Trumple down economics vs. entitlement state

[BRUTE]

this interested brute in the debate last night. question was how candidates would grow the economy and jobs.

Trump: cut corporate tax to 15%, remove regulation, this will attract business and lead to growth and job.
Clinton: paid child leave, raise minimum wage.

brute is basically a libertarian and therefore believes in the magic of the free market, which would be Trump's side. but it can't be denied that no market is completely free, and therefore, and for other reasons, certain humans get a really bad deal. but certainly minimum wage and child leave can't fuel the growth of the entire economy?

opinions?

[Dragline]

I don't think either would have any significant impact on the overall economy. Tweaking government policies on the margins like this is vastly overrated when compared with non-governmental factors like private credit expansion or contraction, and long-term shifts in manufacturing to lower-cost economies outside the US.

For a reality check, compare what various states have done with these kinds of economic policies and what the impact has been overall. States tend to do well in spite of their economic policies, not because of them, because other factors are in play and similar businesses tend to congregate together, which is convenient for attracting capital and talent.

And you can forget about significant growth as measured by GDP unless the working-age population is also growing. But growth for growth's sake is overrated as well.

[Riggerjack]

Well, HRC also said stop and frisk was ruled unconstitutional because it was ineffective.

While such a standard would totally be nice, it falls in the category of EVERY other thing that came up last night. Garbage, shoveled at the public that isn't supposed to know any better.

Since they are our only choices, they must be right.






Vote Johnson!

[stand@desk]

With Hillary, would there be a massive flood of illegal immigrants and legal ones for the matter..and yes minimum wage goes up, but there becomes less jobs because the companies do not want to pay the higher wages. The taxes on the very wealthy go way up and they leave or leave certain US states with the higher taxes.

With Trump, illegal and legal immigration remains similar or declines, there is less competition in the job market because of fewer participants, companies will have to pay a reasonable wage to attract reasonable talent. The unemployment rates stabilize or go down. I definitely think companies would reinvest in America with lower corporate taxes.

Taxing the rich is great as long as they want to stay in the USA. Or maybe they get more loophole/avoidance savvy and not pay these taxes anyway. Further.. if it gets to the point of diminishing returns (of staying), I would think many would want to move elsewhere. Then there goes your tax base and the increased benefits for the poor will be paid for by whom? (ie Detroit)

[jacob]

Garbage, shoveled at the public that isn't supposed to know any better.

... or ... don't like to be reminded that they don't know any better?

Anti-intellectualism is pretty strong these days so woe be unto any person who attempts to talk to people as if they [the people] were intelligent. Even I know this much---I just ignore it, but that's mainly because I'm not trying to get elected or win a popularity contest.

[Riggerjack]

Well, maybe. Seems to me that the undecided at this point are the reality TV watching, drooling Masses. That was clearly the audience the "debate" was aimed at.

By now, anyone who is interested, has chosen a side, or tuned out, so they wouldn't be worth courting.

My fault for watching.

[stand@desk]

http://www.zerohedge.com/news/2016-09-2 ... -cars-pile

A perfect case in point. Higher taxes in Connecticut and the big players move to Florida. The rich pay attention to taxes and defend themselves against them. They don't just say ok sure whatever..they act.

[George the original one]

Oh, gee, a zerohedge article "on topic" shows up the day after the debate? Better recognize when you're being manipulated.

[black_son_of_gray]

The taxes on the very wealthy go way up and they leave or leave certain US states with the higher taxes...Taxing the rich is great as long as they want to stay in the USA. Or maybe they get more loophole/avoidance savvy and not pay these taxes anyway. Further.. if it gets to the point of diminishing returns (of staying), I would think many would want to move elsewhere. Then there goes your tax base and the increased benefits for the poor will be paid for by whom? (ie Detroit)

I'm curious about this - is it really true? Would large numbers of wealthy people really pick up their lives and leave a place just to maintain a higher income? There have been many years in the past where the highest marginal tax rate has been 70+% ... is there any data on people leaving because of it?

I ask because I assume that many of the wealthy have assets or family or businesses tied to specific locations - just moving away isn't so easy for them.

[Dragline]

Well, zero hedge is at least three people now generating articles for a particular audience of advertisers seeking a particular set of eyeballs. Those guys make bank, though -- they have good business model for the internet infotainment age, even if it is of the broken clock variety.

The "logic" or impetus of that article would have dictated that these folks would have moved the whole town to Florida a generation or more ago. Query why they did not. There is no governmental economic policy reason why any of the financial industry stays where it is located in NYC or the surrounding communities. They stay because they have built an infrastructure of industry and talent there that continues to attract, in spite of higher taxes and regulations. The Hamptons are the Hamptons, Jeeves. The fact that it remains there completely falsifies this theory that governments tinkering with economic policies around the edges has any significant or immediate effect. It's only one small factor of many.

But more critically, why don't they all move to Kansas? They are running the ultimate governmental economics policy experiment in that state right now, which supposedly will attract all manner of business activity. It's practically Galt's Gulch there. But they are not getting any significant takers because this policy crap is just overblown nonsense that is only a small factor in decisions about where businesses locate or relocate.

[Dragline]

I'm curious about this - is it really true? Would large numbers of wealthy people really pick up their lives and leave a place just to maintain a higher income? There have been many years in the past where the highest marginal tax rate has been 70+% ... is there any data on people leaving because of it?

I ask because I assume that many of the wealthy have assets or family or businesses tied to specific locations - just moving away isn't so easy for them.

No, what they do is create corporate structures or trusts in various places to shield assets to the extent possible. But they do not actually move for the most part. This explains real estate prices in the most popular wealthy cities.

[jennypenny]

I don't have an opinion on taxes without knowing the details. Arbitrarily raising or lowering taxes is pointless. What are the taxes or tax breaks meant to accomplish and how are we going to guarantee that they have the desired outcome?

If taxes are going to go up, what will it be spent on specifically? If it's for infrastructure, expanded health care, or energy transition, then I'm in. If it's for another war, expanded welfare spending, or debt reduction, then I'm not. IMO the first three require capital outlays, the second three could/should be addressed by fixing the root causes of those problems.

If we're going to lower taxes for businesses, what are we going to get in return? Will we require businesses to locate in certain areas, pay a minimum wage, lower executive pay, comply with tighter environmental standards, or convert to renewable energy sources? Could we tie tax rate to compliance level with new standards? If we lower taxes on the wealthy, what do we get in return? Luxury or consumption taxes? Required community service or civic participation? Required environmental standards on homes and other personal property? Make them take the standard deduction on their taxes?

I'm not so dogmatic about taxes that I couldn't be talked into either arrangement if it was the most productive.

[stand@desk]

http://blog.dilbert.com/post/1509194166 ... clinton-to

From Scott Adams Blog, the creator of Dilbert..

On the topic of Higher Estate Taxes from Hillary..

"Yes, I can do clever things with trusts to avoid estate taxes. But that is just welfare for lawyers. If the impact of the estate tax is nothing but higher fees for my attorney, and hassle for me, that isn’t good news either."

So that goes back to my point if you raise the taxes on the Wealthy, they find new clever ways to avoid. More work for lawyers!! So lawyers get the work and the effect of the new policy is muted. They had a similar plan in Canada to tax the wealthiest harder to give a break to the middle class but later realized this new tax income from the highest earners would have a minor effect so they just paid for the tax break by taking on new debt. I'm just saying the tax the wealthy system isn't as easy as it sounds.

[jennypenny]

I understand your point very well S@D having been executor on my parents' estate. It was beyond frustrating to see how much money was skimmed from their estate for who knows what when that money could have been used by their heirs for better purposes (including tuition since two of my siblings were still in college).

Still ... here is the rest of what Adams said ... "I oppose the estate tax because I was born to modest means and worked 7-days a week for most of my life to be in my current position. (I’m working today, Sunday, as per usual.) And I don’t want to give 75% of my earnings to the government. (Would you?)"

I share his sentiment. We've also worked very hard and lived well below our means to accumulate what we have, and it pains me to think that my children won't get half of it. However, I also know a lot of people who've worked just as hard as we did (and Adams) who haven't had the success we've had. Adams was born to modest means, but he is also very intelligent and has a couple of degrees IIRC. He also avoided being born in an inner city, or in the south, or dirt poor, or to minority parents -- all of which would have lessened his chances of being successful despite his work ethic.

I totally get it, and like I said, I would want to know EXACTLY what that money would be used for. I'm also open to other taxes that might extract the same amount of money like consumption taxes on luxury goods. I'd love to see an overhaul of the tax system which would probably fix some of the tax inequities and produce more revenue without raising rates. I'd also like to see policy changes to promote job growth instead of welfare spending, which would increase tax revenue. And my first instinct is always to lower spending (just like it is in my personal life).

I still think his argument is flawed, though. There are a lot of good arguments against such a large increase in estate taxes, but I don't think "I worked hard" by itself is one of them when it comes to estates over $5 million. An estate that large means you not only worked hard but your work paid off, and you also managed to avoid big financial pitfalls and major health issues that would have drained that estate before your death. That's a little lucky, too.

[Dragline]

You know, I wouldn't take Adams very seriously. He seems to be playing for attention and/or laughs, I'm not sure which. E.g.: "Likewise, Bill Clinton seems to be in bad shape too, and Hillary wouldn’t be much use to the country if she is taking care of a dying husband on the side." That sounds like late-night talk show monologue material.

But query why he chooses to live in a high-tax state like California if he really feels so put upon -- his business is not even location dependent. Shouldn't he have moved years ago under the theory that tax policy is the primary driver in financial decision-making?

[jacob]

@Dragline - BATS (which is the third largest equity exchange company after NYSE and NASDAQ) is in Kansas. If you're using a budget broker, your trades are probably done through them. More generally, what is called "Wall Street" is de facto all over the place. In some ways the old power centers (NYC, Chicago, and SF) just serve as customer offices and TV studios; whereas a lot of the rest is moved into the burbs and/or smaller big cities all over the rest of the country (e.g. Houston, Philadelphia, Kansas City, Los Angeles...) . It sort of depends whether you're working for a company that likes the prestige of a fine address or whether they'd rather be anonymous.

In any case, all that stuff about millionaires leaving is nothing new. Google "millionaires leaving" and you'll find they do it for all kinds of perceived reasons, typically interpreted through some thinly disguised political lens. It's kinda like looking at the credit crises. People look at the part they relate to: It's the taxes. No, it's the crime. No, it's the weather.

Whereas b/millionaires probably just leave because they can more easily do so than can a middle class salary couple. They're highly mobile. Goes with the whole globalization thing. If they want to emigrate, they can easily get a visa either through skills or simply paying for it. Whereas the rest of us peons have a much harder time if it's not outright impossible.

[Riggerjack]

Money is mobile. It doesn't require moving residence to move money. If you have entyof money, there is no reason to not live where you want to live, and put your money where it does the most good.

WA has a nasty estate tax for big estates, but the argument for keeping it, when it came up in a referendum was that it only hit less than 400 estates per year. Those are the poorly planned estates, usually deaths by misadventure. There is no shortage of money here, but if you have a 5 million dollar estate, lawyers are cheaper than giving half to WA state, before the IRS takes their bite.

The Telecom I work for moved call centers to Utah, because it was cheaper than overseas.

Boeing started in Seattle, but opened a competing 777 plant in SC, for taxes and to have negotiating power with the state and Union. If a tax break isn't extended,they say, fine. We will expand SC. Strike? Not in SC. Duplicate tooling costs many millions, but is more than made up in B and O tax savings.

Tax policy matters. But it isn't the only factor.

Currently, we have the world's highest corporate tax rate, at 35%. The result is that corporations have strong incentives to pay congressmen to keep their loopholes. I can't believe this is coincidental.

[BRUTE]

I don't have an opinion on taxes without knowing the details. Arbitrarily raising or lowering taxes is pointless.

brute thinks about it a bit differently. a tax is basically the government saying "humans are going to spend this money less effectively than the government would, thus we'll take it from them and spend it better". thus, in brute's opinion, the government is under continued obligation to prove this assumption is correct.

brute would like something where all taxes were temporary, and the government had to prove to the taxed that they're still a better steward of this money. it'd also be nice if the tax bill was itemized so tax payers could pay for what they thought was good use of their money, instead of having to pay everything together. this would prevent these types of "unless we receive money for subsidizing corn and wheat and 3 more wars, there won't be roads tomorrow and little old grannies are going to be raped by Mad Max type criminals who are literally on fire".

[chenda]

I don't have an opinion on taxes without knowing the details. Arbitrarily raising or lowering taxes is pointless.

brute thinks about it a bit differently. a tax is basically the government saying "humans are going to spend this money less effectively than the government would, thus we'll take it from them and spend it better". thus, in brute's opinion, the government is under continued obligation to prove this assumption is correct

Like by holding regular elections ?

[Dragline]

"Taxes are the price we pay for a civilized society."

"A Constitution is not intended to embody a particular economic theory . . . It is made for people of fundamentally differing views, and the accident of our finding certain opinions natural and familiar, or novel, and even shocking, ought not to conclude our judgment upon the question whether statutes embodying them conflict with the Constitution of the United States."

-- Oliver Wendell Holmes