Hard Sell
•
by Moishe
The debate is on in Congress and One Eye, Chairman of the Congressional Budget Office, has called for a vote.
A vote on what?
The lowering of ALL Import Taxes to the Minimum.
That means all Foreign companies will be able to sell in the USA once they purchase an Export License for the barest cost - that of 1% of their asking price.
So what does that mean for USA companies and employees? That is the question being asked in Congress. But, unless you are prepared to meet the stringent requirements set forth by the Chairman of the CBO do not post in the CBO forum or you may get temporarily banned and your post moved, not to the Congressional Forum, but to the General Discussion Forum.
On the one side there are the pro-no-tax group led by One Eye and supported by Publius, Vincent Garibaldi, and mjdiv. On the opposing side there is b. k. blake, Bienville, George Baker and Alphamega.
Both sides bring up interesting points.
One Eye insists that more stuff is better than gold in delivering damage to the enemy. His position is that if the USA can buy more stuff from foreign nations at cheap prices then we will gain more power because we have more stuff.
His opponents are concerned that more foreign competition will drive prices lower causing wages to decrease as companies have to lower their prices.
The pro-no-tax group counters with "lower wages is all right if we can buy more stuff with lower wages."
But, of course, the price of Gold does not go down. This same Chairman of the CBO has the responsibility of ensuring that Gold remains as close as possible to 50 USD for 1 Gold. So where as now you might be making enough every three days to exchange it for One Gold should wages decrease it will take five to seven days to get that same chunk of gold.
In related news One Eye has tried (and succeeded) in getting Raw Material Import Taxes lowered to 1%. The hope at the beginning of that journey was that if we do it our trade partners will do it. The thing is - our trade partners, for the most part, have told us to stick it in our ear.
The CBO Chairman asked for, and got, an extension in order to speak to foreign governments on agreeing to a Fair Trade Agreement. Such an agreement was never achieved (even though the Chairman did come close).
But rather than returning Raw Material Import Taxes to their pre-Free Trade position Congress is now considering dropping ALL Import Taxes.
If you are for lower Import Taxes inform the Congressional Candidates now running for office of that fact. And if you are against such a decrease you, too, should inform your Congressional Candidates. Remember, Congressional Members only serve because YOU vote them into office. You also have the power to fire them for not performing as you believe they should.
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Comments
First!
@Teucer: who gives a rat's butt? That is about as immature a comment as I have ever seen. How about having an opinion?
http://www.youtube.com/watch?v=IZBxdsDLIwg" target="_blank">http://www.youtube.com/watch?v=IZBxdsDLI[..]LIwg
~ Geno
I've seen no facts that suggest that low import taxes are the way to go. The only argument coming from that camp seems to be based on a "wait and see" type of philosophy and it's shameful that the eUS citizens are being used as guinea pigs to test this out. It's time to start taking care of our own and stop worrying about what is good for other nations.
Low import taxes=lots of imports=homerun companies lose profit
Im not sure I like this idea either Mo.
The whole idea behind it is more stuff is > than more gold. That idea assumes we have a massive base of 10x per battle fighters, we don't. Our military is growing larger, but not everyone in America wants to join the military, let alnoe command units with in it. The whole idea needs MASSIVE amounts of active players and well the US doesnt really have that many.
Way I see it, more foreign competition equals low prices on goods, which equals lower wages, and less tax revenue coming in. This plan could put Americans out of business. We need to be helping American industry not crippling it.
I have stated more than once I would support a bilateral agreement with trade partners along with embargoes for those who do not play along.
But Congress does not have the balls to embargo Romania, Canada, or the UK. Does it have the balls to go against the American People? The Chairman of the CBO does not have to be concerned about re-election but the Senators do. Now is the time to speak. Make them commit their selves! 😃
"But, of course, the price of Gold does not go down."
If prices and wages were to fall, i.e. we were to experience deflationary pressures, the only way to keep the exchange rate the same would b to put (even) more USD into the market. It wouldn't make America poorer, but it would make citizens poorer by increasing the stealth tax, which is printing and selling USD. (It's a tax because the government makes money and you lose it.)
I would say that lower import taxes are good. Full Stop. As for finished goods, One Eye may be correct for his objectives, but in 9 cases out of ten I support low rather than no import taxes on finished goods. I also believe in a flat import tax across manufacturing.
I'll add that One Eye makes his own argument, and wages ARE irrelevant to it.
I would say that lower import taxes (on Raw Mats) are good. Full Stop.
Also Moishe, in reference to your comment above my first one, I have been meaning to write an article centered around that all week.
@Vincent: Each of us are welcome to their opinions. We all know what opinions are like, right? And in this case it is exactly that. No one knows for certain what would happen. So let's just jerk the rug out from under Import taxes. Not a gradual decrease as we see victories. Well I am not willing to accept your or One Eye's nomination as Guinea Pig.
If this goes through I will close the doors of my companies, sell them, move my Orgs to Romania and Import to the USA at half the price.
That means 30 Americans (who currently are among the highest paid for their skill) will be going to work for about half the wages.
Moishe, I am disappointed that would would not rock out with me to that awesome video I made for you.
http://www.youtube.com/watch?v=IZBxdsDLIwg" target="_blank">http://www.youtube.com/watch?v=IZBxdsDLI[..]LIwg
~ Geno
Brother, I am playing it over and over as I vibe to what is happening around the eGlobe. All I can say is, You Rock! My young, patriotic chaver!
I'll give you credit, most of this article is very balanced. I still don't know why the exchange rate needs to stay at 50 to 1??? One of the beauties of lowering import taxes is that companies will be using and getting USD driving up the price, and making all of your USD assets more valuable.
@J😨 I have been awaiting your input. It is very important to me. The CCBO has an agenda that settles the Gol😛USD at 1:50. Reason? IDK.
Admittedly I favor more protection for American Industry. HOWEVER I am going to give One Eye credit for being who he is and his abilities. But I refuse to be a Guinea Pig for the CBO. There is no solid proof that his proposal will work. So let's take it slow, eh?
@Moishe: Slow ride, take it easy...
As a former Econ Council member, I can answer the 1:50 question. USD was appreciating during and after Operation Taco Bell from about 1:62 down to about 1:45, which was hurting exports. Jewitt proposed issuing USD to bring that down so exports would be more affordable.
EC consensus was reached that 1:50 was the highest MM rate we wanted, and so that became the peg. MM demand for USD has pretty much kept it there ever since despite additional USD issues.
On lower import taxes, my position is pretty well known. I favor greater trade for two reasons. One, primarily, so we can EXPORT. Two, so we have stronger diplomatic and economic ties. To me, importing is tax, if you will, that we are willing to pay in exchange for the other two.
That said, I strongly oppose unilateral lowering of import taxes. Instead, I insist that it must be done in a trade negotiation framework so that the two goals stated above are met. One Eye and I disagreed pretty vigorously on this point, but he has since embarked on trade talks, and so I give him credit for that.
Do you not agree that if lower Import Taxes cause lower wages the average citizen would find it harder to obtain Gold through the MM? Sure, they may be able to buy "stuff" at lower prices (from foreign vendors) but the chances of them saving enough to create their own company becomes slimmer?
Also, is it not One Eye's intention, albeit somewhat covertly, to limit the future creation of USA companies? Has he not said that he favors fewer companies?
@ ssomo- Oh, Ok, that makes sense, but they have been stable now for quite sometime.
Also if little can be predicted, wouldn't the best experiment be to run a test run?
I think lower import taxes would inevitably lead to greater supply, then lower prices, then lower operating margins for business, and ultimately lower wages.
If they work every day, workers will continue to get 5 gold per month as a hard worker, exactly the same as they do now. But from wages, less so. The free gold factor is part of what puts pressure on the value of USD (and all eWorld currency) in the MM.
Yes, OE and Publius have each stated at times that there are 'too many' businesses and that they are the wrong kind of business to maximize either (a) strength or (b) profits.
They'd rather the eUS import lower margin/productivity things like Q1 food or Q1 moving tickets, so we can focus on the heavy artillery (so to speak).
Well, I am a no holds kinda guy. If I could set things myself I would watch each commodity and adjust Import Tax to limit foreign imports to about 50%. Also I would increase Income Tax on Diamonds and Iron to dissuade those industries. From there on I would let the market decide. If we need more Q4 food I would slowly drop the Import on that until we stabilized. If we had too many Gifts I would raise the Import Tax on that until I saw prices going up.
This Congress/Administration (much like the last few) see One Eye as some kind of Wizard that Knows All and Does No Wrong. But he does. And has. Raw Materials for example.
Yeah, speaking as a lower level player, the wages don't mean very much to us. We mainly work for the 5 gold. Then when we have 20 gold, we buy a company which goes under, and we then quit.
I think the best think for businesses is not to shield them from foreign competitors, but give them easy access to capital by contribute in the lending markets, providing them with bonds that can be bought and sold. Which then goes to banks who can give loans out. This is a completely different issue though.
The Fed can always bail out those loans if they default. 😉
Thanks Obama Jr.
"They'd rather the eUS import lower margin/productivity things like Q1 food or Q1 moving tickets, so we can focus on the heavy artillery (so to speak)."
Who doesn't want this? The USA makes expensive technological stuff rather than t-shirts for a reason you know.
As far as extending credit to business, I'd say that offering to subsidize or extend credit for upgrading q1 grain, oil, and, wood companies (in high regions) would produce enough tangible gains to be worth it, if done correctly. I can understand why many would oppose it though. It doesn't feel right, even though the numbers come out well.
Also, I would argue that the USD is not so much comfortable at 0.02, as we are continually forcing it down. I mean look at the USD to Gold rate. 50.02 USD for 1 gold? That spread is tiny, it's more than just an indication of liquidity and stability, there's upward pressure on our currency now. We could easily end up with more pressure on it.
If you want a perfect example of what happens when you have low wages/cheap goods on your market, look no further than Israel.
We deal with this nightmare every day, and yet, the US wants to create the nightmare to deal with for itself.
Basically, we're talking about dropping all import taxes, while our allies keep up theirs, and the income tax on the American worker is still quite large?
This strikes me as nuts.
Do we really want an import deficit?
The bottom line on winning this war in the long term is a strong economy. The economy stays strong as long as we're an export economy. When we import our goods, American manufacturers have to compete with foreign manufacturers here, but can't compete in those same countries because they have high import taxes. They have multiple markets, we only have one.
The only commodity I can see having a low import tax on is iron, because we don't have a high iron region.
We shouldn't lower our import taxes until our allies are willing to lower theirs.
JBB
What the ....! Like JBB said all nations know that you ideally want to export, export, and export more with at the very least avoiding a trade deficit. All enations want this and that is why it is hard to get a unbalanced import/export deal in your favor because all push for the edge. I see no benefit for the eUSA to drop all taxes on imports, but I do see a lot of other companies rubbing their hands together with a gold glint in their eyes. Fair import, export tax agreements with allies that make sense well make sense.
On the other side of things wages are already dropping and jobs being lost. I wanted to start a business but not now at least not in eUSA. I been out of a job 3 times in a week and had to message my present employer to get a fair wage after he dropped it over 30% the 3rd day of employment(2 days working). The biggest threat to economy even here is the threat of failure. How much will be lost in taxes if a LOT of companies close shop in eUSA.
The thing no one has said here is that lower wages will reduce government revenues. This, of course, will reduce our capacity to make war; which, after all, is the point of this game.
Having less companies in the eUSA also seems stupid to me. We have over 40% unemployment. If anything we need MORE companies, and higher wages to keep and get more people involved in the game and to keep them here in the eUSA. People like making more, they don't like making less. This is simple human nature.
This is an outrage, why are we giving hem equal access to our markets while they still have 20-99 percent barriers on there markets. this will be the beggining of an exodus of american business mark my words.
why i say this is because yo can now bypass the american income tax by just setting up shop offshores and buying a import license and not pay high income tax while still making the same profits.
the workers have began to move thank you, you idiot for destroying our country 🙂
I've started living in eSpain a month after being e-born.
I was getting sick of gaining experience levels, but making the same or less, and the inevitable message after three days "your employer has adjusted your salary from 12.5 USD to 9.0 USD".
Now I have the house I wanted, and enough money to fly off and fight for the US (or Germany, or whoever I want to, whenever I want to).
I've gotten used to the fact that I don't understand the Spanish media, and don't have any Spanish friends.
I still consider myself American, but the labor market in the US makes the life of the American worker just too hand-to-mouth and unpredictable, IMHO.
I'm not an econonomist, but I have to think that import taxes at zero would only make it worse.
eUS needs to adopt mercantilism for a better economy. Focus more on exports over imports.
Vote no on lowering taxes!
We can not afford to buy everything that our competitors hawk while we sell nothing.
http://www.erepublik.com/en/article/what-would-happen-if-imports-were-lowered-or-raised--834860/1/20" target="_blank">http://www.erepublik.com/en/article/what[..]1/20
What would happen
Read it earlier, Don. Nicely said.
This relates to part of my campaign platform right now, concerning the iron industry and Spanish imports. Very interesting read, comments included.
Reading more, I think I can be a little more firm. This is economic suicide. One Eye seems to think the purpose of American business is to support his idea of whats fun in this game. Sorry bud, but other people play this game for other reasons. One of them is making money.
Take that away so you can have a "stronger USA," whatever the hell that means, and we'll go somewhere else to make our money, leaving unemployeement for a goodbye gift. I don't know what his vision of a stronger USA is, but thats certainly not mine.
Good going, Robert! Push that platform.
For the next month in an official capacity, you bet!
Or, if luck would have it the other way, five days and unofficially, ha!
What do you think the chances of this thing passing is? It seems like a lot of people on the Congressional board are against it, but I'm worried people will just swallow One Eye's assertions blindly. What do you think?
death to the retard!!
higher import tax now
I say that if One_Eye does pass his thing-just move out of the country ,but since there is soo many people spread about- how are we giong to keep in touch?
whats next sending jobs overseas lol
I moved my business to Romania. As is, I'm able to provide stable jobs, compete domestically (and I can actually do better in the US market being based out of Romania), and actually earn a small profit. I could not do this once things were changed in the US and I've already spoken to a number of business owners that have and are moving their companies overseas.
That said, One Eye is right. There will be more "stuff" on the market, but it will be coming from companies like mine that can now export to the US at a much lower rate and it's the citizens of these countries that we've moved our companies to that will be reaping the benefits of stable, higher wages as opposed to US citizens. That's the shame of it all.
More stuff does not equal more consumption. If he wants to increase food consumption, promoting US citizenship is the way to go. Same population + way more products = death to American business while foreign companies flourish at its expense.