? No. Add together the Current Accounts side and the Capital Accounts side and they'll NECESSARILY equal zero. I.e.: balanced trade.
Some of the returning dollars from China, of course, are being used to finance our government's spendthrift ways: we offer Treasury bonds and the Chinese return our consumer dollars by buying them. At fault here is the U.S. government for spending so much, not the Chinese for buying what we offer. Stop the spending and China won't buy so many Treasuries. However, given the fact that we have a spendthrift government, it's still better that foreigners subsidize our debt than that we do it: every dollar that China uses to buy U.S. government debt is a dollar that an American doesn't have to: That China spends its dollars on buying U.S. debt means that Americans don't have to spend so many of their dollars buying U.S. debt -- it frees up dollars in the U.S. to be invested -- or simply spent -- on other things.
Higher productivity always, by necessity, drives out lower productivity jobs. Candle-makers lost out to the makers of electric lightbulbs -- TOO BAD FOR THE CANDLE-MAKERS. Do they deserve special consideration -- as in "protection" -- from the newer, better lightbulb industry? No. We all accept it and mark it up to economic progress. Would it matter if those lightbulbs were manufactured in the U.S. or in China? No. The candle-makers still lose out. Buggy-and-whip makers lost their jobs to the makers of automobile manufacturers. TOO BAD FOR THE BUGGY-AND-WHIP MAKERS. Do they deserve special consideration, special "economic protection" from the newer, better car industry? No. We all accept the demise of the buggy-and-whip makers and crack it up to "economic progress." Would it matter if those cheaper, more efficient automobiles were manufactured in the U.S. or in China? No. Buggy-and-whip makers still lose out, and deserve government proaction in neither case.
Same happened with agriculture in the U.S.: 200 years ago, 98% of the workforce was employed on farms, or farm-related jobs; today, it's about 2%. OH MY GOD!!!! WHERE DID ALL THOSE FARM JOBS GO! HELP!!!! THE U.S. HAS LOST FARM JOBS!! Did we lose farm jobs to cheap foreign competition? No. We lost farm jobs because of our own doing: higher and higher productivity per acre yield, due to mechanization, tractors, combines, chemical fertilizers, refrigerated railcars, better and faster transportation to market, genomic engineering, better pesticides, etc. We lost all those farm jobs because the economy no longer needs all those farm jobs. We grow enough for ourselves and much of the world on relatively few acres Hey!! What happened to those who were made unemployed by the higher productivity? In the long run, they re-educated themselves and re-trained themselves and learned to work in factories in the burgeoning manufacturing sector. Same thing will occur to those leaving manufacturing and learning to work in the higher-valued service sector.
The reason certain self-styled "conservatives" don't complain that the candle makers lost their jobs to the lightbulb makers is that the latter were American; so it's OK for an American to lose his lower-productivity job to a higher productivity job so long as the latter is also American. But if an American candle maker were to lose his job because cheap lightbulbs were being imported from China, and consumers preferred cheap lightbulbs (irrespective of their origin) to higher priced candles (irrespective of their origin), suddenly they cry "UNFAIR! We've lost jobs to foreigners!"
Additional, the notion that a service -- such as mowing a lawn -- is not really an economic good -- as opposed to the physical lawn mower itself -- is pure mercantilist baloney. "Services" are goods, and they not only add value to an economy, they often add more value than physical goods themselves.
As per the great law of Comparative Advantage, the U.S. should be concentrating on doing whatever adds the most value to its economy -- and to the world economy, as well. Designing new drug molecules, designing smartphones, and writing software are among them. Weaving textiles and physically manufacturing electronic goods are not.
Protectionism is poison to the entire country, with the possible exception of the specific industry chosen for special consideration -- it's just the same "bail-out" mentality displayed by many banks and insurance companies the last few years. You are blissfully ignorant of the fact that MOST -- yes, MOST -- of our cheap imports from China are themselves economic inputs into our own manufacturing. If you implement tariffs on those imports, you will drive much of our own manufacturing artificially out of business -- and only a few politically favored industries will be chosen by Uncle Sam to survive.
I can tell from your post that you don't understand the basic principle of comparative advantage, which is a fundamental law describing the way humans will freely interact with one another under a system of "division of labor." The only way to get people NOT to follow this law is by government coming in and preventing it from occurring by the use of force. When government does so -- as when it implements tariffs, quotas, or other protectionist, non-free-trade policies -- everyone in the U.S. is ultimately made poorer.
I would instead say:
1) There are no solutions that actually fix the problems that the majority of voters will perceive as ‘fair’. Example : Extended Unemployment comp is loved by voters as is minimum wage, both are counterproductive and hurt even the recipients. "Fairness' is the enemy of "positive results/outcome"
2) A plan as bold and as sweeping at Cain's would have to be implemented in slowly phased stages to avoid political backlash, and even then there will be unintended negative consequences. It's inevitable
I read that to be an exporter/producer the German workers had to agree to tolerate limits on what the government demanded from their employers, versus Greece. But we could never trust out government to do the right thing anyway, and certainly not explain it.
I can tell from your post that you took one economic course, you managed to absorb the buzzword "comparative advantage," you misapply the concept far beyond its useful application and you have little understanding of the reality of the concepts underlying the neat graphs in your "Introduction to Macroeconomics" textbook.
Politicians imposing tax and regulatory policies that hinder economic activity and the ability to fully realize economic potential, or resisting policies that would better allow economic potential to be realized, have NOTHING to do with any theory of natural comparative advantage.
Resisting a change in the method of taxation that would improve the competitiveness of domestic production of goods at the expense of foreign importation of goods on the grounds that this somehow offends the "law of comparative advantage" is such incredible GROSS STUPIDITY that it practically defies description.
You prove once again the old adage that "a little knowledge is a dangerous thing."
Bookmark Shiff & Cain
The 999 rates assume there will be an offset for those in poverty, else the rates could've been as low as 777. Again, it's in the scoring report.
As a proposal, one rate across the board makes sense. In an implementation, exempting food and medicine in exchange for a half point may be something the American people demand. As an alternative, of course, it might be possible to slash enough spending and grow the economy sufficiently to do both and not need that extra half-percent but 999 was mathematically developed to reach 2008 revenue levels.
A business transactions tax would radically broaden the base for businesses. Each business would pay tax on gross receipts less payments to other businesses. Allowing the subtraction of payments for intermediate goods yields the value added by the company. Subtracting investment as well yields a subtraction method value-added tax.From my view, it's seems a bit disingenuous to claim loss of this exemption is like a hidden fourth 9% tax. There's nothing hidden, it's integral to the 9% flat business tax. Schiff is thinking in terms of the existing tax code's corporate tax, the deductions and assumptions baked into it.Businesses would save and invest with pretax dollars because any investment is subtracted from the tax base. They would, however, pay tax on the returns. ...
... The business transactions tax would have the largest base at about 83.5 percent of GDP. Untaxed GDP consists mainly of investment and untaxable imputations. Because labor compensation is not deductible, the labor income of workers in private businesses would be taxed at the business level. Labor compensation in other sectors, such as government, would be collected at the employer level. Exempting exports and taxing imports expands the base by nearly 3.5 percent of GDP. Having the largest base relative to GDP, this proposal has the lowest tax rate.
On the plus side, Schiff sees how 999 can be a great benefit to the economy and that sufficient gov't spending cuts can address his concerns.
I’ve said before that I honestly thought I’d never see a serious push for major tax reform in my lifetime — yet here it is!
The more smart people work to understand what this means for our economy and our freedom, the more they can be part of the team that finally cracks this nut.
I’ve said we’ve got to be the linemen’s push — where the offensive line digs in en masse and pushes and pushes and pushes the ball carrier up and over that big defensive wall of linemen and into the end zone.
That takes training, strength and understanding of what every team member’s role is!
Schiff said even if 999 were implemented as it is now, it would work if coupled with strong government spending cuts.
So he, in fact, at least described a path to success, in his mind.
All major reforms are phased in at some level. Reagan’s tax cuts didn’t tax effect for two years.
Peter Schiff is right. I have supported Cain’s 999 plan pending more details. If employers cannot deduct the cost of payroll, this will not help manufacturing jobs in any way. In fact it will encourage manufacturing to automate, and get rid of labor.
The only way I can support 999 if the business tax means “gross revenues minus expenses”, where expenses means cost of goods, SG&A, payroll, rent etc. If businesses cannot deduct the cost of labor, then not only do businesses have the least incentive to hire people, but in fact most business will fold.
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