Ron Paul raises $3.5 million in 1 day

[Ramo]

They spend it on something, even if that's just stocks. VAT is not just a sales tax. It modifies, directly or indirectly, the price of every item on the market, because it applies to every step of economic activity.

A lot of that depends on the demand elasticity of the products that the firm in question creates. A lot of the VAT can be passed onto the next guy down the line (and ultimately the consumer).

Why before?

Because the government doesn't know you're going to buy a car next year. You could get a tax rebate at the time of the transaction, but then we get into that ridiculously complicated territory...

It would be just like the normal income tax, except just a few straight multiplies instead of tons of exemptions.

My tax process takes about an hour (half hour to double check). Keeping track of all my receipts and tallying them up at the end of the year would be horrendously longer. A huge waste of time. Huge new avenues for fraud as well. I don't see the upside.

It would also dramatically simplify the rest of the tax code.

That's independent of the switch from the income tax. You could have a simple progressive income tax if you wanted as well.

Hell, you could even do a sort of reverse automatic withholding.

I have no idea what that's supposed to mean.

[Imran Siddiqui]

As for your other points, I don't think Americans would mind paying more for a doll or an automobile if it meant they paid no incomes taxes and more Americans were employed in higher paying jobs.

Yeah, I doubt that. Especially since the cars, among other things, would be crappier (see: American made cars in the 70s, before the crappiness was so horrible that people were willing to pay through the nose for a decent Japanese car).

Tariffs would reduce their standard of living, as they tend to do. You are putting up barriers to competition, making sure that people get lesser quality goods and pay more for them (that's what lack of competition in goods does). I doubt Americans are going to like the idea of paying more for crappier goods when they are used to paying less for better quality goods.

And that competition is better for American companies. And if those companies don't survive, well, then they just weren't efficient or smart enough.

[Ramo]

Sure, goods that are currently imported from slave labor wage countries would go up in price. But no one is forced to buy those goods. If you think low prices on junk at Wal-Mart is economic heaven while American jobs keep going overseas - I would argue you are wrong. At least from an American perspective. But, as someone else said, it is great for China and India. I just can't imagine China and India purposely hurting thier economy to help ours.

As for determining wage rates and a fair tarriff - that would give something for all of the out of work IRS agents to do.

I don't like slave labor either, but there's a policing problem that's a bit hard to figure out. What if a company is in a country with crappy labor rights, but there's no evidence of any sort of coercion from the employer?

The only way you're going to get the sort of revenues needed is if you label vast amounts of the world as under slavery. Foreign trade is something like a quarter of the GDP, so if everyone's a slave and you say free labor is 20% more expensive, you might get to the income rate IIRC. 'Course, consumers aren't going to pay for these kinds of price increases, the economy as a whole would be ****tier, there'd be other problems. The short answer is that the numbers don't look like they add up.

[Deity Dude]

Originally posted by Imran Siddiqui

As for your other points, I don't think Americans would mind paying more for a doll or an automobile if it meant they paid no incomes taxes and more Americans were employed in higher paying jobs.

Yeah, I doubt that. Especially since the cars, among other things, would be crappier (see: American made cars in the 70s, before the crappiness was so horrible that people were willing to pay through the nose for a decent Japanese car).

I said I wouldn't penalize and advantage based on quality or productivity and I used the Japanese auto industry of the 70's as a perfect example. Obviously, you are having trouble reading.

Originally posted by Imran Siddiqui

Tariffs would reduce their standard of living, as they tend to do. You are putting up barriers to competition, making sure that people get lesser quality goods and pay more for them (that's what lack of competition in goods does). I doubt Americans are going to like the idea of paying more for crappier goods when they are used to paying less for better quality goods.

And that competition is better for American companies. And if those companies don't survive, well, then they just weren't efficient or smart enough.

Obviously you didn't read again. I am not against competition. I am for fair competition. If you can out compete given the same rules I am fine, but if you can pay your workforce 1/20 of what I pay mine, offer no benefits and house them all in dormitories I am not for that.

Once again so it is clear - I am for a fair wage tarriff only. Equalize the labor and labor related expenses on products thru a tarriff and let the rest of the chips fall where they may. - NO MORE NO LESS.

I also think your general premise that American standard of living would go down is blatantly wrong. I would argue the difference in prices on discretionary goods would be more than offset by the absence of taxes and more higher paying jobs.

I also don't agree that most Americans are so short sighted and selfish that they would mind paying a litlle more for products if they knew that we would have higher quality employment and a higher standard of living both here and worldwide.

[Kuciwalker]

A lot of that depends on the demand elasticity of the products that the firm in question creates. A lot of the VAT can be passed onto the next guy down the line (and ultimately the consumer).

People invested wholly in specific industries could benefit initially, yes, as no two different tax schemes are economically identical, but the market would quickly even things out. The benefitted stocks would just rise in value.

Because the government doesn't know you're going to buy a car next year. You could get a tax rebate at the time of the transaction, but then we get into that ridiculously complicated territory...

You would have the previous year's rebate, or a sort of rolling rebate in the same vein as withholdings on paychecks (just in reverse).

My tax process takes about an hour (half hour to double check). Keeping track of all my receipts and tallying them up at the end of the year would be horrendously longer. A huge waste of time. Huge new avenues for fraud as well. I don't see the upside.

What? Why would be keeping receipts for anything?

That's independent of the switch from the income tax. You could have a simple progressive income tax if you wanted as well.

You'd have to change the structure of the income tax for that, to eliminate the distinction for capital gains, etc. And income taxes don't evenly effect the economy as a VAT does.

I have no idea what that's supposed to mean.

Government adds some money to your paycheck instead of taking it. This is corrected (in either direction) at the end of the year the same way it works now. And no, I don't see this as open to much more abuse than the current system.

[Kuciwalker]

Originally posted by Ramo
On a completely unrelated note, VA Senate Dems FTW

I missed this earlier. Big

[Seeker]

Greenwald had a good article on Mr. Paul. I like almost everything about him still, especially his candor that many of his policies are 'ideals' rather than things he'd try implementing right away, but the article did score a telling blow to his most important quality, steadfast consistency:

Apparently, he voted for the 'zygotes are humans' bill, but when pressed on abortion as a candidate he seemed to duck and just said he'd leave it up to states. I think that hurt him because even people who strongly disagree with him over abortion would understand if he just stated his position without BS.

[Imran Siddiqui]

Originally posted by Deity Dude
I said I wouldn't penalize and advantage based on quality or productivity and I used the Japanese auto industry of the 70's as a perfect example. Obviously, you are having trouble reading.

At least my basic cognitive skills are intact... or do you think that Japanese workers in the 70s were actually being paid the same as American auto workers? Under your "system", we'd have to tariff Japanese cars so as to not reward them for their cheaper labor costs. Hell, they still do... but that's most a result of the pensions and retiree health care agreed to by American auto companies.

Obviously you didn't read again. I am not against competition. I am for fair competition.

You can sugar coat it and call it what you will and claim your opponents aren't reading, but "fair competition" is simply another restriction on competition.

If you can out compete given the same rules I am fine, but if you can pay your workforce 1/20 of what I pay mine, offer no benefits and house them all in dormitories I am not for that.

So you'd like to restrict the competition for a "fair playing field". Hmmm... Walmart is paying its employees much less than Mom & Pop stores, and usually offer fewer benefits. Shall we penalize Walmart? I know you are going to bring up that Walmart has cheap prices because of outsourcing, but really a lot of it is because of economies of scale.

I also think your general premise that American standard of living would go down is blatantly wrong. I would argue the difference in prices on discretionary goods would be more than offset by the absence of taxes and more higher paying jobs.

Seeing as how economic surveys have shown that free trade increases the standard of living (more competition with better quality goods being sold cheaper tends to do that), I'd doubt that. No other country in the world has benefited as much from free trade as the United States. The initial crunch in the 80s, as we realized that other states can make things like cars better than we can, led to greater competition and an explosion of innovation in the 90s.

In addition:

http://www.econlib.org/library/Enc/FreeTrade.html

Many estimates have been made of the cost of "saving jobs" by protectionism. While the estimates differ widely across industries, they are almost always much larger than the wages of the protected workers. For example, one study estimated that in 1984 U.S. consumers paid $42,000 annually for each textile job that was preserved by import quotas, a sum that greatly exceeded the average earnings of a textile worker. That same study estimated that restricting foreign imports cost $105,000 annually for each automobile worker's job that was saved, $420,000 for each job in TV manufacturing, and $750,000 for every job saved in the steel industry. Yes, $750,000 a year!

This being in 1984 dollars, mind.

So protectionism costs the American taxpayer MORE than free trade. There is a reason why most economists advocate free trade. It isn't just for kicks. It's because the numbers don't lie.

In addition protectionist arguments failed to take into account comparative advantage and the benefits of specialization. While inefficient manufacturing jobs are sent elsewhere, where they'll be accomplished more efficiently, the US concentrates on high tech jobs where it has an advantage.

Also, from the same link as above:

But the situation is actually worse, for a little deeper thought leads us to question whether any jobs are really saved overall. It is more likely that protectionist policies save some jobs by jeopardizing others. Why? First, protecting one American industry imposes higher costs on others. For example, quotas on imports of semiconductors sent the prices of memory chips skyrocketing in the eighties, thereby damaging the computer industry. Steel quotas force U.S. automakers to pay more for materials, making them less competitive.

So we are really just pushing the costs around. Unless, and you have said that you don't, you want to tariff everything. So if we put tariffs on Chinese steel, but not on Japanese automobiles, American automobile manufacturers will still be at a disadvantage as they have to pay more for steel than the Japanese companies and therefore their cars will cost more and Americans will buy Japanese (we, Americans, aren't dumb... we are going to buy the best good at the best cost, nationalist bullcrap be damed).

Furthermore, the US has experienced the wonders of free trade firsthand for most of its history. There is freedom of trade among the states. And that has allowed different states to specialize in different things, based on what they are comparatively good at. Seeing as there are WIDELY different worker protection laws, it doesn't seem to have hurt, say, Massachusetts much to allow free trade with, say, Alabama.

[Imran Siddiqui]

In addition:

http://www.fee.org/publications/the-freeman/article.asp?aid=2103

(Written in 1991)

The common argument advanced in favor of “fair” trade is that trade deficits (excesses of imports over exports) cost American jobs. But this is a myth. Over 15 million new jobs were added between 1982 and 1989 as the U.S. ran up huge trade deficits. And the majority of these jobs paid rather well, contrary to the “McJobs” myth. Job growth was mainly in those sectors that were largely unprotected against foreign competition: computers and data processing, telecommunications, petroleum and chemicals, pharmaceuticals and health-related areas, scientific and photographic equipment, entertainment, leisure and recreation, hospitality and tourism, and the service industries.

Meanwhile, protectionist measures were failing to save American jobs. Quotas against Japanese autos (euphemistically called “voluntary” export restraints) imposed in the early 1980s didn’t prevent the loss of over 200,000 jobs in the U.S. auto industry, and General Motors recently announced massive new layoffs. The record in steel, textiles, dairy products, shipping, and meat packing is much the same. These industries shrank while protective tariffs and subsidies were lavished on them to save jobs.

So, as I was saying, comparative advantage led to job growths in computers, telecommunications, chemicals, etc. Oh, and the service industries generally pay quite well (ask a lawyer how much he makes, for one).

In fact, it can be argued that the United States is the unfair trader. James Bovard points out in The Fair Trade Fraud (reviewed on page 282 of this issue) that America has over 8,000 tariffs, 3,000 clothing and textile import quotas, and a variety of quotas and other nontariff barriers for steel, autos, sugar, dairy products, peanuts, cotton, beef, machine tools and other industrial products. For example, America limits imports of ice cream to the equivalent of one teaspoon per person each year, and foreign peanuts to two per person. Such restrictions reduce competition, raise prices, decrease variety, and cost American consumers $80 billion per year, or $1,200 per family.

So all those tariffs in the 80s and that helped prevent steel and auto jobs from going elsewhere?

[Saras]

Originally posted by DinoDoc
Re NATO: Where's our glorious allies help in Afghanistan? The burden there is being shouldered by a grand total of 3 countries out of the entire alliance.

Surely you mean Brits, Poles and Lithuanians, right?

[DinoDoc]

No I mean the Brits, Canadians, and Americans.

Some soldiers in Afghanistan drink beer, the others risk their lives. That is how the British have characterized the current disparity among NATO allies in Afghanistan.

http://www.spiegel.de/international/0,1518,449183,00.html

[Saras]

Originally posted by DinoDoc
No I mean the Brits, Canadians, and Americans.

Some soldiers in Afghanistan drink beer, the others risk their lives. That is how the British have characterized the current disparity among NATO allies in Afghanistan.

http://www.spiegel.de/international/...449183,00.html

So my good friend from the Lithuanian special forces is actually somewhere else? And the war stories and 6 cd's of photos from his previous two tours are fakes?

[Arrian]

Tarriffs

Say hello to more expensive goods and retaliatory measures by the nations impacted by said tarriffs. Hurray for recessions!

-Arrian

[Wezil]

DD

NATO is a proven failure in it's first real test. This is not an alliance.

edit: Add the Netherlands to the "doing their part" group.

[Whoha]

Originally posted by Imran Siddiqui
I'm looking at the US's GDP numbers and unemployment figures, and I can't see what exactly the problem is.

It is important to not confuse the credit bubble with trade.

In any event Ron Paul's opposition to trade lies with the way the bills were crafted, not that they were trade bills. There isn't really anyone on the board who is a protectionist.