Tag Archives: economics

A Couple of Questions

Posted on by
Reply

Former President and Republican Presidential candidate Donald Trump says he wants to “once again turn America into the manufacturing superpower of the world,” and that a couple of the ways he’d achieve that would be to reduce the corporate tax rate to 15% for those companies that make their products in the US and by applying tariffs on foreign-made goods.

One question concerns how strictly he’d apply that tax break criterion—or how strictly Congress would allow him to. Would making their products in the US include or exclude companies who assemble their products in the US, but do so from components or subassemblies that are imported? If implemented in some form, would the exclusion include components or subassemblies that are made in USMCA members Mexico and Canada?

The subassembly bit especially would impact the several car companies that assemble their vehicles in the US, but these are far from the only companies that do that. Which brings up another question: what about those international companies headquartered in other nations but that assemble/manufacture in US factories products for sale in the US. Would the 15% tax apply to the US component of those businesses? To the whole foreign-domiciled company?

How would the tariffs apply to the components imported for final product assembly? How would the tariffs apply to those foreign-headquartered companies that bring in components for final assembly in the US and sale in the US?

Answers need not block either of the two proposals, but they do need to be worked out.

The Professors Have a Thought

Posted on by
Reply

Charles Silver, Civil Procedure Professor at University of Texas Austin’s School of Law, and David Hyman, Professor of Health Law & Policy at Georgetown Law, have an idea on how to improve Medicare, and it doesn’t even include cutting Medicare or raising taxes. Here’s their straightforward solution:

Rather than pay providers, Congress should give Medicare money directly to enrollees, as it does with Social Security. The government should deposit each enrollee’s subsidy into a health savings account, letting seniors decide what they need and how much they are willing to pay. By reducing the government’s role, this reform would eliminate most forms of healthcare fraud, waste, and abuse immediately, saving hundreds of billions of dollars.
The reform would also significantly improve healthcare. When patients pay for it directly—as they do for cosmetic surgery, Lasik, over-the-counter medications, and other elective procedures not covered by insurance—things work well.

Such a move likely would increase the number and range of doctors available to seniors, also. Large numbers of doctors, for a variety of reasons, currently won’t take patients who are on Medicare. Among those reasons are Medicare’s reimbursements to doctors being so low that many doctors lose money on Medicare patients, and Medicare’s slow rate of payments. With patients paying their doctors directly, albeit with Medicare dollars, those doctors would be paid promptly and wouldn’t have to worry about taking a loss on the appointment.

Letting people be responsible for their own decisions. What a concept.

The professors’ thought is a very good one.

Kamala Harris’ Tax Policies

Posted on by
Reply

And misallocation of those tax collections. Progressive-Democratic Party Presidential candidate Kamala Harris wants to raise taxes on Americans and our corporations by some $5 trillion over the next decade and cut other taxes by more than $4 trillion. Or so she claims, especially regarding the latter. The former can be taken as gospel; raising taxes, especially on those Evil Rich Americans, is what Party does.

Under her plan, taxes would go up sharply on some high-income households, and top marginal tax rates would reach their highest point since 1986. The wealthiest investors and company founders would encounter sizable s that they don’t face under current law.

That capital-gains tax bill is made the more sizable by her plan to tax capital gains that haven’t been realized—i.e., gains that don’t exist.

Her claim to not have any tax increases on households making under $400,000 is shown to be a sham promise by her decision to ignore the effect her corporate tax increase to 28% and her increase in the diktated [sic] minimum corporate tax to 21% would have on middle-income workers and shareholders. The impact includes that tax on phantom capital gains that Harris wants to impose on us middle class workers who own shares of companies in our own, however miniscule, portfolios.

Left unanswered, so far, is what Harris intends to do with those tax revenues. Her silence here stands against the backdrop of the Biden-Harris administration’s years long cuts, in real terms, to funding for our defense establishment, leaving us the weakest we’ve been in decades at the moment of greatest national security danger we’ve faced in decades.

This tax policy also is one of the reasons Harris floated her price controls proposal—to try to distract us from the policies she’s serious about slipping past, a squirrel maneuver which a compliant press is actively aiding her with its concentration on price control proposals while minimizing coverage of the rest of her ideas.

Don’t Only Blame Gensler

Posted on by
Reply

The Wall Street Journal‘s editors have their panties in a twist over SEC Chairman Gary Gensler’s imposing $393 million in fines on 26 companies that fail[ed] to track employee “off-channel” [personal] communications.

It’s certainly true that Gensler badly overstepped his bounds with those fines. The SEC, and no one in it, has any authority to surveil or to require surveillance of private company’s private employees’ personal communications. Gensler and his SEC should be swatted down—hard—in court for that excess.

However.

A major part of the blame for this overstep belongs on the management teams of those 26 companies. Those worthies demonstrated deeply disgusting cowardice when they meekly acceded to the fines. They’ve done a disservice to the companies of which they’re in charge, they’ve betrayed their shareholders, and they’re right next door to betraying the fiscal duties those managers have to their companies’ shareholders. Their meekness serves only to expose their companies to further government overreach, and it exposes their employees to further unwarranted (in both senses) surveillance by an overreaching government.

That betrayal vastly outweighs any financial “savings” from agreeing to pay the SEC fines…because it’s less costly than resisting in court. And it interferes with that necessary swatting-down, an interference that potentiates the likelihood of those future costs.

Two Questions…

Posted on by
Reply

…that answer themselves.

Can the US and its allies deter all these rivals—including Iran and North Korea—at the same time, given the decay in the West’s military-industrial base and the unwillingness of voters to spend dramatically more on defense?

Of course we can, and the path to that is in that last bit: spending more on defense (while keeping in mind that a Critical Item for defense is a strong offense) and refurbishing our military-industrial base. Convincing us average Americans to spend more on defense is simpler and more straightforward than it apparently seems to the journalist crowd. It’s necessary and simple to explain the nature and depth of the threat posed by our four primary enemies, listed in my order of risk: Russia and the People’s Republic of China tied at the top; the one as demonstrated by its active shooting war of invasion and steady threats to continue west if its current land grab is successful. The other because of its active invasion and occupation of the South China Sea, seizing territory owned by other nations around the rim of the Sea and controlling sea lines of commerce that are critical to Japan and the Republic of Korea and extremely important to us, its increasing threats to invade and conquer the Republic of China, and the cyber war it’s already inflicting on us.

In third place is Iran, with its near production of nuclear weapons, which it will use promptly to destroy Israel and then shop to its terrorist surrogates and to any others who’ll have the purchase money. This nation already shops its conventional weapons—at heavily discounted prices—to its surrogates attacking Israel and commercial shipping on the Gulf of Oman and the Red Sea.

A distant fourth is northern Korea, whose rhetoric makes them worth watching carefully along with shoring up RoK’s and Japan’s defenses and our own in the northern and western Pacific, but not much more than that.

And then it’s necessary and simple, except for those politicians of both parties, to reallocate spending away from the billions of froo-froo already in the budget and toward the defense establishment. The only really hard part (and we all know what “hard” means) is getting rid of the deadwood, both civilian and in uniform, in the Pentagon and streamlining development and acquisition.

For our allies, it’s slightly more complicated (but only slightly). If they don’t want to spend more on defending themselves—especially in Europe and particularly those European NATO members who already are betraying their fellow members with their sloth—then it will be time to stand up a separate mutual defense arrangement among the US, the Three Seas Initiative nations, and Great Britain (for starters), and then walk away from NATO altogether.

And

And if not, should, and could, an accommodation be sought with one of the rival great powers? If so, which one—and at what cost?

There can be no accommodation with enemy nations whose solemn goal, often stated, is to conquer us. This is the goal of Russia and the PRC. Nor can there be an accommodation with an enemy nation whose oft-stated goal is to destroy Israel and then us. An accommodation with northern Korea is almost irrelevant, and wholly unnecessary—just do the watching and regional plussing up.

The cost of accommodating nations with those goals should be obvious—such a step would only be a step closer to their goals for those enemies. Too, that would only be the first step of a short path to our functional destruction: having accommodated our enemies once, they’ll only seek a further accommodation, and then another, then…, until we’re no longer capable of effective self defense.