Even though Warrens analysis is correct, I highly doubt that a difference in the tax structure is enough to make a difference in the competitiveness of American goods overseas. The cost of production, excluding taxes, is much higher here than it is elsewhere.

That said, you are assuming that American goods in general are desired on the world markets. I'm not so sure that is true except in certain cases.

 

Isn't it the good accountant who looks for tax advantages and effeciencies for their customers? With the current system in place, I feel like the U.S. has the tax accountant from hell.

Let's hope any tax structures are adopted that make our products more competitive overseas--hopefully "Joe Union" in Dearborn and "Joe Entrepreneur" in Houston can both benefit.

As for U.S. goods in the world market: U.S. dominates the world market in computers and software, aerospace, medical and even agriculture, to name a few. They would see a positive effect of adding even 2-3% to their bottom line, or using that percent as a competitive advantage to grow their market share.

 

Warren,
I also wonder about the cumulative results of a continuous flow of dollars (innocuous paper money) outside the country to pay for the ever growing balance of payments... Doesn't that money eventually return as payment for alien purchases of our national wealth and treasure? Growing sections of our economy and culture are no longer under American ownership or control.

 

Yes - that is the flip side of the story. If overseas governments and other big dollar holders decided to reduce their dollar holdings, that paper (actually mostly electronic) money would come flowing back, and we'd be sending real goods overseas. If we weren't prepared for it, the net effect would be high inflation, high interest rates, or both.

I don't really think it's a good thing we're running a trade deficit. Some parts of the trade deficit I don't worry about - inexpensive shirts from China, for example, given that so few people are still employed making them domestically - and some parts I worry about a lot, like oil imports.

 

Cordy

The current system wasn't put into place by a tax accountant. It was put into place by the lawmakers.

My point was simply that a change in the structure of the tax from an income tax to a sales tax probably wouldn't make much difference in the competitiveness of US goods in the world market. Tax is such a small part of the cost of production that a change in the structure wouldn't lower the price much. Unfortunately, tax is an easy target.

As for the products that you site, they dominate the world market now, they are not the products that need the boost of a tax change. They probably have as much of a share of the market as they will have. The products that need the help are US produced automobiles and other consumer goods. There is a very good chance that they won't experience much of a change even at a lower price.

 

Good point about lawmakers v. accountants, Rob.

However, I think you underestimate market forces, and the ability of entrepreneurs and savvy businesses to take advantage of the smallest advantage.

 

with that policy.

In fact the political differences that Rob and I have helped to create this policy last year.

The fact of the matter is that there are a few people that are NOT attending SF05 because of some of the differences in opinion expressed last year. Fortunately, Rob and I have long ago agreed to disagree on some issues and respect each others opinions as neither right or wrong. In the interest of an having an enjoyable event at SF05 I would ask that it is in everyone's best interest to not discuss controversial issues at SF05. When we all turn to our "respective corners" at home we can resume the discussion here.

At least that is the policy that I am sticking too at SF05.

 

Looks like vintage has accepted the Rodney King philosophy regarding controversy.

Here's my question. Is this a symptom of wisdom or one of age? Is it based on an educated rational judgement by a the group or is it more hormonal syndrome of communal age structure within the herd? Is there an anthropologist on call?

As I've grown older I've noticed in m decision making process that I seem to take a less confrontational path to get to the same place. How about you?

Just trying to stir the pot


fltsfshr

 

Yep, me too. I'd attributed to the fact that it's all come around and gone around and not a lot of headway has been made regardless of all of the fuss (history repeats itself, we learn from the mistakes of others and improve on it before we do it again) .... apathy? or just tired of ? That's my take on it from a feminine point of view. With guys, I'd just attributed it to dwindling testosterone

 

I couldn't have said it better.