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Trump calls for 10% tariff on all imports

Discussion in 'Too Hot for Swamp Gas' started by dangolegators, Aug 22, 2023.

  1. dangolegators

    dangolegators GC Hall of Fame

    Apr 26, 2007
    As it should be. The rich make the vast majority of money.
     
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  2. QGator2414

    QGator2414 VIP Member

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    And no one has said they should not be paying the vast majority of the taxes. They do.

    That said our system is a complete mess and needs to be simplified. No one is calling for the rich to have lower marginal tax rates than the poor.
     
  3. dangolegators

    dangolegators GC Hall of Fame

    Apr 26, 2007
    Actually there are folks who think everyone should pay the same rate. Glad you're not one of them.
     
  4. g8rjd

    g8rjd GC Hall of Fame

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    But therein lies the problem. Their effective tax rate of 8.2% while I and likely you pay an effective tax rate close to 20% is just bananas. And when the richest of the rich pay 3.4% effective tax rate, the progression of the income tax clearly needs to be re-examined at the high end.

    Wealthiest Americans pay just 3.4% of income in taxes, investigation reveals

    But pointing at the poor, who end up with a lower effective income tax rate (but amazingly at times still above some of the super rich), as though they aren’t paying taxes when they’re getting hammered with regressive taxes, typically by state and local taxation, really doesn’t seem to me to be an effective way to ensure federal income tax is appropriately set.
     
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  5. G8tas

    G8tas GC Hall of Fame

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    That's not necessarily true. Just because someone in rich doesn't mean they spend a lot of money
     
  6. QGator2414

    QGator2414 VIP Member

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    Again. It is about recognizing the income. That is the crux. If you invest your after tax dollars and make a fortune it should not be taxed at income tax rates. If you are a CEO and paid in stock options it should be taxed at income tax rates and then if reinvested later taxed at cap gains.

    We have a mess for sure. But you have to understand it is unfair to say an executive has an effective tax rate of 1% because they did not recognize any stock options in a year yet were paid in stock options plus some nominal salary.
     
  7. l_boy

    l_boy 5500

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    those low numbers are due to unrealized capital gains. Are you suggesting that people pay taxes on gains on assets they have not sold? Now they will have to sell assets to pay the taxes.

    Also comparing capital gains tax to income tax is a bit of apples and oranges. Capital gains and dividends taxes are a tax on the gains of the owner. The owner already pays income taxes on corporate income. So there is duplicate taxation on corporate shareholder ownership.

    Finally taxation of capital gains is partly a tax on inflation, to the extent an asset appreciates with inflation is not a real gain, but it gets taxed nonetheless.
     
    Last edited: Aug 22, 2023
  8. dangolegators

    dangolegators GC Hall of Fame

    Apr 26, 2007
    It's not duplicate taxation. Only gains are taxed. If there is no gain there is no tax.
     
  9. l_boy

    l_boy 5500

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    Of course only gains are taxed. You don’t tax principal.

    Net income is one measure of the “gain” of the enterprise. That gain is taxed.

    Net market value is another measure of gain, and all else equal market value increases with net income. Capital gain is a realized increase in market value and is also taxed.

    Alternatively if dividends are distributed they are taxed to the owner.

    So

    Net income is taxed.
    If net income is distributed it is taxed.
    If it isn’t distributed enterprise value increases and that increase is taxed, if realized.
     
  10. OklahomaGator

    OklahomaGator Jedi Administrator Moderator VIP Member

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    I see both sides of the tariff argument If a foreign government is subsidizing foreign production of, let's say steel, to be imported into the US below their cost to produce it. I can see the argument to put a tariff on that steel to offset the foreign governments subsidy. That protects American jobs and lets them compete on an equal basis with the foreign steel. However, long term view is it will cause the foreign government a lot of money to continue to subsidize their steel production and cause inflation in their own country and eventually offset their lower costs.
     
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  11. dangolegators

    dangolegators GC Hall of Fame

    Apr 26, 2007
    This has nothing to do with what I said. I was only responding to your claim that it is duplicate taxation. It is not.
     
  12. ncargat1

    ncargat1 VIP Member

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    I tried to tell people this at the time, and no one wanted to hear it. Foxconn did the same thing in Arizona. They have done the same thing in Oregon. Now they have even done the same thing in India. Off topic from the thread, but I am not clear on why anyone ever does business with FoxCONn.
     
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  13. mdgator05

    mdgator05 Premium Member

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    Pretty sure they got Pennsylvania too. That deal never made any business sense except as a con that was mutually beneficial to the politicians and the company, which got to grab a bunch of real estate for nothing and sell it.
     
  14. rtgator

    rtgator Premium Member

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    Trump doesn't have a clue how tariffs work.

    Screenshot_20220522-012336_Google.jpg

    Screenshot_20220220-105959_Photos.jpg
     
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  15. StrangeGator

    StrangeGator VIP Member

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    I think Amazon still does business with them.
     
  16. docspor

    docspor GC Hall of Fame

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    it's a bit more complicated than "2 sides". fighting tariffs with tariffs might seem like macho hardball.....it is BAD economic policy.


    How have Trump’s trade wars affected Rust Belt jobs? | Brookings

    POLASKI Sure. Let’s take the example of Trump’s steel tariffs. So he put a 25 percent tariff— that’s big, that’s like having a new tax put on something you buy of 25 percent. He put it on imported steel from Canada, Europe, Mexico, India, China, everybody in 2018. This meant that industries that use steel— metal-using industries like autos and trucks, appliances like washing machines, construction— all had to pay 25 percent more for their inputs. So they raised their prices and they lost market share in the global market to competitors from other countries who didn’t have to pay this 25 percent tax. That’s a very, very big differential, 25 percent. So, businesses lost market share, other businesses downstream like auto, and they laid off workers. But that’s just the beginning of this story.

    I agree with you, Sandra. Those are the two main effects. And I’ve also looked at those studies about the overall effect. The one I looked at had, I think, about 170,000 fewer manufacturing jobs because of the effects that you describe, but overall about 300,000 fewer jobs. I would just add that one other effect is that these tariffs actually make us poorer, and therefore people spend a little bit less. Not dramatically, but they spend a little bit less on lots of other things. We actually had job losses across a whole range of service sectors that you might think are not connected to international trade. That’s an example of the kind of indirect effects we’re talking about.
     
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  17. cocodrilo

    cocodrilo GC Hall of Fame

    Apr 8, 2007
    I was going to say, weren't a lot of American farmers ruined by Trump's China tariffs, when China subsequently quit buying their product? The government wound up subsidizing the farmers, at least temporarily. Did those farmers ever recover? It seems to be a forgotten chapter in recent American history, specifically that of the Trump presidency. Just like the Trump gang's orphaning of immigrant children by separating them from their parents and not even keeping records of which children were sent where. Who still remembers or cares? All that's important is that Trump is a shoo-in for the Republican nomination to run again. Inexplicable except as a thirst among his followers for an authoritarian and vindicative ("I'm your retribution") Trump regime.
     
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  18. Gatoragman

    Gatoragman GC Hall of Fame

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    I would like for you raise tax guys to say just how much of the income tax they should pay?
    I'm not talking tax rate of income I'm talking actual dollars. Right now, the top 10% of income earners pay around 75% of the income tax. What percentage would be fair? Should the top 10% be responsible for 80%? 90%? 100%?
    What is fair?
     
  19. docspor

    docspor GC Hall of Fame

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    Did Trump’s tariffs benefit American workers and national security? | Brookings

    The $79 billion brought in by the Treasury could in principle come from three different sources: the foreign companies exporting goods to the United States; the American companies importing goods from abroad, or using imported inputs in their production processes; and American households as final consumers. Tracking precisely who pays for tariffs is difficult, because it depends on how buyers and sellers adjust their prices in response to tariffs, and how these price changes then ripple though supply chains and down to final consumers. The Trump administration has repeatedly argued that foreign companies are paying for tariffs. But multiple (https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.33.4.187) studies (The Impact of US-China Trade Tensions) suggest this is not the case: the cost of tariffs have been borne almost entirely by American households and American firms, not foreign exporters. While estimates vary, economic analyses suggest the average American household has paid somewhere from several hundred (https://www.nytimes.com/interactive/2019/business/economy/trade-warcosts.html) up to a thousand dollars or more (https://www.washingtonpost.com/busi...ll-cost-us-families-year-jp-morgan-forecasts/) per year thanks to higher consumer prices attributable to the tariffs. Did tariffs benefit American workers?

    In general, then, Trump’s tariffs have helped some workers and hurt others. Nothing is particularly surprising about this; trade policy almost always has important distributive effects, and any change in trade policy is a choice to benefit some groups at the expense of others (https://www.project-syndicate.org/commentary/free-tradeblinders) . Yet, overall, when economists have attempted to add up the net effect of Trump’s tariffs on jobs, any gains in importing-competing sectors appear to have been more than offset (https://www.federalreserve.gov/econres/feds/files/2019086pap.pdf) by losses in industries that use imported inputs and face retaliation on their foreign exports. And even those jobs that have been created have come at great cost: studies suggest American consumers paid about $817,000 (https://www.nytimes.com/2019/04/21/business/trump-tariffs-washingmachines.html) in higher prices attributable to the tariffs for every job created in the washing machine industry and $900,000 (https://www.washingtonpost.com/busi...st-usconsumers-every-job-created-experts-say/) in the steel industry. While policy interventions to support manufacturing jobs may be warranted, there are cheaper ways to do so.

    Did tariffs help the US negotiate better trade agreements? The Trump administration also argued tariffs were part of a tougher negotiating posture that would give the United States leverage to secure more favorable trade agreements. During its first term the administration completed two major trade agreements: the U.S.-Mexico-Canada Agreement (USMCA), which updated the previous North American Free Trade Agreement (NAFTA); and the so-called “Phase One” China deal. U.S. tariffs certainly shaped the context for both the USMCA and China negotiations: in the absence of U.S. pressure, including the application of tariffs and threats of future tariffs, it seems unlikely either Mexico and Canada or China would have sought to negotiate a new deal with the Trump administration. In this basic sense, then, Trump’s tariffs did give the U.S. trade negotiators some leverage. 8/23/23, 9:30 AM Did Trump’s tariffs benefit American workers and national security? | Brookings Did Trump’s tariffs benefit American workers and national security? | Brookings 6/8 Yet when we look in closer detail at the outcome of these negotiations, the threat of tariffs does not appear to have brought substantial gains to the U.S. The USMCA is, in general, very similar to NAFTA (5 things to know about USMCA, the new NAFTA | Brookings) . And the Phase One trade deal consisted mostly of basic purchase agreements—which, due in part to the COVID-19 shutdown, are extremely unlikely to be attained—while punting the trickier, but more important, structural questions to a hypothetical Phase Two deal (https://www.brookings.edu/opinions/phase-one-china-trade-deal-tests-the-limits-ofus-power/) (which at this point seems unlikely to ever occur). Tariffs may get other countries’ attention, but don’t necessarily lead them to make substantial concessions to U.S. demands.
     
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  20. l_boy

    l_boy 5500

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    They are both taxations on owners equity.

    What Double Taxation Is and How It Works

    It may be more obvious with dividends. Profits are taxed, and then when profits are distributed as dividends the dividends are taxed.

    If dividends are not distributed the owners equity increases, and all else equal you will have capital gains if/when owners equity sells shares and capital gains are taxed.