Prudent Tax Reform Would Solve Many of Our Problems
Prudent Tax Reform Would Solve Many of Our Problems
August 17, 2016 Daniel Mills
We have been told the only way to decrease the deficit is to either increase income taxes or cut spending on entitlements such as Social Security and Medicare. This simply isn’t true. At the heart of both of these issues is America’s trade policy. Much of what we hear comes from corporate interests wanting “free trade” agreements that increase their profits and ship jobs overseas.
What we need are fair trade agreements, and at the core of our trade policy we must include a border-adjustable tax. The United States originally developed into a wealthy and productive nation by protecting its domestic industries and jobs. Americans bought American-made products, and foreign countries were taxed if they wanted to sell their goods here.
The U.S. has no import tax and derives only 1.38% of its revenue from tariffs and customs duties. The Chinese government, on the other hand, does not sell out its economy with “free trade.” China gathers approximately 20% – one fifth – of its total revenue from a combination of import value-added taxes, import consumption taxes, tariffs, and customs duties. There is no reason we cannot do the same.
If the U.S. had imposed a similar rate of taxation it would have gathered $216 billion in customs revenue rather than the $29.1 billion it gathered last year. That is not an insignificant number given the amount of debt the United States owes foreign nations.
Some of the other benefits of a border-adjustable tax include:
eliminating all income taxes on the first $100,000 earned, which will abolish income taxes completely for approximately 100 million Americans
bringing back the jobs lost to other countries whose foreign VAT penalizes our exports; this will level the economic playing field
dropping the corporate tax from 35 to 15% which would allow the U.S. tax rate to realign with international tax norms
allowing us to subsidize our exports
allowing American products to be more competitive; this will reawaken America’s industrial base and generate new American manufacturing on a much larger scale
increasing the advantages of producing, saving and investing in the U.S.
allowing our companies to keep more of their profits, lessening their need to borrow money eliminating the need for thousands of accountants and bureaucrats while reducing fraud
stimulating economic growth and lowering unemployment in the United States
encouraging businesses to remain in the U.S. instead of off-shoring, ensuring that more tax revenue and jobs are kept in this country
increasing revenue from foreign countries and companies, creating greater income for the U.S.; this will decrease our budget and trade deficits
Every other nation in the world, including the vast majority of our trading partners, practices protectionism in some way, shape or form. Meanwhile, the U.S. is not fighting to protect itself at all, and these countries are not hesitating to take advantage.
The people of America have been fed a lie, and that lie is that the United States cannot compete economically, that jobs lost to outsourcing can’t come back, and that the only way to compete is to strip ourselves of regulations and reduce our wages. We must look past this lie to the truth – America CAN do better with simple tax reforms. We must begin to implement fair trade policies that allow American manufacturing to compete with the rest of the world.
READ MORE: http://economyincrisis.org/content/36603
August 17, 2016 Daniel Mills
We have been told the only way to decrease the deficit is to either increase income taxes or cut spending on entitlements such as Social Security and Medicare. This simply isn’t true. At the heart of both of these issues is America’s trade policy. Much of what we hear comes from corporate interests wanting “free trade” agreements that increase their profits and ship jobs overseas.
What we need are fair trade agreements, and at the core of our trade policy we must include a border-adjustable tax. The United States originally developed into a wealthy and productive nation by protecting its domestic industries and jobs. Americans bought American-made products, and foreign countries were taxed if they wanted to sell their goods here.
The U.S. has no import tax and derives only 1.38% of its revenue from tariffs and customs duties. The Chinese government, on the other hand, does not sell out its economy with “free trade.” China gathers approximately 20% – one fifth – of its total revenue from a combination of import value-added taxes, import consumption taxes, tariffs, and customs duties. There is no reason we cannot do the same.
If the U.S. had imposed a similar rate of taxation it would have gathered $216 billion in customs revenue rather than the $29.1 billion it gathered last year. That is not an insignificant number given the amount of debt the United States owes foreign nations.
Some of the other benefits of a border-adjustable tax include:
eliminating all income taxes on the first $100,000 earned, which will abolish income taxes completely for approximately 100 million Americans
bringing back the jobs lost to other countries whose foreign VAT penalizes our exports; this will level the economic playing field
dropping the corporate tax from 35 to 15% which would allow the U.S. tax rate to realign with international tax norms
allowing us to subsidize our exports
allowing American products to be more competitive; this will reawaken America’s industrial base and generate new American manufacturing on a much larger scale
increasing the advantages of producing, saving and investing in the U.S.
allowing our companies to keep more of their profits, lessening their need to borrow money eliminating the need for thousands of accountants and bureaucrats while reducing fraud
stimulating economic growth and lowering unemployment in the United States
encouraging businesses to remain in the U.S. instead of off-shoring, ensuring that more tax revenue and jobs are kept in this country
increasing revenue from foreign countries and companies, creating greater income for the U.S.; this will decrease our budget and trade deficits
Every other nation in the world, including the vast majority of our trading partners, practices protectionism in some way, shape or form. Meanwhile, the U.S. is not fighting to protect itself at all, and these countries are not hesitating to take advantage.
The people of America have been fed a lie, and that lie is that the United States cannot compete economically, that jobs lost to outsourcing can’t come back, and that the only way to compete is to strip ourselves of regulations and reduce our wages. We must look past this lie to the truth – America CAN do better with simple tax reforms. We must begin to implement fair trade policies that allow American manufacturing to compete with the rest of the world.
READ MORE: http://economyincrisis.org/content/36603
This is a great plan... Why won't the republicans want these reforms?