Rand Paul Outlines Plan for 14.5% Federal Flat Tax

[wufan]

At some point we are going to require a significant tax increase. It will have to be across the board. It's probably going to have to hit upper classes harder than lower classes unless we are willing to accept Rio de Janeiro types of ghettos in our cities. The people earning $8 - $15 an hour do not have the money to help out much in reducing our debt.

American capital investment in manufacturing is putting that money into Asia, so increasing our manufacturing output to raise money to reduce the debt isn't going to happen. In fact, the outsourcing of manufacturing to the 3rd world is increasing corporate profits, but it's also driving trade imbalances, which contribute to increasing national debt.

I can see a legitimate argument for higher taxes on profits based on foreign manufacturing. If some entity is taking money out of the USA economy and putting it into the economy of a foreign country in order to increase their profits, I think it's fair to penalize them for that.

Sam Walton insisted he could provide value to consumers by selling products made in America. After he died, his successors got insanely rich by sending all their purchasing dollars to China instead of leaving them in America. That does 2 things. It reduces the money available in the American economy and increases the money the American economy sends to foreign countries. Not only is Wal-Mart not penalized for those practices, Wal-Mart actually includes instruction for applying for government assistance for their new hires.

I'm all for free markets and capitalism, but that ship sailed some time after the robber barons of the 19th century showed us exactly what would happen if they were unregulated. Now we have Wal-Mart stockholders profiting from increasing the national debt while relying on either the national debt or the taxpayers to subsidize their employees.

If that's capitalism, then I'm opposed to capitalism.

I kinda disagree with most of this. We live in a world market. Taxing corporations at a higher rate will make them inclined to leave. When the wealthy leave then who pays off the debt?

The other option one could take in reducing national debt is to spend less.

Finally, I take issue with "regulating" business as a result of the industrial revolution. At that time, laws were put in place to prevent collusion, price gauging, and the unfair treatment of workers. That is totally different than the regulations that now govern business. Current regulations not only stifle major corporations from growth, but they often times prevent small businesses from being able to even get into the market. Companies make cuts (jobs) and pass on cost to consumers. Worse yet, they move their industry to countries where they don't have to deal with the added expense of US regulations.

[shockmonster]

I kinda disagree with most of this. We live in a world market. Taxing corporations at a higher rate will make them inclined to leave. When the wealthy leave then who pays off the debt?

The other option one could take in reducing national debt is to spend less.

Finally, I take issue with "regulating" business as a result of the industrial revolution. At that time, laws were put in place to prevent collusion, price gauging, and the unfair treatment of workers. That is totally different than the regulations that now govern business. Current regulations not only stifle major corporations from growth, but they often times prevent small businesses from being able to even get into the market. Companies make cuts (jobs) and pass on cost to consumers. Worse yet, they move their industry to countries where they don't have to deal with the added expense of US regulations.

Aargh had it right ( at least this is how it was 35-65 years ago) although I don't think that the industrial revolution and excess, was the catalyst for his premise. Patriotism and what was good for our country, at one time (when I was growing up) were a part of the decisions that American business' made(my grandfather never owned a car that wasn't a ford or Chevrolet). The attitude of doing what was best for our country instead of ourselves/families) goes back to the rationing, etc. that were a part of winning WWII. People and businesses made sacrifices for the greater good of our country. This is no longer the case. Businesses now go overseas to increase the pockets of their investors. Very few people, if any, buy goods because they are American made. Our country is no longer united (especially economically) and self sacrificing.

[wufan]

I still buy made in America when feasible. What did Aargh say about Ameican culture 35-65 years ago? I guess I missed that in his post.

[shockmonster]

I still buy made in America when feasible. What did Aargh say about Ameican culture 35-65 years ago? I guess I missed that in his post.

He didn't wufan. I added my opinion to his post (in parenthesis) and his mention of Sam Walton. One could quibble about the years that patriotism in business tended to be dominate, but in my opinion, those days are gone except for a couple of holdouts like yourself maybe. Actually, there are still some businesses who do what is best for their workers (I'm not sure that if they do it for America and patriotism) instead of profit, but to me, the number seems to be dwindling.

[Play Angry]

Those years also coincided with times when manufacturing costs in the U.S. were competitive. Very few people would pay 3x to 10x the price for basic goods, then or now, in exchange for feeling patriotic. The difference is that in the 1940s there wasn't an option.

A lot of folks egregiously glorify bygone eras as ideal.

[shockmonster]

Those years also coincided with times when manufacturing costs in the U.S. were competitive. Very few people would pay 3x to 10x the price for basic goods, then or now, in exchange for feeling patriotic. The difference is that in the 1940s there wasn't an option.

A lot of folks egregiously glorify bygone eras as ideal.

Good points. But in the 50's businesses (when manufacturing costs were competitive)were being taxed at a 90% rate, and they didn't take their profits off shore.

[Play Angry]

Good points. But in the 50's businesses (when manufacturing costs were competitive)were being taxed at a 90% rate, and they didn't take their profits off shore.

I could be wrong, but I thought the astronomical top brackets in the post-war era involved personal income (with shelters and loopholes big enough to drive a dump truck through) and that corporate income rates topped out around 50%? Cash amounts on corporate balance sheets, even adjusted for inflation, were so much smaller back then. The dollars some of these guys have available now is truly mindblowing.

[shockmonster]

I could be wrong, but I thought the astronomical top brackets in the post-war era involved personal income (with shelters and loopholes big enough to drive a dump truck through) and that corporate income rates topped out around 50%? Cash amounts on corporate balance sheets, even adjusted for inflation, were so much smaller back then. The dollars some of these guys have available now is truly mindblowing.

I think that Kennedy lowered the rates quite a bit to boost the economy after he was elected in 1960.

[Play Angry]

Kinda interesting...per the IRS' history of U.S. corporate income tax rates, the years where the top bracket was at its highest rate were 1968-69 (52.8%). I woulda thought it would have been 1946 and immediately thereafter.

[shockmonster]

Kinda interesting...per the IRS' history of U.S. corporate income tax rates, the years where the top bracket was at its highest rate were 1968-69 (52.8%). I woulda thought it would have been 1946 and immediately thereafter.

Yes PA you are correct. I finally looked it up (my memory is not so good) and I was thinking of the personal income amount which was at 92 percent with the real percentage at 70 percent because of loopholes. Kennedy lowered this percentage to 65 percent (I thought it was a little lower than that). Corporate rates were at the 52.8 percent at it's highest until it was lowered to it's current 35 percent.

Even though you were right about the exact amounts, they were still very high. Even though I was knee high to a grasshopper during the 60's, I still remember people (family members and their friends) discussing economic issues and thinking about them in patriotic terms. I must admit that these people I heard discussing these issues weren't in the top tax brackets.

[Rlh04d]

If that's capitalism, then I'm opposed to capitalism.

You're not really describing capitalism, you're describing globalization and free trade.

Ultimately, I go out of my way to purchase goods that are only made in America. Doing so requires effort and requires me to spend more money. But the truth is that if AMERICANS wanted goods that were made in America, AMERICANS would choose to buy them. That is not the case. Blaming Wal-Mart for delivering what Americans want is insane. A company doesn't have the moral requirement to tell the consumer what they should want. The average American is looking to maximize their spending dollars to get the best situation for their families, and in very few cases are American manufacturing choices the cheaper option. Should we make all American consumers across the board worse off in order to benefit unskilled manufacturing workers?

I didn't make an effort to buy American goods until my income got to the point where that kind of discretionary spending was easy to justify, though. Additionally, online marketplaces are making American goods more cost-effective versus box stores like Wal-Mart by cutting out the middle-men and enabling the manufacturers to sell direct to the consumer. I buy a lot of my casual clothes (and all of my undies) from Flint and Tinder for instance. Also my soap, but they tricked me into that. They have damn good soap.

Most people look at the idea of globalization from the standpoint of jobs, and without question we've lost a lot of low-skilled jobs overseas due to globalization. We've also opened the US market to cheap goods which have enabled the average American consumer to purchase things they never could have several decades ago. It goes both ways.

I'm all for regulation to a degree -- the invisible hand of the market is rarely if ever perfect -- but shuttering ourselves in to protectionism will never be the answer.

My take on globalization is the old adage "a rising tide lifts all boats." The world is continually becoming better and better off. That will continue to benefit our country and average American consumers more and more as the years go by. Technological innovation will dramatically speed up as the world becomes more educated. Not to mention that wealth, education, and economic integration tend to decrease threats to worldwide peace, which should hopefully enable us to cut military spending in the future.