Daily Archives: 6 May 2021

Fair Share and Government’s Revenue

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President Joe Biden’s (D) Council of Economic Advisers Chairwoman Cecilia Rouse had some very instructive things to say on Fox News Sunday last weekend.

One was this:

The idea is to make sure that corporations are paying their fair share, to button up some of the loopholes, which have meant more corporations were actually putting more money offshore—off of US soil—and having a global minimum tax so that we’re working with the rest of our trading partners, so that we’re working with the rest of the world so that corporations are paying their fair share worldwide[.]

Couple things on this. One is that business of “paying their fair share.” Once again, a Progressive-Democrat declines to say what that “fair share” is, leaving us to conclude that “fair share” to Party is “more” until Government is getting all of it.

Sadly, too, Fox News Sunday‘s host Chris Wallace chose not to ask her what she considered to be that fair share, choosing instead to let that slide.

Another instructive remark from the FNS segment was this one by Rouse.

Yes, internationally we don’t want to be disadvantaged, so he’s also working with other countries so that we have a minimum tax internationally so there’s not a race to the bottom.

This is another example of the Progressive-Democratic Party politicians pushing us to be more like the European Union. Every nation must charge high taxes with no economic competition among the nations to attract real innovation, real business, real economic activity which can only redound to the citizens of each nation.

Rouse, like the administrative state running the EU from Brussels, insists that a tax rate race to the bottom, a race to leave ever more money in the hands of the folks working to earn that money, is somehow a bad thing.

And that flows from a third instructive Rouse statement.

What we’ve seen over the past several decades is that the wealthiest Americans, the big corporations are getting wealthier, and they’re contributing less in terms of federal revenue[.]

“[I]n terms of federal revenue.” Because it’s not Americans’ money, it’s not (big) corporations’ money, it’s Government’s money.  Never mind that Party (nor Republicans nor Conservatives) have for far too long, justified Government’s claimed need for the money.

Other Implications

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Automakers are starting to adjust their level of dependence on Just in Time manufacturing, a technique whereby manufacturers vastly reduce inventory holding costs by having the relevant inputs—car parts, for instance—arrive at the factory just before they’re needed. In some of the more extreme cases, that includes arriving on the moving assembly line just before it’s needed for addition to the growing product.

The hyperefficient auto supply chain symbolized by the words “just in time” is undergoing its biggest transformation in more than half a century, accelerated by the troubles car makers have suffered during the pandemic. After sudden swings in demand, freak weather, and a series of accidents, they are reassessing their basic assumption that they could always get the parts they needed when they needed them.
“The just-in-time model is designed for supply chain efficiencies and economies of scale,” said Ashwani Gupta, Nissan Motor Co’s chief operating officer. “The repercussions of an unprecedented crisis like Covid highlight the fragility of our supply-chain model.”

That’s true, and it’s also good that that fragility finally is being taken seriously.

There are two other factors in JIT supply chain fragility beside those largely innocent ones. One is the fact that an enormous amount of trade goods, including raw materials and components for assembly into larger components or finished products, passes through the South China Sea. A large majority of Japan’s inputs and trillions of dollars of value for the US pass through the that Sea. Those shipping lanes are at increasing risk from an increasingly aggressive and acquisitive People’s Republic of China.

The other source is supply chain disruption by union strikes. Strikes generally and supply disruption by strikes are ways in which unions extort concessions out of manufacturers.

Inventory on hand, rather than on trucks or rail cars, helps manufacturers get through those deliberate disruptions.