Quote:
Originally Posted by PepsiFree
That still doesn't change the fact that consumer prices would skyrocket. I think it's pretty simplistic to think that raising the tax to a point that completely negative the foreign advantage would just increase jobs and circulate money money inside the country. Along with consumer prices skyrocketing, sales would plummet, jobs would be lost, and some companies would either close or leave completely. The US is a huge market, but don't expect that to continue as long as costs are astronomical.
Along with all that, the price of their exports would go up which would lead to less exports in general. That reduces the "cash flow" coming into the country significantly.
If you limit imports from China, they're almost guaranteed to start calling in their debt because they only let it ride at its current state due to the benefit they receive from it (calling in their debt would raise their currency against the US). The more they call in their debt, the more it'll crush the US dollar. The US are beholden to the goodwill of China at this point and reducing free trade is a bad solution. Even if you think it's a first step, it's a suicidal first step.
I mean, if you think that just taxing major corporations are going to push them offshore, you're going to in for a surprise when the lower domestic tax rate doesn't make up for the huge increase in cost of doing business by forcing their operations within the border. I always love that thinking: "If we tax corporations, they'll go offshore! We should force them to do all their business in one of the most expensive countries in the world. That'll fix it."
|
I think prices would go up a bit, but I'm not sure how they would skyrocket. Increasing competition helps keep prices down and affordable, I don't see how having domestic competition for the Chinese imports would be a bad thing. The import sales would go down and the domestic sales have nowhere to go but up. What jobs would be lost? The one's that don't exist in the US anymore? Prices can go up and wages can go up, it's all relative. You go way up North in Canada and yeah prices for goods are higher but their wages are higher to offset that. It's not like China would just stop exporting goods to one of largest markets in the world.
I think the gains the US would make on imports would offset any of the loses they experience on exports.
They call in their debt, don't pay it unless they are willing to renegotiate these deals. Really what can they do? So what solution would you adopt? Continue with these one sided deals and become more indebted to China because they have a "gun to your head"? They have to address the problem or they will continue to bleed economically.
You can't just keep treating business as your cash cow for spending, that's why nothing is being made in the US anymore. You must be referring to the major corporations that have all sorts of tax loop holes, exemptions and powerful lobbyists and make large campaign contributions to both parties. They won't go anywhere, they will just hide more holdings offshore if anything.
I'm open to hearing some of your solutions.