The Glade 4.0

The WSJ and Forbes have been hammering the overseas corporate tax as a problem for helping US companies invest locally.

It is very difficult to justify transferring profits made by overseas subsidiaries of US companies just to face a 35-40% tax on that income when they can leave those funds overseas and invest there, where the money has already been taxed once.

The US is the only country in the first world with such a high level of taxation (double).... most of the others are in the 3% range.

Hauser's law Aizle.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

What's so funny about that statement? Seriously, if you're going to get all haughty, you better be able to back it up.

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You're suggesting that we cut spending by 75%, or in other words a 4.5 trillion dollar reduction, and you're asking me what's so funny?

Seriously dude, buy a grasp on reality.

As for the almighty Hauser coming to the rescue, if indeed his law is both acurate and would apply, wouldn't that make it cut taxes by 60% and spending by 15%? As cutting those taxes would still keep money rolling in at the same level?

How would we be able to reduce the principle of the debt if we did that?

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Your response seems to be a dismissive insult. Again, why is it funny?

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My understanding is that Hauser's Law describes the post-WWII period only, by which time all of those structural elements were already in place.


You're arguing that preferential tax treatment is the only (or at least primary) reason people invest rather than work?


That's my point. As personal, corporate, and capital gains rates declined over the last 60 years, payroll tax rates went up. At the end of the day, the contrary changes roughly balanced out, and overall receipts stayed relatively constant. Consequently, Hauser's Law doesn't really tell us much about what would happen if all the taxes moved in the same direction.


My recollection of the last 13 years is that most center and center-left economists and pundits advocated maintaining Clinton-era tax rates and splitting the surplus between paying down the debt and saving it to cover future Social Security & Medicare shortfalls, while most right-leaning economists and pundits advocated tax cuts. (The left advocated increasing discretionary spending, but no one was listening to them in the late 90s and early 00s anyway.) The right won the political argument, we lowered taxes, and the deficit went up. It seems to me that the loss of credibility was on the right, not the center and center-left.


If the choice is between raising income and capital gains taxes or adding a consumption tax, though, which would you choose?


Yeah, I know the CPI basket has changed, and some of the specific changes have been controversial. However, it's not like those changes are mere trickery, and if they are, it's a pretty damn good trick, since it seems to have fooled the Fed, the major banks, the bond markets, etc., etc., all of which seem to be indicating they think inflation is low and likely to stay low for some time.

What is funny is that you believe that there is 4.5 Trillion dollars worth of cutting that could be done to the budget that wouldn't send this country into anarchy.

Or perhaps, you want the anarchy, in which case refer back to the LOL.

Anarchy is assured in our present course Aizle. It is only surmised in your view of the alternate courses available.

Which do you believe the reasonable amongst us would suggest following?

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

It actually extends back to the early 1920s, but even then most of those elements weren't really in place as you know them until 1960s and 1970s.It's not preferential tax treatment as much as it is a secondary tax on what should theoretically be free capital. That said, if you tax investments as income, investments drop. You think the bottom fell out of the short-term speculative markets for no reason at all? It couldn't possibly have anything to do with taxing short-term investments at the highest applicable income marginal, right?Personal income taxes have risen every year for the majority of people who should be paying taxes. That demographic generally has their tax burden offset by credits and allowances not available to people affected by the Alternative Minimum Tax. And it does tell us a lot of things about what happens if all taxes move in the same direction: money dries up and taxable sources tend to disappear.The deficit didn't decline during Clinton's Administration. Social Security and FICA revenues were borrowed against to add money to the general fund. It's extremely important to remember this, because Clinton neither balanced the budget nor shrank the budget deficit. His administration changed the nature of Federal accounting to give it the appearance of solvency. Conversely, during Bush's presidency, the deficit actually did shrink in 2003, 2004, 2005, 2006, and most of 2007. It, however, started to grow in 2007 with the change of Congressional power. So, no, the loss of credibility wasn't on the right unless you believe that the balance sheet hoodoo of the Clinton Era. As for leaving taxes at Clinton levels, then why is it important to raise the highest marginal to 39.0%? Clinton cut it to 35.6% after the initial hike to 39.0% cost government revenues. Bush (W.) was responsible for a larger increase to payroll taxes than any president prior, but you're leaving that out of your "tax cut" rhetoric. And, oddly enough, Obama lowered payroll taxes marginally while simultaneously complaining about a lack of funding and revenue from FICA. It seems to me you're listening to too many ideologues instead of looking at the actual sources of income for the Federal government.

More to the point, the economists you have mentioned keep saying we're in a recovery, while ignoring the fact that every revision to labor, inflation, and GDP reports keeps getting revised into the negative with little to no mainstream press coverage.False dilemma. There are better options to choose and more than two options available. First, we can cut both the personal income tax and the capital gains taxes without negatively impacting anything. In fact, de-marginalizing earnings might be the single most productive thing the current Administration could do to help the economy. It would allow for better savings, increase capital mobility, and increase the ability of the poor and disaffected to actually live their lives. As such, I would get rid of all front in taxation and introduce transaction level taxes, such those which funded this nation for a very, very long time.They are mere trickery, and the fact that you believe they aren't is proof of how much power the talking heads have in most economic opinions.

How much did your annual fuel expenses rise in the last year?
How much did your annual food expenses rise in the last year?
How much did your income rise in the last year?

People don't keep track of these things because they don't really think about a $0.30 increase in the cost of a Taco at Taco Bell. Nevermind that said increase in the cost of a Taco from $0.89 to $1.19 was a 33% increase in the cost of said item. The continued contraction of purchasing power is quite real, but government and the media do a grand job of trying to obfuscate that reality. But, you know, I doubt you keep receipts like I do.

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Don't make me whip out Shadowstats again.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

How do you reconcile this with your statement that the military is "already bare bones?" There wouldn't be any money for anything else.

Hauser's law is about the ultimate of conspiracy theories, BTW. It's basically saying straight up that the US has a secret Illuminati-esque ruling class that's secretly robbing all of us. Because if Hauser's law actually held after significant tax cuts, the only reason we don't have tax cuts is because this secret organization wants to make slaves of everyone.

Military spending is only 18% of the budget. So, that's about right ...

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The real consideration I feel should be % of GDP.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

The government also has to pay interest on the existing debt, I think they would be in the red already after a 75% spending cut.

No, I do agree that, ceteris paribus, taxing investments at a higher rate than we do now would almost certainly reduce the amount of investment. I'm just doubtful that the effect of a moderate change in tax rates would lead to anything more than a moderate change in investment. Also, one could argue that the lower rates on capital gains relative to wage income distorted the economy and contributed to the various speculative bubbles of the last couple decades as well as the increasing prominence of financial services and paper transactions as a percentage of GDP.



I know Clinton's surpluses were actually still deficits once you factor in the borrowing from social security, but all recent Administrations have done that. I'm not sure what accounting trickery you think Clinton alone engaged in. Also, I don't see how you can argue that Bush shrank the deficit in each of those years without giving him a pass on the very accounting "tricks" you're whacking Clinton for. The only years in which the total deficit declined from the previous year during Bush's presidency were 2005 and 2007, but even that is giving him too much credit, since his starting point was to more than triple the deficit in his first year! So sure, Clinton didn't really hit a surplus, once you factor everything in, but he actually did lower the deficit every single year except his last, and he came damn close to true balance, whereas Bush immediately tripled the deficit, managed to drop a bit from record highs in the middle years, and then ended on a massive record deficit in 2008. I know you're no fan of Bush, but there's really no question that Clinton's fiscal numbers were far, far better.

Ummm, it's not so secret, and they're not secret about robbing you either, they just convince you that they are "needed". Think about the whole idea of what Progressives stand for (I'll give you a hint: the whole tax system is meant to take money from those who have it and build up a tremendous bureaucracy in order to dole it out to the those who don't - at the discretion of our "betters"); think about the way the Big Government Democrats tell you to your face that they know better than you do how to spend your money, as well as how to be "benevolent" with it. Think about the Big Government Republicans who tell you that only they can protect you and to to that there needs to be a larger apparatus to do the protecting. Think about the Environmentalists who have no problem advocating spending hundreds of billions of your money to further their aims, regardless of the havoc it would cause. Think about the Liberals who want to make sure your children are properly indoctrinated and every child has access to public schools no matter the cost or efficacy. Think about the Conservatives who know better than you do what you should be doing in your bedroom, living room, rec room, and what you can do with your body, and the police force and Agencies they need to fund in order to make sure you aren't doing anything they think you shouldn't.

It ain't no secret man.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

Ignoring the idignant crap posted between you and me.

What is the percentage over budget we currently run and what is the % of the debt to collections currently?

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I didn't thing that either you or Khross were being indignant to each other.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

I think he means everyone else in between was indignant.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Well, it was sure good of him to comment on that on his way to ignoring it.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

I'm not following you.. did I spoil a joke or something?

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Nah, I just thought it rather, ummm egoistic, of him to point out that what was posted between Khross's post and his post was "idignant crap", and that he's ignoring it -if that was indeed his intent.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

But the thing is, if this was the reason, then we'd still be cutting taxes. If Hauser's law continued to apply, then all these folks could have their cake and eat it too. They could cut taxes, and still have just as much money to spend on all these pet projects. The only reason not to cut taxes is if they're somehow diverting that money into their own pockets, or don't really care about the money and just have a pathological need for control.

Or they simply don't believe in Hauser's Law? I think you're overthinking this one Xeq. It's not accepted by every single person as a fact, even if many of us here believe it to be true.