I don't get it. The country can do without this. We need to use some of the tariff policies that other countries use to keep their economies strong. We let foreign goods come in without duties anywhere near what other countries charge and thereby undercut our own manufacturers, or whatever is left of them and their jobs here.

We let the job and factory exporting get out of hand as goods formerly made here are now imported in and the companies that used to make them here don't want tariffs on the stuff they're bringing back in. That way they make even more obscene profits from paying foreign workers chump change compared to what they used to pay American workers.

Even with shipping costs back here they still make out like bandits — the companies were profitable before paying Americans living wages but the greed I guess of paying foreign workers less than a dollar a day got too hard to resist.

There is no future in that for the country. Sooner of later a turning point is reached where there aren't enough remaining workers with jobs who can afford anything but the cheapest imported goods.

...then it might be easier to swallow. But, not only do they take our jobs overseas, they take the profits from selling their products overseas also...

To me, it seems that tariffs would be the fairest way to handle this unfair manipulation by US corporations.

no one paid personal income tax. All the money to run the government came from tariffs. During this time our industries grew.

in my opinion.

The Hidden Progressive History of Income Tax

The income tax was the most popular economic justice movement of the late 19th and early 20th century. This truly grassroots movement forced politicians to act in order to stay in office, leading to the 16th Amendment to the Constitution in 1913. That’s right, the income tax was so popular that the nation passed a constitutional amendment so that the right-wing Supreme Court couldn’t overturn it.

Income and Tax Inequality in the Late 19th Century

Everyday Americans hated the tax system of the Gilded Age. The federal government gathered taxes in two ways. First, it placed high tariff rates on imports. These import taxes protected American industries from competition. This allowed companies to charge high prices on products that the working class needed to survive while also protecting the monopolies that controlled their everyday lives. Second, the government had high excise taxes on tobacco and alcohol, two products used heavily by the American working class.

These forms of indirect taxes meant that almost the entirety of federal tax revenue came from the poor while the rich paid virtually nothing. This spawned enormous outrage. The poor had a model in creating an income tax—President Abraham Lincoln, who instituted the nation’s first income tax to pay for the Civil War. Lincoln’s Revenue Act of 1861 created a graduated tax on everyone who made at least $800 a year, allowing him to pay for the war. Although a grand success, Republicans pulled away from it as they backed off of racial equality in the late 1860s and it was overturned in 1872.

...grassroots organizations across the country began organizing around replacing the tariff with the income tax. He tells the story of Merlinda Sisins of Pickleville, Michigan, a mother of 16 who, despite a lack of education and poor spelling, began writing letters to the Journal of United Labor, where she demanded that working people nominate their own to Congress in order to pass legislation that would destroy the tariff and the monopolies.

The income tax became such an overwhelming political movement during the 1890s that Congress, despite so many members' close relationship with the plutocracy, passed an income tax law that would have forced the rich to begin paying income taxes for the first time since 1870. The Wilson-Gorman Tariff of 1894 placed a 2% tax on incomes over $4000 a year (approximately $88,000 today).

Corporations immediately organized against this. In a strategy we can recognize today, the Chamber of Commerce distorted the bill’s purpose, telling the public that the income tax would drive them into poverty, even though the bill did not affect working-class people. Yet the Chamber made little headway in the face of this overwhelmingly popular movement.

http://www.alternet.org/labor/hidden-progressive-history-income-tax?akid=9361.277129.2KDGDd&rd=1&src=newsletter706781&t=14

There is a reason that corporations loved high tariffs and working people hated them. That is why the GOP was the 'high-tariff' party back in the day.

How are you going to tax profits that are hidden in tax havens?

Also, Clinton and Obama have more or less compromised all tax rates at 39% maximum, which will probably never be met?

The basic issue is one of fairness. Is it fair for American corporations to fire workers in this country, move their operations overseas for the cheap labor and lack of regulations, then ship the products back to this country, then take the profits from those products and put them in a tax haven in the Netherlands, and not pay any taxes to the American people, even after displacing the workers in almost 60,000 manufacturing plants??

low tariffs and high taxes. I doubt anyone thought the "political reality" would change during the 1920's.

Of course, our 'political reality' is that republicans freak out when tax increases are mentioned so they are, would you say, impossible. Tariffs may be more 'politically realistic' because the republican party has a wing that favors them as does our party. We do stand a better (more 'realistic') chance of enacting tariffs (if you exclude our membership in organizations that preclude it) than we do of increasing taxes. And there are many republicans in their base that would love to dump our membership in the UN, WTO and trade agreements in a heart beat.

Then the question becomes "Will that help with our economic problems?" FDR saw higher tariffs were a 'fools gold' of solutions to economic problems. That is why he restructured international trading to make it more difficult for countries to solve problems with 'fools gold'.

You are right about that. The only question is, how urgent is this "problem"? I think it is rather urgent that we do something. Just my opinion.

Why are we importing--without tariffs--anything that can be made or grown here? It only undercuts our workers and our industries and our economy, as the money for, say, Japanese cars flows out instead of circulating around. It's nutty...well, actually not nutty, but elevating the greed motive certainly is.

I agree with you that tariffs should be paid and our trade deficit should be greatly reduced. It is sucking out the lifeblood of our country.

If we leave capitalism unchecked, our middle class will be eaten from the bottom up as capital chases cheap labor and easy money. This chase is not of evil intent; CEOs and managers don't try to plot against the middle class, it is just baked into the game as they try to increase corporate profits and report them to Wall Street every 90 days. The result has been great for Wall Street, owners and Executive Management of businesses that outsource, as well as labor suppliers such as China and the other major emerging markets. It has been a lousy deal for the middle classes of the United States, Japan and much of Europe.

Tariffs are a way to more slowly allow trade to flourish and not kill off parts of a society in the process.

Managed trade, as compared to NAFTA type solutions, would have prevented the decimation of the US manufacturing industry seen over the past few decades. Trade could have still flourished.

The obvious, huge, pitfall of managed trade and industry is, however, who gets to manage it? If this process is full of corruption, then you end up with Soviet Union style industry or Chinese ghost cities. Managing trade is not easy. Do we trust Washington to manage trade by imposing tariffs? Good question.

What is obvious is that unregulated capitalism is currently failing individual countries, although you can argue it is good for the world as a whole, as middle classes in China and elsewhere grow at the expense of the United States and other developed nations.

You should be advising the House on their TPP votes.

Why not jack the price of a ton of goods up? Hell, the poor people can work a few more hours to afford that TV right?

Different circumstances. Apples and oranges, This time, we are losing jobs and revenues.

...if they had to move their jobs back to the USA, wouldn't it?

https://en.wikipedia.org/wiki/Customs_war

Five years after the passage of the tariff, American trading partners had raised their own tariffs by a significant degree. France raised its tariffs on automobiles from 45% to 100%, Spain raised tariffs on American goods by 40%, and Germany and Italy raised tariffs on wheat.[2] This customs war is often cited as one of the main causes of the Great Depression.

is good. There is a difference between "free trade" and "fair trade". We are not discussing tariffs on other countries products that they export to America. We are talking about products American corporations ship back to America from the cheap labor of other countries. Do you honestly see no difference??

Who cares where the corp hailed from if the end users are paying twice what they did before? Only the poor gets hurt from that.

If you think it's such a critical deal that prices are doubled on imports, don't look at others to enforce your wishes. Pick up a gun and go down to the piers and enforce it yourself. See, you don't mind delegating the dirty work to others, but you wouldn't dare try and enforce it yourself.

If you’re whims are so important that they HAVE to be done, then do it!

Have you seen the prices on some of those imported TV's lately? The prices are only lower until the American competition is put out of business. Then the prices go back up again. Even Walmart prices have gone up almost across the board. But there is more to the story than just lower prices for poor people. Jobs are lost and wages are driven down and the standard of living is lowered for almost everyone. Study the issue and come back when you are more prepared with facts.

Maybe you ought to be looking at those people devaluing the dollar to figure out why each dollar now buy less and less.

http://www.shadowstats.com/alternate_data/inflation-charts

According to the inflation methods used previously (and more accurately include food and energy), inflation has been running around an average of 5% since the 90s.

Of course you see prices going up. They HAVE to when the fed has been printing non-stop with 0% interest rates for about 7 years (which has NEVER occurred in our history before now).

It always amazes me that people can be so simple minded they don't understanding printing money devalues the money. Go ask Zimbabwe how that's working out for them.

They said you didn't know what the hell you were talking about??

I take that as a win. Good day.

Good night and good luck.

I voted to HIDE.

On Fri Jun 19, 2015, 12:42 PM an alert was sent on the following post:

What does that have to do with the facts?
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6864189

REASON FOR ALERT

This post is disruptive, hurtful, rude, insensitive, over-the-top, or otherwise inappropriate.

ALERTER'S COMMENTS

"Say hi to Hitler and Vader" is insulting and uncalled for in a disagreement over a political issue.

JURY RESULTS

You served on a randomly-selected Jury of DU members which reviewed this post. The review was completed at Fri Jun 19, 2015, 12:52 PM, and the Jury voted 4-3 to HIDE IT.

Juror #1 voted to LEAVE IT ALONE
Explanation: Yes, it is uncalled for.
And there are ways to deal with it other than jury vote.
Putting putting the person on ignore, for instance.
Letting the person's comments stand is a way to show others on DU this poster' input is not worth consideration in future.
Juror #2 voted to HIDE IT
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Juror #6 voted to LEAVE IT ALONE
Explanation: No explanation given
Juror #7 voted to LEAVE IT ALONE
Explanation: Its a reference to political systems, not a personal insult.

Thank you very much for participating in our Jury system, and we hope you will be able to participate again in the future.

It is possible to oppose tariffs without invoking Hitler, you know.

I hear that's how one gets taken seriously. Maybe stick with your investment vehicle of choice and promote bitcoin for a while instead of this topic. You at least have links for that, even if they are quickly dismissed and mocked. You evoked Hitler. Really?

It's disappointing you've failed to provide any supporting evidence for your allegations, and feel compelled to lump in with a fascist dictator anyone who disagrees with you. Facts, indeed.

No doubt, you'll rationalize the one and justify the other... as the irrational and self-validating mind requires little else to comfort itself with.

The other issue with it is that Tariffs are a drag on trade - the prevent money, raw materials, and products from flowing freely between nations. Increasing tariffs will lead to products generally being more expensive to produce or import, and as such more expensive to purchase. Certain industries may suffer slow downs from being unable to get sufficient quantities of the raw materials they need in order to produce products.

The Smoot-Hawley Tariff passed in 1930, is credited with worsening and lengthening the Great Depression. From Wikipedia "Using panel data estimates of export and import equations for 17 countries, Jakob B. Madsen (2002) estimated the effects of increasing tariff and non-tariff trade barriers on worldwide trade during the period 1929-1932. He concluded that real international trade contracted somewhere around 33% overall. His estimates of the impact of various factors included about 14% because of declining GNP in each country, 8% because of increases in tariff rates, 5% because of deflation-induced tariff increases, and 6% because of the imposition of non-tariff barriers." President Roosevelt argued to end the Tariff as part of his economic program.

In fairness, I don't know that the economy is the same today as it was in the 1930s (well I know it isn't), and I don't know if the drag on the economy would be the same.

Bryant

We are talking about "American corporations" exporting their goods from other countries and the damage it is doing to our country and our Treasury and our jobs. Totally different from Smoot-Hawley.

Situation 1: Apple manufactures a computer in China and sends it to the US retail market.
Situation 2: some Chinese company does the same.

Are you saying these should be treated differently?

There are also intermediate scenarios. Like let's say Apple designs a computer. It then contracts a Chinese company to build some parts of the computer, which are exported to the US for final assembly. Where would that fall in the continuum?

If they get tax breaks from our country to move their jobs overseas, they should be considered an "American corporation".

If they want to build their computers in China, let them sell their MACs to the Chinese. By the way, I have read that the Chinese people who build the computers have never seen the computer at its completion and most could not afford to buy one. The market is still in America. The only reason it is being built in China and not America is the labor cost and profit margin. Do you have no problem with that?

We presently have over a $500 billion dollar trade deficit. That translates directly into lost jobs. Free trade is not necessarily fair trade. Then, to take their profits made from the American consumers and hide it in some tax haven, provided by some slick Trade Bill created by our Presidents and our Congress, is just a little more than we should take, in my opinion.

There are two major ways that companies move jobs overseas. One is to operate factories in, say, China. The other is to contract out parts of the production process to Chinese companies. If you tax American companies that operate factories in China, then companies can respond by subcontracting instead.

If you also tax goods that are built by foreign subcontractors, then you are most of the way to an outright tariff on imports. If you want to exclude "regular" imported goods from the tax, there's going to have to be some legalese in there.

For instance, say I make bikes here in the US, but there's a certain component in my bikes that I import from China. Does that component get taxed? Presumably yes -- this is subcontracting part of the production process.

Now suppose I own a bike store, and I sell that imported component to my customers, which they can install themselves. In this case, presumably the same component doesn't get taxed, it's just a regular import. What if, out of the same bike store, I build custom bikes where customers get to choose their components. If I build a custom bike for someone and they choose the Chinese gear system, does that mean I (or they) owe the tax?

It might also lead to weird unintended side effects. Hypothetically, say the US builds great frames and China builds great gear systems. Buying a ready-made bike with both means paying the tax. If I want to avoid the tax, I can either buy an fully American bike with lousy gears, or a fully-imported Chinese bike with a lousy frame. If I want both, either I pay the tax, or else I have to buy the parts separately and assemble the bike myself.

So maybe a Chinese bike company then gets smart and decides to import the quality American frames, attach quality Chinese gears to them, and export it back to the US as a Chinese import, thus avoiding the tax. In fact, it wouldn't even have to be a Chinese company. A Canadian company could do this. The end product would be a Canadian-imported bike, duty free, made from American and Chinese components.

At present, we have neither.

If we have to sacrifice American jobs, it is not fair trade. If we have a huge trade deficit, it is not balanced. We cannot continue as a First World country if we ship all our manufacturing plants overseas, just because we can.

The idea behind trade between nations is to get the products your nation does not produce in exchange for something the other nation does not produce. It is not meant, except in these recent trade treaties, to move your plant to a country to exploit their labor or environmental laws, simply for the benefit of stockholders. It should be for the benefit of the country.

In my opinion, this is a dangerous direction we are going by giving so much power to these corporations to rthe detriment of the workers in this country. We are in such a grip already that the tariff on foreign-made American products is the only weapon we have left with which to fight for the American workers.

How would you see that working with companies like Ford vs. Toyota? Would Toyota be on the hook because they are partially incorporated in the States?

Bryant

If we recall, Japan and Toyota almost destroyed the US auto industry in the 1970's. Eventually it was negotiated that they would produce some cars in the US, so we would at least have some jobs. But Toyota still took most their profits back to Japan. Some cases do not fit the mold and have to be negotiated individually if the country is too adversely affected. The '70's were a difficult time for the American auto industry.

Rather than using tariffs as a weapon how about we raise the income tax paid by our rich people? That's what progressive countries do. And they import 2 to 3 times as much as the US imports. If those progressive countries thought that tariffs would improve life for their citizens, they would have jumped on that bandwagon decades ago. They did not.

When corporations earn huge profits, whether deserved or not, who benefits? The answer: the 1% who own 99% of the stock. What happens if you raise the tax on the 1% to 70%, 80% or 90% on both their earned and unearned (capital gains and dividends) income? The incentive to screw the rest of us and the country as a whole by devious means diminishes greatly since the rich don't get to keep most of the extra money.

FDR did this. He reduced tariffs, increased trade and raised taxes on the rich. The result: the economy improved, the middle class benefitted and business grew. Instead of using any means possible to maximize profits, corporations invested in their plants and equipment, cultivated long-term customer loyalty rather than slick marketing and invested in a well-paid and largely unionized work force that would be good for the company in the long run. This happened for several reasons but one was that the rich had little incentive to maximize short term corporate profits since they were going to be paying a 90% tax on any money they received anyway.

Low/no tariffs, high taxes, effective regulation led to a healthy middle class, strong unions and a growing economy - it worked under FDR and his successors back in the day. It still works today in progressive countries.

Do you agree?

We have never been in this type of unregulated capitalism before in our history. It would be much, much preferable to stop companies from getting tax breaks for working or exporting jobs overseas than in imposing tariffs that are, by and large, regressive.
[hr][font color="blue"][center]You should never stop having childhood dreams.[/center][/font][hr]

Tariffs on trade between countries are probably regressive, as you say. However, American companies, thru trade treaty negotiations, have fired American workers and moved their jobs to the cheap labor of Third World countries, simply for the profit margin for stockholders and to escape paying any taxes on their profits, even as they sell most of their products in the American market.

I would agree that it would be preferable to stop companies from "getting tax breaks for working or exporting jobs overseas than in imposing tariffs", but the argument is that we are in a "global market" and that is probably not going to happen. Therefore, an exception should be made for a tariff on American products coming into America whereby all profits are put into tax havens to escape paying any taxes to the American government and creating shortfalls in revenues plus social costs of lost jobs.

because they are no longer 'relevant'? FDR did have to deal with a Depression and a world war. Germany, Sweden and many other progressive countries thrive well using FDR trade policies. Why can we not do the same?

We import about 1/2 to 1/3 as much as progressive countries import. How is cutting our imports even more going to help? republicans cut our imports down to about 0 in the 1920's. It did our middle class no good at all.

Why exactly is "our trade situation" the cause of our economic problems. Back in FDR's day we sought solutions to our economic problems by going after our 1% with higher taxes on the rich, increased regulation of their corporations and an improved safety net for the rest of us. Come to think of it, that is exactly what progressive countries do today.

...and lower wages...and a lower standard of living.

But if you want equality with workers around the world, then it may be a perfect policy to continue the status quo, with even more trade treaties?

that they established under the terms of treaties negotiated by their governments, ship their products back "home," and pay taxes in the US. The US is not exceptional in this way.

I'd also change the word for what Walmart has from "accounts" to "assets". It doesn't just put funds in accounts in tax havens, it organizes corporate shells in countries that are tax havens. Those corporations often own real and fixed assets--lands, equipment, factories, inventory. Some assets will be contracts for future delivery of agricultural or manufactured products. A decent chunk of it, no doubt, will be liquid assets that could be repatriated.

Notice that other countries don't have liquid-asset repatriation problems, and it's not because their companies are more "patriotic" or less profit-motivated. This US is exceptional in this way. Attempts to fix this and make us more like other countries are usually denounced as corporatist, even as many say we need to be more like those same other countries in other ways.

BTW, there are tariffs imposed on a wide range of goods. They get factored into the price of goods we pay; my boss used to consider tariffs like a ransom--the customs agency has your goods and charges you to release them. Congress has the authority to levy them as part of the general taxing authority for the purpose of raising revenue, but at times has done so for protectionism. I don't know if Congress has broadly outsourced this authority to the executive or not, but tariffs or their absence is often covered by treaty, including the WTO. However, tariffs are excise taxes on goods, not on individual companies or people. Targeting individuals starts to have a whiff of bill of attainder about it.

I'm fairly sure Congress under the WTO treaty and possibly other treaties has outsourced the authority to impose tariffs in the case of a finding of unfair trade practices by governments, but that's subject to adjudication under the terms of the treaty.

I don't think so.

Yes, there have been instances where the trade balance gets out of hand and new deals have to be negotiated. I think with a $500 billion trade deficit, we are probably at that point right now?

Because of the loss of jobs and the tax evasion of off-shore companies, it is a question of fairness to the American people. Why should the profits of any corporation take precedent over the common good of our country? Corporate thinkers might think otherwise?

A few decades ago, Cadillac built an assembly plant in Iran. It was not a rousing success, but I guess it pleased the State Department.

time of the Depression, which is an excellent way out.
We had tariffs at a reasonable percentage until Ronny
came around. That was the big change in many ways
to treat the economy.

Why did we try to fix something that worked? Because
the big corporations wanted it. No other reason. That
shows the success of the republican thinking.

isn't income in America taxed?

The off-shore accounts are foreign profits rather than US-sourced profits?

They are still American corporations that only re-located for the cheap labor. They still want to sell to American customers. And they still do. But, in the process, they fired their American workers and they take all their profits and put them in tax havens so as to avoid taxes. It is a question of fairness and balance, not what is good for any corporation.

if they sell a product in the US, they get taxed on the income. So I'm not sure how you mean they avoid taxes.

If the income is made overseas, the tax is deferred until they bring the income back to US.

Last edited Fri Jun 19, 2015, 12:55 PM - Edit history (1)

It doesn't really even change where the profit goes since a "foreign" company probably has a lot of its shares in Americans' portfolios.

and it is not imaginary when taxpayers pick up the slack from companies that do not pay a livable wage and their workers must get some type of public assistance. There is a difference between Wall Street and Main Street. One has a portfolio and one does not.

Both create jobs here and both move jobs here overseas.

How many jobs were lost when over 50,000 manufacturers moved their operations overseas?

And how many manufacturers moved to America?

Does this have anything to do with the $500 billion dollar trade deficit?

We cannot continue on this path and survive as an economic power.

We cannot continue to assume that if corporations do it, then it must be alright?