"A journey of a thousand miles begins with a single step."
Some of you regular readers may remember a lengthy post here on The Silent Podium regarding Foreign Policy AKA Lunacy (Oh how witty..)
It was basically about what things I thing would greatly benefit our suffering economy here in the U.S. specifically regarding foreign policy and taxation.
Today on the White House Blog (Yeah...there IS one! XD ) I read this. For those of you who won't click hyperlinks, here is a very short series of snippets.
"Today the President answered that question with proposals to curb tax havens and replace tax advantages for creating jobs overseas with incentives to create them here at home."
The plan involves;
"Getting Tough on Overseas Tax Havens
· Eliminating Loopholes for 'Disappearing' Offshore Subsidiaries
· Cracking Down on the Abuse of Tax Havens by Individuals
· Devoting New Resources for IRS Enforcement to Help Close the International Tax Gap"
I know I know, politicians often make a lot of promises and usually come through with painfully few but its a start yeah? No word on importer taxation but all in due time... :)
3 comments:
Beware the politician who says he is going to "fix" anything. The last time they "fixed" the tax laws to simplify them, I paid more. And, no, I was definitely not the "rich". Remember, it was politicians who wrote in those loopholes and tax havens in the first place.
I have no idea what the "international Tax Gap" is. Does that mean some other countries tax corporations less than we do? If so, is it better to lower our corporate tax rates or to (somehow) get those other countries to increase theirs?
With politicians, it is wise to remember this:
"Be careful what you wish for."
I don't think I'll ever be able to complete trust a politician when I know I couldn't trust myself to be one either.
I wanted the U.S. to increase the taxes of foreign companies. Specifically those that don't even bother to employ folk in the country they are selling to. Even if those companies increase their prices to pay off the increased cost of importing it would make home made products more competitive.
Sounds ugly and it sucks for foreign companies but they often do the same (or worse like Japan) to stay afloat so in a time of need like now, we should employ those same tactics.
It would be interesting to see the result of a decrease in local taxes and increase in foreign.
I would really like to see a penalty for U.S. companies that manufacture elsewhere and bring those same products back to the U.S. to sell. (I think that is exactly who these new proposed actions are directed at.)
It's a normal response in times like these to want to increase tariffs. However, it is not a sound policy since it often results in a sort of "tariff war" where other countries retaliate by increasing theirs. If you look back at the pre-WWII era, you will find that this occurred. It was not the sole cause of that war, it was one of the factors involved.
The problem with all solutions to current problems (or any type) is the phenomena known as "unintended consequences". These are also called "unforeseen events" because they are almost impossible to predict. But, as in everywhere in life, what makes you feel good today may come back to make you feel really bad in the not so distant future.
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