tag:blogger.com,1999:blog-582368152716771238.post9152544280591150251..comments2024-03-28T05:14:02.071-05:00Comments on The Grumpy Economist: Strassel insight, and cheers for a long speaker tussleJohn H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-582368152716771238.post-57887981070405608862023-02-06T15:16:27.097-06:002023-02-06T15:16:27.097-06:00Given that the administrative state is already out...Given that the administrative state is already out of control, term limits on elected officials would only make the problem worse. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-88900648195931133802023-01-11T00:39:19.999-06:002023-01-11T00:39:19.999-06:00Two comments:
First, Berkshire isn't just a ...Two comments: <br /><br />First, Berkshire isn't just a stock trading company. It wholly owns and operates some of America's most successful companies, including BNSF, See's Candies, GEICO, Duracell, Fruit of the Loom and dozens of others. Buffet and his team actively manage these companies. <br /><br />Second, the "what-buffet-bezos-musk-pay-in-taxes" fetish is flat out weird. People who indulge in this fetish seem to believe that there's only so much money and buffet-bezos-musk are hording it. Reality is the opposite: buffet-bezos-musk's companies are literally creating billions of dollars and pumping it out to ordinary Americans even *before* they pay a cent in taxes. <br /><br />1) All of these companies operate in dozens of countries and much of that revenue flows back into the US via the salaries of their professional staffs who work here. <br /><br />2) the reason they operate in dozens of countries is because they provide some of the best products and services in the world, and they do so with unusual efficiency. They're making consumers wealthier by providing better products and services than the companies that came before them. <br /><br />That's how buffet-bezos-musk got rich. By creating wealth, not by hording it. The products and services of the companies they lead or led enrich others. IOW, they have **already shared a massive proportion of the wealth they created**. <br /><br />So while it makes sense that they share in the national tax burden, there's no reason they should have to share disproportionately from the profits generated by products and services which are *already sharing* substantial wealth with almost everyone in the world. Jimnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-38757939968712668252023-01-10T10:32:15.515-06:002023-01-10T10:32:15.515-06:00J. Powell has explicitly ruled out an expanded rol...J. Powell has explicitly ruled out an expanded role for the Federal Reserve Bank system: “Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals,” he said. “We are not, and will not be, a ‘climate policy maker.’” quoted in The Wall Street Journal article titled "Jerome Powell Says Bringing Down Inflation Could Fuel Political Opposition -- Fed chair highlights importance of central-bank independence", by Nick Timiraos, January 10, 2023.<br /><br />Time to revisit the role of the FRB in the federal government?Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-5735594974498051232023-01-09T14:15:13.270-06:002023-01-09T14:15:13.270-06:00The VAT system in Brazil is notoriously complicate...The VAT system in Brazil is notoriously complicated, involving several different tax bases and tax rates. The idea, in general, would be that products such as food pay a lower rate than alcoholic beverages. And even within food items, bread might have a lower rate than ice-cream.<br />But this is a rabbit hole, and things get way too complicated in the real world. What is the difference between "normal" bread and a croissant, for example? Brazilian courts are packed with these fights between companies and the revenue service.<br />Tax reform is always top of mind when it comes to the political debate, but alas so far at least the country may present a guide on how not to implement a VAT scheme.<br />Otavio Augusto Mazzarolonoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-82342825453236685042023-01-08T08:04:11.668-06:002023-01-08T08:04:11.668-06:00I am curious why, John, you are against term limit...I am curious why, John, you are against term limits? It strikes me as yet another pearl of wisdom originating from our founding fathers, who did not believe politics should be a career profession.<br /><br />If you subscribe to the view that our system relies on expert politicians to succeed, then that runs counter to Milton Friedman's desire for a designed system that is meant to be idiot proof.James Carlylehttps://www.blogger.com/profile/06778250145758547603noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-52565135621499873852023-01-08T08:00:03.233-06:002023-01-08T08:00:03.233-06:00If the money he doesn't spend in consumption e...If the money he doesn't spend in consumption ends up in savings, just why is that a bad thing? James Carlylehttps://www.blogger.com/profile/06778250145758547603noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-55764841086504400562023-01-08T04:54:05.552-06:002023-01-08T04:54:05.552-06:00N.Z. collects a goods & services tax on purcha...N.Z. collects a goods & services tax on purchases (with some exceptions) and an income tax at graduated rates on N.Z. residents' world-wide income. N.Z.'s top income tax rate is 39%. N.Z.'s goods and services tax rate is 15%. Thus, N.Z. has both a consumption tax and an income tax that are paid by residents of that country. Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-78030350801915159892023-01-07T19:03:25.618-06:002023-01-07T19:03:25.618-06:00To tax what we consume as opposed to what we earn ...To tax what we consume as opposed to what we earn (income) or have saved and invested (wealth) is not so different on average, since we earn and save in order to consume (or to help heirs do that). The issue is all about minimizing tax-induced disincentives for lifetime effort, savings, business formation and risky creativity (entrepreneurship). Marginal decisions depend on marginal tax rates almost regardless of the tax base (like a consumption tax, our income tax already exempts a lot of retirement savings, unrealized capital gains and other non-labor income). The bigger advantage of a pure (New Zealand style) VAT is that the tax rate is flat and fairly low. The political propensity to put super-high marginal tax rates on those with proven ability to add to their future income is well-designed to discourage additions to national income - real GDP. Alan Reynoldshttps://www.blogger.com/profile/03322477711116513830noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-15968863175772202472023-01-07T16:39:12.188-06:002023-01-07T16:39:12.188-06:00V.A.T. (value-added tax) is usually set at one rat...V.A.T. (value-added tax) is usually set at one rate and applies to all products and services, except for essentials such as groceries. The way most V.A.T. schemes work is that at each production level the V.A.T. is applied to selling price. The V.A.T. is collected from the purchaser at point of sale by the seller. The seller paid the V.A.T. on the inputs (other than labor) used to produce the goods and/or services, and deducts the V.A.T. paid on those inputs from the V.A.T. seller collected from the purchaser at the point of sale. The difference is the tax on the value-added by the seller. The seller remits this difference to the government. V.A.T. applies to services as well as to goods and commodities. Exports are generally zero-rated for V.A.T.; the exporter recovers the V.A.T. he paid domestically for the export goods by a remittance application to the government of the V.A.T. paid. V.A.T. applies to goods imported, and is remitted by the importer to the government.<br /><br />V.A.T. systems are found in Canada, U.K., and the E.U. The rates range from 5% in Canada to 20+% in the U.K. and E.U. I am not aware of any V.A.T. system that has different tax rates for different goods or services, other than 0% for exported products and exemptions for groceries, and (in Canada, real estate) other than new construction real estate where the V.A.T. is graduated, i.e., progressive, based on the selling price of the property.<br /><br />There is no evidence that a V.A.T. "forces people to save more" or instill "more incentive for business to produce the necessities but not so much into luxury or unnecessary goods." Businesses pass the V.A.T. through to end consumer by the virtue of the mechanism of "value-added". Certain administrative exceptions are provided for, such as in Canada where a small business that does not exceed a specified threshold in terms of annual dollar-volume revenue is exempt from registration with the Canada Revenue Agency. This reduces the administrative burden on imposed by the V.A.T. scheme on small business owners, typically proprietorships or small partnerships. But, the non-registered business cannot recover the V.A.T. that it pays for the inputs used to make the products or deliver the services that the non-registered business sells to its customers.<br /><br />The U.S., if it adopts a V.A.T., would likely follow the established practices prevalent elsewhere around the globe where V.A.T. systems are in effect, for administrative convenience and efficiency.Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-25683154194385932092023-01-07T11:06:00.196-06:002023-01-07T11:06:00.196-06:00“ I'm a policy wonk, but I care very little ab...“ I'm a policy wonk, but I care very little about politics, who is up and who is down.”<br /><br />You could have fooled me, John. : )Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-12083033769473753122023-01-07T09:06:36.287-06:002023-01-07T09:06:36.287-06:00You can tax different rates on different goods and...You can tax different rates on different goods and services for consumption tax, usually the lower for the more necessary. So this wouldn’t really hurt the middle and lower income classes. Consumption tax is goos because it forces people to save more and more incentive for business to produce the necessities but not so much into luxury or unnecessary goodsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-36943858481601513692023-01-07T08:25:32.257-06:002023-01-07T08:25:32.257-06:00How about we TAX all non-profits where ANYONE gets...How about we TAX all non-profits where ANYONE gets $100k+ Hospitals, colleges, non-profits giving millions to SINGLE individuals are VERY PROFITABLE...they should pay taxes. Also NO more tax deferral or tax shelters...you get money...you pay your taxes! No Generation skipping or $100 Million Dollar IRA, 529, trusts, etc Then we lower the rate and remove 98% of deductions. Guyhttps://www.blogger.com/profile/03057507938210279134noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-63208612124496913082023-01-07T08:22:20.736-06:002023-01-07T08:22:20.736-06:00so Warren Buffett who spends .00000001% of wealth ...so Warren Buffett who spends .00000001% of wealth per year on cheap meals and frugal ways on consumption is going to pay less taxes than average family of 4 making $100,000? Or are businesses going to pay a consumption tax....since COMPANIES are allowed to MAKE political donations like any individual? Guyhttps://www.blogger.com/profile/03057507938210279134noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-80425186381634274812023-01-07T08:18:05.638-06:002023-01-07T08:18:05.638-06:00a consumption tax is terrible. How about a 5% tax ...a consumption tax is terrible. How about a 5% tax on gross value all wall street financial transactions...stocks, bonds, options, derivatives....make wall street transactions about INVESTING....not churn! Guyhttps://www.blogger.com/profile/03057507938210279134noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-84326322838723426022023-01-07T08:17:48.091-06:002023-01-07T08:17:48.091-06:00A storm knows what it is doing. While it topples o...A storm knows what it is doing. While it topples old growth, it also makes way for new roots, and ultimately new blossoms. The roiling seas of Liberty work the same way. <br />Your observations, and those of whom you cite, are the most insightful I have come across regarding the Speakership vote and Israeli governance. Fghdcpnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-3774897891580755232023-01-06T19:20:57.086-06:002023-01-06T19:20:57.086-06:00We are going to get a consumption tax. That has al...We are going to get a consumption tax. That has already been decided. But, it will be in addition to, not in lieu of, the income tax.<br /><br />We have already spent the money. The tax will be paid. The only issue is what form it will take. Fat Manhttps://www.blogger.com/profile/09554029467445000453noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-63505267749256517082023-01-06T16:16:44.855-06:002023-01-06T16:16:44.855-06:00Federal government receipts as a fraction of nomin...Federal government receipts as a fraction of nominal GDP ranges around 16.5%. Personal consumption expenditures as a fraction of nominal GDP ranges around 67%. To replace all federal receipts by a ad valorum transaction tax and raise the same quantity of nominal dollars would require a VAT of around 24% with no zero-tax rated commodity exceptions.<br /><br />A practical VAT regime would have the VAT rate closer to 30% with zero-rated exceptions and administrative costs. State and local sales and use taxes would levied separately.<br /><br />For example, in the State of Washington, the state and local sales and use tax rate is around 10.8% (varies from locale to locale within the state). A federal VAT of 30%, say, and a state and local sales and use tax of 10.8%, would add 40.8% to the consumer's cost of goods and services (excepting zero-rated goods and services).<br /><br />Even at those tax rates, the budget would not be balanced. If FICA Medicare/Medicaid premiums are to be collected via the federal VAT regime, the VAT rate would be higher still. Possibly as high as 35%, for a total tax at the point of sale of 45.8% in Washington state, say.<br /><br />Such a change would greatly advantage high-income households and disadvantage middle-income and low-income households, especially the latter.<br /><br />Nations that have VAT regimes seldom attempt to replace their income tax revenues with VAT revenues.<br /><br />Expound on the advantages of the Republican proposal. Perhaps a business case can be made for it.Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.com