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Renegade

Trump's Trade War

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I like free trade.  But, I have to concede, China doesn't play fair.  So, what to do about that?  Trump seems to think we hold the best cards because we import more than they do.  If we keep upping the ante on this trade war, it hurts them more than us.  But, we still get hurt.  Like any other war, both sides take losses.  Just look at the stock market.  I'm supposed to retire next week.  This isn't cool.

 

I've been trying to think how this might play out.  It undoubtedly means higher prices.   It should also mean increased employment eventually if we have to start making things for ourselves again.  Our farmers will probably export to some other country and then that other country will export to China.  I suppose the same thing could happen with their goods coming to the USA, but toys are easier to trace than soybeans.  It should be good news for Mexico and Canada.  If we lose our Chinese suppliers, these countries could pick up some of the slack.

 

The biggest problem is disruption.  Global supply chains will need to be rerouted.  Business HATES this.  They would rather give up their intellectual property than lose their supply chain.  These folks are going to put a lot of pressure on Trump (not sure if he cares) and the Republicans (not sure if they can do anything about it).  

 

The Chinese face the prospect of higher food prices and unemployment.  Both of those could cause instability, much feared by the Communist Party.  Why not give the Donald some cosmetic victory?  They could make some empty promises, reduce a few barriers, and cut a few subsidies.  Trump could crow even though nothing much changed.  He'd probably be willing to back down for that, right?

 

I wonder who will blink first.  I just want someone to blink.  I like getting cheap stuff.   

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3 hours ago, Renegade said:

I like getting cheap stuff

 

Cheap stuff made by slave labor in vast factories half a world away.  The seductive lure of low prices make the dark side of it is so easy for us to ignore.  And yet Chinese-made goods or goods with Chinese-made components are so ubiquitous, we probably all buy them.  I do. 

 

3 hours ago, Renegade said:

I wonder who will blink first.  I just want someone to blink

 

When the going gets tough, Trump has a habit of backing down.   There is no lack of examples: 

Trump backed down from the border wall funding requirement   https://www.nbcnews.com/nightly-news/video/pres-trump-backs-down-from-border-wall-funding-requirement-929486915818

Trump backed down in his row with Theresa May   https://www.telegraph.co.uk/news/2018/01/26/donald-trump-backs-britain-first-us-president-says-ready-apologise/

 

And many other instances:

  • He hasn’t fired Attorney General Jeff Sessions.
  • He hasn’t fired special counsel Robert S. Mueller III.
  • He signed the Russia sanctions bill.
  • He fired Michael Flynn (and seems to have regretted it ever since).
  • He reaffirmed our support for NATO.
  • He signed a budget resolution without funding for the wall.
  • He did not withdraw from NAFTA.
  • He now has singled out for condemnation the KKK, neo-Nazis and white nationalists.                                                                        

After all his bullying, bluster and braggadocio,  Trump is a weak man.  If a trade war with China threatens to heat up to the point where both nations are set to inflict heavy economic casualties, Trump, seeing that his bluff failed, will back down.  A plunging stock market will speed his characteristic vanishing act.  And  under pressure from both Republican and Democratic lawmakers, Trump will cave.  Whereas Xi Jinping can act, with relative autonomy.

 

3 hours ago, Renegade said:

I've been trying to think how this might play out.

 

It may very well turn out to be strictly an academic exercise.  I am guessing there will be no trade war.  I hope I'm right.:)

 

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creating unnecessary costs on U.S. consumers is no way to run a government. It would be great if instead the people in power could focus more on the people and the workforce here. 

The TTP was bad news due to how it was heavily laden with intellectual property rights and patents. If you want good trading partners you should be demanding environmental protection and workers rights, no, human rights, first and foremost. And the stock market wavers at the drop of the hat on just about any political move. You know, I thought silly as it seems, that the stock market was a way to invest in businesses that showed promise. I thought it could be a way for a good idea and strong leadership to generate capital. I had foolishly thought that that was it's sole intention. Of course that's utterly ridiculous. 

 

Peace!

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On 4/7/2018 at 8:14 PM, TheOldBarn said:

You know, I thought silly as it seems, that the stock market was a way to invest in businesses that showed promise.

 

What do you think now?

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On 4/6/2018 at 9:39 PM, bludog said:

 

Cheap stuff made by slave labor in vast factories half a world away.  The seductive lure of low prices make the dark side of it is so easy for us to ignore.  And yet Chinese-made goods or goods with Chinese-made components are so ubiquitous, we probably all buy them.  I do. 

 

I don't believe "slave labor" is an accurate description of Chinese industry.  Why do you use that term?  I am under the impression that their standard of living has improved considerably over the last 10 or 20 years.

 

On 4/6/2018 at 9:39 PM, bludog said:

When the going gets tough, Trump has a habit of backing down. 

 

It may very well turn out to be strictly an academic exercise.  I am guessing there will be no trade war.  I hope I'm right.:)

 

 

I hope you're right, but I'm worried.  He's on his third round of proposed tariffs now.  First it was $2 billion, then it was $50 billion, now it's $100 billion.  It's a shame we can't have a 'no confidence' vote.  

 

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13 hours ago, Renegade said:

I don't believe "slave labor" is an accurate description of Chinese industry.  Why do you use that term?  I am under the impression that their standard of living has improved considerably over the last 10 or 20 years

 

Remember the Mitt Romney leaked video of six years ago?   http://theinterrobang.com/mitt-romney-talks-about-using-chinese-slave-labor-to-profit-bain-capital/

He described a large Chinese factory to investors, in glowing terms, where the workers were held in slave-labor conditions.  These vile conditions are what attract investment.  Although there is a growing middle class in China, who are not factory workers, there is no indication that the vast Chinese industrial complex has changed in favor of the workers.   This is one of the main reasons why Chinese goods are so cheap.  True, they make a lot of shoddy and defective stuff.  Even poisoned foodstuffs.  But they also make quality products that are cheaper than anything made in the West. Slave-labor is the reason.

 

Not only are Western investment companies like Bain Capital interested in getting a piece of the action, but many Western manufacturers export their operations there to take advantage of the horrible pay and working conditions.

 

Even environmentally progressive companies like Patagonia have been caught profiting from human trafficking and worker exploitation.  In this case the location was Taiwan.   https://www.theatlantic.com/business/archive/2015/06/patagonia-labor-clothing-factory-exploitation/394658/

 

13 hours ago, Renegade said:

He's on his third round of proposed tariffs now.  First it was $2 billion, then it was $50 billion, now it's $100 billion.

 

I strongly suspect proposed is the operative word here.  And the Chinese have now made proposals in retaliation.  Trump has a long history of folding when his bluff is called.

 

Quote

I hope you're right, but I'm worried.

 

Of course, no sensible person, IMO, is taking this lightly.  I'm just saying that there's reason to be hopeful that a trade war won't happen, considering Trump's past record.

 

13 hours ago, Renegade said:

It's a shame we can't have a 'no confidence' vote.  

 

100% agree.  The parliamentary system of government is superior in that respect.

 

 

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Tariffs cause prices to rise. That disproportionately hurts the bottom rungs of society much more than those in the upper middle class and above. Poor people suffer. And since everything is interconnected when prices on one thing go up, prices on everything go up. If steel goes up, therefore vehicles go up,  therefore construction and delivery go up. And since the entire economy needs construction and delivery, everything goes up.

 

(Moreover, greed will make most merchants raise prices in excess of the rise in their costs, figuring correctly that everyone will do it.)

 

Since our prices will rise, our exports will drop. So there will be more unemployment. Again this hurts the lower rungs of the economy disproportionately.

 

Higher prices and more unemployment. That's what the Trump tariffs will give us if they're implemented.

 

18 hours ago, bludog said:

I strongly suspect proposed is the operative word here.  And the Chinese have now made proposals in retaliation.  Trump has a long history of folding when his bluff is called.

 

Higher prices and more unemployment.  So I hope Bludog is right, that Trump will back down and nothing will happen.

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On 4/8/2018 at 10:22 PM, bludog said:

 

Remember the Mitt Romney leaked video of six years ago?   http://theinterrobang.com/mitt-romney-talks-about-using-chinese-slave-labor-to-profit-bain-capital/

He described a large Chinese factory to investors, in glowing terms, where the workers were held in slave-labor conditions. 

 

Romney says the fence was to keep people out because "people want so badly to come work in this factory".  That doesn't sound like slave labor to me.  It sounds like an opportunity compared to what they would have otherwise had.  Just because the conditions don't meet your standards doesn't mean it's "slavery".  Slavery implies coercion by some means other than a paycheck.  Also, the factory he was describing was from "back in my private equity days", so somewhere between 1984 and 2001...probably at least 20 years ago. 

 

Even if the "slave labor" accusation was true at one point, and I'm not saying that it was, I think it's pretty obvious that those days are gone now.  

 

chart-china-income.top.gif

 

ChinaSpecialNoteChart1.png

 

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Then why do Chinese products remain so cheap?

 

The working conditions and pay Romney touted the potential investors at the meeting, were inhumane by any standard, not just mine.  Do you think the pay and conditions Romney was describing with delight are humane?  China has an income boom, but, similar to the USA, it's happening mostly at the top. 

 

Romney was specifically trying to lure investors with low pay and working conditions.  "Back in my private equity days" sounds like a self-indulgent, nostalgic condeit.

 

If factory conditions and pay have significantly improved, I would like to see evidence of that.

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On 4/9/2018 at 5:15 PM, laripu said:

Tariffs cause prices to rise. That disproportionately hurts the bottom rungs of society much more than those in the upper middle class and above. Poor people suffer. And since everything is interconnected when prices on one thing go up, prices on everything go up. If steel goes up, therefore vehicles go up,  therefore construction and delivery go up. And since the entire economy needs construction and delivery, everything goes up.

 

(Moreover, greed will make most merchants raise prices in excess of the rise in their costs, figuring correctly that everyone will do it.)

 

Since our prices will rise, our exports will drop. So there will be more unemployment. Again this hurts the lower rungs of the economy disproportionately.

 

Higher prices and more unemployment. That's what the Trump tariffs will give us if they're implemented.

 

Higher prices and more unemployment.  So I hope Bludog is right, that Trump will back down and nothing will happen.

 

I agree with most of this, but I'm not so sure about the employment part.  We currently import more than we export and have a 4% unemployment rate.  If all trade were to cease, you'd think we would need to employ more labor to make up for the missing imports than we would free up by losing exports.  Look at the people in North Korea who are forced to exist with almost no foreign trade (similar to the effect of very high tariffs).  They're poor as dirt, but they're not unemployed.  They have to work very hard to supply all their needs without trade.

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Posted (edited)
17 minutes ago, bludog said:

Then why do Chinese products remain so cheap?

 

It's all relative.  That $3,000 per capita disposable income number for China compares to $39,000 for the USA.  They're 4 times as rich as they were 20 years ago, but we're still 10 times as rich as they are today.  So, they can get a raise and work at what is, for them, a very nice job and still turn out products that look 'cheap' to us.

 

p.s.  I think the Chinese disposable income number has doubled again since 2010 (the end of the chart above).  That would mean that we're only 5 times as rich.  A few more decades and Chinese stuff won't be cheap anymore.

Edited by Renegade
more data

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11 hours ago, Renegade said:

A few more decades and Chinese stuff won't be cheap anymore.

 

Most likely true.  And if current trends continue, the reasons will be twofold:---  Improving conditions for ordinary Chinese people and deteriorating conditions for ordinary Americans.

 

In the meantime, I would like to see evidence that pay and working condition have improved for Chinese factory workers, who comprise a very large part of the employed population in China.  Charts showing growing income and decreasing poverty do not reflect which sector of the population is raising the average.

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12 hours ago, Renegade said:

 

I agree with most of this, but I'm not so sure about the employment part.  We currently import more than we export and have a 4% unemployment rate.  If all trade were to cease, you'd think we would need to employ more labor to make up for the missing imports than we would free up by losing exports.  Look at the people in North Korea who are forced to exist with almost no foreign trade (similar to the effect of very high tariffs).  They're poor as dirt, but they're not unemployed.  They have to work very hard to supply all their needs without trade.

 

When a company that exports closes its doors, it's not only that work that's no longer done.  The suppliers to that company no longer supply.  The people at that company no longer hire others for services (e.g. child-care, cleaning, repairs, etc). And each of the suppliers or service companies may lay off people, and that trend continues until a new stable point is reached.

 

So yes, tariffs will lead to unemployment. It's not 1 to 1, but there will be more jobs lost than created. Also the jobs created will be lower value jobs, resulting in less tax revenue and therefore less money available for government services.

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8 hours ago, laripu said:

 

When a company that exports closes its doors, it's not only that work that's no longer done.  The suppliers to that company no longer supply.  The people at that company no longer hire others for services (e.g. child-care, cleaning, repairs, etc). And each of the suppliers or service companies may lay off people, and that trend continues until a new stable point is reached.

 

So yes, tariffs will lead to unemployment. It's not 1 to 1, but there will be more jobs lost than created. Also the jobs created will be lower value jobs, resulting in less tax revenue and therefore less money available for government services.

 

I have two rebuttals...  First, if we import fewer washing machines for example, that would result in unmet demand.  Washing machine factories in the USA (such as the one in Newberry South Carolina) can profit by increasing production to meet that demand.  Increased production would create additional jobs, not only at the company expanding production, but also at each of their suppliers.  That would also increase demand for other services (e.g. child-care, cleaning, repairs, etc.).   So, it's not clear to me why lost exports cause more jobs to be lost than are created by increased domestic production needed to replace lost imports.

 

Which brings me to number two.   Let's say we lose $100 billion in exports due to tariffs.  The labor component in those exported goods is probably smaller in hours (remember our labor is expensive) than the labor component in the $100 billion of imports we don't buy (because their labor is cheap).  So, replacing the lost imports would take more labor hours than was freed up by the lost exports.   

 

Dollar for dollar, reducing trade should put increased demand on our labor market.  If the powers that be get really carried away and end all trade between the two countries, it wouldn't even be an even dollar for dollar loss since we buy more from them than they do from us.  The whole reason for trade is efficiency.  If we lose efficiency by not trading, that means we need more labor to achieve the same output.  

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10 hours ago, bludog said:

 

Most likely true.  And if current trends continue, the reasons will be twofold:---  Improving conditions for ordinary Chinese people and deteriorating conditions for ordinary Americans.

 

In the meantime, I would like to see evidence that pay and working condition have improved for Chinese factory workers, who comprise a very large part of the employed population in China.  Charts showing growing income and decreasing poverty do not reflect which sector of the population is raising the average.

 

When you were offering evidence of slave labor, you sourced a republican politician speaking to fundraisers.  What can I use as proof?    I can produce any number of charts showing increased average income and I think the charts of decreasing poverty show that it's not just a case of a few rich guys raising the average. 

 

Here's a chart of their Gini coefficient:

china-2017-oecd-economic-survey-more-res

 

I don't mean to imply that China some sort of utopia.  I just don't think it's full of shackles and chain gangs either.   So, I don't mind actually like trading with them, so long as they respect the rules. 

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Decreasing income inequality is evidence, of sorts, that living standards must be rising for those at lower income levels.  Still, one would think that if real progress was being made in favor of factory workers, the Chinese government would be eager to publicize it.  Yet, as you indicated above, it is extremely difficult to come up with any specific information on improving pay and conditions for factory workers.  And the Chinese factory complex is vast.

 

The only evidence available still seems to be critical of worker treatment.  And there is plenty of it.

 

Just a small sample of articles no more than one year old:

Quote

 

Jan 7, 2018 - A US-based Chinese workers' rights organisation has claimed that a factory worker at a firm that produces Apple's iPhones in China, died after jumping from a building on Saturday. China Labor Watch (CLW) said that Li Ming, 31, jumped to his death from a building in the city of Zhengzhou, in the ...
 
Jan 16, 2018 - At a Catcher Technology Co. manufacturing complex in the Chinese industrial city of Suqian, about six hours' drive from Shanghai, workers stand for up to 10 hours a day in hot workshops slicing and blasting iPhone casings for Apple Inc., handling noxious chemicals sometimes without proper gloves or ...
 
Working Conditions Still Poor for China's Factory Workers, Says Watchdog Organization. By Annie Wu, Epoch Times. November 30, 2017 9:32 am Last Updated: December 6, 2017 8:37 pm. A Chinese worker paints unfinished licensed ceramic "Smurfs" at a factory in Dehua County, Fujian Province, China on December 7, ...
 

    CHINA 2017/2018. The government continued to draft and enact new laws under the guise of “national security” that presented serious threats to human rights. .... In May, labour activists Hua Haifeng, Li Zhao and Su Heng were detained in Jiangxi province while investigating work conditions at Huajian shoe factories.

     

     

    A Google search for  "Improving factory conditions in China" turned up only one mostly positive article with many negatives.  The rest of the articles this search yielded were about how poor conditions and pay are.  Here is the positive article:

     

    https://thediplomat.com/2015/02/chinas-changing-labor-conditions/

    Quote

     

    China’s Changing Labor Conditions

     

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    I also googled  "Increasing labor union participation in China".  Most of the what's known shows that despite sporadic union incursions, large numbers of Chinese workers don't know what a union is.  And, as of yet, there is no place in China where a union has been strong or successful.

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    8 hours ago, bludog said:

    I also googled  "Increasing labor union participation in China".  Most of the what's known shows that despite sporadic union incursions, large numbers of Chinese workers don't know what a union is.  And, as of yet, there is no place in China where a union has been strong or successful.

     

    That's my main gripe with China...a lack of freedom.  Their internet is heavily censored; their education comes with a heavy dose of brainwashing; and they can't form any sort of association (such as a union) that could conceivably challenge the Party's authority.    Workers aren't slaves to the factory or the company, even at state owned enterprises, but they have no political freedom.  

     

    Conventional wisdom said free trade would undermine the authoritarian nature of their government and lead to something more democratic.  Conventional wisdom was wrong.  Apparently free enterprise can prosper just fine without political freedom.

     

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    On 4/8/2018 at 6:20 PM, Renegade said:

     

    What do you think now?

    I think it has to do with big banks finding creative ways to bring in the most returns for their investors, and also for themselves, and little to do with investment in America. 

    It is actually not good for competition. The money managers make money for themselves and the richest investors, and yes, they do get far richer. And this amounts to 

    an incredible disparity between the rich and the poor, and a diminishing middle class. It also creates more and more recessions and more and more loss of stability in the economy.

     

    Right this very moment in time, a financial snapshot in time if you will, the payment on the national debt as a percentage of GDP is the lowest it has been in decades, and yet, 

    the Right focuses only on the future deficit instead of trying to grow a stable economy. This won't last forever, if the right has its way however.

    Their mantra focuses on destruction of the social contract regarding social security and healthcare. And we aren't even talking yet about rebuilding our crumbling infrastructure.

     

    Yes, trade is good. Your country makes something on its own efficiently and trading makes perfect sense for both parties involved. This is not what is happening with globalism 

    just now. Not even close. And the reasons are clear.

     

    Peace!

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    20 hours ago, TheOldBarn said:

    Right this very moment in time, a financial snapshot in time if you will, the payment on the national debt as a percentage of GDP is the lowest it has been in decades, and yet, 

    the Right focuses only on the future deficit instead of trying to grow a stable economy.

     

    Interest on the debt consumes about 6.8% of our federal budget.  That's while paying an average interest rate of 2.3% (Pew Research).   I'm having a hard time believing these low rates can last.  Historically, rates were often much higher.

     

    200-YEARS-US-GOVT-BONDS.png  

     

    With $19.8 trillion in debt, every percentage point that interest rates go up means we have to pay an additional $198 billion in interest payments every year forever.  That's money down the drain with nothing gained in return.  For now, as long as it lasts, we just borrow more money to make the interest payments.  In 2018 we will borrow over $800 billion out of $4.1 trillion spent.    

     

    Do you think we're investing those borrowed dollars wisely?  I don't.  I'm afraid that when you borrow money and blow it, you end up broke.  Of course our politicians only care about the next election.  Raising taxes or cutting spending would be a political disaster for whichever party did it.  So, they play chicken with the economy.  Republicans say "I dare you to raise taxes.  If you do, we'll kill you at the polls."   Democrats say "I dare you to cut spending.  If you do, we'll take all three branches."   Nope, it's not gonna happen.  We're going to borrow some more money.

     

    It's our fault.  As voters, we only care about 'me' and 'right now'.  We elect politicians who give us instant gratification, future be damned.   

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    3 hours ago, Renegade said:

    .Republicans say "I dare you to raise taxes.  If you do, we'll kill you at the polls."   Democrats say "I dare you to cut spending.  If you do, we'll take all three branches."   Nope, it's not gonna happen.  We're going to borrow some more money.

     

    Except that Republicans do cut spending, on everything that might benefit or make life easier for poor people. Instead, they spend on stuff that will make rich people richer. Private prisons. Military adventures.

     

    And Democrats do raise taxes, mostly on rich people.

     

    But if we really wanted to eliminate the yearly deficits and pay off the debt, we'll have to raise taxes on everyone, with a sharply progressive tax, and cut spending by curtailing the military. We have to put the country to work rebuilding our crumbling infrastructure, raise teacher salaries, and put computers and Internet in every home.

     

    We need government that puts the needs of ordinary folks above the needs of people with $100 million and more in net worth, the top 0.5%.

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    This   ^    ^    ^                                    

    ===========================================================================================================

     

    Usually Democratic administrations tend to balance the budget and when the Republicans prevail again, they use their $$$superior$$$ command of the media trying to take credit for the improved economy.  When Republicans wreck the economy again and a new Democratic administration takes power, the Repugs use the same ploy trying to blame the Democrats for a colossal deficit ...  GOP disinformation as usual.

     

    http://politicalticker.blogs.cnn.com/2010/02/03/cnn-fact-check-the-last-president-to-balance-the-budget/

    Quote

    CNN Fact Check: The last president to balance the budget

    CNN's Jim Dexter

    (CNN) - President Obama declared on Wednesday that Democrats can be trusted on the budget because, "the last time the budget was balanced was under a Democratic president."

    Fact Check: Who was president the last time the budget was balanced?

    - snip -

    - Democrat Bill Clinton was president in 1998, when the government finally recorded a surplus.
    - There also were budget surpluses in 1999, 2000 and in 2001. 2001 was the last year the Clinton administration proposed the budget.
    - Republican George W. Bush succeeded Clinton in 2001. The United States had a budget deficit in 2002, and it has recorded budget deficits every year since.

     

     

     

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    Here's a tax proposal. I doubt it will work, because I haven't run the math details; but anyway let's have some discussion.

     

    Here are the assumptions.

    1. Social security and Medicare for all should be sacred trusts and maintained.

    2. All post-deduction income is equal. So all income should be taxed at the same level, whether it's labor income or investment income.

    3. There should be deductions allowed if you had to spend money to make money.  That could be rent for your store, but also clothing because you have to get dressed to go to work. Tools and safety gear should be deductible if you have to pay for it yourself (e.g. if you are a small renovations contractor). Transportation should be deductible. All of the above need to be within reason. Ivanka and her cohort can't deduct high-end jewelry or Sevruga caviar.

    4. Families and dependents should be deductible within reason. Private schools shouldn't be deductible if there are public schools available; unless it's special education or advanced learning for geniuses. All college tuition should be deductible.

    5. State and local taxes should be deductible at the federal level, except sales taxes.

    6. Post-deduction income should be taxed according to the percentile of that income. Post-deduction income in the bottom 5 percentile should be taxed at no more than 5%. The top marginal rate, whatever it is, depends not on fixed amount but on percentile. At 99.99 percentile, it should be 90%. At the 90th percentile, it should be 50%. So Gates and Bezos will pay top dollar on their top dollar; so to speak.

    7. To save money, there should be a moratorium on any foreign conflicts not explicitly declared as war by Congress and not stemming from a direct attack.; the president may not deploy military into foreign countries unless we are attacked or Congress declares war.. This moratorium should expire only when there has been no more debt for 16 years running; intervening debt restarts the clock. Any war explicitly declared by Congress should be matched with tax increases to pay for it over time, but no longer than 16 years starting from the end of the current Congress.

     

    What do you think?

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    It's a great compendium of proposals, Laripu, but it would take a government comprised of people of good will to implement them.

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    On 4/15/2018 at 9:02 PM, laripu said:

     

    Except that Republicans do cut spending, on everything that might benefit or make life easier for poor people. Instead, they spend on stuff that will make rich people richer. Private prisons. Military adventures.

     

    And Democrats do raise taxes, mostly on rich people.

     

    Show me.   Here's what I see.  Taxes only go down.

     

    US_Effective_Corporate_Tax_Rate_1947-201

     

    0a1a01aef1d228a6b4269df0b4029927.jpg

     

    And spending only goes up.

     

    spending-GDP-chart1.png

     

    cbo-chart-medicare-medicaid-obamacare_su

     

     

    I could post charts all day long, but I think you can see why I am skeptical.  These charts don't even show the most recent set of tax cuts (Republicans) and spending increases (bipartisan).  Both parties take turns in office.  Both parties give lip service to 'taxing the rich' or 'cutting spending', but they don't follow through.  Over time, taxes go down and spending goes up because that's what wins votes.  

     

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