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The Border Adjustment tax a long term revenue loser?

Well, I guess the poors will just have to tighten their belts even more.

http://blogs.cfr.org/setser/2017/03/17/just-how-much-money-should-the-border-adjusted-tax-raise-be-expected-to-raise/

Quote

I have a new paper out with David Kamin of New York University Law School—it will be formally out in Tax Notes in a couple of weeks, but given that there is a live debate on the topic, we are posting it in draft form now—and the New York Times had a related editorial linking to it earlier this week.

So this is a joint post with David Kamin.

Our paper makes two arguments.

1) Even with fairly optimistic assumptions about long-term growth and long-term interest rates and the persistence of “excess returns” from U.S. direct investment abroad, the U.S. cannot sustain trade deficits of approaching 3 percent of GDP over the long-run. The CBO’s estimates for long-run growth and the long-run nominal interest rate on the U.S. debt stock imply a sustainable long-run trade deficit of about 1 percent of GDP. That would generate maybe 20 basis points of GDP in permanent revenue. If the excess returns (“dark matter”) on U.S. foreign direct investment go away, the U.S. would need to run a small trade surplus—and the border adjustment would lose revenue over the long-term.

As a result, realistic projections of revenue from a border adjustment should show that revenue falling considerably and, possibly, entirely disappearing over the long-term.

 

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13 minutes ago, OldGimletEye said:

The Border Adjustment tax a long term revenue loser?

Well, I guess the poors will just have to tighten their belts even more.

http://blogs.cfr.org/setser/2017/03/17/just-how-much-money-should-the-border-adjusted-tax-raise-be-expected-to-raise/

 

Yeah, we've been talking about it here.  It only "makes" money because of the triple taxation in the transition period.  

Should add - it's why we eventually end up with a lower rate territorial income tax and a traditional VAT.

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Just now, Mlle. Zabzie said:

Yeah, we've been talking about it here.  It only "makes" money because of the triple taxation in the transition period.  

Should add - it's why we eventually end up with a lower rate territorial income tax and a traditional VAT.

The Chinese government has recognized the need for more consumption spending. Plus, I wouldn't be surprised if the population demands better social safety nets. Both these factors should help to reverse long term trade deficits.

With regard to the VAT, I'm not necessarily against it. But, I don't think it's appropriate right now, as our main pressing issue is to get interest up and get us away from the ZLB, with sufficient demand. As I'm sure you are aware, a VAT, should increase national savings, which normally wouldn't be a bad thing. Except, of course, I don't think the world right now can absorb the additional US savings. In the future it might though and then a VAT would be something to consider.

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1 minute ago, OldGimletEye said:

The Chinese government has recognized the need for more consumption spending. Plus, I wouldn't be surprised if the population demands better social safety nets. Both these factors should help to reverse long term trade deficits.

With regard to the VAT, I'm not necessarily against it. But, I don't think it's appropriate right now, as our main pressing issue is to get interest up and get us away from the ZLB, with sufficient demand. As I'm sure you are aware, a VAT, should increase national savings, which normally wouldn't be a bad thing. Except, of course, I don't think the world right now can absorb the additional US savings. In the future it might though and then a VAT would be something to consider.

A properly constructed VAT, plus a transition rule that appropriately taxes offshore profits, plus a territorial system, should broaden the tax base and discourage a lot of the stateless tax planning that goes on. We are going there eventually.  The current system isn't sustainable.  

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Just now, Mlle. Zabzie said:

A properly constructed VAT, plus a transition rule that appropriately taxes offshore profits, plus a territorial system, should broaden the tax base and discourage a lot of the stateless tax planning that goes on. We are going there eventually.  The current system isn't sustainable.  

I'm not necessarily disputing this. But, I'm talking about the macro effects of a VAT right now. Throw in hysteresis effects caused by another ZLB episode and our long term fiscal position likely gets worse. Plus all the additional suffering.

And as far as lowering the corporate tax, I guess for me it depends, on what we do with income taxes and other institutional matters that drive income inequality. Maybe I'd be willing to give that up if the Republican Party stops busting unions and top income taxes are sufficiently high and there are good rules to stop hiding income taxes as a "corporate tax".

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I see that a new tactic for the fake news crowd is to print their shit and bury a message somewhere that their site is 'satire'. The one I just saw was a story Michelle Obama's mother has been charged with fraudulently collecting a $160,000 annual pension for looking after her grandchildren.  It's been shared more than 17,000 times. Just so you know, yes she looked after the grandkids at the WH, no, she wasn't paid and no, she didn't collect a pension for that.

What a strange world we now live in. Satire is merging with news because politicians are doing the unthinkable, and racists are trying to spread their hate under the guise of satire.

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39 minutes ago, Fragile Bird said:

I see that a new tactic for the fake news crowd is to print their shit and bury a message somewhere that their site is 'satire'. The one I just saw was a story Michelle Obama's mother has been charged with fraudulently collecting a $160,000 annual pension for looking after her grandchildren.  It's been shared more than 17,000 times. Just so you know, yes she looked after the grandkids at the WH, no, she wasn't paid and no, she didn't collect a pension for that.

What a strange world we now live in. Satire is merging with news because politicians are doing the unthinkable, and racists are trying to spread their hate under the guise of satire.

That ones been around for years in various forms.

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21 hours ago, The Anti-Targ said:

I would say that Democrats should be coming up with policies that oppose Republican policies. For instance, with Healthcare, rather than simply oppose and try to obstruct, formulate policy that would fix what a lot of what progressives see as flaws in the ACA, and say, this is what congress should be passing because these are the benefits, but oh well, you voted for the other guys, so you are probably going to get a shit sandwich for healthcare reform 

Democrats have literally released a Medicare-for-all bill that is exactly this.  How's that news cycle working for them?

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39 minutes ago, Fragile Bird said:

I see that a new tactic for the fake news crowd is to print their shit and bury a message somewhere that their site is 'satire'. The one I just saw was a story Michelle Obama's mother has been charged with fraudulently collecting a $160,000 annual pension for looking after her grandchildren.  It's been shared more than 17,000 times. Just so you know, yes she looked after the grandkids at the WH, no, she wasn't paid and no, she didn't collect a pension for that.

What a strange world we now live in. Satire is merging with news because politicians are doing the unthinkable, and racists are trying to spread their hate under the guise of satire.

Damn! Here I played with the thought to make myself a new hobby out of replying to every single deranged 'That's communist jewish libtard bias!' comment I find "Please, dear God, let this be satire". Those bastards must have read my mind!

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2 hours ago, Swordfish said:

I saw the transcript of that interview earlier.  he's insane.

 

No kidding.  The level of illusion, narcissism, just overall inability to form a coherent thought  with any semblance of logic..

I should be used to it by now, but for some reason, I was still surprised when I read this.  And also very depressed.

http://time.com/4710456/donald-trump-time-interview-truth-falsehood/

 

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1 hour ago, Maithanet said:

I guess they finally got sick of all the "winning"

 

ETA:

I finally got a chance to read this, and now there are at least 37 members of the Republican House Caucus that are against the bill. They've lost, not gained, support over the last few days. So much for Trump being the ultimate negotiator. 

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What a clusterfuck this is. Hard not to enjoy it, though. Just read that Trumpcare now faces a logistical challenge because the Senate has a schedule of Gorsuch, Montenegro, budget to prevent shutdown, then VAYYCAYYYYTIOOOON recess. There's simply a very limited time window for handling the bill before that. Which could really draw this out.

Looking forward to seeing the polls over the next days. This could be the first blow to Trump among the die-hards. A lot of Breitbart commenters sure aren't impressed with Trump missing the vote of a bill they think he shouldn't have backed in the first place.

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1 hour ago, aeu said:

No kidding.  The level of illusion, narcissism, just overall inability to form a coherent thought  with any semblance of logic..I should be used to it by now, but for some reason, I was still surprised when I read this.  And also very depressed.http://time.com/4710456/donald-trump-time-interview-truth-falsehood/

Fascinating. After 3 nights of terrible sleep and having been up for a bit more than 15 hours I somehow vaguely understand what he's saying...
All it takes is to forget anything approaching subtelty. Paint with as broad a brush as possible. Simplify everything.

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2 hours ago, MerenthaClone said:

Democrats have literally released a Medicare-for-all bill that is exactly this.  How's that news cycle working for them?

That's not "fixing the flaws in the ACA", that's re-reforming the healthcare system. An actual public health service didn't fly when Obama had majorities in both houses, even though that was on the wishlist of the progressive faction of the Democratic party. It's DoA (A = announcement in this case) with the Republicans in control of everything. Put up a proposal that at least has a non-zero chance of getting through.

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25 minutes ago, Manhole Eunuchsbane said:

Remind me again of how this guy won 53% of the white female vote? Like how the fuck did that happen?

Have you considered why maternity coverage as an essential insurance benefit might (and has) result in higher premiums?

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