A disgusting vat of filth that no self-respecting intelligent person would wade into.

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy
Sometimes we should change our equation, and social security taxes are a place where we are out of step with the rest of the world and should change the equation on our side.

How are social security taxes any different from income taxes, which most of our major trading partners have?

The fact that half the tax is "paid" by the employer is not an answer, because economically speaking it's irrelevant. What's more, the VAT is "paid" by the company adding the value at each step of the production process. It's then recovered from consumers at the end.

[Greedy,Greedy,Greedy]

Originally posted by Mmmm, Burger (C.J.)
How are social security taxes any different from income taxes, which most of our major trading partners have?

The fact that half the tax is "paid" by the employer is not an answer, because economically speaking it's irrelevant. What's more, the VAT is "paid" by the company adding the value at each step of the production process. It's then recovered from consumers at the end.

The fact that it is a tax directly on wages is a difference - it excludes from the tax base all income other than wages, and it collects it at the point of production. This adds a cost directly to goods.

VATs are generally refundable on export, so as you look toward the price of goods and what has been included in it, any cost represented by a VAT is excluded from the costs of most goods we import here. Thus, the VAT on French wine is included in the cost of wines in France, but not wines exported to the US. But if we sell an American car to France, the costs funded by social security go directly into the costs of production.

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy
The fact that it is a tax directly on wages is a difference - it excludes from the tax base all income other than wages, and it collects it at the point of production. This adds a cost directly to goods.

So why not eliminate all taxes on corporations? Same problem, right?

It's a cost of production, because it's a labor cost. Why are the various benefits european companies are required to provide (6 weeks vacation, loads of maternity leave, etc.) not similar costs borne by companies in other countries.

And why is an income tax not a cost of production, since it raises teh wage that employees will demand?

The only difference I can see, economically, is that one could more easily administer a refund mechanism because you've got a clearly denominated amount.

But if you want ease of administration, why not just give straight up export subsidies? And if you're going to do that, why not just send cash overseas directly?

[Greedy,Greedy,Greedy]

Originally posted by Mmmm, Burger (C.J.)
So why not eliminate all taxes on corporations? Same problem, right?

It's a cost of production, because it's a labor cost. Why are the various benefits european companies are required to provide (6 weeks vacation, loads of maternity leave, etc.) not similar costs borne by companies in other countries.

And why is an income tax not a cost of production, since it raises teh wage that employees will demand?

The only difference I can see, economically, is that one could more easily administer a refund mechanism because you've got a clearly denominated amount.

But if you want ease of administration, why not just give straight up export subsidies? And if you're going to do that, why not just send cash overseas directly?

You mean, just send all our hard-earned money to Iraq? No thanks, we've done enough of that.

If you want to advocate for treating income taxes differently on export, go ahead. I point to the fact that certain costs are treated fairly uniformly in the developed world as coming out of general revenues, and others are treated as part of the costs of goods, and that it makes sense to have parallel tax systems if we want our goods to be competitive. It evens the playing field for our goods. We've spent a lot of time trying to come up with export subsidies when harmonizing tax systems would likely get our exports more benefits in a less disruptive way.

With respect to things like mandatory severance costs in France and Germany, I will leave French policy to the French and German policy to the Germans. If they choose to burden their exports with costs beyond ours, that is their choice. Obviously, I would prefer them instead to ship their cash to Iraq like we do.

[Tyrone Slothrop]

This is an interesting point, made by Matt Yglesias on his blog:

• [P]rimary school teaching doesn't benefit from many technology-driven productivity gains since it intrinsically involves high levels of personal supervision. As a result, we should expect education spending to need to increase in real per capita terms over time merely to maintain the same quality level.

[Sidd Finch]

Originally posted by Tyrone Slothrop
This is an interesting point, made by Matt Yglesias on his blog:

• [P]rimary school teaching doesn't benefit from many technology-driven productivity gains since it intrinsically involves high levels of personal supervision. As a result, we should expect education spending to need to increase in real per capita terms over time merely to maintain the same quality level.

How is that affected by VAT?

[Tyrone Slothrop]

Originally posted by Sidd Finch
How is that affected by VAT?

I'm sure whatever Burger says on that point is mostly right.

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy
If you want to advocate for treating income taxes differently on export, go ahead. I point to the fact that certain costs are treated fairly uniformly in the developed world as coming out of general revenues, and others are treated as part of the costs of goods, and that it makes sense to have parallel tax systems if we want our goods to be competitive. It evens the playing field for our goods. We've spent a lot of time trying to come up with export subsidies when harmonizing tax systems would likely get our exports more benefits in a less disruptive way.

I would happily agree with you today that we should use a consumption tax rather than an income tax. That would fully address your concerns, as none of the tax revenues generated would be directly borne by producers.

[Mmmm, Burger (C.J.)]

Originally posted by Tyrone Slothrop
This is an interesting point, made by Matt Yglesias on his blog:

• [P]rimary school teaching doesn't benefit from many technology-driven productivity gains since it intrinsically involves high levels of personal supervision. As a result, we should expect education spending to need to increase in real per capita terms over time merely to maintain the same quality level.

Only to the extent that the cost of that labor is increasing relatively more rapidly. If we use cheap, foreign, child labor, then he's wrong.

[Greedy,Greedy,Greedy]

Originally posted by Mmmm, Burger (C.J.)
I would happily agree with you today that we should use a consumption tax rather than an income tax. That would fully address your concerns, as none of the tax revenues generated would be directly borne by producers.

Of course, that would fully burden US taxpayers with all costs in our system, rather than replicating the division of costs in other developed countries. If we were a developing, export-oriented economy, I could see the argument.

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy
Of course, that would fully burden US taxpayers with all costs in our system, rather than replicating the division of costs in other developed countries. If we were a developing, export-oriented economy, I could see the argument.

So you're saying some costs are good to export, but not all, and right now we're exporting more costs than other countries, who export some, but not all? That's incoherent. Or, you're trying to hold on half way down that slippery slope. I don't understand the principle.

Anyway, we're not failing to export all costs. To the extent there's a high consumption tax to pay for high social services, workers will demand higher wages, which will send costs up.

[Greedy,Greedy,Greedy]

Originally posted by Mmmm, Burger (C.J.)
So you're saying some costs are good to export, but not all, and right now we're exporting more costs than other countries, who export some, but not all? That's incoherent. Or, you're trying to hold on half way down that slippery slope. I don't understand the principle.

Anyway, we're not failing to export all costs. To the extent there's a high consumption tax to pay for high social services, workers will demand higher wages, which will send costs up.

The principle is that if you think free trade is a worthy goal, a tax system that is harmonized with the countries you compete with is a good thing.

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy
The principle is that if you think free trade is a worthy goal, a tax system that is harmonized with the countries you compete with is a good thing.

So we should follow their lead, rather than enacting our own policies? Should we harmonize our labor laws with those of the third world?

[Greedy,Greedy,Greedy]

Originally posted by Mmmm, Burger (C.J.)
So we should follow their lead, rather than enacting our own policies? Should we harmonize our labor laws with those of the third world?

Come now. Read above.

There are times we should acknowledge when a system has become common throughout the world and we are out of step - as with social security taxes.

There are other times where we should lead. After all, being the world's largest economy has its advantages.

What are you looking for, a simple set of rules that says "free trade = good", "tax = bad", "teacher's union = satan"? Head to Spankyland if that's the case, we don't sell that magical horseshit here.

[Hank Chinaski]

Originally posted by Mmmm, Burger (C.J.)
So we should follow their lead, rather than enacting our own policies? Should we harmonize our labor laws with those of the third world?

wow, you proved GGG has made some idiotic statements. good job.

Burger. Do us a favor? Wrap this up and go have a convo with ppnyc, maybe about Christmas bonus expectations.