EU Threatens Trade War Over US Tax Provisions

TradeAlert.org ^ | Wednesday, May 14, 2003 | William R. Hawkins

[NetValue]

Trade relations vs. US Sovereignty
Um mmm! Tough call. Not.

[caisson71]

EU threatens AGAIN, WTO, UN? Those voices seem to be distant cries since they left US to deal with Iraq and terrorism. The less we have to do with their policies the more THEY have to deal with it - global warming, national economies, etc.

[austinTparty]

Oh, this is easy. The U.S. needs to stop taxing overseas income of U.S. Corporations. No one else does it and thus our government is putting our corporations at a competitive disadvantage.

[Willie Green]

No one else does it and thus our government is putting our corporations at a competitive disadvantage.

Then why are the Euroweenies protesting the way we currently do it?

Hmmmmmm???

[Chewbacca]

What would happen if the US was to eliminate all income taxes and corporate income taxes and institute a national consumption tax on all non-food items?

Would that be enough to suck all the companies out of Europe and bring back productivity to the USA?

[Sonny M]

That would leave europe somehere in the middle ages.

[Mister Baredog]

French backstabbing dirty deeds at work in the EU, not just the UN.

The EU challenge should, however, awaken American leaders to the need to reform and toughen trade policy if the U.S. is to prosper in a world were political economy is a blood sport.

Don't mess with Texas.

[geedee]

Anyone know the "nationalities" of the judges who ruled against us in this BS? Might be interesting.

[Willie Green]

Would that be enough to suck all the companies out of Europe and bring back productivity to the USA?

No. Shifting the entire burden of a bloated federal government onto consumer purchase would only serve to squash the consumer market. Furthermore, such a proposal does absolutely nothing to reduce the oppressive regulatory bureaucracy and excessive litigation.

[AbsoluteJustice]

LET EM LET EM block our trade that will bring more jobs back hope!!!

[AbsoluteJustice]

Back home

[Libertarianize the GOP]

http://www.freerepublic.com/perl/bump-list

[staytrue]

What would happen if the US was to eliminate all income taxes and corporate income taxes and institute a national consumption tax on all non-food items? Would that be enough to suck all the companies out of Europe and bring back productivity to the USA?

It would help

[Taxman]

Thanks for posting this article, Willie.

However, once again, we find ourselve on opposite sides of the tax reform debate and, as before (and as always on these tax threads), you are dead wrong!

In the first place, the entire burden of government is ALWAYS paid by "consumers." The National Retail Sales Tax (NRST) does not seek to, and cannot, change that simple fact of life. What the NRST can and does do is make the tax burden highly visible to the consumers who pay it.

The agenda in this respect is to, over time, by exposing the FRaud and the Big Lie, force the governement to be more respectful of the monies it extorts FRom the taxpayers.

In respect of foreign trade, a NRST would, indeed, cause American products to be more price competitive in overseas and domestic markets, and would, indeed, cause products imported into American markets to be less price competitive.

We have discussed this phenomenom on many occasions over the years on these tax threads.

Now to my main point: Under the NRST, consumers WILL NOT be dinged for an increase in the retail price of domestic goods and services.

THERE WILL BE NO INCREASE IN THE RETAIL PRICE OF GOODS AND SERVICES, WILLIE!

In fact, the total, after tax price of goods and services will, in effect, remain unchanged. A $20,000 car in today's income tax environment will be a $20,000 car in the NRST environment, inclusive of the NRST!

As you know, businesses pay income taxes. They also must pay to comply with the IRC. That combined burden is passed along as a higher price to consumers. It is also reflected as lower earnings for business owners and lower employee wages.

The NRST will the salutory effect of lowering (pre-tax) retail prices, raising business profits and increasing employess wages. It will also make American products more competitive domestically and in the world marketplace.

That is a "FIVEFER!" if I ever heard of one, Willie! A "SIXFER!" when you account for the decreased price competitiveness of imported goods.

And, to address your specific point that the NRST will "only serve to squash the consumer market" You are 100% wrong.

Americans, under the NRST, by virtue of being able to keep 100% of their earnings, not being punished for working, saving and investing and the Family Consumption Allowance, will see and immediate increase in their standard of living. Americans will have more disposable income(even after the NRST is imposed on retail purchases), and will save and consume more, causing the American economy to really boom!

And, as I pointed out above, retail after tax prices will not increase. Let me repeat myself: Americans will have more money and they will spend and save more. It is that simple.

The American economy will really take off under the NRST. Try doubling the GNP rate of growth for starters. And, it gets better over time.

The NRST is a WIN-WIN FOR AMERICA, WILLIE!

As for reducing "the oppressive regulatory bureaucracy and excessive litigation," Willie, you gotta start somewhere, and fundamental tax reform is the place to start.

Once the NRST empowers the American people and disempowers the government in respect of taxes, we can organize ourselves around the issues of oppressive regulation and excessive litigation, and do the same: disempower government!

Work with us here, Willie. We need your help and the help of millions more thoughtful Americans to Take Our Country Back.

Gotta start somewhere, and this is it!

[Willie Green]

Thanks for posting this article, Willie.

You're more than welcome.
William Hawkins is one of my favorite essayists on the issue of globalization.

However, once again, we find ourselve on opposite sides of the tax reform debate

Yes. That's because the long term effects of your extremist tax "reform" panacea would result in a two-tiered socio-economic stratification of our citizenry: Essentially a 21st Century eco-feudal system where the globo-corporate aristocracy would reign in a tax-free environment while 90% of the consuming peasantry would be encumbered with an onerous and excessively burdensome taxation on consumption to finance the social security welfare redistribution system.

Now to my main point: Under the NRST, consumers WILL NOT be dinged for an increase in the retail price of domestic goods and services.
THERE WILL BE NO INCREASE IN THE RETAIL PRICE OF GOODS AND SERVICES, WILLIE!

Good grief. Of course consumers will be "dinged" for any increase in the retail price of goods and services, just like they always are.
How the hell do you think you're gonna stop prices from fluctuating according to the laws of supply and demand, ninny? Price controls?

[Taxman]

Good grief! Willie!

A two-tiered society? Please cite for me the research that concludes that such a ridiculous long-term outcome would result when the US replaces the income tax with a National Retail Sales Tax and abolishes the IRS!

Pay attention, Willie. There will be no increase in the price of goods and services solely as a result of replacing the income tax with a National Retail Sales Tax.

The laws of supply and demand are entirely different and have no relationship to the NRST.

Your thoughts on this, Geezer?

[ancient_geezer]

There will be no increase in the price of goods and services solely as a result of replacing the income tax with a National Retail Sales Tax.

When you remove a cost from business, whether it be a tax imposed along with costs associated with any remitted tax, or any other cost of doing business, it places that business in a more competitive position. Prices will move to sustain market share, that means room to move retail pricing downward as producer prices decline, with profits and labor costs remaining constant.

The key to remember the NRST replaces all income and payroll taxes, it is not an additional tax, thus does not add to the total cost of consumer products.

The new shelf price plus NRST will just be where todays prices with those embedded costs are now as set by Supply/Demand factors.

Producer prices are expected to fall approximately 22% in response to the repeal of business portions of income & payroll taxes along with the costs of compliance associated with those taxes. With a 23% NRST the total payment for a given basket of consumer goods remains essentially constant with with what it is today.

The NRST merely makes a burden that is now embedded into retail pricing visible to the consumer. It becomes a separated line item on a sales receipt instead of being buried out of view as it is under the income/payroll tax.

[Willie Green]

When you remove a cost from business, whether it be a tax imposed along with costs associated with any remitted tax, or any other cost of doing business, it places that business in a more competitive position.

As I've pointed out to you many times, the fatal flaw in your arguement is your assertion that the corporate income tax is a "cost". It is NOT. It is a government confiscation of a portion of the profits (if any) AFTER costs are deducted from revenues.

Frankly, your tax will probably stick it too taxpayers even more because you're taking a BIG chunk of the retail price right off the bat, regardless of whether or not the business makes a profit.

[americanbychoice2]

Wiilie, just slow down a bit?
Some questions for you:
1) Who pays the corporate taxes?
2) What is the percentage of VAT in Europe, which is in addition to a lot of other taxes they pay?
3) If a corporation is taxed at a rate of 35%, who pays the bill?
4) Who pays the VAT tax?

A hint, let's examine the billion dollar rewards that were handed down by the courts against the cigarette manufacturers? Who paid those settlements?