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Post by douglavers on Dec 21, 2017 6:56:45 GMT
Sigurdur
I don't think raising taxes has proved effective in kick-starting growth and stabilising government debt in the Western world.
Many of the really vibrant economies elsewhere are characterised by low corporate tax rates [cf Hong Kong, Singapore].
Trump is trying an interesting economic experiment!
I have no idea whether it will work.
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Post by Ratty on Dec 21, 2017 8:06:43 GMT
Sigurdur I don't think raising taxes has proved effective in kick-starting growth and stabilising government debt in the Western world. Many of the really vibrant economies elsewhere are characterised by low corporate tax rates [cf Hong Kong, Singapore]. Trump is trying an interesting economic experiment! I have no idea whether it will work. Yes, we live in interesting times.
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Post by sigurdur on Dec 21, 2017 11:18:18 GMT
Sigurdur I don't think raising taxes has proved effective in kick-starting growth and stabilising government debt in the Western world. Many of the really vibrant economies elsewhere are characterised by low corporate tax rates [cf Hong Kong, Singapore]. Trump is trying an interesting economic experiment! I have no idea whether it will work. Nor has cutting taxes. The only effective way to stimulate growth has been to reduce debt. The US tax change does not do that.
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Post by nautonnier on Dec 21, 2017 17:27:29 GMT
Sigurdur I don't think raising taxes has proved effective in kick-starting growth and stabilising government debt in the Western world. Many of the really vibrant economies elsewhere are characterised by low corporate tax rates [cf Hong Kong, Singapore]. Trump is trying an interesting economic experiment! I have no idea whether it will work. Nor has cutting taxes. The only effective way to stimulate growth has been to reduce debt. The US tax change does not do that. True, the tax change on its own cannot increase growth and thus increase wealth for the USA. However, a tax increase will not do that either. Some kind of stimulus is needed to increase wealth creation while at the same time government expemditure needs to be reduced. The new tax regime will increase wealth creation in those industries where it is possible. Investment decisions are made based on ROI and the new tax approach changes all the ROI calculations particularly for manpower and capital intensive industry. It also acts as a considerable incentive for industries to repatriate funds held overseas to avoid punitive taxation. Those funds will be invested somewhere in the USA instead of being invested in some competitor country. If someone is in debt then the first thing to do is increase their earnings so they can pay back the debt at an increased rate. That is the intent of the tax cuts. It must be followed by reductions in federal expenditure and state expenditure. If government spending increases to match the incoming funds then there really is no point. Spending must be cut. The ideal targets are disretionary politically motivated spending - there is lots.
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Post by Ratty on Dec 21, 2017 21:39:07 GMT
It must be followed by reductions in federal expenditure and state expenditure. If government spending increases to match the incoming funds then there really is no point. Spending must be cut. The ideal targets are disretionary politically motivated spending - there is lots.
There's the rub. Modern governments seem incapable of doing it or .... getting re-elected if they do.
Our state government is a example: Spending out of control under Labor, LNP elected in 2012 with a massive majority and set about culling the public service and reducing spending in most areas. Everybody unhappy. 2015 election, Labor scrapes back into power and begins re-building the public service, etc.
2017: Labor returned to continue the spending and commit to a 50% renewables target by 2030.
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birder
Level 3 Rank
Posts: 223
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Post by birder on Dec 21, 2017 21:45:16 GMT
The increase in deficit is based on growth of around 2%. The growth has not been that low since spring. If you wish to pay back the deficit then you have to: 1. Grow the US economy and make things in the US and sell them internationally. Taxing the people that do that will not work nor will rewarding companies that make things internationally to sell in the US - that is the wrong direction. Increasing energy exports is one way and getting internal industry exporting is another. The taxation does stimulate the correct things. 2. Shrink the government spending. This is more difficult as the Defense budget has been cut to a level that aircraft are Christmas-treed for spares, training is dangerously low, and strength is lower than since Pearl Harbour. Entitlements are also difficult to cut politically. The only way out is to not recruit - and that is being done; and look at various areas like Dept of Education with a view to rolling that back to the States. The country was run on credit for the entire 8 years of Obama. And is like a couple in a new house with a pool, two cars, golf club and fitness club memberships and every single thing on credit with all cards maxed out. _stop_ spending and increase income. We are getting a realllllllly crappy deal in regards to defense spending. It needs to be cut by a minimum of $200 billion. The Chinese are cleaning our shorts worldwide. They own the largest copper mine in the world and the US defends it. We are realllllllly stupid! The Chinese now own most of the mineral wealth in Africa. They own approx 1/3 of the tillable land in Brazil. While we run around the world like a chicken with its head cut off, bleeding wealth all the way. Absolutely insane! How about cutting the military spending to zero, it would save over 500 billion dollars a year, or do you think that Russia, China or North Korea would then attack the USA?
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Post by sigurdur on Dec 21, 2017 23:06:17 GMT
We are getting a realllllllly crappy deal in regards to defense spending. It needs to be cut by a minimum of $200 billion. The Chinese are cleaning our shorts worldwide. They own the largest copper mine in the world and the US defends it. We are realllllllly stupid! The Chinese now own most of the mineral wealth in Africa. They own approx 1/3 of the tillable land in Brazil. While we run around the world like a chicken with its head cut off, bleeding wealth all the way. Absolutely insane! How about cutting the military spending to zero, it would save over 500 billion dollars a year, or do you think that Russia, China or North Korea would then attack the USA? Cut military spending by 500 billion and there would still be 200 billion left to spend. The thing to look at is: What is the annual budget of the UK? The whole budget. #2. Does the US have treaties? #3. China won't attack the US. They are intent on BUYING the US. #4. Russia won't attack the US as well.
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Post by Ratty on Dec 21, 2017 23:06:41 GMT
[ Snip ] How about cutting the military spending to zero, it would save over 500 billion dollars a year, or do you think that Russia, China or North Korea would then attack the USA? Well Birder. You could absolutely guarantee that there would be no invasion.
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Post by sigurdur on Dec 22, 2017 3:33:52 GMT
That was a point that President Eisenhower made. Even without a military, the USA has the largest standing army in the world. Seems that a lot of country bumkins have rifles etc and can shoot the tail off a squirrel....on purpose.
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Post by nautonnier on Dec 22, 2017 7:46:51 GMT
I think that you could rely on Iran or one of its proxy groups attacking the US. Remember their religion is based on the 'return of the Imam' after a battle. They would have no reservation at all about attacking 'the great Satan' especially knowing that nothing would be done in retaliation. .
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Post by nautonnier on Dec 22, 2017 11:32:07 GMT
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Post by nautonnier on Dec 22, 2017 12:01:56 GMT
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Post by blustnmtn on Dec 22, 2017 13:25:58 GMT
I hope so Naut. If war is what they want, it shouldn’t be one sided.
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Post by nautonnier on Dec 23, 2017 11:27:30 GMT
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Post by glennkoks on Dec 24, 2017 1:57:01 GMT
I have mixed feelings on the tax cuts just passed. The CBO has stated that the tax cuts would add 1.4 trillion to the deficit. Yes, as a middle class tax payer I feel I could use a break and so does every other tax payer in just about every tax bracket. I also feel that President Trump is trying to add a large dose of common sense business practice to our government and a business climate friendly atmosphere. I like the fact that if you take the reigns off the economy it will go.... With that being said 1.4 trillion in deficit increase is not a good thing. I prefer we all buckle down pay our fair share, work and grow our way out of this. Tax cuts are not the magic pixie dust some of the Republicans think it is. A common sense approach to taxation and spending is. Health Care is still weighing down on the economy. I know several if not dozens of people who would start their own business if they were not afraid of losing their health care provided from their current employer. We have to fix that first and the free market is usually the best option. We need to cut lose the reigns, cut out the middlemen and let the free market provide solutions to health care. The increase in deficit is based on growth of around 2%. The growth has not been that low since spring. If you wish to pay back the deficit then you have to: 1. Grow the US economy and make things in the US and sell them internationally. Taxing the people that do that will not work nor will rewarding companies that make things internationally to sell in the US - that is the wrong direction. Increasing energy exports is one way and getting internal industry exporting is another. The taxation does stimulate the correct things. 2. Shrink the government spending. This is more difficult as the Defense budget has been cut to a level that aircraft are Christmas-treed for spares, training is dangerously low, and strength is lower than since Pearl Harbour. Entitlements are also difficult to cut politically. The only way out is to not recruit - and that is being done; and look at various areas like Dept of Education with a view to rolling that back to the States. The country was run on credit for the entire 8 years of Obama. And is like a couple in a new house with a pool, two cars, golf club and fitness club memberships and every single thing on credit with all cards maxed out. _stop_ spending and increase income. I will agree with point one. We have to grow the U.S. economy. You do that with a business friendly/common sense regulatory environment. At some point adding to the deficit will come back to bite us and have the exact opposite effect. As Sigurdur pointed out "our kids and grandkids will pay". I could not disagree more with point 2. We have more than enough defense to protect our nation and our allies. We still have the flat tops and nuclear power sub's that set us apart from the rest of the world. As for the final paragraph in the post. To be fair we have been run on credit from every administration since President Reagan decided to cut taxes and ramp up spending to break the USSR. It's easy to run on credit, live the high life in Washington and pass the debt on to future generations. Much harder to make tough decisions now, tighten the belt and correct our fiscal problems.
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