Don't worry, when those rust belt Trump supporters pay 25% more for their stuff at Walmart, they will still find a way to blame Obama
51
Honestly, i disagree with Trump on many, many issues but this is one that I actually support because I'm so tired of the bi-partisan hypocrisy on this issue. No one wants to call out the truth, one of the fundamental reasons that we have an illegal immigration problem and a US manufacturing problem is our collective addiction to cheap goods and cheap food. There was a report on the dairy industry's concerns about the wall because they rely on illegal workers because they can't afford to pay legal wage rates since the Feds set the price of milk. Ok then, let's do the social experiment. I don't believe that American workers won't do the jobs of illegal migrants, I just think that we have to establish the pay rate at which they are actually willing to do the work. And if that means that milk becomes $6.50 a gallon so be it. There is a price to pay for cheap; are we willing to pay it? Perhaps one of the side benefits is that we'll find a remedy to our obesity problem.
28
Most of the commenters here are really missing the point of this article. It's not just about New York Fashion designers making their products in America.
An import tax will affect everything, including necessities such as gas and food - prices will rise significantly for American consumers. Unless wages for the average American worker increase as well, which likely they will not, this will have a devastating affect.
Yes, maybe you are "willing to pay more for American made" or"can do with fewer shirts", but what about the typical family of four? Can they make due with "less food" and "no gas" because it has become too expensive for them to afford on their same salary?
An import tax will affect everything, including necessities such as gas and food - prices will rise significantly for American consumers. Unless wages for the average American worker increase as well, which likely they will not, this will have a devastating affect.
Yes, maybe you are "willing to pay more for American made" or"can do with fewer shirts", but what about the typical family of four? Can they make due with "less food" and "no gas" because it has become too expensive for them to afford on their same salary?
46
Cheap, disposable clothing and shoes made by some poor soul in Bangladesh or another Third Workd country vs, higher prices and a requirement that business increase wages and make more products in the U.S. I would choose the second option every time. I've had the same TV for the last 10 years and I am considering having a favorite pair of shoes resolved because I can't stand buying the cheaper, less well made products made in China. It won't hurt others to consider their purchases more carefully. And no, I did not vote for Trump.
39
Working class US citizens should be very angry at Bill and Hillary Clinton and their “Established Mainstream Politicians” who are controlled by their elite the “Clinton Foundation” donors, the elite “DONOR CLASS” campaign contributors, and PACs (foreign and domestic) campaign contributors who paid these politicians to create NAFTA, PNTR for China, ND all of the other FREE TRADE laws that economically required that our US STEM manufacturing jobs relocate to foreign nations when US citizens do not agree to work for the same wages that Third World citizens are glad to work for.
The US federal government has therefore economically required that US businesses relocate as many US jobs as possible to third world nations when US citizens refuse to work for third world wages.
The US federal government has therefore economically required that US businesses relocate as many US jobs as possible to third world nations when US citizens refuse to work for third world wages.
8
The author fails to account for 2 important factors: 1. The border adjustment tax will increase the value of our dollar which will decrease the fashion importer's cost of goods sold by more than it will increase its US tax liability. 2. Europe's VAT produces incentives to export which the US does not currently have. The border adjustment tax will equalize that incentive for US exporters.
11
Precisely. In addition, it ignores the decrease in corporate taxes that would also likely decrease tax liabilities beyond the point of decreased profits from increased border taxes. But the effect of decreasing REAL costs of goods due to increasing USD value cannot be understated.
5
But a stronger dollar make U.S. exports more expensive which hurts sales. Econ 101
14
People need jobs more than they need dozens of pairs of shoes or shirts or jeans made by no rights essentially slave laborers in corrupt and murderously authoritarian 3rd world nations. US dollars and factories flooded into authoritarian states creates the same kind of "oil curse" effect that oil money has in the Middle East, it enables murderous dictators and oligarchies to stay in power forever. Perhaps cheap trash that wears out in a few months or blows up the day after the warranty is up is "necessary" so that our 3% business owner nobility can turn this into a 3rd world 'low wage economy' where they can rule like the sheiks in the Middle East or the Oligarchies in Latin America, China et al. But that is feeding-enabling a vicious regressive cycle what no sane person in the American majority wants. A few pairs of good long lasting American made shoes and enough shirts and jeans to wear until the weekly laundry is done, and one or two TV sets made to last 20 years, is all anyone needs of these items. Most common people, the majority would agree that they really need a job, and one that pays enough to pay their monthly rent, buy food and pay for transportation, medical care and college so they do not have to beg for some crooked politician for government handout in order to survive.
26
Should US workers hold grudges against President Clinton because he created the laws that started their mass job relocations to relocate to China and Mexico?
Ex-President Bill Clinton (and Professor Robert Reisch) could have said, "Once you were employed and were able to feed your family, so I signed NAFTA into law and that economically caused your manufacturing job to relocate to Mexico because you would not agree to work for the same wages that Mexican citizens would work for."
Then President Clinton could have also said, "Once you were employed and were able to feed your family, so I created PNTR for Communist China and this economically caused your manufacturing jobs to relocate to China because you would not agree to work for the same wages that Chinese citizens would work for."
Ex-President Bill Clinton (and Professor Robert Reisch) could have said, "Once you were employed and were able to feed your family, so I signed NAFTA into law and that economically caused your manufacturing job to relocate to Mexico because you would not agree to work for the same wages that Mexican citizens would work for."
Then President Clinton could have also said, "Once you were employed and were able to feed your family, so I created PNTR for Communist China and this economically caused your manufacturing jobs to relocate to China because you would not agree to work for the same wages that Chinese citizens would work for."
7
Trump is poised to enact the largest tax increase for working people (his own base) in decades. Other poorly thought out policies like this one, best illustrated by his "Muslim Ban," flow from Bannon's White House like vomit. Let's hope the resist movement turns into a true political force that ousts these dangerous and incompetent people.
18
"Americans will have to get used to paying a whole lot more for shoes, shirts and TVs."
OR, we can start manufacturing those items in the United States. But I'm sure there are "globalists" who have no faith in American manufacturing ability.
OR, we can start manufacturing those items in the United States. But I'm sure there are "globalists" who have no faith in American manufacturing ability.
8
So the argument is that because domestic industry has been decimated by foreign competition, there is no justification for favoring domestic industry because it cannot compete. On the other hand, where is the incentive to invest domestically if foreign imports can always undercut domestic production? And undercut they will: there is plenty of slack still in Asia, in underdeveloped countries that still have plenty of agricultural labor ready to be converted to cheap factory labor. There isn't a playing field to be leveled here: what there is is a dam with a lot of water behind it. Sure you can open the floodgates and enjoy all that cheap water: but people who get flooded out by it aren't going to be happy.
10
The New York Times does not want America to be great again.
2
Went to the supermarket yesterday and noticed how many fruits (like strawberries, cantaloupes) came from outside the US, where right now most of the nation is experiencing some degree of winter. Those prices will surely go up.
But not as much as--wait for it--DRUG PRICES! Yes, MANY MANY drugs--over the counter as well as prescription drugs--are either manufactured overseas or their chemical intermediates are (mostly India and China). Anyone think that Big Pharma will keep prices the same while paying more in taxes?
But not as much as--wait for it--DRUG PRICES! Yes, MANY MANY drugs--over the counter as well as prescription drugs--are either manufactured overseas or their chemical intermediates are (mostly India and China). Anyone think that Big Pharma will keep prices the same while paying more in taxes?
10
It does not matter what form of government that any city, state, or nation (or any family) selects.
Every Republic, Democracy, Theocracy, Capitalism, Communism, Socialism, Fascism, Dictatorship, Kingdom, Principality or any other form of government still has to have their privately owned businesses continuously create sufficient new taxable national wealth in their nation so that there is enough available wealth in that nation for that nation's government to confiscate a portion of that new taxable national wealth and/or profit through income taxes, sales taxes, property taxes, tariffs, etc., and other taxes to pay for their wealth consuming government activities.
This can only be accomplished by limiting government spending to less than the government collects in taxes.
Hopefully this can be done by each government without borrowing wealth from individuals (mostly in other nations) to pay for their various wealth consuming government activities including any distribution of wealth confiscated from the wealth creators and then handed to the tax supported citizens.
Nations such as the USA should re-industrialize or take other actions ASAP as required to generate as much new taxable wealth as they need to pay for their wealth consuming government activities.
Every Republic, Democracy, Theocracy, Capitalism, Communism, Socialism, Fascism, Dictatorship, Kingdom, Principality or any other form of government still has to have their privately owned businesses continuously create sufficient new taxable national wealth in their nation so that there is enough available wealth in that nation for that nation's government to confiscate a portion of that new taxable national wealth and/or profit through income taxes, sales taxes, property taxes, tariffs, etc., and other taxes to pay for their wealth consuming government activities.
This can only be accomplished by limiting government spending to less than the government collects in taxes.
Hopefully this can be done by each government without borrowing wealth from individuals (mostly in other nations) to pay for their various wealth consuming government activities including any distribution of wealth confiscated from the wealth creators and then handed to the tax supported citizens.
Nations such as the USA should re-industrialize or take other actions ASAP as required to generate as much new taxable wealth as they need to pay for their wealth consuming government activities.
3
Not only severe changes in consumer manufactured goods, from shirts to electronics, and commodities like food, oil and chemicals, but, in my area, the seeds of a major American downgrade.
This is research. Whether one understands it or not, basic and applied research is the foundation for technology, agriculture, and health. When research, already a defunding target of the know-nothing politicians can't afford instrumentation from overseas, bring in educated workers, obtain investment for new products, then we're no longer first rank. In fact, since it's a catalytic effect, I'd say we drop out of the first world category completely.
I make scientific hardware. I rely on many very technical products no longer made here, in order to serve researchers who no longer can afford current product. I don't know if it would surprise anyone, but no R&D means no new industries, no new products, no relevant education, and definitely, fewer good paying jobs as we race to the bottom.
This is research. Whether one understands it or not, basic and applied research is the foundation for technology, agriculture, and health. When research, already a defunding target of the know-nothing politicians can't afford instrumentation from overseas, bring in educated workers, obtain investment for new products, then we're no longer first rank. In fact, since it's a catalytic effect, I'd say we drop out of the first world category completely.
I make scientific hardware. I rely on many very technical products no longer made here, in order to serve researchers who no longer can afford current product. I don't know if it would surprise anyone, but no R&D means no new industries, no new products, no relevant education, and definitely, fewer good paying jobs as we race to the bottom.
10
Due respect to the author of the article, but the NYTimes could not have picked an example that Trump supporters would be less sympathetic to. Trump's supporters aren't interested in fashion, let alone luxury fashion. They certainly aren't worried about a fashion designer in New York City losing the million dollar salary she earns by sending jobs overseas. I'd wager that many Trump voters have been doing their part to "buy American" since the late 70s.
12
New jobs for workers could be created in the USA to build, operate, maintain, and repair these future robots, but these jobs will require STEM knowledge to be employed in the manufacturing of robots..
Without a Science Technology Engineering and Mathematics (STEM) human database in the USA, the artificial intelligence and hardware for those future robotic and automation machines for manufacturing products will NOT be designed, developed, manufactured or built in the USA.
The USA will need a STEM educated workforce with the critical thinking skills and concentrated focus that is required to design, develop, operate, maintain, and repair these robotic manufacturing systems after they are created by the Engineers and Scientists.
I do not believe that the USA has sufficient numbers of technically STEM educated people that that is required to design and develop robotic manufacturing machines.
The US education system is now producing large numbers of graduates with useless degrees that are not educated in the subjects that would even help them to even learn how to operate, maintain, and repair these robotic manufacturing systems, so maybe robotic manufacturing businesses will not ever even be located in the USA.
Without a Science Technology Engineering and Mathematics (STEM) human database in the USA, the artificial intelligence and hardware for those future robotic and automation machines for manufacturing products will NOT be designed, developed, manufactured or built in the USA.
The USA will need a STEM educated workforce with the critical thinking skills and concentrated focus that is required to design, develop, operate, maintain, and repair these robotic manufacturing systems after they are created by the Engineers and Scientists.
I do not believe that the USA has sufficient numbers of technically STEM educated people that that is required to design and develop robotic manufacturing machines.
The US education system is now producing large numbers of graduates with useless degrees that are not educated in the subjects that would even help them to even learn how to operate, maintain, and repair these robotic manufacturing systems, so maybe robotic manufacturing businesses will not ever even be located in the USA.
9
Ah... those good jobs that Trump will bring back to America. Buggy whips. Princess phones. Vacuum tubes for our radios and black and white TVs. Maybe even picking cotton?
How dumb are we to listen to this ignorant child.
How dumb are we to listen to this ignorant child.
18
Do proponents of this measure expect other nations to just stand by and idly accept these new rules of trade. More than three centuries ago Newton formulated his three laws of physics, the third stating essentially that for each action there is an equal and opposite reaction. I suggest the Trump administration and US congress take this into consideration. Thank you.
8
Clear and simply written. We Americans are addicted to consumption and demand low prices for what we buy. Personal consumption is a very large portion of US GDP. If prices were to increase in response to a border tax, consumption would decline (basic economic principle), adversely affected importers and retailers. These businesses would seek to offset this impact by reducing expenses, including cutting jobs. Furthermore, these price increases would not incentivize US production for at least two reasons. First, the tax reform proposal also reduces the corporate income tax rate from 35% to 20%. This would partially mitigate the border tax impact, such that for many wholesalers and retailers, it would still be less costly to import. Second, there is a dearth of US manufacturing capacity for many of these industries as the supply chains left the US. Manufacturing capacity would take many years to rebuild, including the need for long term capital investment. Investors allocate their capital based upon a best risk/reward ratio. And this is a bad one. Americans have always led the world in looking forward and innovating (read some of Thomas Friedman's articles on this topic). I believe the border tax, like some recent policy proposals is wrong headed and not good for the economy, America’s or the rest of the world.
6
Many commenters seem to think the making items that are now cheaply made outside the USA will be made in the USA, but have higher prices. People will still buy the product, but less of them. Meaning that few people will be employed producing these items. For example. an oversees worker earning $200 per month can produce 1000 shirts a month which will be sold to 1000 people for $20 during that month. The $20/shirt covers all expenses from production to sales and is assumed to be the equilibrium price to sell 1000 shirts/month. A USA worker will need $2000/per month, adding $2 per shirt, or a 10% increase in price. This will result in only 900 shirts being sold. Next month, $2.22 is added to cover the shirt maker. Few shirts will be sold, fewer workers needed. This goes until a new equilibrium is reached. Most likely a 4--6-% increase. Jobs from overseas will not come back 1-to-1. Prices will go up, few items will be purchased. Few workers will employed than anticipated and these worker will be demonized for asking for too much pay/benefits. Everyone will not happy.
The best solution is to export our low-skilled labor to low-cost countries and import high-skilled labor. That will 'Make America Greater than Before.'
The best solution is to export our low-skilled labor to low-cost countries and import high-skilled labor. That will 'Make America Greater than Before.'
10
Oh darn, I can't afford those cheaply made shoes and jackets that fall apart before the year is out?
Funny thing is I still have my 20 year old bomber jacket in good condition as it was made in the USA.
Funny thing is I still have my 20 year old bomber jacket in good condition as it was made in the USA.
18
Designed obsolescence is what we have in goods now. Profit is king. Things use to last, clothes, appliances. Now they are manufactured off shore, the prices are higher, salaries to the workers far lower, and they don't last. Guess where the profits are going. With low pay in this country, and no unions, we are doomed.
19
Well Trumpians, what about all those obsolete jobs you were hoping would be brought back by this Idiotic Demagogue?
Think those trading nations of the US are going to make "tremendous deal" with the most hated Leader in the World (Trump now trumps Putin)?
Amerika, you asked for it, You've got it. Wait till you see what's coming your way. Trump has done in one week more damage to the United States than any foreign enemy could have accomplished.
Putin is right now simply gleeful.
DD
Manhattan
Think those trading nations of the US are going to make "tremendous deal" with the most hated Leader in the World (Trump now trumps Putin)?
Amerika, you asked for it, You've got it. Wait till you see what's coming your way. Trump has done in one week more damage to the United States than any foreign enemy could have accomplished.
Putin is right now simply gleeful.
DD
Manhattan
21
Many of these comments indicate a supreme indifference to the facts laid out in the column. The bottom line is this: the Trump idea is a blunt instrument that will sharply raise your own cost of living. Rapidly.
17
I thought the GOP was all about free trade, lower taxes, no government interference, individual liberties, and Christian "values"??
LOL
LOL
10
Paying more for things isn't always such a bad thing. When you have to, you adjust your priorities and tend to buy a lot less junk that you don't need. So I can't have twenty pairs of tennis shoes. After all, I only have two feet, so what's there to miss?
9
@Iver Thompson
Pasadena, Ca
Ask your fellow citizens.
Pasadena, Ca
Ask your fellow citizens.
4
This tax, if implemented, will not only stop people from buying more "stuff", it will severely depress economic growth. A cascade effect, much like what happened during the Financial Crisis, will occur.
Business "A" raises prices, so sells less. They lay off some employees and buy less machinery, or supplies or put off expansion. In turn, the businesses that supply Business "A" will also have to tighten their belts, following the same reduction in spending and layoffs. This will have a rolling effect in the economy, causing higher unemployment, closing of businesses, higher government spending for benefits for those affected, etc. And that doesn't even count the cost around the world, as U.S. suppliers cannot sell their goods here any longer. In short, it will be a disaster.
Business "A" raises prices, so sells less. They lay off some employees and buy less machinery, or supplies or put off expansion. In turn, the businesses that supply Business "A" will also have to tighten their belts, following the same reduction in spending and layoffs. This will have a rolling effect in the economy, causing higher unemployment, closing of businesses, higher government spending for benefits for those affected, etc. And that doesn't even count the cost around the world, as U.S. suppliers cannot sell their goods here any longer. In short, it will be a disaster.
6
I'm shocked that Ivanka and Jared would support this!
3
When cheap underwear has cost you your job, it's already costing more than it's worth.
10
Dems demand more than a DOUBLING of the federal minimum wage to $15/hr to help low-skilled workers.
But Dems won't protect those low-skill workers from outsourcing (via a tariff).
I don't get Dems. An idea isn't a bad idea just because Trump likes it.
But Dems won't protect those low-skill workers from outsourcing (via a tariff).
I don't get Dems. An idea isn't a bad idea just because Trump likes it.
8
@Jay Lincoln
NYC
Those low paid workers can't afford expensive goods. In fact the entire US economy functions on the basis of cheap imports (everything from ipads to avocados), paid for with inflated value dollars many of which have been borrowed at low rates of interest. You don't get anything.
NYC
Those low paid workers can't afford expensive goods. In fact the entire US economy functions on the basis of cheap imports (everything from ipads to avocados), paid for with inflated value dollars many of which have been borrowed at low rates of interest. You don't get anything.
6
the dollar stores and discounters most reliant on cheap goods largely cater to the poor. We should pay a VAT on luxury goods. It's the .01% who are dodging personal, corporate and value added taxes.
15
The Trump administration really is pro-business; it's just that it's pro *big* business. The biggest. Yuge. If you're one of the big ones, you will be just fine; if you're not, you are (and, by implication, deserve to be) a loser.
12
Two words to you: child labor. I see it all the time in Asia. And vastly underpaid adults. I don't favor Trump's policies. But why is it so cheap for you to make your clothes overseas? A little more honesty would have definitely helped your argument.
15
This is EXACTLY why we need to start taxing consumption of purchases and stop taxing income, payrolls, capital gains, estates, property, etc. Everyone should educate themselves about H.R. 25 and it's Senate companion bill, both parked for years in Congress.
Why don't you know about? Because the wealthiest have gamed the system and like just fine, and a full half of income earners don't pay anything because they don't make enough.
Why don't you know about? Because the wealthiest have gamed the system and like just fine, and a full half of income earners don't pay anything because they don't make enough.
8
Two weeks so far; 206 to go. A long time to hold our breath and our noses.
12
For the commenters waxing poetic about how noble it would be to consume less in order to protect American workers: I urge you to adopt a broader perspective. We are not only talking about manufacturing jobs. American fashion and apparel makers and sellers employee tens of millions of people in jobs that range from hourly work in retail stores and warehouses to salaried, white collar work like mine. All of us will suffer the effects of a contraction in the apparel markets tied to price increases. We are talking about trading the livelihoods of MILLIONS of Americans for likely less than 100,000 low-paying, back breaking, factory jobs. It is easy to say "wages will rise" or "the dollar will be stronger" - but if these effects materialize it will likely take DECADES, and they will come far too late to protect, or even to rescue, the vast majority of us whose work evaporated.
13
Has anyone considered that IF we did provide a tax disadvantage to imported content and a tax advantage to overseas sales, other countries would simply do the same thing? We're not in a vacuum here.
9
i spend money on American made stuff and I don't mind paying a little more.
3
I do too but buying stuff from other countries creates strong middle classes everywhere that want to buy our stuff too. It's a win-win.
5
Another Trump bait and switch. He's got a million of 'em". The Rs talk a great story but in the end it's the little guy who gets it in the neck and the wallet. You won't see international corporations getting taxed and hurt. There will always be an "out" for them. You can bet on it.
4
Let's not forget the border tax has already kicked in as the Mexican peso has declined nearly 20% versus our dollar. There goes your tariff fee. Where are the great Wall Street minds we have hired to do our bidding. Hiding I'm sure!
2
A US Dollar that would buy about 8 Mexican pesos in 1960 can now exchange for as much as 12,654 of the 1960 Mexican pesos today.
Mexico now prints the "SUPER PESO" worth 1000 of the 1960 pesos each and is now called the "Mexican Peso"
This is equivalent to about 158,175 percent inflation over that period.
A $2 USA loaf of bread would then cost $3,750 today if the USA had implemented Mexican type economic monetary policies in the 1970s, and $4,000 next month, and maybe $4,500 the month after.
Mexico now prints the "SUPER PESO" worth 1000 of the 1960 pesos each and is now called the "Mexican Peso"
This is equivalent to about 158,175 percent inflation over that period.
A $2 USA loaf of bread would then cost $3,750 today if the USA had implemented Mexican type economic monetary policies in the 1970s, and $4,000 next month, and maybe $4,500 the month after.
1
Too bad Mr Nakios couldn't put this in 140 characters so that Trump could learn something. Trump seems to be for a kind of economics that picks winners and losers. Given his business background he cannot pick either.
3
The right thing to do about trade inequalities is nothing. Instead, we need to tax those who benefit the most, I.e. multinationals and billionaires, in order to pay for those being left behind by technology and cheap foreign labor. These funds would not only pay for a safety net, but for new industries like clean energy, advanced healthcare, and for better education and a massive infrastructure gap. What the Trumpists are doing with the Republicans continued to avoid the real issue of inequality and greed. They are doing the exact opposite in fact and hoping we don't see it. The border wall is just a symbol that should remind the rest of us of the straw man xenophobic argument they have made to avoid doing what's right. I hope we can see that the argument of paying for the wall is a hoax
6
Ok, we want more jobs brought back to the US. Explain please in very simple terms what those jobs are- high paying tech jobs that one needs education for or low paying unskilled factory jobs. If its the high paying jobs, ok, get an education, sacrifice, do well in school and you will compete for those. If its the other - be prepared to compete with robots (automation) and a low salary. Gone are the days when you make $30.00 per hour plus benefits to sew a shirt, bolt a door or any other menial task. Sorry, thats the truth. Now take that money you aren't making and get ready to spend more of it on necessities like food and clothes. Thats your Trump world. Where the uneducated whine instead of doing.
14
Factory jobs are high paying, not just because they are skilled, but also once the company invest $1Billion building the factory, the worker is in a much stronger bargaining position. The boss can no longer say, its my way or the highway. Instead workers can retort, fine leave your $1Billion investment here. We can find someone else that has a fairer attitude towards workers to buy it. And the worker can back up this position because it is always possible for the city to take the factory by eminent domain for a fair price to sell to another.
2
I don't support Trump's wall. I think it is a massive waste of money.
At the same time, I do think it might be time that we stop the race to the bottom created by the exploitation of cheap labor. I hear complaints from farmers, for example, that American workers do not want the jobs they offer in their industry. I think what they mean is that they don't want those jobs at the wages farmers (and indeed the corporate farms) are willing to pay. Sure, an out of work American might not take a job in the field picking fruit for minimum wage, but he may very well take that job for $20 an hour with benefits. That will mean higher food prices for everyone, but if that is what it takes, so be it. The system as it stands now has resulted in a cheeseburger being cheaper than a head of lettuce, which is insane. Thank the fast food industry for this, but I digress.
I buy American when I can. These products are much more expensive than their foreign equivalents, but that is what it takes to support U.S. makers. I am lucky to be able to spend the extra money, but maybe if the working class had better jobs which could be created due a little less globalization, they would be able too.
The Democrats need to get on this. They need to talk about bringing back unions. they need to talk about bringing back pensions. They need to fight (and I mean fight) for better wages and lower taxes for the working class. Right now these issues are being co-opted by a charlatan with nefarious intent.
At the same time, I do think it might be time that we stop the race to the bottom created by the exploitation of cheap labor. I hear complaints from farmers, for example, that American workers do not want the jobs they offer in their industry. I think what they mean is that they don't want those jobs at the wages farmers (and indeed the corporate farms) are willing to pay. Sure, an out of work American might not take a job in the field picking fruit for minimum wage, but he may very well take that job for $20 an hour with benefits. That will mean higher food prices for everyone, but if that is what it takes, so be it. The system as it stands now has resulted in a cheeseburger being cheaper than a head of lettuce, which is insane. Thank the fast food industry for this, but I digress.
I buy American when I can. These products are much more expensive than their foreign equivalents, but that is what it takes to support U.S. makers. I am lucky to be able to spend the extra money, but maybe if the working class had better jobs which could be created due a little less globalization, they would be able too.
The Democrats need to get on this. They need to talk about bringing back unions. they need to talk about bringing back pensions. They need to fight (and I mean fight) for better wages and lower taxes for the working class. Right now these issues are being co-opted by a charlatan with nefarious intent.
13
Should we increase tariff's to protect industries located on American soil? Certainly, an open issue to debate. But a simple derision of tariffs, simply emboldens Trump. These attacks simply underscore how Trump's policies, even if they are poorly conceived and potentially dangerous to America's economy, are truly "anti establishment."
Instead we should ask serious questions, such as should all free trade agreements require minimum mandatory environmental and union protections, where the penalty for non compliance would be a tariff on goods exported by the offending country? That would certainly create an even playing field for our domestic industries with emerging economies.
America must criticize Trump's solutions and discuss viable options to them; but we must address Trump's concerns as having great merit. To do less is a disservice to us all.
Instead we should ask serious questions, such as should all free trade agreements require minimum mandatory environmental and union protections, where the penalty for non compliance would be a tariff on goods exported by the offending country? That would certainly create an even playing field for our domestic industries with emerging economies.
America must criticize Trump's solutions and discuss viable options to them; but we must address Trump's concerns as having great merit. To do less is a disservice to us all.
7
The so-called border adjustment tax boils down to this: corporations make more money, and lower/middle class Americans pay higher prices. A dream scenario for Republicans, who don't give a damn about the welfare of the 99%. Eventually, it would cause consumer demand to fall, and push us into recession. But I guess that would be a problem for next year.
How about a special tax on yachts, or residences in excess of 5,000 square feet?
How about a special tax on yachts, or residences in excess of 5,000 square feet?
16
I'm not sure why this is being labeled as any kind of tax. Currently, "companies can write off the cost of imports". That's a tax deduction, which effectively subsidizes foreign producers. Why not phase it out gradually over a period of years so that domestic supply chains have time to ramp up, and other adjustments can be made over time rather than suddenly and disruptively?
7
I understand how we have this romantic notion about buying American made goods. I certainly would pay a little bit extra for those products. I do think that many people are not looking at the full picture though. 1) A significant portion of the low-skilled manufacturing jobs that we have moved abroad would easily be automated if they were moved back to the US. 2) We seem to forget how many blue collar jobs we have created at our ports, in distribution centers and through other logistics services in the US to support this global supply chain. 3) Let's say we don't allow the automation to occur. Do we really strive to have our children knitting t-shirts in a factory? I feel for all of the low-skilled workers that have lost their jobs to outsourcing, but how many of them are in their early 20s? Instead of trying to bring back low-skilled jobs, how about we look to educate people to have careers in high skilled manufacturing jobs that are abundant in this country.
13
We're going to disrupt the world economy so that some people in the Rust Belt can have a manufacturing job in their home town with the same level of pay and benefits as the factory workers in the 50s. Ain't gonna happen. If the jobs do come back and they don't go to the South and they're not done by robots then the pay and benefits will only be a fraction of the old days because the Republicans they just elected have spent the last 40 years destroying the labor unions that got the workers of the 50s that pay and benefits. Sorry about that.
20
If your business plan is dependent upon slave wages, child labor, no environmental (EPA), no workplace safety (OSHA) in order to work you need a new business plan. Globalization is largely a code word for depressing wages and exploiting the environment in search of outsized profits.
My current VW Golf was made in Mexico, my previous one was made in Germany. VW raised the price after shifting production for the US to low wage Mexico. One pair of Keen Sandals I own were made in Portland, Oregon and the other in Mexico despite being the same model and the price was the same. Levi Strauss did not cut the price of it's clothes when it closed the plant in Arkansas to shift production elsewhere. The same is true for tires, plumbing fixtures, car parts, air conditioning equipment, and any number of other products. The claim of more affordable goods is bunk.
I will gladly pay more for a product made in the US or other countries where workers make decent living wages in factories that respect environmental laws. I gave no interest in buying from sweatshops that employ and exploit workers- sonetimes Children as young as 12- and use the environment like an open sewer.
I did not vote for Trump, but did not vote for the WTO, GATT, NAFTA, CAFTA, TPP, TISA, KFTA or TTIP. My Dollars support my neighbors when I can. I have no interest in supporting sweatshops in third world countries.
My current VW Golf was made in Mexico, my previous one was made in Germany. VW raised the price after shifting production for the US to low wage Mexico. One pair of Keen Sandals I own were made in Portland, Oregon and the other in Mexico despite being the same model and the price was the same. Levi Strauss did not cut the price of it's clothes when it closed the plant in Arkansas to shift production elsewhere. The same is true for tires, plumbing fixtures, car parts, air conditioning equipment, and any number of other products. The claim of more affordable goods is bunk.
I will gladly pay more for a product made in the US or other countries where workers make decent living wages in factories that respect environmental laws. I gave no interest in buying from sweatshops that employ and exploit workers- sonetimes Children as young as 12- and use the environment like an open sewer.
I did not vote for Trump, but did not vote for the WTO, GATT, NAFTA, CAFTA, TPP, TISA, KFTA or TTIP. My Dollars support my neighbors when I can. I have no interest in supporting sweatshops in third world countries.
31
A fancy way of saying "Socialize costs, privatize profits".
5
I am waiting to hear the words "protectionism" and "trade wars" enter the public lexicon around this kind of issue. Republicans believe in a free market, my foot
5
I'm not an economist, and don't claim to be one, but can someone explain how this plan doesn't force an American consumer to pay double the cost of the wall? First his-her tax dollars pay for the construction of the wall. Let's say 20 billion when all is said and done. To recoup this amount an import tax is put on imported goods and the American consumer pays again to offset what they've already paid. But this time they pay with their after tax dollars. How is this 'Mexico will pay for the wall?'
4
Taxing imports would bring back jobs. But the American people won't tolerate paying fifty cents more for a bag of tube socks so that a US factory could employ unskilled labor ... or robots...to make them.
Decades ago, Walmart had a TV advertising slogan touting Made in USA. It switched to Falling Prices, where savings of literally pennies on the dollar where advertised. If Walmart isn't crazy, it proves what Americans want most: cheap prices.
Basically, Americans want unskilled factory jobs at union wages from 1970, without unions and without paying more for products. When push comes to shove, they have chosen no unions and low prices.
Decades ago, Walmart had a TV advertising slogan touting Made in USA. It switched to Falling Prices, where savings of literally pennies on the dollar where advertised. If Walmart isn't crazy, it proves what Americans want most: cheap prices.
Basically, Americans want unskilled factory jobs at union wages from 1970, without unions and without paying more for products. When push comes to shove, they have chosen no unions and low prices.
7
Everybody here is pining for "quality American goods".
It wasn't so long ago that our domestic cars were junk, until the Japanese showed us what to do, and I still don't think a US car can totally compete with the quality of Toyota or Honda.
And our domestic car distribution was basically a dishonest scam, a shakedown scheme, until the Japanese came in and showed us how to sell (no options to cheat the customer with).
Good riddance to the US car industry ... I would have left them to go bankrupt ... their fault entirely. Arrogant fools who thought Asians could not equal the proud American worker or business person. Wrong. The Asian people turned out to be better.
It wasn't so long ago that we waited 6 months, 9 months, a year, for ordinary furniture from "quality" US furniture manufacturers in North Carolina and Vermont. Sure, let's bring that back too.
There are thousands of examples, why bore this board with them …
It wasn't so long ago that our domestic cars were junk, until the Japanese showed us what to do, and I still don't think a US car can totally compete with the quality of Toyota or Honda.
And our domestic car distribution was basically a dishonest scam, a shakedown scheme, until the Japanese came in and showed us how to sell (no options to cheat the customer with).
Good riddance to the US car industry ... I would have left them to go bankrupt ... their fault entirely. Arrogant fools who thought Asians could not equal the proud American worker or business person. Wrong. The Asian people turned out to be better.
It wasn't so long ago that we waited 6 months, 9 months, a year, for ordinary furniture from "quality" US furniture manufacturers in North Carolina and Vermont. Sure, let's bring that back too.
There are thousands of examples, why bore this board with them …
4
I don't know about you, but I'd be delighted to pay more for shoes, T-shirts, and TVs if it means a better living standard and more jobs for more people who would accordingly be able to afford the increase on such items. But somehow I suspect it won't quite work out that way. Anyway, it's all we can do to keep up with how much more we're paying for housing and health care.
It does, I have to admit, put a damper on my secret plans for a quick trip across the border for a cheap hair transplant, which was to be my next birthday present to myself. Oh, well.)
It does, I have to admit, put a damper on my secret plans for a quick trip across the border for a cheap hair transplant, which was to be my next birthday present to myself. Oh, well.)
6
It's OK with me. None of this stuff is made in my USA to begin with. Let the tariffs begin!
4
This OpEd seems very self-serving. I don't have all the answers but I do agree that... offshoring work to lower-paid workers is generally not a good thing, nor is it usually steeped in any kind of 'altruistic' desire to try and better the lives of people in Bangladesh, etc., for whom working for an American company provides a better livelihood.
If American mills are too 'outdated' or 'small' as the author suggests, we then lets fix them. If 'production costs' (worker salaries?) are too high, well, yeah, I suppose if you compare American salaries to those of Bangladesh, then duh.
I do agree with Trump that....and as many of us have seen with our own eyes, the US has shot itself in the knee by allowing so many companies to offshore the production of their products, IT support, HR/Payroll, etc. There are fewer such jobs in the US as a result. The quality of many products has diminished, and 'customer support' is now a phone call with someone half-way across the globe, reading from a script.
Especially if we are talking about larger clothing manufacturers, we need to take the money out of the pockets of the overpaid CEOs, and put it back into American-level salaries for American workers. The money is there.
If American mills are too 'outdated' or 'small' as the author suggests, we then lets fix them. If 'production costs' (worker salaries?) are too high, well, yeah, I suppose if you compare American salaries to those of Bangladesh, then duh.
I do agree with Trump that....and as many of us have seen with our own eyes, the US has shot itself in the knee by allowing so many companies to offshore the production of their products, IT support, HR/Payroll, etc. There are fewer such jobs in the US as a result. The quality of many products has diminished, and 'customer support' is now a phone call with someone half-way across the globe, reading from a script.
Especially if we are talking about larger clothing manufacturers, we need to take the money out of the pockets of the overpaid CEOs, and put it back into American-level salaries for American workers. The money is there.
7
This column explains in detail why we are addicted to cheap labor, because we are addicted to cheap goods. So, how does an unemployed 55 year old shoemaker afford to buy shoes? No matter how cheap the shoes get with foreign labor, it is doubtful the shoes will ever be free. I am old enough to remember when we traded car tires for coconuts and coffee...something we made for something we did not make or grow. But now, free trade means trading away our jobs for cheap goods.
4
Folks who tell me they don't follow politics and stuff because it doesn't matter might wake up and pay attention now that it will bite them in the wallet.
4
It only stands to reason that if prices rise from protectionism and taxes on imports that people are going to spend less. Clearly, as with everything he's done, Trump hasn't considered what that is going to do to an economy that has been set up to only do well when Americans are spending.
Hang on, is all I have to say.
Hang on, is all I have to say.
6
When faced with higher prices for TV's, toys, clothes, cars, and food, families will adjust by buying less of these things. These industries will suffer no growth or go out of business, depressing the availability. Families will spend the same, but will get less for their income dollar. This seems to indicate something that more people are scratching their head about - maybe Trump and his troop who are making such proposals are not as smart as they look. The triumphant deal maker, emperor with fewer and fewer clothes, has succumbed to the "Peter principle", yet another promoter launched into a position of leadership that is beyond him: not only lacking the intelligence, but the character, integrity and core needed for high position in the USA.
6
"The tax’s proponents also argue that encouraging domestic consumption — which, put differently, means sending fewer dollars overseas — would drive up the value of the dollar,"....I really hope people think this through more seriously. Because if the value of the dollar does increase to off set the tax a couple of rather unpleasant things are going to happen. First, countries like China that hold a significant amount of U.S. debt in the form of treasury bonds are going to experience a windfall profit and at the same time countries that hold debt (the dollar is an international currency) will be in serious trouble. Second, the price of U.S. exports like corn and soybeans will crash, having a very significant negative impact of the economies of the rural Midwest.
2
In this article, the narrator opined about the recent tax "issues" being released by President Trump. Trump's proposals are going to hurt a lot of businesses. So I do agree with this article and narrator on why his business would suffer.
This tax idea is not Trump's ... it's Ryan's and an associated coterie of Republicans, and it is basically to end the corporate income tax (taxing "profit") and institute what is a VAT in all but name ... and with it instituting a Border Adjustment.
There are good arguments both for and against an American VAT, together with other changes to the tax code -- many of these arguments hinge critically on the mix of taxation. (The Ryan/Trump scheme as it stands is powerfully regressive; this could be offset in a variety of ways by changes to other taxes, particularly the personal income tax ... but of course they don't propose that).
There are good arguments both for and against an American VAT, together with other changes to the tax code -- many of these arguments hinge critically on the mix of taxation. (The Ryan/Trump scheme as it stands is powerfully regressive; this could be offset in a variety of ways by changes to other taxes, particularly the personal income tax ... but of course they don't propose that).
2
Hopefully the higher prices will slow down our destructive and excessive consumption patterns.
3
And since the economy is driven by consumers, the economy will crash.
2
But really it seems only fair that, as a religious group, the Branch Donaldians should be exempt from paying all taxes.
Of course, first they have to pass the religious test that begins by kissing Donald's ring.
Of course, first they have to pass the religious test that begins by kissing Donald's ring.
1
The point of "higher prices" for imported consumer goods is to enable more of our own countrymen to work. Since most Americans don't mind paying taxes to SUPPORT the unemployed, perhaps slightly higher costs of consumer goods to individuals would be offset by the fact that some of our welfare, Medicaid, and other social welfare tax funds could be transferred to covering other critical needs of the nation.
"Outsourcing" the production of clothing and other consumer goods has led to a false feeling of prosperity here, as many of us buy much, much more than we need, so much that our landfills and oceans can't keep up with it. That keeps us "happy," which is good for politicians who would prefer to raise taxes to support the unemployed instead of working on reducing the causes for neediness as much as reasonably possible.
If we could look at some of these trade offs with clear eyes, we might be surprised to perceive that many of the fundamental difference in goals between Democrats and Republicans is not as great as they seem.
"Outsourcing" the production of clothing and other consumer goods has led to a false feeling of prosperity here, as many of us buy much, much more than we need, so much that our landfills and oceans can't keep up with it. That keeps us "happy," which is good for politicians who would prefer to raise taxes to support the unemployed instead of working on reducing the causes for neediness as much as reasonably possible.
If we could look at some of these trade offs with clear eyes, we might be surprised to perceive that many of the fundamental difference in goals between Democrats and Republicans is not as great as they seem.
3
Americans are addicted to cheaper and cheaper imported consumer goods over the last thirty years. Cheap imported consumer goods enable Americans to have or maintain a higher standard of living despite stagnation of incomes and the US economy to have low inflation despite accommodative monetary policy. Stagnation of incomes is unsustainable because it contributes to income inequality, increasing consumers' debt, and negatively affecting retirement savings.
A border adjustment tax will surely increases the prices of consumer goods but overtime it will be offset by rising inflation, higher wages (companies will be forced to pay higher wages in order to stimulate demand), and substitution effects.
Americans will have to choose between higher wages or cheap imported consumer goods. Between immigrants or cheap fast food hamburger or lawn mowing service.
A border adjustment tax will surely increases the prices of consumer goods but overtime it will be offset by rising inflation, higher wages (companies will be forced to pay higher wages in order to stimulate demand), and substitution effects.
Americans will have to choose between higher wages or cheap imported consumer goods. Between immigrants or cheap fast food hamburger or lawn mowing service.
Making an economic analysis by adjusting only one component, as Nakios does, brings almost no insight because it is fantasy. In his example, consumer prices would rise for clothing (and shoes), and total revenue for the business would rise. leading to potential owner profits. Lower consumer prices in America have led to fewer jobs in America, pure and simple. An analysis of any utility needs to deal realistically with the facts. Nakios' example does not deal with facts, but with fantasy.
3
An article years ago in one of the financial magazines had a subtitle "Are $11 toasters really worth it?". In the end, it concluded that the movement of factories to off shore locations had a big impact on wages and only a moderate one on prices.
2
Who cares about revenue when your margins are lower?
The clothing industry involves low cost labor. America's economy is so successful that few Americans are willing (or should be willing) to work at the low pay traditionally offered for most clothing workers.
So let's change our economy so that laborers in underdeveloped countries lose work. And garment workers in the US get paid lots more. Of course the price of clothing will soar. Will the higher pay the garment workers make be enough to cover their higher personal clothing costs?
Why not train the out of work US garment workers so they can work in a technology or personal service industry? Then the low paid workers in underdeveloped countries could keep their jobs and the newly trained US workers would have better paying jobs.
So let's change our economy so that laborers in underdeveloped countries lose work. And garment workers in the US get paid lots more. Of course the price of clothing will soar. Will the higher pay the garment workers make be enough to cover their higher personal clothing costs?
Why not train the out of work US garment workers so they can work in a technology or personal service industry? Then the low paid workers in underdeveloped countries could keep their jobs and the newly trained US workers would have better paying jobs.
5
Right off the top of my head I can think of five ways a 20 % tax on imports from Mexico would hurt me: Corona, Dos Equis, Pacifico, Modelo and Tecate.
Will there be a 20% tax on the oil coming by pipeline from Canada?
cheers!
Will there be a 20% tax on the oil coming by pipeline from Canada?
cheers!
6
"Will there be a 20% tax on the oil coming by pipeline from Canada?"....There won't be any oil in the pipeline coming in from Canada as the break even cost of tar sand oil is right now $65 to $70 dollars a barrel. Add another 20% and break even becomes more like $80 a barrel.
"Will there be a 20% tax on the oil coming by pipeline from Canada?"
Naw, it like the beer is just passing through on its way to Asia or maybe Africa now that China is building it up.
Once again a foreign country gets over on us with the help of our "leaders". The Canadians don't want to build a pipe to their coast or even Hudson Bay because they know how dangerous and unusually corrosive the tar sand oil is and therefore a very damaging leak or blowout is a certainty at some point in time as pipeline companies never replace pipes until they leak or blowout in spite of the fact that they could easily predict the safe life and replace before it failed.
Naw, it like the beer is just passing through on its way to Asia or maybe Africa now that China is building it up.
Once again a foreign country gets over on us with the help of our "leaders". The Canadians don't want to build a pipe to their coast or even Hudson Bay because they know how dangerous and unusually corrosive the tar sand oil is and therefore a very damaging leak or blowout is a certainty at some point in time as pipeline companies never replace pipes until they leak or blowout in spite of the fact that they could easily predict the safe life and replace before it failed.
1
Any tariff on imported goods would have an impact but no one seems to care that even a 20% rate is only applicable to the declared value at the port of entry. So, a $10 six-pack IS NOT going up to $12. Most of that $10 price is in shipping after the border crossing plus handling, packaging, marketing and markup.
2
Let's tax these good and use the money to build affordable housing, create better health programs and fix our crumbling infrastructure. Let's halve the military budget to bolster those programs.
And let's stop thinking it's somehow acceptable to exploit people in other countries in order to have throwaway clothing. Produce better clothing, keep it longer, pay people for making it. An enormous amount of waste, pollution, and suffering are integral to the clothing industry.
And let's stop thinking it's somehow acceptable to exploit people in other countries in order to have throwaway clothing. Produce better clothing, keep it longer, pay people for making it. An enormous amount of waste, pollution, and suffering are integral to the clothing industry.
1
My question is - where are the voice of Congress in all this ('this' being the Muslim ban, the border wall, the border tax, the politicizing of the Security Council)? Very silent.
They are afraid.
They are afraid.
4
If we the people could only see Trump's personal and corporate income tax returns and his personal and corporate business holdings and deals then we could know how fashionable, wise and beneficial these tax ideas are to "The Man in the High Castle" aka Mr. Trump Tower.
3
Don't worry, the invisible hand of the market, which is a genius, will make everything perfect. It's only had a couple of hundred years to make obvious the benefits that all people derive from unfettered capitalism. Give it time.
1
yes. and in europe gasoline is more expensive. germany still makes all kinds of goods we import because there is no other option, and more and a stronger unions.
2
One would think Mr. Nakios would sympathize with President Trump, as the business practices of each seem to coincide with the possible exception that Trump imports labor as well as product.
Would your help be able to afford your product if they made $15 an hour? I doubt it.
Would your help be able to afford your product if they made $15 an hour? I doubt it.
1
When the trump family retools an American factory, with thrir own money I might add, to produce their clothing line, I might start to take any of this blather seriously. Not holding my breath.
5
I'm glad that I just bought a new car. Very soon that car would will cost about $5000 including the tarif, sales tax and licence fees going up by 20%. Does "Making America Great Again" have to cost so much?
1
Maybe the government needs to cut back of some of its expensive regulations, as Trump has proposed, so that it isn't wildly expensive to make things in this country. Cheap stuff is all well and good, but how cheap does it have to be if people are out of work and have no money, before they can afford it?
2
"Maybe the government needs to cut back of some of its expensive regulations,"....When ever any of my friends make this comment I ask them which expensive regulations should be cut back. In variably they can't think of any.
4
It's amazing how the NYT can support a policy like the minimum wage increase proposed by HRC and completely ignore the fact that it would almost certainly raise prices across the board for the goods and services produced by the industry affected.
And yet, when Trump proposes an import tax as a way of preserving good paying jobs in the U.S., the response is "Woah, that's gonna raise prices for Americans".
This is sophism, pure and simple. Yes it's a fact that certain business practices affect the prices of goods. And they also affect the workers who produce them.
As has already been written in the NYT this week, an import tax would not have a dramatic impact on prices as it is wholesalers not the final goods that will be taxed. In contrast, raising the minimum wage causes a significant price increase for goods and services in industries where labor is the primary cost.
And yet, when Trump proposes an import tax as a way of preserving good paying jobs in the U.S., the response is "Woah, that's gonna raise prices for Americans".
This is sophism, pure and simple. Yes it's a fact that certain business practices affect the prices of goods. And they also affect the workers who produce them.
As has already been written in the NYT this week, an import tax would not have a dramatic impact on prices as it is wholesalers not the final goods that will be taxed. In contrast, raising the minimum wage causes a significant price increase for goods and services in industries where labor is the primary cost.
2
I would be willing to pay more for products made in the United States IF they are quality products and IF those making them are paid a living wage for the area they reside in. I grew up in a small town in Kentucky where a textile company was the biggest employer until the late 1990s. The men farmed and many of the women went to "the factory" where they had steady wages, the opportunity to make more by producing more, and health insurance. When the factory closed and production was moved overseas, I stopped buying the products. they were no longer well made, though the price didn't go down.
4
I am a micro-business owner but I have to say this: people who operate businesses, particularly ones they own in whole or to a large degree, tend to look at the world myopically. Everything is about them and what they believe they need to succeed.
Here is one line from this op-ed: "In a market where consumers demand low-priced, high-quality products, it’s nearly impossible to do it any other way."
Who "demands" low prices? It is the manufacturers and retail outlet that have taught people they can expect low prices. When you sell based on price alone, you are taking your product and your customers satisfaction down a one way street with no exit. (This is a place called "WalMart".)
Beyond a doubt, the ability for businesses to merely design or imagine a product and have it shipped in on schedule has boosted our economy and allowed for lots of start-ups. One hot company of this type now is GoPro. They sell small video cameras for personal view, action sports recording. At the same time, low price is not always a benefit.
Does everyone really need four big screen televisions in their houses? Do we need a 60 inch instead of a 40 inch?
People who order stuff made and sell it to retailers have to make certain their margins allow for everyone in the chain to profit. That's means there has to be something like a 50% markup on the cost of manufacturing and shipping, etc. Could it be that low prices are mainly allowing bigger profits without great benefit to those who buy?
Here is one line from this op-ed: "In a market where consumers demand low-priced, high-quality products, it’s nearly impossible to do it any other way."
Who "demands" low prices? It is the manufacturers and retail outlet that have taught people they can expect low prices. When you sell based on price alone, you are taking your product and your customers satisfaction down a one way street with no exit. (This is a place called "WalMart".)
Beyond a doubt, the ability for businesses to merely design or imagine a product and have it shipped in on schedule has boosted our economy and allowed for lots of start-ups. One hot company of this type now is GoPro. They sell small video cameras for personal view, action sports recording. At the same time, low price is not always a benefit.
Does everyone really need four big screen televisions in their houses? Do we need a 60 inch instead of a 40 inch?
People who order stuff made and sell it to retailers have to make certain their margins allow for everyone in the chain to profit. That's means there has to be something like a 50% markup on the cost of manufacturing and shipping, etc. Could it be that low prices are mainly allowing bigger profits without great benefit to those who buy?
2
Another falsehood spewed here is that "low-priced" and "high-quality" belong in the same sentence, and pertain to cheap imported clothing. There is nothing "high-quality" about the crap that has replaced even basic US-made clothing, that used to be ubiquitous even at low-end retailers (such as Woolworth's, Sears, etc.). Basic stuff that used to be made in USA by default (such as white T-shirts) is now made in Honduras, El Salvador, Jamaica, you name it. Having stocked up during the pre-NAFTA years, I still own American-made undergarments that systematically outlive the few newer imported junk I bought for lack of options for a while. Now, I've made a habit of getting NOS US-made Munsingwear Tees off ebay, for more than what I'd pay for new imported ones, but the quality is worth it. Nothing fancy, but they're sturdy, comfortable; they fit, and if the ones I bought in the early '90s are any indication: they last. Those imported ones I happened to get in the meantime serve to polish my shoes: quite pricey for rags. If standard, everyday items become available in the US-made variety, I'll be shopping at department stores again...
1
It's quite simple, really. All we need to proclaim is that for each and every article or component imported into the United States of America, the importer is required to place one brick into the new border pyramid. Once the pyramid has been completed, and the ginormous "T" installed on top, we will begin the new sphinx construction. Substantial savings will be realized as a result of not having to build the freakishly large paws of the original -- the new sphinx will have tiny, dainty paws.
3
A quick google search of Thomas Nakios reveals that he co-owns a very high end clothing company and lives in a $6000 a month apartment. His editorial is tone deaf. His industry is built on the backs of cheap labor and poor working conditions in foreign countries. He is complaining about having to possibly use homegrown labor that he feels will be too expensive. I think we should all be willing to pay more for what we wear if it means paying the workers living wages. We should have a discussion about how to best regulate trade and wages but a high-end fashion house owner complaining about a tax that will cut into his profits is not the place to start.
2
For some people, Trump's "unfashionable tax idea" is no more unfashionable than raising taxes on the middle class to pay for the welfare state. So what if we pay more for certain items of clothing, if it means putting Americans to work and reducing the cost of welfare and unemployment and Medicaid. I guess it all depends on whose ox is getting gored, and the author clearly is one of those people who does not want to pay more himself, but is perfectly happy making others pay more.
2
Americans 'demand' low-priced, yet high-quality products? Most Americans who want true quality EXPECT to pay a fair, higher price. The only Americans who insist on low-price (i.e., the Walmart shoppers of the world, etc.) wouldn't know quality if it hit them in the face. Something has fundamentally changed in the U.S. We've gone from people who appreciated fine clothing, nice furniture, finely-detailed buildings, etc. to people who simply want More, Cheaper, Faster. Nothing can be Used or Recycled. Everything must be New.
If the prices for products end up going up, then American consumers will simply have to think more carefully about how they are spending their money. Instead of buying 4 cheap shirts made in Bangladesh, they will simply get 2 shirts, of better quality, made in the US. I don’t see that as a bad thing. I’d like to see Americans living more simply, having an appreciation for quality, and not being so focused on amassing ‘stuff’. (In my Queens, NY neighborhood, I can’t tell you how many of my home-owning neighbors own Multiple Cars, and then 'complain' about the lack of parking in the neighborhood, while all the while their own Garage is not available for parking one of their cars. As to ‘why’ their garage is not available for use? Oh, that's because it’s crammed to the ceiling with ….’stuff’.)
We’ve become a nation of literally gross consumption.
If the prices for products end up going up, then American consumers will simply have to think more carefully about how they are spending their money. Instead of buying 4 cheap shirts made in Bangladesh, they will simply get 2 shirts, of better quality, made in the US. I don’t see that as a bad thing. I’d like to see Americans living more simply, having an appreciation for quality, and not being so focused on amassing ‘stuff’. (In my Queens, NY neighborhood, I can’t tell you how many of my home-owning neighbors own Multiple Cars, and then 'complain' about the lack of parking in the neighborhood, while all the while their own Garage is not available for parking one of their cars. As to ‘why’ their garage is not available for use? Oh, that's because it’s crammed to the ceiling with ….’stuff’.)
We’ve become a nation of literally gross consumption.
2
For many years a majority of Americans have been overconsuming due to artificially low prices made possible only by slave wages. This is a bad situation for many reasons, not the least of which is that the production of excess unnecessary clothing and other products is extremely detrimental to the environment. Buying fewer goods and being willing to pay the prices required for goods that are sustainably produced and designed to last is something those of us with reasonable means can do to reduce our burden on the earth.
Import duties, no matter how they are framed, are a tax paid by consumers. That is the first problem with them. The second, is that they protect domestic industry, which them becomes less efficient, and consumers are left with more expensive goods and perhaps shoddier goods. Does anyone remember the automobiles that the domestic automakers produced in the seventies, eighties, and into the nineties? They were junk. Why? Because Reagan during the 1980s imposed a severe import duty on Japanese automobiles. The result was a protected auto industry which had no desire to improve the quality of their product. It wasn't until they had to fend off competition from Korea, Japan and others, as well as near bankruptcy extinction, that they finally started getting their act together. I find it amusing that the country which claims to be the capitalistic light on the hill, is always so willing to throw away tried-and-true market principles for questionable reasons. We have problems to solve, this particularresponse is not a solution.
5
This is the problem with the Republican approach to "tax reform."
We already have the data and statistics surrounding import tariffs, and non-progressive tax code changes. We already know this isn't going to accomplish bringing jobs back to the U.S. and that it will increase the cost of goods, while wages remain stagnant. Republicans ram home the wrong approach to our problems, because all of their solutions HAVE to involve massive tax cuts for the rich, and extreme levels of deregulation.
The reality is, this problem can be corrected with more balanced and corporate friendly solutions then the knee jerk approach of import tariffs.
The global supply chain is too integrated to start taxing people importing pieces required in their manufacturing operations.
Instead, why not consider the following:
- Eliminate loopholes that allow American corporations to offshore profits (untaxed)
- Provide massive tax breaks on direct business investment only. This idea of "tickle down" economies, where tax breaks are given to the rich because "they'll use it to re-invest in their companies, etc" is bogus. Apply the tax breaks ONLY to when those wealthy CEOs who DO invest it into their businesses
- Take the tax cuts for the wealthy and give them directly to the middle/lower class
- Raise minimum wage
- Provide big tax breaks to companies that keep jobs local, and limit them for those who ship jobs South
I'm out of room but you get the idea - move it from punishment to cooperation
We already have the data and statistics surrounding import tariffs, and non-progressive tax code changes. We already know this isn't going to accomplish bringing jobs back to the U.S. and that it will increase the cost of goods, while wages remain stagnant. Republicans ram home the wrong approach to our problems, because all of their solutions HAVE to involve massive tax cuts for the rich, and extreme levels of deregulation.
The reality is, this problem can be corrected with more balanced and corporate friendly solutions then the knee jerk approach of import tariffs.
The global supply chain is too integrated to start taxing people importing pieces required in their manufacturing operations.
Instead, why not consider the following:
- Eliminate loopholes that allow American corporations to offshore profits (untaxed)
- Provide massive tax breaks on direct business investment only. This idea of "tickle down" economies, where tax breaks are given to the rich because "they'll use it to re-invest in their companies, etc" is bogus. Apply the tax breaks ONLY to when those wealthy CEOs who DO invest it into their businesses
- Take the tax cuts for the wealthy and give them directly to the middle/lower class
- Raise minimum wage
- Provide big tax breaks to companies that keep jobs local, and limit them for those who ship jobs South
I'm out of room but you get the idea - move it from punishment to cooperation
5
Regressive taxation shifts the burden from the rich to the poor and middle classes. The administration is pursuing this strategy because they have promised to both lower the tax *rates* and keep revenues the same. This is mathematically impossible without new sources of income for the government, and that means for every dime saved by the billionaires in the Trump cabinet, another dime comes out of your pocket and mine.
2
It goes back to an argument I have made for many years. Take this example, a jeans factory in rural America has 30 employees, paid well with benefits. The company moves the factory to Mexico to take advantage of cheaper labor costs. The community left behind now has 30 family's out of work, the local car dealers have 30 less customers, the local merchants have 30 less sources of purchasing goods and services. The community is hurt. And the jeans are still being sold at the SAME price here in the USA. Who benefits in the USA? Only the share holders and corporate big wigs. We are paying the same for the goods! Less profit or a healthy economy. Seems obvious to me. We don't need import taxes we need less greed.
4
This article highlights one of my objections to the GOP: they claim to be the "party of business." But the only tool that they have used in the past is to reduce the cost of doing business: anti-labor, anti-regulation (health, safety, environment), low wages, lower taxes (which increases profits, but not production) ... I'm not sure the border tax adjustment fits into one of these categories, but it seems clear that the administration didn't talk to anyone who actually operates a business. Instead of calling themselves the "party of business," perhaps they should cll themselves the "party of profits."
3
Traveling thru Asia including Hong Kong. Korea, Singapore, Thailand one finds that folks pay a whole lot more for electronics, cars, clothes and especially more for American made products. There is a cache for American made, and sometimes specifically New York, San Francisco, Los Angeles. Food products fly off the shelves in Hong Kong where wealthy Chinese go to stock up on American foods, because they don't trust their own domestically produced food. I'm not describing fois gras and canned heart disease cheese, but anything to do with infant care or childrens' products are scooped up pronto. Lots of Fords and Chevys are flying up and down the highways in Korea. It's Not all Samsung and Toyota, but America lost that market share by Not keeping up with the industry and putting out crappy cars and deciding that American Made was worth trading in for Cheaper to make over there and Cheaper to buy here. I hope we are not on the path to sell oil there while China sells solar to the rest of the world. Another loser in the future. We should change this.
3
Nowhere and at no time in this growing discussion of taxes do I hear any new ideas at all.
I think the tax discussion can best be summarized as "small minds thinking big ideas".
The USA seems to attempting to force a well-tuned Industrial Age formula to function in an Electronic Age Society. All efforts to make the old formula work in today's world .... are doomed to failure.
The Tax Code, based on industrial age "incomes", simply cannot sustain a government's functions as incomes are decreasing!!
Meanwhile, the economic output of the electronic marketplace(ie...the internet) is expanding at a completly un-taxed exponential rate.
Yes, it remains important to tax and regulate real goods and services which cross our borders. Tariffs and excise taxes are largely a tactic of establishing and enforcing National Sovereignity....not growing National Tax Revenues. It is important to recognize that Mexico is our ALLY and economic partner, while CHINA is the challenger and the competition......NOT the other way around as our national leadership seems to assume.
As for Russia, we most definately need to form an alliance, and tax and regulate our internet connections with this most precarious relationship. Continuing to treat Russia as a Cold War Adversary is foolish to the extreme.
I think the tax discussion can best be summarized as "small minds thinking big ideas".
The USA seems to attempting to force a well-tuned Industrial Age formula to function in an Electronic Age Society. All efforts to make the old formula work in today's world .... are doomed to failure.
The Tax Code, based on industrial age "incomes", simply cannot sustain a government's functions as incomes are decreasing!!
Meanwhile, the economic output of the electronic marketplace(ie...the internet) is expanding at a completly un-taxed exponential rate.
Yes, it remains important to tax and regulate real goods and services which cross our borders. Tariffs and excise taxes are largely a tactic of establishing and enforcing National Sovereignity....not growing National Tax Revenues. It is important to recognize that Mexico is our ALLY and economic partner, while CHINA is the challenger and the competition......NOT the other way around as our national leadership seems to assume.
As for Russia, we most definately need to form an alliance, and tax and regulate our internet connections with this most precarious relationship. Continuing to treat Russia as a Cold War Adversary is foolish to the extreme.
1
Business economics 101. Corporate taxes are a pass through to the consumer, they are a cost of doing business. Increase tariffs by 20%, decrease corporate profits by 50%, is almost a wash.
Business economics 101. When you have fixed costs into plant and equipment and your prices fall (which Mexican exporters will decrease their prices to compete) your payback on the fixed plant and equipment simply either never happens or takes much longer. This greatly reduces the affect on consumers.
Business economics problems as it relates to the media. Non business journalists, and even many journalists for financial media, are simply ignorant to business economics. I would bet that not one editor of this paper has any background or real knowledge of how the pricing mechanism of products works relative to tariffs, taxes and investment. You would be best to editorialize about subjects you actually understand or else people who understand those subjects see you as ignorant at best and frauds at worst.
Business economics 101. When you have fixed costs into plant and equipment and your prices fall (which Mexican exporters will decrease their prices to compete) your payback on the fixed plant and equipment simply either never happens or takes much longer. This greatly reduces the affect on consumers.
Business economics problems as it relates to the media. Non business journalists, and even many journalists for financial media, are simply ignorant to business economics. I would bet that not one editor of this paper has any background or real knowledge of how the pricing mechanism of products works relative to tariffs, taxes and investment. You would be best to editorialize about subjects you actually understand or else people who understand those subjects see you as ignorant at best and frauds at worst.
1
The net effect of an import tax will be higher prices and lower consumption. It's that simple. Some existing factories will get additional orders and a few new ones will be built, and this will result in a small uptick in employment in (boutique) manufacturing. A few new jobs will be created. But as has been pointed out repeatedly, the cost of the new manufactured goods will be higher because of the higher labor costs here.
All those cost-conscious Walmart shoppers will see themselves priced out of the clothing, produce, hardware and housewares, etc markets. Low end clothing has razor sharp profit margins, so every dollar in import taxes will translate to a dollar in retail cost. Prices on low end cars will rise, as well as on repair and maintenance parts. Due to the interconnectedness of the global economy, may other retail sectors will experience shortages and price rises.
With all, as key products become more expensive and scarce, there will be upward pressure on wages and the seeds of an inflationary spiral in wages and products.
All this due to what was apparently a spur of the moment idea.
All those cost-conscious Walmart shoppers will see themselves priced out of the clothing, produce, hardware and housewares, etc markets. Low end clothing has razor sharp profit margins, so every dollar in import taxes will translate to a dollar in retail cost. Prices on low end cars will rise, as well as on repair and maintenance parts. Due to the interconnectedness of the global economy, may other retail sectors will experience shortages and price rises.
With all, as key products become more expensive and scarce, there will be upward pressure on wages and the seeds of an inflationary spiral in wages and products.
All this due to what was apparently a spur of the moment idea.
3
The US should concentrate on high value added goods (and services) and sell them around the world. This does not include shirts, socks or microchips. Germany knows how to do that. So does Switzerland (they sell tax evasion), and Singapore, just examples.
Why can't we do that? One reason is that some of the countries that sell a lot of goods to us erect non-tariff trade barriers against our high value-added goods. Another is that we have a temporary workforce education/skill issue: former furniture and shirt makers don't know how to write code (for example). Another is lack of determination to make that happen.
At the end of the day, we can do that. But it might require a national industrial policy. And restricting immigration to legal immigration of high skilled workers, particularly with skills not easily (so far) found here. And reducing emphasis on "college" education, in favor of trade schools. And continue to support a strong military that will make the world safe for US business and trade in general. And so on.
In other words, to quote ex-President Obama, don’t do stupid things.
Why can't we do that? One reason is that some of the countries that sell a lot of goods to us erect non-tariff trade barriers against our high value-added goods. Another is that we have a temporary workforce education/skill issue: former furniture and shirt makers don't know how to write code (for example). Another is lack of determination to make that happen.
At the end of the day, we can do that. But it might require a national industrial policy. And restricting immigration to legal immigration of high skilled workers, particularly with skills not easily (so far) found here. And reducing emphasis on "college" education, in favor of trade schools. And continue to support a strong military that will make the world safe for US business and trade in general. And so on.
In other words, to quote ex-President Obama, don’t do stupid things.
5
Some one must figure out how we in the US compete with cheaper goods worldwide. Do you suppose that is possible? We must learn to accept less for our products and pay less to our manufacturers who in turn must pay less for their manufacturing process. We must devalue all of our price points so that we will match Vietnam, the Philippines and the Chinese in cost structure. Possible? Nope. Therefore, based on our price structure, we pay more, earn more income and the capitalists earn less income because cheap labor is factored out of the equation. Go for it. This should be a nice experiment.
2
I think your margin example is a little too generous to importing companies. Maybe in designer apparel or high fashion footwear but a 10% margin on the typical person's shoes is a joke. You entirely skipped the economics of the industry. You would be out of business already.
The margin on an average pair of shoes, sneakers, or boots is generally between 50-70%. Meaning: If a company charges the consumer $90 for a pair of shoes, they're only paying $27 and banking the other $63. This compared to the more common retail margin of about 30%. If the shoe is foreign made, the cost is tax deductible too. Footwear is known as a high-margin product. If you're on a shoestring after enjoying this sort of windfall for decades, you've got problems bigger than an import tax.
Personally, I agree a V.A.T. is more egalitarian to importers and exporters. I prefer the idea to Trump's tax proposal. It's simple and easily enforced. However, you fail to mention how a V.A.T. is essentially a sales tax and therefore regressive in nature. The tax does pick winners and losers. The poor lose disproportionately compared to the rich when purchasing imports. You can also believe there will be massive lobbying when establishing tax rates on goods and services. This opinion is but one example.
The margin on an average pair of shoes, sneakers, or boots is generally between 50-70%. Meaning: If a company charges the consumer $90 for a pair of shoes, they're only paying $27 and banking the other $63. This compared to the more common retail margin of about 30%. If the shoe is foreign made, the cost is tax deductible too. Footwear is known as a high-margin product. If you're on a shoestring after enjoying this sort of windfall for decades, you've got problems bigger than an import tax.
Personally, I agree a V.A.T. is more egalitarian to importers and exporters. I prefer the idea to Trump's tax proposal. It's simple and easily enforced. However, you fail to mention how a V.A.T. is essentially a sales tax and therefore regressive in nature. The tax does pick winners and losers. The poor lose disproportionately compared to the rich when purchasing imports. You can also believe there will be massive lobbying when establishing tax rates on goods and services. This opinion is but one example.
2
I'm sympathetic but essentially you are saying that obtaining Wal-Mart and Amazon prices are worth millions of Americans losing their jobs and way of life.
This is apparently an instance where the "Liberal" view of capitalism is a bit schizophrenic:
should we extract all our fossil fuels for cheap energy or make some sacrifices for future generations?
should we ensure our goods are manufactured under "fair trade" conditions or outsource all garment manufacturing to cheaper countries with lax child labor and environmental laws?
are we just economic units looking for the lowest prices or our we something more?
Finally, a note about this policy: I think the intent is to more closely replicate if there was one global corporate income tax. That's why you don't tax exports destined to be taxed again abroad and you tax imports that were never subject to VAT taxation. So it does seem like the current system introduces perverse incentives to offshore production of goods destined for the U.S. (because neither the home country nor the U.S. will collect the "right" amount of tax due to the different systems).
This is apparently an instance where the "Liberal" view of capitalism is a bit schizophrenic:
should we extract all our fossil fuels for cheap energy or make some sacrifices for future generations?
should we ensure our goods are manufactured under "fair trade" conditions or outsource all garment manufacturing to cheaper countries with lax child labor and environmental laws?
are we just economic units looking for the lowest prices or our we something more?
Finally, a note about this policy: I think the intent is to more closely replicate if there was one global corporate income tax. That's why you don't tax exports destined to be taxed again abroad and you tax imports that were never subject to VAT taxation. So it does seem like the current system introduces perverse incentives to offshore production of goods destined for the U.S. (because neither the home country nor the U.S. will collect the "right" amount of tax due to the different systems).
2
Sorry Thomas but you editorial is very misleading. It is true that unless US companies repatriate profits from sales outside the US their is no US tax paid but this doesn't take into account that the company paid income taxes on profits made in every country where they sell products. So, they do pay taxes in those countries and there is no reason they should be "double taxed" on sales made in other country markets. The fact is taxing the repatriated income will only drive companies to continue to keep cash outside the US and if the US Government becomes to oppressive on taxation they can and will move their global business headquarters to Ireland or some other low corporate taxation country. Sorry Tom - Two Pinocchios
1
Sorry, Mr. Nakios, but your demonstration doesn't make much sense.
First of all, small businesses like yours do not contribute much to the US economy. I get that when the whole low-cost textile industry relies on imports, there's an incentive to follow the crowd, if only to remain competitive while maintaining your margins. But when import tariffs are imposed across the board, your competitors are too. Which means you are all faced with the same conundrum: pass on the extra cost to consumers, close down, source domestically, or, an option you seem to have missed: reduce your margins. In the low-end section of the industry, it's obviously different, but retail prices are usually mostly based on what an item can be sold for, rather than what it actually costs. Higher prices tend to artificially justify status; lower send the message of value (or cheapness, in all its meanings). In an admittedly high end fashion house I used to work for, the suits I ordered from our Italian supplier were routinely marked up by x3.5 (that's 350%, not 3.5%). In another, it was 500%. Of course, overhead is relatively high in that end of the industry, but there would have been PLENTY of wiggle room to offset a 20% tax on imports.
First of all, small businesses like yours do not contribute much to the US economy. I get that when the whole low-cost textile industry relies on imports, there's an incentive to follow the crowd, if only to remain competitive while maintaining your margins. But when import tariffs are imposed across the board, your competitors are too. Which means you are all faced with the same conundrum: pass on the extra cost to consumers, close down, source domestically, or, an option you seem to have missed: reduce your margins. In the low-end section of the industry, it's obviously different, but retail prices are usually mostly based on what an item can be sold for, rather than what it actually costs. Higher prices tend to artificially justify status; lower send the message of value (or cheapness, in all its meanings). In an admittedly high end fashion house I used to work for, the suits I ordered from our Italian supplier were routinely marked up by x3.5 (that's 350%, not 3.5%). In another, it was 500%. Of course, overhead is relatively high in that end of the industry, but there would have been PLENTY of wiggle room to offset a 20% tax on imports.
2
Student Loans have a much wider implication than just for education. It starts of their lives in Debt and affects their subsequent decisions on Marriage, Home Purchase, Jobs and Support of their families. It decreases their ability to take Risks and start up businesses. It affect their quality of life and can over-shadow the lives of the generation to follow.
Wouldn't it make sense to address this most long-term issue? How can Student Loans be reduced or Waived? How can Schools and Colleges be supported to ensure only minimum costs are translated into Tuition fees? How can the Corporates, Trusts and Rich Individuals contribute towards reducing Student Loans? How can we have No Student Loans in the future?
Wouldn't it make sense to address this most long-term issue? How can Student Loans be reduced or Waived? How can Schools and Colleges be supported to ensure only minimum costs are translated into Tuition fees? How can the Corporates, Trusts and Rich Individuals contribute towards reducing Student Loans? How can we have No Student Loans in the future?
1
Clothing at any price is ephemeral, so perhaps not the best example. Let's talk refrigerators and washing machines: they used to be made here. Durable, expensive, high performing, easy to maintain as needed. Now they are all made off shore. The life span is 10 years. (not durable) The performance varies-- some are good-- but with a ten year life span, that value component goes down. There are fewer repairmen for a variety of reasons, but some of them just find the newer imports not worth the trouble to work on (see not durable) And they are not cheaper than in the past! We pay just as much or more in real dollars for lesser quality equipment we all need in our homes. And we do not get the benefit of our fellow citizens making them. All that said. trump and the oligarchy and their policies, are not going to make the midwest the place to make stoves..ever.
2
Great article.
Most of these tax changes punish US firms for importing goods produced by people doing jobs that nobody in the US wants. Who on earth in this country has a child and dreams they will grow up to be a textile worker? Those were the types of jobs people aspired to at the start of the industrial revolution. Look at Trump's children - I don't see any of them preparing for a life hand manufacturing sweaters somewhere. Instead we should focus on preparing all people to do the kinds of jobs Americans really want.
Second, raising the cost of imports will impact all businesses. Prices of goods and services will rise a lot. Wages will need to rise in response. American exports will become more expensive and will therefore suffer. Many domestic businesses will become unprofitable once their wage bills rise and will close. The notion that you place a tax on imports and everything else is unaffected is illogical.
Most of these tax changes punish US firms for importing goods produced by people doing jobs that nobody in the US wants. Who on earth in this country has a child and dreams they will grow up to be a textile worker? Those were the types of jobs people aspired to at the start of the industrial revolution. Look at Trump's children - I don't see any of them preparing for a life hand manufacturing sweaters somewhere. Instead we should focus on preparing all people to do the kinds of jobs Americans really want.
Second, raising the cost of imports will impact all businesses. Prices of goods and services will rise a lot. Wages will need to rise in response. American exports will become more expensive and will therefore suffer. Many domestic businesses will become unprofitable once their wage bills rise and will close. The notion that you place a tax on imports and everything else is unaffected is illogical.
1
Another point that puzzles me is your explanation of the effects of VAT, which seems to stem from a misunderstanding of the differences in vocabulary between different countries. In Europe, yes, VAT is a tax accrued on all items (usually) consumed in a country. It is the direct translation of the "sales tax" known to Americans. But it isn't exclusive of import taxes, which only affect imports, and which you seem to conveniently leave out of the equation. If I want to import US made textile goods to France, I have to pay an import tax starting at 12% to pass customs, and make sure that what I'm importing complies with regulations pretty much tailor-made to exclude foreign competition. A VAT (sales tax in American parlance) of between 20% (general case) and 33% (luxury goods) is added on top of that and passed on to the consumer. That aforementioned 12%+ import tax only affects imported goods, thus, contrary to what you wrote, "picks winners and losers" among imports and French (now European) made.
I'm hoping that this was an honest mistake unfortunately not spotted by the NYT, and not a means of making false claims to influence the readership.
I'm hoping that this was an honest mistake unfortunately not spotted by the NYT, and not a means of making false claims to influence the readership.
1
Another aspect of a high American dollar that needs to be clearly set out is its effect of raising the cost of American produced goods in other countries. Throughout the early post WW2years the industrial base of much of Europe and Japan was destroyed. As their industries these countries also modernized, becoming more efficient. They became - and are now - able to compete with American industry , if not excel, in terms of quality and productivity.
A strong U.S. dollar will erode the U.S. export market, leaving foreign importers a wide range of alternative suppliers.
This is already happening with fields such as renewable energy systems, where American retreat from TPP, where China is set to become the world leader in renewable technology and building those trade links without American participation.
A strong U.S. dollar will erode the U.S. export market, leaving foreign importers a wide range of alternative suppliers.
This is already happening with fields such as renewable energy systems, where American retreat from TPP, where China is set to become the world leader in renewable technology and building those trade links without American participation.
2
It's been said before, but evidently it can't be repeated often enough: Stop normalizing Lyin' Donnie Trump.
This column is a perfect example, because it refers to the border adjustment tax as Trump's "idea." This suggests the impossible, that Trump has the desire and ability to develop and hold coherent ideas on matters such as tax policy. Rubbish!
Now, there may very well be individuals in his administration or among his donors (or, more likely, members of Congress and their donors) who have very clear policy ideas and who are pushing a border adjustment tax. But it beggars belief that Lyin' Donnie would ever originate such an idea or have any sense of its implications for the nation's well being.
What's far more likely is that when Trump's attack dog floated the idea of a 20 percent tariff, opportunists in Congress and/or within the ranks of Trump's minions saw an opening to push their pet idea, the border adjustment tax.
In a normal administration, policy makers would consider views such as those expressed in this column by Mr. Nakios in the process of fashioning recommendations to the President. But these are not normal times.
This column is a perfect example, because it refers to the border adjustment tax as Trump's "idea." This suggests the impossible, that Trump has the desire and ability to develop and hold coherent ideas on matters such as tax policy. Rubbish!
Now, there may very well be individuals in his administration or among his donors (or, more likely, members of Congress and their donors) who have very clear policy ideas and who are pushing a border adjustment tax. But it beggars belief that Lyin' Donnie would ever originate such an idea or have any sense of its implications for the nation's well being.
What's far more likely is that when Trump's attack dog floated the idea of a 20 percent tariff, opportunists in Congress and/or within the ranks of Trump's minions saw an opening to push their pet idea, the border adjustment tax.
In a normal administration, policy makers would consider views such as those expressed in this column by Mr. Nakios in the process of fashioning recommendations to the President. But these are not normal times.
3
I would be willing to pay a tax that encourages American manufacture and promotes the hiring of American workers, but not at the expense of massive tax cuts for fellow citizens who least need any such break, nor for the punitive targeting of countries we are told we shouldn't like because they have been scapegoated to push a narrative that is basically racist and xenophobic.
No border adjustment tax will stem the tine of manufacturing automation. Accordingly, its support for American labor will be limited. Better to invest in the education and re-training of the labor force to capitalize on our economy of the future. As the hockey great Wayne Gretzky once declared, "skate to where the puck is going, not to where it is."
www.endthemadnessnow.org
No border adjustment tax will stem the tine of manufacturing automation. Accordingly, its support for American labor will be limited. Better to invest in the education and re-training of the labor force to capitalize on our economy of the future. As the hockey great Wayne Gretzky once declared, "skate to where the puck is going, not to where it is."
www.endthemadnessnow.org
23
Now I'm confused. I thought that over the last 10 + years that people were made that companies went outside the US to make products and then ship them here with little consequence. That led to the demise of a once strong textile industry in this country, along with steel and other industries.
As those industries vanished, so did their manufacturing capabilities and experienced labor force. Now, this author and the NYTimes are promoting that taxing those goods to promote manufacturing in the US is a bad idea. I'm not arguing with the turnabout, just making an observation that some have made before....
If you increase import taxes, prices go up. When they go up to a certain level, it makes bringing manufacturing back to the US, but those prices don't go down. More people, in theory, have jobs. What isn't recognized with that policy is that a) those industries and the infrastructure required are no longer prevalent in the US, making a comeback of jobs a long term perspective at best - not many people here work in sewing factories, for example, and many may not 'want' to. b) those countries now making products for consumption here and in the EU are employing citizens that just 15 years ago lived in abject poverty. While many here call it 'slave wages' those overseas have seen 1000+% increases in their salaries and standard of living.
So, are we to support the employment of those in other countries, or in the US. Short term? Long term?
As those industries vanished, so did their manufacturing capabilities and experienced labor force. Now, this author and the NYTimes are promoting that taxing those goods to promote manufacturing in the US is a bad idea. I'm not arguing with the turnabout, just making an observation that some have made before....
If you increase import taxes, prices go up. When they go up to a certain level, it makes bringing manufacturing back to the US, but those prices don't go down. More people, in theory, have jobs. What isn't recognized with that policy is that a) those industries and the infrastructure required are no longer prevalent in the US, making a comeback of jobs a long term perspective at best - not many people here work in sewing factories, for example, and many may not 'want' to. b) those countries now making products for consumption here and in the EU are employing citizens that just 15 years ago lived in abject poverty. While many here call it 'slave wages' those overseas have seen 1000+% increases in their salaries and standard of living.
So, are we to support the employment of those in other countries, or in the US. Short term? Long term?
13
I owned an advertising agency in Houston for most of my career. We both benefitted from and were hurt by international competition. When a large American computer manufacturer outsourced some of the work we did to India, we were hurt. But when a large Canadian company was trying to launch a project in America, we were helped.
The flow goes both ways. In my experience, one offset the other. While the production side of my business was temporarily hurt by cheaper foreign competition, the sales were helped by open access to foreign markets.
One factor not yet mentioned in any of the articles I have read about the border tax is the administrative overburden it would create. I feel that would place small American businesses at a competitive disadvantage relative to large American businesses.
Large businesses can afford dedicated, specialized accountants and lawyers who keep track of foreign payments and income, and make sure that taxes are paid appropriately. In a small business, that burden would usually fall on the already overworked owner. S/he may not have the time to spare.
Compliance would have placed a huge hidden tax on us. I was already working 14 hours a day. I could not have afforded the time to set up a separate tracking system for foreign income. Nor could I have afforded the time to understand and file yet more government forms and payments.
My advice to Mr. Trump? A good first step in reducing regulations is not to establish more.
The flow goes both ways. In my experience, one offset the other. While the production side of my business was temporarily hurt by cheaper foreign competition, the sales were helped by open access to foreign markets.
One factor not yet mentioned in any of the articles I have read about the border tax is the administrative overburden it would create. I feel that would place small American businesses at a competitive disadvantage relative to large American businesses.
Large businesses can afford dedicated, specialized accountants and lawyers who keep track of foreign payments and income, and make sure that taxes are paid appropriately. In a small business, that burden would usually fall on the already overworked owner. S/he may not have the time to spare.
Compliance would have placed a huge hidden tax on us. I was already working 14 hours a day. I could not have afforded the time to set up a separate tracking system for foreign income. Nor could I have afforded the time to understand and file yet more government forms and payments.
My advice to Mr. Trump? A good first step in reducing regulations is not to establish more.
25
Nakios raises some interesting points. As a note, however, his point regarding the oil business is simply wrong. "Commodities traders will leap at the chance to make money off the difference between the cost of imported and domestic oil." It is currently illegal to export domestically produced oil.
But his general point reveals the difference between the way free trade has worked out in the US compared to the classical idea behind trade championed by Ricardo in the 18th century. The idea behind "comparative advantage" was that trade would allow each country to focus on what it created most efficiently ... and trade for the rest. A more developed country like the US would import labor-intensive fabric but more design work (like the author's) would be based in the US. While this is true in some cases (e.g. pharmaceuticals, aircraft manufacturing), there is little broad support to suggest that the markets in low-wage countries are as valuable as our own.
In contrast to Ricardo, the main beneficiaries of trade with low-cost nations are US consumers not producers. We all enjoy buying $5 t-shirts and care little where they are sourced.
In general, I support the Border Adjustment Tax. Nakios explains that millwork is typical imported because "American mills are either outdated or too small, and American production costs are too high." But isn't it reasonable that greater domestic demand would lead to updating of domestic manufacturing ? It's worth a try.
But his general point reveals the difference between the way free trade has worked out in the US compared to the classical idea behind trade championed by Ricardo in the 18th century. The idea behind "comparative advantage" was that trade would allow each country to focus on what it created most efficiently ... and trade for the rest. A more developed country like the US would import labor-intensive fabric but more design work (like the author's) would be based in the US. While this is true in some cases (e.g. pharmaceuticals, aircraft manufacturing), there is little broad support to suggest that the markets in low-wage countries are as valuable as our own.
In contrast to Ricardo, the main beneficiaries of trade with low-cost nations are US consumers not producers. We all enjoy buying $5 t-shirts and care little where they are sourced.
In general, I support the Border Adjustment Tax. Nakios explains that millwork is typical imported because "American mills are either outdated or too small, and American production costs are too high." But isn't it reasonable that greater domestic demand would lead to updating of domestic manufacturing ? It's worth a try.
10
Brazil has a 50% import tax on all electronics. a high tax on all other imports and has had for years. The many poor people of Brazil hate that they pay so much more than their European counterparts and impoverish themselves buying necessities of modern life such as televisions, cellphones etc. in "parcelas" or payments with monstrous interest rates.. American made goods such as mouthwash, toothpaste, over the counter medications, again many things not made in Brazil are very expensive. Does this boost the Brazilian economy? No.
I don't see higher taxes on imports in the USA as benefitting anything except perhaps helping to pay for the billion dollar Wall. The average person in the USA will just be poorer as goods will cost more.
Manufacturing in the world is now so interconnected that parts for products are made in various countries even before arriving in the USA as completed or for final manufacture. Like everything else this protectionist idea is going to throw a monkey wrench in a system that works for the American consumer, increasing costs at many levels.
Trade is a form of communication that binds the world together in a good, friendly way. High import taxes are economic walls and will diminish the wonderful variety of international goods we currently import. The world will manage without the USA consuming more easily than the USA can manage without importing. Completely withdrawing from the proposed TPP will also diminishes US influence and power.
I don't see higher taxes on imports in the USA as benefitting anything except perhaps helping to pay for the billion dollar Wall. The average person in the USA will just be poorer as goods will cost more.
Manufacturing in the world is now so interconnected that parts for products are made in various countries even before arriving in the USA as completed or for final manufacture. Like everything else this protectionist idea is going to throw a monkey wrench in a system that works for the American consumer, increasing costs at many levels.
Trade is a form of communication that binds the world together in a good, friendly way. High import taxes are economic walls and will diminish the wonderful variety of international goods we currently import. The world will manage without the USA consuming more easily than the USA can manage without importing. Completely withdrawing from the proposed TPP will also diminishes US influence and power.
28
And don't forget the economic impact of uncertainty over changes to Medicare and Social Security being tossed around by Paul Ryan and HHS nominee Tom Price. As a retiree, I've already cut my spending in general and postponed plans to move until I know whether Medicare will become a stingier voucher system and Social Security benefits will be "reformed." Throw in higher prices because of a "border adjustment tax" -- i.e. tariff -- and 20 million people losing their health insurance and I suspect you'll see consumer spending drop substantially. Hello, recession...
10
I say, let's do it. Let's make the American people pay outrageous amounts of money for the things which we have taken for granted – cheap clothes, cheap(ish) electronics, etc. Let's all get hit where it hurts the most (our wallets), and in four years, everyone will have realized the mistake which was made, and we can throw DJT out of office. After all, many seem perfectly fine with the restrictions placed on other people – as long as it doesn't affect me personally. The American people need to pay (literally) for the mistake we've made.
8
The myth of cheap foreign goods rides again. America had several labor movements in this country to stop what's currently going in manufacturing all over the globe. Companies move where labor is cheapest not to pass on savings to the American consumer. Corporations are hording vast amounts of cash offshore. The portion of Corporate tax as part of the federal budget is almost half what it was in the 1950's despite today's record profits. Our government has supported this movement at the expense of the countries workforce.
This has to stop. If companies want to do business with the US then it's time for more balanced trade agreements.
This has to stop. If companies want to do business with the US then it's time for more balanced trade agreements.
8
Absolutely true, but the Republicans have been working laboriously to create this situation and destroy unions. They are definitely not the ones to help now.
1
Mr. Trump and his supporters and the media would benefit by a refresher course in Civics. He cannot enact tariff (or any other) legislation. The legislature (Congress) will have to weigh in here. Until it does, we might consider refraining from treating this proposed tariff as though it were a done deal.
4
The tax would probably encourage businesses to locate in the US. In the process, they would fully automate their factories. Then, with foreign goods taxed at 20%, the US businesses could raise their prices by 15%.
2
Jim, it sounds good, but in reality if you are correct we all pay a lot more for everyday items. I would expect to see inflation rising at a faster pace which would also raise interest rates to 1970's levels in the high teens. Let's not go to 15 to 18% interest.
1
I personally think goods should be more expensive. US consumers do not have a God given right to cheap stuff. Will it hurt poor and lower class folks? Perhaps it will. Maybe those Trump voters will wake up and smell the coffee.
I don't personally buy a lot of things. Maybe people will learn to save more to afford things they buy.
What bothers me is where are the arguments/ requirements to phase things in to avoid the uncertainty we were told was holding companies back when the Obama administration was proposing well thought out and reasonable changes?
That's the part that frustrates me. Please media point out this obvious hypocrisy.
I don't personally buy a lot of things. Maybe people will learn to save more to afford things they buy.
What bothers me is where are the arguments/ requirements to phase things in to avoid the uncertainty we were told was holding companies back when the Obama administration was proposing well thought out and reasonable changes?
That's the part that frustrates me. Please media point out this obvious hypocrisy.
5
Buy fewer shirts and TVs and less often.
Make donations to people in need.
Nothing is possible until it is possible.
Make donations to people in need.
Nothing is possible until it is possible.
8
I had a friend who was a furrier & was very successful, this was before wearing furs became unfashionable.He purchased a Yacht & registered it in New York, which seemed strange as most yacht owners registered their Yacht in Delaware where there was no Luxury tax.. When I asked him why he didn’t register his yacht in Delaware, he replied,” this country and state has been very good to me & my family, the taxes I pay is my gratitude for the good life it has afforded me.
Even though my shoes & shirts will cost me more if they are produced in America, it would give me the satisfaction that i in a way contributed to the welfare of my fellow Americans, & less Americans are dependent upon the Government for support , which in itself winds up costing us more taxes to support the unemployed.
Even though my shoes & shirts will cost me more if they are produced in America, it would give me the satisfaction that i in a way contributed to the welfare of my fellow Americans, & less Americans are dependent upon the Government for support , which in itself winds up costing us more taxes to support the unemployed.
9
Your article lays out the plight of the small manufacturer in the face of the proposed border adjustment tax but what about the plight of the millions of Americans who have watched helplessly as their factories close and their jobs are shipped overseas. The American tax code--which let's face it--is precisely what the top 1% want it to be, encourages this trend.
I did not vote for Trump and I do not agree with him on very much, but we need an economy which enables everyone, both those who have attained an advanced education and those who have not a chance at a decent life. Given a choice between cheaper goods and jobs for my fellow Americans, I'm going to go for the jobs--and for the satisfaction of knowing that my new jeans or cell phone were not produced in some Asiatic hell hole.
The political and economic elites of both parties have ignored the needs of the majority of Americans for far too long aided and abetted by both political parties. The election of Donald Trump was only the beginning. If we continue to have an economy that only benefits the top 1% then expect things to get worse and fast.
I did not vote for Trump and I do not agree with him on very much, but we need an economy which enables everyone, both those who have attained an advanced education and those who have not a chance at a decent life. Given a choice between cheaper goods and jobs for my fellow Americans, I'm going to go for the jobs--and for the satisfaction of knowing that my new jeans or cell phone were not produced in some Asiatic hell hole.
The political and economic elites of both parties have ignored the needs of the majority of Americans for far too long aided and abetted by both political parties. The election of Donald Trump was only the beginning. If we continue to have an economy that only benefits the top 1% then expect things to get worse and fast.
11
I agree with a lot of your points, but I find it hard to believe that a majority of Trump's lower class voters are going to jump up and down with joy when they realise they will have to pay $50 dollars for the same jeans they used to pay $20 - all because they are now made in America. Let's face it, they like the idea of American made goods - but it's a different story when they'll have to pay double for their iPhone because it's no longer made in China.
1
Not that I care for Trump, it's actually good leadership to make Americans walk the walk if they are insisting on talking the talk. He pandered to the cranks in the Rust Belt and Appalachia on the campaign, told them he'd do things that they could figure would cause them alarm at Wal Mart, now they made their bed they can sleep in it. What's ironic is that the NYT can't recognize him for it in a positive way. I work with these people, they say they don't care, we shall see.
Sanders contributor, voted Hillary.
Sanders contributor, voted Hillary.
10
I'd have less of a heartburn with this idea if human rights was tied to the agreement - the whole selling point of "free trade" was that the employment of exported labor would benefit the labor pool abroad as well as create a market for their labor here. Well, the USA got cheap goods here, but the agreement did nothing for the labor abroad - employers exploited the workers instead of middle class income (for their country).
What these agreements lacked was an insistence that workers could afford housing and food on a 40 hour work week, without government assistance. (Hey, that could apply to us, as well!) If a country agrees to raise its min wage (and enforces the rule - pipe dream, I know) then no tariff. Otherwise, tax their exports with fees that include the min wage. (Of course, we have an administration and Congress that wouldn't understand this concept.)
However, we also need to somehow tax software and services that we pay higher prices here than abroad - Microsoft almost gives away Windows software to countries that would pirate it otherwise, but Americans subsidize the cost - that difference should be taxable. Actually, electronic goods and services need a transaction fee in general, since those companies don't have material items that physically cross borders.
I don't see this happening in a Trump administration, but, maybe like O-Care, the idea of an import/export tariff might include human rights, instead of walls.
What these agreements lacked was an insistence that workers could afford housing and food on a 40 hour work week, without government assistance. (Hey, that could apply to us, as well!) If a country agrees to raise its min wage (and enforces the rule - pipe dream, I know) then no tariff. Otherwise, tax their exports with fees that include the min wage. (Of course, we have an administration and Congress that wouldn't understand this concept.)
However, we also need to somehow tax software and services that we pay higher prices here than abroad - Microsoft almost gives away Windows software to countries that would pirate it otherwise, but Americans subsidize the cost - that difference should be taxable. Actually, electronic goods and services need a transaction fee in general, since those companies don't have material items that physically cross borders.
I don't see this happening in a Trump administration, but, maybe like O-Care, the idea of an import/export tariff might include human rights, instead of walls.
5
The worse part is that the border adjustment tax does not originate in any study of the American economy. It's the first thing that came to the delusional minds in the WH to pay for a stupid wall that will serve no other purpose than to poison a vital relationship.
4
'' 97 percent of what is sold in America is contracted out to mills around the globe, then import the pieces for sale or final assembly here. In a market where consumers demand low-priced, high-quality products, it’s nearly impossible to do it any other way; American mills are either outdated or too small, and American production costs are too high. ''
There is the root of the problem
YOU should build factories to produce those products and WE should support our local economy, businesses and people by paying a little bit more for those products.
It is simple economics.
There is the root of the problem
YOU should build factories to produce those products and WE should support our local economy, businesses and people by paying a little bit more for those products.
It is simple economics.
10
Simple but people who shop at Walmart's will have none of it.
1
Nakios is just another globalist who's been arbitraging cheap overseas labor to line his own pockets. Trump was elected to put a stop to it, and he's doing it. Millions of Americans are willing to pay more for clothes, shoes etc. made in the USA instead of Vietnam or Malaysia if it means they keep their jobs. The game has gone on long enough now that the gap in labor rates has shrunk considerably (i.e.; American consumers have built other country's middle classes). Time to end it.
7
While people say they're willing, when it comes right down to it they won't. As a society we've become conditioned to low low prices. Wages haven't gone up, so paying more is not something people will want to do voluntarily. There's always the Dollar Store for a reason.
1
I never thought I'd find myself agreeing with Republicans on a tax issue, but with the border adjustment, I think they're pursuing the right idea. The corporate income tax as structured now is unsustainable. Its revenue keeps declining as fewer and fewer companies actually pay it and more and more of them buy into ever-more-elaborate evasion schemes. It punishes small companies in particular, because unlike Google and Apple, they can't pretend all their profits are being made in Ireland. Yes, it would raise the price of consumer goods a bit, but no one is talking about a rate higher than 20%, and that's only on the wholesale value at import, surely less than half the retail price even for finished goods, and even that would be offset to some extent by as increase in the value of the dollar. So maybe a 5-10% increase in price at most. No one likes a tax increase, but after all you have to tax something, and taxing wages to pay for everything in government as we do now puts us at a tremendous disadvantage compared to countries that use a VAT, which is also much easier to collect and harder to evade. No, the border tax isn't exactly a VAT, but it's more like a VAT, and that's a step in the right direction.
16
Hey Larry, if theres a 20% border tax, then goods will increase 20% or more- and if they can't be increased, people will be fired in order to maintain a profit margin. Do you honestly think bob and betty from des moines are looking to spend another 20% on anything? that coupled with Donnys wildly expensive wall and tax cuts - makes sense because hey, we can spend more while collecting less makes sense to him in his twisted mind.
Let's be honest here, the United States pays tariffs and taxes on just about anything they export to other countries. That is, if we can get our goods into those nations at all. We tolerated these unfair, unequal policies since we felt that many of our trading partners were, in large part, developing countries. Now we have become the world's largest consumer of imported goods. That's not necessarily and bad thing, but it has had some negative results. We have just about wiped out the working middle class. Not everyone can become a lawyer, doctor, or politician. To be more specific, our steel industry has been decimated by China, their policies of dumping have created a skewed competitive playing field for American producers. You who are in the clothing industry have outsourced production for only one reason--profit. Don't gloss this over by saying that we can't produce clothing in the United States. I buy American made clothes whenever I can. Yes, these products do cost more, but the quality is almost always better and it provides employment for Americans, not a bad deal. Need has to beat greed this time!
4
Fine, they can make it cheaper abroad, we get that. And it's not the Mexicans that are ruining the economy, it's the microchip. Got that too. Then start paying service workers a living wage, starting at $15.00 an hour, so the copious profits are distributed more equitably, than billowing over the top. The money's there. It's the distribution that's out of whack.
11
We can't have it both ways - dirt cheap goods and high-wage paying factory jobs here in the US. I, for one, am happy to pay more for a product that has a clean manufacturing chain. I worry about a $7 shirt from Old Navy that was made in Indonesia - was it made by a child? I worry about my iphone - was it made by a father in a residential labor camp? Bring on the VAT tax, it is long overdue in the US.
4
Thanks for the lesson in Economics 101. So prices of shirts will rise. So what?
Let's say the Chinese RMB is 20% undervalued ... because China manipulates its currency value. If the RMB traded freely, it would be 25% higher, and so a shirt sold for $12 yesterday would sell for $15 today, wholesale price to the importer. This price increase might (or might not) make US domestic shirt manufacturing competitive (if it still exists). An import tax, a tariff, a duty, or non-deductibility of the cost of goods from taxes, all accomplish the same thing as a free trading RMB. The tariff or non-tariff barrier just describes leveling the playing field for shirts.
Where is the unfairness in that? So shirts will cost more, and so if you want a shirt maybe you'll buy less ice cream. Your decision.
If this happens to enough Chinese imports, maybe the Chinese will look up and realize that manipulating the RMB, and restricting US goods access to the Chinese market through non-tariff barriers, and whatever other trade shenanigans, need to be adjusted in order to establish "fair" trade between China and the US. And probably we won't have to impose those barriers described above after all.
This is a rather simplistic description of a sound principle.
I fail to see where a cheaper shirt is a human right. And a cheaper cup of Starbucks coffee is not.
Let's say the Chinese RMB is 20% undervalued ... because China manipulates its currency value. If the RMB traded freely, it would be 25% higher, and so a shirt sold for $12 yesterday would sell for $15 today, wholesale price to the importer. This price increase might (or might not) make US domestic shirt manufacturing competitive (if it still exists). An import tax, a tariff, a duty, or non-deductibility of the cost of goods from taxes, all accomplish the same thing as a free trading RMB. The tariff or non-tariff barrier just describes leveling the playing field for shirts.
Where is the unfairness in that? So shirts will cost more, and so if you want a shirt maybe you'll buy less ice cream. Your decision.
If this happens to enough Chinese imports, maybe the Chinese will look up and realize that manipulating the RMB, and restricting US goods access to the Chinese market through non-tariff barriers, and whatever other trade shenanigans, need to be adjusted in order to establish "fair" trade between China and the US. And probably we won't have to impose those barriers described above after all.
This is a rather simplistic description of a sound principle.
I fail to see where a cheaper shirt is a human right. And a cheaper cup of Starbucks coffee is not.
6
Crooked lying Trump's governing by edict, haphazard and irresponsibly casual, without considering the untoward long-term effects, may be (ought to be) the beginning of the end of his rein as 'emperor'...and his megalomaniac appetites, filled by his dangerous advisers (Bannon and Flynn). We are viewing a slippery slope Machiavello would be proud of, the end justifying the means, however cruel and improvised.
This seems like a short sighted attempt by Republicans to tax the the poor and the other lower income earners.Take for instance,Wal-Mart and any of the "Dollar" stores where low income people shop. Most of their merchandise is imported. A tax reduction of a few hundred dollar will do nothing if the costs go up 20% for everyday purchases. Will the border tax cover bananas and other produce not grown in the states or out of season? Oh well,the poor don't vote so who cares,right?
5
Mr. Nakios and I probably have little in common politically, but his points, well made, are why this tax will probably never happen.
This and other "actions" by the mad man makes me wonder how long it will be before impeachment. It would certainly happen if the American people ever got to see his tax forms. "Small crimes and misdemeanors..." Few of these are small crimes against Americans and humanity.
Then we get the current VP. Just as bad for America, especially women.
This and other "actions" by the mad man makes me wonder how long it will be before impeachment. It would certainly happen if the American people ever got to see his tax forms. "Small crimes and misdemeanors..." Few of these are small crimes against Americans and humanity.
Then we get the current VP. Just as bad for America, especially women.
2
We don’t need a “border-adjustment tax” when a VAT – (as a payroll tax replacement) is much better for U.S. jobs of all types. Both Mexico and Canada have a VAT that adjusts to their favor when products cross the U.S. border. The best way to counteract this effect is not with a tariff or border-adjustment tax, but rather with a small U.S. VAT (perhaps 4%) that would replace the business share of the payroll tax. This change would accomplish three things:
1. The negative border adjustments can be neutralized
2. The business cost of U.S. domestic labor is reduced by 7.65%
3. The use of a VAT as a Payroll tax replacement is revenue neutral and consumer neutral
Where there is a trade imbalance (i.e. Mexico, China, etc.) a U.S. VAT serves as a counterbalance. There is no good economic reason to reduce income taxes on exporters that are profitable in addition to reducing their payroll taxes.
The focus should be on jobs rather than products – especially where services are a growing part of the economy. There will be no net gain if U.S. workers are simply funneled to factories and quality service jobs are shipped overseas as if they were a form of intellectual property.
The U.S. is great and exceptional in many ways, but it is fair to ask why it is the only developed country in the world without a VAT. In the big picture, a VAT (as Payroll replacement) can help workers while all the other suggestions primarily help foreign investors.
1. The negative border adjustments can be neutralized
2. The business cost of U.S. domestic labor is reduced by 7.65%
3. The use of a VAT as a Payroll tax replacement is revenue neutral and consumer neutral
Where there is a trade imbalance (i.e. Mexico, China, etc.) a U.S. VAT serves as a counterbalance. There is no good economic reason to reduce income taxes on exporters that are profitable in addition to reducing their payroll taxes.
The focus should be on jobs rather than products – especially where services are a growing part of the economy. There will be no net gain if U.S. workers are simply funneled to factories and quality service jobs are shipped overseas as if they were a form of intellectual property.
The U.S. is great and exceptional in many ways, but it is fair to ask why it is the only developed country in the world without a VAT. In the big picture, a VAT (as Payroll replacement) can help workers while all the other suggestions primarily help foreign investors.
1
So, the Republicans aim to dismantle the public school system, and have factories built all over the country. America will become nothing more than a nation of illiterate assembly line workers. Sounds good.
2
What is incredibly ironic about this proposal is the people who will be most impacted: the working class that voted for Trump. They are the ones who currently buy cheap imported products by the freight ship load. They shop at places like Wal-Mart that rely almost entirely on cheaply produced imports. They choose to buy imports because they're so cheap and because they can't afford more expensive clothing and TVs. They will be the ones who suddenly won't be able to shop anywhere except Goodwill when imports are taxed through the roof.
The NYC fashion designer, by contrast, will probably be able to survive by simply passing on costs to the buyer. The upper-middle class shoppers who buy from these sorts of places will be perfectly willing to pay more, if they have to. I'm speaking from personal experience here because I'm that kind of customer. If the price goes up, I'll pay it and keep you guys in business.
The NYC fashion designer, by contrast, will probably be able to survive by simply passing on costs to the buyer. The upper-middle class shoppers who buy from these sorts of places will be perfectly willing to pay more, if they have to. I'm speaking from personal experience here because I'm that kind of customer. If the price goes up, I'll pay it and keep you guys in business.
32
You know what? Paying more for clothing, shoes, and TVs is JUST FINE if it actually means more people go back to work.
We don't need any more made-in-China $1.99 T shirts. And with all due respect to fashion designers, the US needs mill-working jobs more than it needs fashion design jobs.
As for TVs, 99% of the people in this country (including those in abject poverty) have a TV. 89% have more than one. I am attempting to give away my TV to Goodwill--and they won't take it, because they only accept electronics less than 5 years old.
That's NUTS! TVs are NOT a necessity.
If they cost more---but manufacturing them here creates more jobs for Americans--that is not a bad thing. People will survive if they have to keep their TVs a couple years longer, or forego that second (or third!) TV.
Bottom line: Globalization gives us cheap consumer goods at the cost of jobs that enable people to pay for them. We'd rather have the jobs, thank you.
We don't need any more made-in-China $1.99 T shirts. And with all due respect to fashion designers, the US needs mill-working jobs more than it needs fashion design jobs.
As for TVs, 99% of the people in this country (including those in abject poverty) have a TV. 89% have more than one. I am attempting to give away my TV to Goodwill--and they won't take it, because they only accept electronics less than 5 years old.
That's NUTS! TVs are NOT a necessity.
If they cost more---but manufacturing them here creates more jobs for Americans--that is not a bad thing. People will survive if they have to keep their TVs a couple years longer, or forego that second (or third!) TV.
Bottom line: Globalization gives us cheap consumer goods at the cost of jobs that enable people to pay for them. We'd rather have the jobs, thank you.
5
How much in taxes are paid on the goods you import? Other countries have VAT taxes that make imports pay their fair share.
So basically you want to bring goods in from abroad that have no tax burden, yet if they are made in the US companies would have to pay Social Security, Medicare, local taxes, state taxes, federal taxes, and others.
Seems like importers like you are taking advantage of the system by bringing in goods that do not contribute to the cost of running our society. The trade deficit in goods is around $600 billion. No wonder we are running such huge budget deficits.
So basically you want to bring goods in from abroad that have no tax burden, yet if they are made in the US companies would have to pay Social Security, Medicare, local taxes, state taxes, federal taxes, and others.
Seems like importers like you are taking advantage of the system by bringing in goods that do not contribute to the cost of running our society. The trade deficit in goods is around $600 billion. No wonder we are running such huge budget deficits.
4
While appreciate and encourage the NYT to continue to present analysis of Trump's plans, we knew from the beginning---remember the first Mexican rapists speech---that this was a know-nothing candidate and proud of it. Trump deals in simple cause and effect solutions which work great for simple problems (e.g. it's raining I need an umbrella), but poorly for complex problems (e.g. my apartment is flooded from global warming).
3
What good comes of low prices when most Americans can't afford the merchandise even at these prices? Why can't they afford it? The good paying jobs went overseas after NAFTA and trade manipulations by the Chinese. We may have to pay higher prices at least for a while until jobs come back and trade imbalances are adjusted.
3
An increase in cost of fashion goods should happen -- and should benefit the factory workers to give them a living wage and decent working conditions. Any extra money should NOT be given the the U.S. government to build a wall. I've been in the fashion and footwear business for over thirty years. The "demands" that the U.S. consumer "makes" are actually the demands of the retail buyers and the pressure of corporate profits. I doubt that if global factory worker standards were actually followed/enforced, that U.S. consumers would balk at paying a few more dollars for a pair of jeans. As it stands, there's a creepy underbelly of sweatshops that make products for WalMart and others. I know it. And you know it. And what drives the whole system is getting that dress imported so that it can retail for $19.99.
8
All this talk of putting Americans back to work making sneakers and cheap cars.
But where is all the profit from these foreign products even going? To the rich of course! So why don't we just have our cake and eat it too? Tax the rich. Build infrastructure, expand our schools, go to Mars.
We should take the profits of globalization and give it to our society, and preferably in the form of doing something useful. "Buy American" is just welfare by another name. We can do better.
But where is all the profit from these foreign products even going? To the rich of course! So why don't we just have our cake and eat it too? Tax the rich. Build infrastructure, expand our schools, go to Mars.
We should take the profits of globalization and give it to our society, and preferably in the form of doing something useful. "Buy American" is just welfare by another name. We can do better.
57
Ironically - all Liberals espouse Buy-Local until it is mandated by a Republican.
When this measure is enacted, there will be four factors in play: Exchange Rates (US$ vs. Mexican Peso); Modified Behavior (Manufacturers building plants locally); Enacted against countries manipulating FX and with large account surpluses; and Tax Revenue In-Flows (more money for infrastructure - which we all love).
The three will behave dynamically over a few years and no one can predict the new equilibrium point - not even the clever amateur economists _ I may not know calculus but I can opine on trade flows - resident in the comments.
When this measure is enacted, there will be four factors in play: Exchange Rates (US$ vs. Mexican Peso); Modified Behavior (Manufacturers building plants locally); Enacted against countries manipulating FX and with large account surpluses; and Tax Revenue In-Flows (more money for infrastructure - which we all love).
The three will behave dynamically over a few years and no one can predict the new equilibrium point - not even the clever amateur economists _ I may not know calculus but I can opine on trade flows - resident in the comments.
1
Trump voters won't care. Have you noticed that the less they have, the more loyal Republican voters are to the Republican party?
3
Critical to understand that a border tax will become a tax on the consumer as it will be passed on. Add a loss of ACA subtract a small tax break for the middle class plus massive tax cuts for the wealthy and corporate America (creating massive deficits/higher interest rates through inflation and borrowing costs) and once again billionaires represented by the right wing have taken care of their own. Middle class suffers biglie. Paying attention Trump supporters?
6
The simple fact is this; Any border adjustment import tax will hurt the ones MOST who Trump is supposedly trying to help - the lower and middle class workers - supposedly the bread and butter of his election victory. Chains like Walmart, Target, Costco, Kmart, JC Penney, etc. will be forced to raise prices - in some cases significantly. And it would also effect what the consumer pays for automobiles and electronics (smartphones, tablets, TVs). This could end up being a disaster and start a long drawn out trade war around the globe.
6
This is a bad idea. The complaint is the demise of heavy industry and the rustbelt.
So you penalize women, who make most consumer purchases including clothes, furniture, appliances, electronics and cars in order to try to put some heavy industry plants that can be operated by high school educated men in the rustbelt.
Bring jobs to the rustbelt, if possible, but don't penalize the rest of us in order to do so. We are just trying to get by. This kind of tax policy could cause injury to retail all over the country, and the loss of jobs, many held by women, many of whom are breadwinners.
A better plan would be to ask the rustbelt to stand on its own two feet, whatever that involves, and not depend on big factories or government to bail itself out. If that is harsh, it is what other communities have done when they have experienced economic dislocation. People could be trained in new kinds of jobs. If there is a substance abuse problem affecting these communities, then that should be the focus of public health. But making everything more expensive doesn't help anyone.
So you penalize women, who make most consumer purchases including clothes, furniture, appliances, electronics and cars in order to try to put some heavy industry plants that can be operated by high school educated men in the rustbelt.
Bring jobs to the rustbelt, if possible, but don't penalize the rest of us in order to do so. We are just trying to get by. This kind of tax policy could cause injury to retail all over the country, and the loss of jobs, many held by women, many of whom are breadwinners.
A better plan would be to ask the rustbelt to stand on its own two feet, whatever that involves, and not depend on big factories or government to bail itself out. If that is harsh, it is what other communities have done when they have experienced economic dislocation. People could be trained in new kinds of jobs. If there is a substance abuse problem affecting these communities, then that should be the focus of public health. But making everything more expensive doesn't help anyone.
20
Trump's proposals seem to be knee jerk solutions that "sell" well to the battered Middle Class, but, as far as far as effective, are not very well thought out. Catchy phrases like " Build The Wall","lock her up", etc.
Why not just fine employers who hire illegals with a penalty that has some bite to it? That would eleminate the Wall and the tax necessity. Then promote a Buy Anerican Act that would help business here in our country. Start by putting the provision in the infrastructure bill(if it ever gets done). Of course, that might hurt The Donald and all these other employers who use illegals extensively.
And start by making all those ugly caps of Donald's here rather than in China.
Why not just fine employers who hire illegals with a penalty that has some bite to it? That would eleminate the Wall and the tax necessity. Then promote a Buy Anerican Act that would help business here in our country. Start by putting the provision in the infrastructure bill(if it ever gets done). Of course, that might hurt The Donald and all these other employers who use illegals extensively.
And start by making all those ugly caps of Donald's here rather than in China.
5
Would you and everyone else please stop using the pejorative term "illegals"?
Though my own mother is a legally documented Mexican immigrant, many in her Spanish-speaking church are not but they are human beings deserving of dignity and understanding. Yes, they "broke the law" but they are legally Homo sapiens like you and me and trying to survive on a politically and morally complex planet. They're not some "Other" creatures emerged from a swamp. Our own citizen violent offenders get more respect than the desperately poor undocumented workers doing the jobs Americans won't do and for far less pay.
For those of you who call yourselves Christian, remember what the Bible said as "Christians", especially of the white evangelical variety, seem to display the most intolerance of the undocumented and frequently use the term "illegals".
"Do not neglect to show hospitality to strangers, for thereby some have entertained angels unawares."
Hebrews 13:2
Though my own mother is a legally documented Mexican immigrant, many in her Spanish-speaking church are not but they are human beings deserving of dignity and understanding. Yes, they "broke the law" but they are legally Homo sapiens like you and me and trying to survive on a politically and morally complex planet. They're not some "Other" creatures emerged from a swamp. Our own citizen violent offenders get more respect than the desperately poor undocumented workers doing the jobs Americans won't do and for far less pay.
For those of you who call yourselves Christian, remember what the Bible said as "Christians", especially of the white evangelical variety, seem to display the most intolerance of the undocumented and frequently use the term "illegals".
"Do not neglect to show hospitality to strangers, for thereby some have entertained angels unawares."
Hebrews 13:2
Uh-oh! Those retailers with double names like "Hank and Eloise" or "Tree and Stone" (I made those names up, but if you get the slew of catalogs in the mail that I get, you know what I mean)--anyway, those double-name retailers already charge $80 for a $25 t-shirt, so I can't imaging what the price will be after tax reforms and trade wars.
2
Funny that Dems are all of a sudden pro-outsourcing and anti-union.
I for one would be happy to pay a little more for shoes and TVs and cars should it support our domestic workers (that doesn't include illegals).
A $15 min wage would have the same effect.
I for one would be happy to pay a little more for shoes and TVs and cars should it support our domestic workers (that doesn't include illegals).
A $15 min wage would have the same effect.
4
In 2-3 years' time I would be interested in reading a thorough investigative piece on, let's say, 'The ultimate insider trader', and would not be surprised to learn that Trump's labyrinthine network of political and personal relationships were beneficiaries.
And btw, why the delay in the release of his tax returns? Surely, somewhere, there are grounds for a subpoena?
And btw, why the delay in the release of his tax returns? Surely, somewhere, there are grounds for a subpoena?
3
While I'm not a fan of paying more for goods, perhaps this is just what our planet needs. We are a nation of consumers who buy goods we don't need at Target and Walmart more because it is "on clearance" . Or is that just me?
3
Thank you for an analysis from the point of view of a real business. It is evident that Emperor Donnie, who has repeatedly gone bankrupt running "real businesses," is not an expert on the economic consequences of some of his ideas or expressed positions.
He also has no idea how to make Mexico pay for a wall.
The man in the Oval Office is a fraud. That is going to become more and more obvious to people as time passes. In a mere 10 days, he has caused appreciable controversy.
I cannot image how deep the controversy blizzard will be in a month. SAD.
He also has no idea how to make Mexico pay for a wall.
The man in the Oval Office is a fraud. That is going to become more and more obvious to people as time passes. In a mere 10 days, he has caused appreciable controversy.
I cannot image how deep the controversy blizzard will be in a month. SAD.
4
I sew in America and disagree. How about using capital expenditures like a 179, buy some sewing machines and hire some people? You would then be manufacturing and could control your cost as well as hire Americans.
21
The reason so little is made in the US is that foreign workers are paid less than 10% of the money the same worker in American would need to be just above the poverty level.
You wouldn't be paying them a living wage for that type of labor. Additionally you face the dilemma of who would be able to afford to buy your stuff? The employees in those low paying jobs are not making enough money to consume anything else but necessities like food and shelter if they can afford that. This dystopian society that we now live in with Ayn Randian acolytes is going to implode sooner rather than later.
I grew up in a highly unionized area, where most of the population worked at various refineries. When Japan began to increase the number cars imported to the USA, the unions were very adamant about how we needed to "buy American". You didn't dare show up at the union hall in a Toyota. Of course, this only applied to cars, since all these guys were also buying the newest Sony TVs and stereo systems for their houses. Flash forward 40 years and TVs are cheap. To manufacture them in the USA would mean we'd have to pay a lot more. But hey, those former factory workers can get a good deal on a Chinese TV at Costco.
3
I am by no means a big Trump supporter, but I've worked for a number of these 'beleaguered and struggling' small and midsize businesses. You get no sympathy here.
I've seen the scams: the owner of the company buying clothes and shoes for his kids and writing
Them off as "samples." The private school and college tuitions paid through the company checking accounts. The "stockholders meetings" in Hawaii consisting of the owner and his wife. The wives with no-show jobs so that they can have payments made into Social Security. And on and on.
Sell the nonsense somewhere else. The readers of the Times aren't easily duped.
I've seen the scams: the owner of the company buying clothes and shoes for his kids and writing
Them off as "samples." The private school and college tuitions paid through the company checking accounts. The "stockholders meetings" in Hawaii consisting of the owner and his wife. The wives with no-show jobs so that they can have payments made into Social Security. And on and on.
Sell the nonsense somewhere else. The readers of the Times aren't easily duped.
43
Jason, I know what you are talking about. This proposal will crush big retailers like WalMart, Best Buy, and the other companies that pay their taxes. There is bad behavior in all walks of like. Don't be so cynical about business.
Let's bottom line it Thomas.
A fair non onerous tax on slave labor countries only, not all countries.
Any increase in price will greatly be offset by employing more Americans who not only will make the product but will have money to buy the product instead of being unemployed.
At least initially, any company like yours that may run into trouble should be helped out with govt tax breaks until the playing field is level.
Anytime a country loses its manufacturing base like we are, it loses its soul and becomes a third rate eco. power.
Every now and then the demagogue like Trump or the boy that guy wolf can be right at least once.
A fair non onerous tax on slave labor countries only, not all countries.
Any increase in price will greatly be offset by employing more Americans who not only will make the product but will have money to buy the product instead of being unemployed.
At least initially, any company like yours that may run into trouble should be helped out with govt tax breaks until the playing field is level.
Anytime a country loses its manufacturing base like we are, it loses its soul and becomes a third rate eco. power.
Every now and then the demagogue like Trump or the boy that guy wolf can be right at least once.
1
Great article of the effects of the same old policies of Republicans, eliminate taxes on Corporations, just wrapped up in a different policy box to try to convince the voters it is good for us.
6
My family on my mother's side come from what used to be a thriving textile town in South Carolina. Now all the mills are gone along with all the jobs. Main Street, which used to teem with shoppers visiting local entrepreneurs is largely boarded over. Its a ghost town now. I understand the need for business to outsource labor to less expensive markets. The answer is far above my pay grade. But to see my hometown hollowed out completely breaks my heart.
When can we expect Ivanka trump to bring her clothing manufacturing business to US soil?
9
It's not hard at all. A tariff by any other name, or however disguised, is still a tariff. My advice to anyone confused by this issue is to look up Smooth-Hawley, the isolationist tariff plan put in place by Congress near the beginning of the 20th century.
To say that it didn't work out is to put it mildly. As one of the contributors to the Great Depression, Smoot-Hawley was a member of the marquee cast.
Free trade is a boon to nations who have figured out what they do well, and do it. It will take time for the U.S. to figure that out as a member of the growing global trade community, but left to itself without the artifice of protectionism and isolationism, American businesses WILL figure it out, and do it.
Much is made of "overregulation" as a drag on the Amerifcan economy, but isolationist tariffs - in any form - are one of the worst drags of all. In trade wars, there are no winners.
To say that it didn't work out is to put it mildly. As one of the contributors to the Great Depression, Smoot-Hawley was a member of the marquee cast.
Free trade is a boon to nations who have figured out what they do well, and do it. It will take time for the U.S. to figure that out as a member of the growing global trade community, but left to itself without the artifice of protectionism and isolationism, American businesses WILL figure it out, and do it.
Much is made of "overregulation" as a drag on the Amerifcan economy, but isolationist tariffs - in any form - are one of the worst drags of all. In trade wars, there are no winners.
10
We're so conditioned to look for the cheapest price that we do it without thinking what cheap really costs. Cheap costs us jobs, clothing that fits us, taxes because unemployed people can't pay into the system, the feeling that we're all have some skin in the game. But the flip side is that I won't buy American unless it's well made whether it's clothes, tools, or anything else. Much is made of buying American made items but manufacturers, citing the high cost of American labor, tend to take shortcuts on quality. This includes underpaying workers, overpaying executive employees, cutting corners on process, and then pricing the items for more than they are worth no matter where they are made.
I'd happily buy American if that meant well made items rather than the junk I see. I'm not about to pay a premium price for a piece of clothing that falls apart after 3 washings, a wrench that breaks because it was poorly made, furniture that isn't solid. I'm told that only American drugs are safe but companies outsource the manufacture of the drugs to other countries. Obviously foreign drugs are safe. It's the industry that would have us believe otherwise so they can pick our pockets while avoiding the use of American workers.
We pay no matter what or who manufactures things. If Congress truly cared about Americans being able to find jobs they would find a way to force corporations to hire, train, and retain Americans. They don't.
I'd happily buy American if that meant well made items rather than the junk I see. I'm not about to pay a premium price for a piece of clothing that falls apart after 3 washings, a wrench that breaks because it was poorly made, furniture that isn't solid. I'm told that only American drugs are safe but companies outsource the manufacture of the drugs to other countries. Obviously foreign drugs are safe. It's the industry that would have us believe otherwise so they can pick our pockets while avoiding the use of American workers.
We pay no matter what or who manufactures things. If Congress truly cared about Americans being able to find jobs they would find a way to force corporations to hire, train, and retain Americans. They don't.
12
These tariffs will be passed to the consumers who may choose to voice their opposition by buying NOTHING new until Jan 21, 2018. Now is the time to manufacture in our communities to create income security, general welfare & domestic tranquility and for our posterity. Tax reductions promised to the wealthiest must be reinvested (not hoarded) to benefit Authentic Citizens of the United States as I have discussed in AREA-A (The American Reinvestment Economic Acceleration Act). The 98th at $210,000, the 99th, (one percent) has about 1,650,000 people earning over $288,000 per year and the 0.1% has about 165,000 people with a base income more than $1,100,000 a year https://dqydj.com/income-percentile-calculator/
1
If you significantly increase the prices of goods people need or want to buy but do not increase their income to match, they will buy less goods, or substitute for cheaper ones ("inferior goods" in economist-speak). You know, less steak and more hamburger.
This, by both definition and empirical experience results in putting the brakes on the already-slow moving economy, and may well kick it into recession. So the author is spot-on that it is a dreadful mistake.
V.A.T. actually does the same thing. Conservatives have long simplistically seen it as a cure-all to the tax code but it's anything but, being HIGHLY regressive as savable income becomes a lower percentage of income the less people make, until it becomes zero. People already unable to save are then forced to make harsh decisions about spending. Do I take my med or cut my pills in half? Do I eat hamburger or just beans. Do I pay my rent or my heating bill?
But those of us in higher income brackets don't face such decisions. We merely grumble about higher prices but enjoy the income tax cuts that offset them.
This, by both definition and empirical experience results in putting the brakes on the already-slow moving economy, and may well kick it into recession. So the author is spot-on that it is a dreadful mistake.
V.A.T. actually does the same thing. Conservatives have long simplistically seen it as a cure-all to the tax code but it's anything but, being HIGHLY regressive as savable income becomes a lower percentage of income the less people make, until it becomes zero. People already unable to save are then forced to make harsh decisions about spending. Do I take my med or cut my pills in half? Do I eat hamburger or just beans. Do I pay my rent or my heating bill?
But those of us in higher income brackets don't face such decisions. We merely grumble about higher prices but enjoy the income tax cuts that offset them.
6
The price increases that would result would probably be perceived as a vague decline in living standards. People might not feel as prosperous as they did when they could go into Walmart and buy something at a low cost produced in another country, but that feeling would not target the border tax as the cause.
The PR campaign to convince people that the border tax will save jobs will be very well done. People will not know they are being fooled.
The PR campaign to convince people that the border tax will save jobs will be very well done. People will not know they are being fooled.
6
I believe we are all going to start paying a lot more for goods as it's likely that some form of a VAT will have to be put in place if we are going to pay for Universal Health Care. There's likely no other way to generate enough revenue to pay the billions of dollars needed to fund it every year. I'm ok with that. I buy too much. An incentive to quit spending so much on products is fine with me. The same thought process would follow on your "more expensive shoes" scenario. I don't need to buy them really.
3
The point of the "border adjustment tax" is missed. It is part of a larger slew of acts and messages targeting and further solidifying the Trump Voter Block...full speed ahead--real impacts on consumers, manufacturers, importers, exporters, even on the Republican Party, be dammed.
It is a political movement being crafted for the long-run; the collapse of your business or broader economic, political, and social stability are simply inconsequential .
It is a political movement being crafted for the long-run; the collapse of your business or broader economic, political, and social stability are simply inconsequential .
33
This is the extent of the Republican/Trump vision of American, bring back textile mills and coal? People really need to read some US history. We had textile mills in the US, lots of them. Mill owners relocated abroad because Americans wanted too much money to work there and because they were dangerous.
Now, through the magic of tariffs we'll bring them back and people will rush to do piecework? The Dept of Labor's new Secretary doesn't seem to be a big fan of either OSHA or a living wage (though he does like girls eating hamburgers in bikinis) so I'm not sure how these new US textile workers will be better off than their counterparts were in 1901.
But I'll be proud to pay more for my pants as the mill owners get richer and curry favor with Trump. America will sure be great again for them.
Meanwhile that socialist HRC wanted to invest in higher education for all Americans! She should have listened to Real Americans when they said that all they really want is to stitch together shirts for $7/hour at someone else's mill.
Now, through the magic of tariffs we'll bring them back and people will rush to do piecework? The Dept of Labor's new Secretary doesn't seem to be a big fan of either OSHA or a living wage (though he does like girls eating hamburgers in bikinis) so I'm not sure how these new US textile workers will be better off than their counterparts were in 1901.
But I'll be proud to pay more for my pants as the mill owners get richer and curry favor with Trump. America will sure be great again for them.
Meanwhile that socialist HRC wanted to invest in higher education for all Americans! She should have listened to Real Americans when they said that all they really want is to stitch together shirts for $7/hour at someone else's mill.
10
Yes, I remember how things were when the only choice we had (other than for cheap knicknacks from Japan) was to "buy American". Furniture and other household necessities were so expensive that we couldn't afford them. On the other hand, the American-made products were of better quality and more durable than the cheaper stuff now coming in from other countries. Examples of this would be the refrigerator and microwave we bought a few years ago, the Sears Kenmore brand, but produced in Mexico. A couple of the freezer shelves had been installed upside down, so that the support bar in the middle effectively prevented across-the-shelf storage, but that problem couldn't be corrected without disassembling the appliance. The microwave door was not level, a situation that could have been hazardous to our health. And anyone who has purchased fiberboard furniture can attest to the fact that it doesn't really "hold up" like the old furniture did.
The kicker is that the losers here are not just American workers, but also American consumers, since some of the "savings" aren't passed on to the consumer, but pocketed by greedy business owners exploiting unregulated labor elsewhere. They are laughing all the way to the bank, while American taxpayers are supporting those who cannot find any job, let alone living-wage jobs, through not just benefits like food stamps and other benefits reserved for the poor, but also Social Security disability benefits and Supplemental Security Insurance (SSI).
The kicker is that the losers here are not just American workers, but also American consumers, since some of the "savings" aren't passed on to the consumer, but pocketed by greedy business owners exploiting unregulated labor elsewhere. They are laughing all the way to the bank, while American taxpayers are supporting those who cannot find any job, let alone living-wage jobs, through not just benefits like food stamps and other benefits reserved for the poor, but also Social Security disability benefits and Supplemental Security Insurance (SSI).
7
Here's the deal, Donald.
You show us your tax returns. I send in mine for this year, by the April 18th deadline.
No show? No file.
Come on Don, you guys have two "extra days" this year to get it together.
You show us your tax returns. I send in mine for this year, by the April 18th deadline.
No show? No file.
Come on Don, you guys have two "extra days" this year to get it together.
3
It may come down to that some day. Money is the only thing the Trump administration values. A concerted decision by employers and individuals to stop remitting income tax payments is the only civil disobedience guaranteed to get their attention.
1
The GOP claim that other nations "tax imports" because they have a VAT is another misleading sham. They tax everything through their VATs. If the GOP wants a national sales tax, they should just say it and see how it sells to their base.
8
Any company that employs 'dozens of freelancers' as you say yours does should be forced to pay them benefits.
7
So now the NYT is the champion of cheap foreign workers being paid slave wages to help the bottom line of businesses?
5
I want to see the labels on every stitch of clothing that Trump and his minions wear......and that includes his wife and and his children.......I want to see where they are made. This man is an idiot and obviously did not think this through. More stupidity in the next four years from this man....guarantee it..
5
I get what you're saying, but it's quite limited thinking. There would be no need for protectionist policies if protectionism were applied by those whom it would benefit most: the American people. You can blame corporations all you want for outsourcing: if people refused to buy imported goods, they simply wouldn't sell. The downfall of Detroit, Dearborn and Flint is directly related to the ubiquity of Toyotas, Hyundais and Kias in the streets of our cities, not (only) corporate greed. American consumers threw their various industries under the bus by going for cheap stuff instead of supporting their own industry. A more suicidal (or plain stupid, who knows) mindset does not exist.
Mr. Nakios, from the tone of your article, I would guess that it is more likely than not that you voted for Donald Trump.
If you did, I have no sympathy for your concerns for your business.
If you did, I have no sympathy for your concerns for your business.
6
Author states American production costs are too high. This means he has to pay American workers too much and this cuts into his profit. Too bad. You sell your product here, you make it here. Pay yourself less.
Any tax levied at the border on imported goods, finished or not, will be levied on the wholesale, or cost value of that item, so the tax will not be 20% of the retail price. So in reality, a Polo Ralph Lauren dress shirt that sells in Macy's for $100.00 might have a wholesale price of $15.00 which, of course, doesn't include transportation, advertising, retail markup, etc. and would be taxed on $15.00.
Any tax levied at the border on imported goods, finished or not, will be levied on the wholesale, or cost value of that item, so the tax will not be 20% of the retail price. So in reality, a Polo Ralph Lauren dress shirt that sells in Macy's for $100.00 might have a wholesale price of $15.00 which, of course, doesn't include transportation, advertising, retail markup, etc. and would be taxed on $15.00.
9
"Pay yourself less." You mean the quaint notion that business owners would pay themselves less to pay their workers more? The abhorrence of this thought lies at the very heart of the 1% Club credo.
1
And FOOD.
The Republicans love Trump because he is doing their dirty work. We have to see what the Republicans do not just what they say; they love HUGE tax breaks for the super-rich and cut social programs for the needy, and that is their legacy, whether it was Presidents Reagan, Bush, or now Trump. The nomenclature used to deceive the public at large is a bipartisan tool used by both parties just a little more by the party of Billionaires – The Republican party.
The tax reform will just benefit the Rich and tax the lower middle class the most. And that is the band of the electorate that voted in the ‘King’.
President Donald Trump claim of fame is that he has never backed down in deal making; mostly he has doubled down – I am along with 100s of million others are scared blue of a man like him having the nuclear code – he may be worse than any other dictator around the world with the kind of War Machine at his disposal. With the consequences of having a stubborn guy at the helm in today’s world stage may just make the effects of a border tax minuscule. Republicans must wake up and try to fix the damage that is being done in their name, because prevention is better than trying to undo any of his EO and Legislation that they pass.
The Republicans love Trump because he is doing their dirty work. We have to see what the Republicans do not just what they say; they love HUGE tax breaks for the super-rich and cut social programs for the needy, and that is their legacy, whether it was Presidents Reagan, Bush, or now Trump. The nomenclature used to deceive the public at large is a bipartisan tool used by both parties just a little more by the party of Billionaires – The Republican party.
The tax reform will just benefit the Rich and tax the lower middle class the most. And that is the band of the electorate that voted in the ‘King’.
President Donald Trump claim of fame is that he has never backed down in deal making; mostly he has doubled down – I am along with 100s of million others are scared blue of a man like him having the nuclear code – he may be worse than any other dictator around the world with the kind of War Machine at his disposal. With the consequences of having a stubborn guy at the helm in today’s world stage may just make the effects of a border tax minuscule. Republicans must wake up and try to fix the damage that is being done in their name, because prevention is better than trying to undo any of his EO and Legislation that they pass.
3
And the dope (Trump) who's pushing this tax plan took, and passed, courses at UPenn's Wharton School? Seriously? Release your transcript, Mr. Trump, or is that too under audit?
4
The fashion industry has raced to the bottom, not only in price but in quality and durability. I would gladly pay twice or three times what I pay now for a shirt that would survive more than 20 washings. But the business model of the fashion industry is based on rapidly-changing, disposable clothing. It is only sustainable because of cheap foreign labor. Time for a race to the top in quality and pay.
11
Frequent Flyer-"I would gladly pay twice or three times what I pay now for a shirt that would survive more than 20 washings."
If you are jet setting around the world you obviously are not one of the struggling poor who can only afford these cheaply made imports. Are you having to forgo eating to pay for this increase? Could you pay triple for a child's pair of shoes that he will outgrow in 4 months on a wage of $7.25 an hour? Triple for his pants that he will tear on the playground? His winter jacket that will only fit one year or his boots? It isn't just about what the comfortable can afford to pay. Can you even comprehend living on a wage of $7.25 an hour? How do the working poor afford these onerous increases? the orange savior is not advocating pay raises he's only advocating punitive taxes to punish Mexico and China for daring to disagree with him. All this does is make the poor even poorer and struggle ever more to provide for the most basic of necessities. There's an obesity crisis in the USA. What happens when the poor can no longer afford any healthy foods, instead relying on soda and cheap junk foods like ramen noodles to feed their children and themselves? Is this acceptable to you? Are you advocating an increase in wages to offset the rise in costs of necessities? Is the orange savior.? So far all I've heard is silence from the disgusting orange nightmare and his merry band of destructive sycophants who do not care about the poor and working man and NEVER will.
If you are jet setting around the world you obviously are not one of the struggling poor who can only afford these cheaply made imports. Are you having to forgo eating to pay for this increase? Could you pay triple for a child's pair of shoes that he will outgrow in 4 months on a wage of $7.25 an hour? Triple for his pants that he will tear on the playground? His winter jacket that will only fit one year or his boots? It isn't just about what the comfortable can afford to pay. Can you even comprehend living on a wage of $7.25 an hour? How do the working poor afford these onerous increases? the orange savior is not advocating pay raises he's only advocating punitive taxes to punish Mexico and China for daring to disagree with him. All this does is make the poor even poorer and struggle ever more to provide for the most basic of necessities. There's an obesity crisis in the USA. What happens when the poor can no longer afford any healthy foods, instead relying on soda and cheap junk foods like ramen noodles to feed their children and themselves? Is this acceptable to you? Are you advocating an increase in wages to offset the rise in costs of necessities? Is the orange savior.? So far all I've heard is silence from the disgusting orange nightmare and his merry band of destructive sycophants who do not care about the poor and working man and NEVER will.
There's a reason the guy declared six business bankruptcies.
4
It was easy to tool down. Now comes the hard part, if it comes at all. Raising the dead is something for the movies.
1
There's a fair amount of cognitive dissonance going on. If you want living wages in this country, prices will necessarily will go up. If you want more Americans working, prices will necessarily will go up.
9
What is funny about this piece is that I've not seen a similar piece describing what happens when the minimum wage goes to the magic $15 per hour. The cost to the consumer will rise when this happens and some business will not be able to raise prices enough to be profitable. The difference of course is the border tax is Trump's and the liberals are supporting the $15 per hour movement. Can we ever expect a non-biased analysis of proposals from the Times.
4
There is a marked difference between the import/export problem and raising the minimum wage. Perhaps when a family is actually able to support his or her family on their wages he or she would not have to supplement their income with Medicaid and other government programs,as do many of those employed by Walmart . We all pay for Medicaid and are indirectly supporting one of the wealthiest families and their shareholders in America (which company is coincidently based in China).
First, a few questions:
Do you wish more Americans, including those without college degrees, had jobs--better jobs--with long term stability, reasonable pay, and critical mass that could support unions?
Do you wish that workers in other countries could be paid more, faced less risk, and more reasonable conditions?
Do you wish that manufacturing, around the globe, followed more environmental guidelines and restrictions, reducing impacts?
Do you wish to reduce excessive transportation (e.g. the Planet Money bit about making T-shirts (shipping US cotton to Indonesian, fabric to Bangladesh, partial components to Colombia, and finished shirts to the USA), thus cutting energy use and impact?
If you answered yes to any of these questions, then you need to be willing to pay more for consumer goods. And while increased consumer costs will impact low earners, increased domestic manufacturing will also increase wages (and maintain demand).
The purpose of tarriffs is not tax revenue. The purpose is to support domestic industry, or at least provide a lever in negotiating trade deals.
Consumer bias and the lowest-price mantra have ruined enough lives, and degraded enough products (air travel, anyone?). Let's try another way.
Do you wish more Americans, including those without college degrees, had jobs--better jobs--with long term stability, reasonable pay, and critical mass that could support unions?
Do you wish that workers in other countries could be paid more, faced less risk, and more reasonable conditions?
Do you wish that manufacturing, around the globe, followed more environmental guidelines and restrictions, reducing impacts?
Do you wish to reduce excessive transportation (e.g. the Planet Money bit about making T-shirts (shipping US cotton to Indonesian, fabric to Bangladesh, partial components to Colombia, and finished shirts to the USA), thus cutting energy use and impact?
If you answered yes to any of these questions, then you need to be willing to pay more for consumer goods. And while increased consumer costs will impact low earners, increased domestic manufacturing will also increase wages (and maintain demand).
The purpose of tarriffs is not tax revenue. The purpose is to support domestic industry, or at least provide a lever in negotiating trade deals.
Consumer bias and the lowest-price mantra have ruined enough lives, and degraded enough products (air travel, anyone?). Let's try another way.
7
Mr. Nakios, Donald Trump cares nothing about you or your business. He cares about getting his name and photo in the press. To accomplish that he constantly stirs up unrest by making outrageous remarks. It is quite that simple, and most of us fall for it and give him what he wants. That is why he keeps doing it.
4
Okie dokie- can't wait to see how the red states like that !!!
7
a pillar of this proposed tax policy is the boost to exports. But it's fantasy. As soon as we tax the imported products our trading partners will raise the taxes on good imported into their countries too...our supposed exports. Net result higher prices for all consumers and no more exports.
3
Because trump hired a worker hating cabinet appointment who does not believe minimum wages need to rise or in overtime pay to head Labor, this will be a double whammy boomerang that will ring trump's neck. Wages will keep up even worse than they have for decades just as prices for what workers need cost a lot more.
When the mob he promised better times to get the double squeeze, they will go after him with even more furry than the one that got them to vote for him.
When the mob he promised better times to get the double squeeze, they will go after him with even more furry than the one that got them to vote for him.
3
This is what I learnt from an importer of clothes from China to be sold later on in H&M, Target etc in the US. They pay the Chinese firm 1 dollar for a shirt. When the ship arrives in the US they sell it to retailers for 2 dollars. The retailer sells it for 30 dollars, thus 28 dollars of this shirt takes place in the US. Advertising, American firms, Work force in the retailing etc. Starting to manufacture the shirts for 2 dollars in the US will create a lot of very low paid jobs. Is that what Mr. Trump wants?
5
You don't seem to get the whole principle discussed here. The current situation would require US workers to accept Chinese wages to even start to be competitive on the same market. This is the situation passed on by the Free Trade champions up until now, Republicans and Democrats alike (Mr. Clinton, Mr. Obama, Mrs. Clinton).
Taxing imports wouldn't force US workers to accept Chinese salaries: on the contrary, they would "only" have to compete with Chinese labor + import taxes + cost of transportation. When the Chinese-made shirt you refer to starts costing closer to what a Made in USA one does, it will make strategic and financial sense to revert to American manufacturing. It's not a sure-fire panacea to all our problems, but it's certainly a step in the right direction, that actually has a chance to work.
Taxing imports wouldn't force US workers to accept Chinese salaries: on the contrary, they would "only" have to compete with Chinese labor + import taxes + cost of transportation. When the Chinese-made shirt you refer to starts costing closer to what a Made in USA one does, it will make strategic and financial sense to revert to American manufacturing. It's not a sure-fire panacea to all our problems, but it's certainly a step in the right direction, that actually has a chance to work.
1
There is no getting around it NYTimes. You have really screwed up with this Op-Ed piece. Either the author is completely wrong and manufacturers will be able to deduct the cost of imported goods from their taxable income, or you have failed to report on the biggest single fiasco of the new Trump administration.
I know you give your Op-Ed writers great latitude, but a quick peruse as a reality-check, or at least some vetting on the qualifications of the writer would have served everyone well.
I know you give your Op-Ed writers great latitude, but a quick peruse as a reality-check, or at least some vetting on the qualifications of the writer would have served everyone well.
4
What?? the writer s qualifications and deep knowledge base on the issue are pretty clear if you read it. And as a small business owner, I can say that the content is on the money, literally.
And this is why Trump has bankrupted his companies 4 times.....see a pattern? He's no business genius... he's a thief and a con man.
9
"American mills are either outdated or too small, and American production costs are too high." How would you address this?
8
And their quality is excellent. Look at Filson and others like that. A shirt will last you ten years, not six months like a cheap Chinese shirt.
4
"American production costs are too high."
The scale and scope of an industry's economics will determine, in part, its competitiveness. However, if those costs include clean air and water, good schools and parks, or health care and social security benefits for all of us then, we must ask ourselves "do we want to accept quality of life" as part of the cost of the goods and services we purchase? But, "if cheaper is better" will we accept the trade-offs?
The scale and scope of an industry's economics will determine, in part, its competitiveness. However, if those costs include clean air and water, good schools and parks, or health care and social security benefits for all of us then, we must ask ourselves "do we want to accept quality of life" as part of the cost of the goods and services we purchase? But, "if cheaper is better" will we accept the trade-offs?
Trump's backers will surely be getting very loud over this proposed massive tax increase. To "pay for the wall", or anything else for that matter, by raising consumer costs by this much makes zero sense. I do have to say, however, I don't understand the author's math. He gives an example of cost of goods sold of $4 million and are 100% imported. Not sure how that would drive an increase in her tax base from $1 million to $5 million.
3
Because there would be 20% tax on the $5 million cost of imported material
Cheap, Cheap, Cheap.... this is the mentality that created this mess. this neoliberal idea is unsustainable and collapsing.
5
There is always a connection to Big Oil with almost every economic plan the GOP puts forth. Second to last paragraph spells it out. This tax system will make American Oil cheaper to export.
5
All business math 101 and you could apply his math to a host of corporations assembling stuff in the US (autos, trucks, construction equipment, lawnmowers, medical equipment, the list is endless). And apropos one of the arguments advanced by proponents of a border tax, how exactly does a stronger dollar assist exporters? As with most things what the lord giveth with one hand he also takes away with the other. Given the USA's incredible dependence on imports of low priced semi finished and finished goods to drive it consumer based economy it's hard to see how making them more expensive and squeezing disposable income is going to assist the low and middle income Americans that Trump and the Republicans claim to care about. It's not going to bring the furniture industry back to NC it's just going to make furniture more expensive.
5
Domestic producers are "spotty and expensive" because they have had no market for many years. Most went out of business. None have made new investments in efficiency.
That is the point, to create domestic production again. They won't be spotty when they have buyers. They won't be so expensive when they invest in modern production methods.
Production by hand by someone paid next to nothing on the far side of the world is not the only way to make things. We can do better.
That is the point, to create domestic production again. They won't be spotty when they have buyers. They won't be so expensive when they invest in modern production methods.
Production by hand by someone paid next to nothing on the far side of the world is not the only way to make things. We can do better.
15
The issue wasn't that they had no market, the issue was that global competition led to specialization, and the simple fact is that contracting the production process out to mills or facilities in other countries, and then importing them for final assembly in the US, has been made far cheaper due to labor costs and the cost of doing business here in the US. A society which demonizes firms for pursuing their livelihood has now begun to reap what it has sown. The consumers and demand are clearly here for the goods, just not at the price the American Society has seen fit to impose on its own domestic industries.
This plan can work, with the right incentives and reforms. The question is, will the Republicans and Trump Administration implement them? My hunch is no, simply because if they were truly interested in improving consumers' access to cheap goods, they wouldn't be pursuing bilateral trade deals piecemeal in the first place. I personally agree with Trump's tax plan, except for this. And his views on international trade. But that's a byproduct of my background in Economics.
This plan can work, with the right incentives and reforms. The question is, will the Republicans and Trump Administration implement them? My hunch is no, simply because if they were truly interested in improving consumers' access to cheap goods, they wouldn't be pursuing bilateral trade deals piecemeal in the first place. I personally agree with Trump's tax plan, except for this. And his views on international trade. But that's a byproduct of my background in Economics.
It takes time to build a plant no one wants in their backyard and no logistics to support.
The new plants will be highly automated so many fewer workers will be needed than in the past.
Not a reason not to have more manufacturing in the US. I'm an engineer so I support making things here.
But let's not kid ourselves that this happens overnight or will result in a large number of high paid jobs for people without only high school education.
We require some college to do the jobs at oil refineries where I work even for admin support.
The new plants will be highly automated so many fewer workers will be needed than in the past.
Not a reason not to have more manufacturing in the US. I'm an engineer so I support making things here.
But let's not kid ourselves that this happens overnight or will result in a large number of high paid jobs for people without only high school education.
We require some college to do the jobs at oil refineries where I work even for admin support.
1
Andrea -- Yes, good points. It will take time, and to work it must be higher tech than overseas sweatshops.
However, that does mean we evolve good jobs on this course, if we do it in a measured way.
Of course there is nothing measured about Trump, but he is at least starting to do it. The next election can return some moderation and sense to the process, starting in 2018 and the positioning for it even now.
However, that does mean we evolve good jobs on this course, if we do it in a measured way.
Of course there is nothing measured about Trump, but he is at least starting to do it. The next election can return some moderation and sense to the process, starting in 2018 and the positioning for it even now.
In order for America to be great again we have to understand that fundamentally Americans can't compete in the world. The Boeing planes, ford and GM cars, I-Phones that are being sold all over the world are simply anecdotal outliers.
We have an undereducated work force and are about to dismantle public education in this country. Our only chance is to use our dumbed down labor to draw our natural resources out of the ground, pollute our water tables and foul our air. How can we do that if we have to compete with countries like Germany that have solid education, solid social safety nets and smart people running their country? The answer is simple. By exploiting last centuries great jobs. Break out the coal miners and sewing machines.
We have an undereducated work force and are about to dismantle public education in this country. Our only chance is to use our dumbed down labor to draw our natural resources out of the ground, pollute our water tables and foul our air. How can we do that if we have to compete with countries like Germany that have solid education, solid social safety nets and smart people running their country? The answer is simple. By exploiting last centuries great jobs. Break out the coal miners and sewing machines.
71
How can Germany afford all that? Did you know that we run a $600 billion trade deficit while they run a $200 billion trade surplus? Did you know that 20% of their workers are in manufacturing, double ours? Could it be Trump is right, that the key to economic prosperity, like Germany, starts with re-establishing our manufacturing base? If you hold up Germany as the beacon to follow, you will realize it starts with manufacturing and a trade surplus and the need to get away from these import companies that send US dollars abroad without paying their fair share of taxes.
1
Americans absolutely can compete. The question is, is the average American willing to put the effort in to compete in a non-service oriented economy? As to having an under-educated workforce, that's debatable. This country offers elite undergraduate and graduate institutions that other countries voluntarily send their best to attend, and our own citizens often are able to attend them for little in the way of costs. Our public universities are top notch, and offer low tuition costs for citizens of the states they reside in. Coupled with the immense student loan programs designed to facilitate higher education (whatever you think of the burden they impose, they are absolutely successful in inducing students to pursue higher education), and the US workforce is educated enough.
The issue with the American Workforce is that we have spent so long idolizing positions and careers that are service-oriented, our society is largely unwilling to take the steps necessary to build a production-oriented economy. And that is absolutely the task at hand, if Trump's plan will succeed. Often, the biggest obstacle in achieving our goals is ourselves.
The issue with the American Workforce is that we have spent so long idolizing positions and careers that are service-oriented, our society is largely unwilling to take the steps necessary to build a production-oriented economy. And that is absolutely the task at hand, if Trump's plan will succeed. Often, the biggest obstacle in achieving our goals is ourselves.
Fantastic, concise explanation of the problem stripped to its core.
I suppose there is no reasonable alternative (no pun intended). We either have to have very high taxes on imports or only buy items made within a 100 mile radius.
People who buy cheap imported goods at Walmart and seldom shop at small non-chain businesses, wonder where the jobs went. Businesses buy products from countries with almost zero concern for the environment and low wages, being careful to take advantage of all the tax deductions and allowances written into law.
I suppose there's nothing in between the two, huh?
People who buy cheap imported goods at Walmart and seldom shop at small non-chain businesses, wonder where the jobs went. Businesses buy products from countries with almost zero concern for the environment and low wages, being careful to take advantage of all the tax deductions and allowances written into law.
I suppose there's nothing in between the two, huh?
17
The wall is clearly one of Trump's most ridiculous and impossible projects, and we, the people, don't need this astoundingly expensive folly. If Trump really wants it, I suggest he start a Kickstarter campaign to fund it.
Whoops, let me correct that. If Trump really wants the wall, let him start a Kickstarter campaign from prison, where he should be right now for treason for collaborating with Russian hackers to game the election, for his flatly unconstitutional "Muslim ban" and for everything else this crook has been sweeping under the rug. And toss Bannon into prison as well, for organizing and attempting to execute a coup in the United States.
We US citizens need a real president, not Trump's band of incompetent would-be overlords. Making America great again begins with Trump's impeachment.
Whoops, let me correct that. If Trump really wants the wall, let him start a Kickstarter campaign from prison, where he should be right now for treason for collaborating with Russian hackers to game the election, for his flatly unconstitutional "Muslim ban" and for everything else this crook has been sweeping under the rug. And toss Bannon into prison as well, for organizing and attempting to execute a coup in the United States.
We US citizens need a real president, not Trump's band of incompetent would-be overlords. Making America great again begins with Trump's impeachment.
31
The astounding amount of pure speculation in this comment leads me to question why it has so many recommendations. Oh wait... I forgot, I'm in the echo chamber that is the NYtimes comment section. The plan to build the wall by removing aid to Mexico, a country which is amazingly furious at not being allowed to send it's citizens across our border untouched and undocumented, is a reasonable and viable plan. The opposition to securing our borders is about as logical as opposition to evolution. If you're going to oppose voter registration to prove citizenship in this Country and proper immigration enforcement, you might as well post our voter ballots on an unsecured server and website, and allow the population of the world to vote for our president. But then, no sane individual would actually argue for that, now would they? It's much easier to cloak your attempts at securing an illegal voter base in the guise of civil rights.
When in Korea decades ago, I dealt with a shirt company that made dress shirts for one of the big department chains. The landed cost in containers was about $1/shirt. They were selling them in the USA for about $20. Allowing for some costs of transport and handling still left a hefty profit margin. No wonder they can offer 50 and 75% off sales.
Even if the cost of the shirts doubled, retailers would survive. We gave up an entire US industry to get that extra few pennies of profit. All those jobs lost and nothing to replace them. What is good for a retailer is not necessarily what is good for the United States. Cheap goods have no benefit if nobody can afford to buy them. Listening Walmart?
Even if the cost of the shirts doubled, retailers would survive. We gave up an entire US industry to get that extra few pennies of profit. All those jobs lost and nothing to replace them. What is good for a retailer is not necessarily what is good for the United States. Cheap goods have no benefit if nobody can afford to buy them. Listening Walmart?
39
Then take away Walmart's legion of buyers Social Security, Medicare, Medicaid, and the ACA, just to name a few of the programs these Republican trolls are going after and we'll see the final death of Walmart, and frankly most retail in the U.S. Maybe Walmart can move to Germany, but German voters are not as ignorant as Americans.
Republicans, at least since Reaganomics, have never realized that 70% of the American economy is based on us buying their stuff. This all is only to get what's left of America's wealth to the Koch Brothers and their ilk. It's as fun to watch as it is frightening for us on Social Security and Medicare.
Republicans, at least since Reaganomics, have never realized that 70% of the American economy is based on us buying their stuff. This all is only to get what's left of America's wealth to the Koch Brothers and their ilk. It's as fun to watch as it is frightening for us on Social Security and Medicare.
1
50-75% off sales have nothing to do with where products are made. The mark up on clothes is extremely high which is why no matter what day of the year you go into a mall you can find a sale.
You're Ignoring the fact that those jobs were replaced by higher paying service jobs during the Reagan, Bush and Clinton administrations. We had full employment, higher paying jobs and virtually no inflation because of cheap foreign labor.
What has really happened is US manufacturing is competitive in the world because of Robotics. China is losing labor to a fast loss of young people because of it's one child policy. They also now have about 3 to 500 million consumers many of whom fly on Boeing planes, drive GM cars, carry i-phones and go to Disney movies.
In the last 10 years the US service sector has been decimated by the internet. We all book our own plane tickets, hotel rooms and car rentals. Many of us order our consumer products on line bypassing traditional stores that employ millions of people. Meanwhile American manufacturing is coming back with very few people needed.
Retailers are done not because of the high or low cost of goods, because their business model will soon be part of the dustbin of history.
What has really happened is US manufacturing is competitive in the world because of Robotics. China is losing labor to a fast loss of young people because of it's one child policy. They also now have about 3 to 500 million consumers many of whom fly on Boeing planes, drive GM cars, carry i-phones and go to Disney movies.
In the last 10 years the US service sector has been decimated by the internet. We all book our own plane tickets, hotel rooms and car rentals. Many of us order our consumer products on line bypassing traditional stores that employ millions of people. Meanwhile American manufacturing is coming back with very few people needed.
Retailers are done not because of the high or low cost of goods, because their business model will soon be part of the dustbin of history.
People seem to forget that there are a lot of other things made in Mexico besides TVs and other home electronics. Many medical devices (e.g., tracheotomy tubes and other life-saving technology) are made in Mexico, but because their pricing only affects a small segment of the American population (i.e., the most vulnerable, the ones who usually don't have representation in Congress) no one is going to notice or care. If the Man Child and his cowardly Republican baby sitters go ahead with the tax, then health care costs will also go up, just as they all plan to get rid of Obamacare--or at least try to.
Bottom line, the most vulnerable members of our community will suffer, along with those of us who want to watch reality TV on big screens. As always, the picture is much, much bigger than we realize.
Bottom line, the most vulnerable members of our community will suffer, along with those of us who want to watch reality TV on big screens. As always, the picture is much, much bigger than we realize.
12
Those medical devices have a gigantic markup charged to their captive audience. That is an abuse of our medical care, one reason our care costs twice as much as in other advanced countries.
Our medical costs are not driven up by a few pennies to the producer of the tracheotomy tubes. It is the gigantic markup and insurance industry overhead.
Our medical costs are not driven up by a few pennies to the producer of the tracheotomy tubes. It is the gigantic markup and insurance industry overhead.
10
Would agree with you, Mark, except that insurance companies are essentially the only thing now standing between consumers and much higher healthcare costs. They negotiate with the providers, whittling the exorbitant costs listed on hospital and physician bills to the much more manageable "allowed" costs. Anyone who has had a serious illness/accident can attest to this. And yes, premiums can be substantial, but they reflect actual claims, i.e., provider billing, and they are the price we pay in exchange for not having to pay whatever providers want. It is the provider costs, including employee compensation that is out of control compared to not only their peers elsewhere in the world, but also compared to equally intelligent, educated, and skilled American workers in other sectors, that is driving a healthcare costs that will eventually bankrupt this country if their rate of increase continues to outpace inflation. One need only look at the US News list of the top ten jobs of 2017, of which eight are healthcare jobs, to see just how disproportionate this compensation is. One thing that would help would be to allow practicing physicians from countries like England, Spain, France, and India to practice their skills here, but that won't happen, because the American Medical Association and other medical-profession lobbying groups have established unreasonable barriers to competition from qualified immigrants. There is no legitimate justification for this.
The activities of insurance companies come at gigantic cost. Their overhead is stunning. There are better ways to do what limited good they do, and ways to do that good for those now victimized by the overcharging.
I saw a different version of the Border Adjustment Tax proposal in which it functioned almost exactly like European VAT policies. I.e., all products bought in US are charged a 20% tax, regardless of origin -- US manufactured good included. This would replace the current corporate income tax regime for US companies.
If this version is correct it is perhaps slightly more rational than the version the author discusses, although it would still create the specific problems the author discussed.
Either way it is American buyers, not Mexican sellers, who will pay for the wall.
If this version is correct it is perhaps slightly more rational than the version the author discusses, although it would still create the specific problems the author discussed.
Either way it is American buyers, not Mexican sellers, who will pay for the wall.
10
A VAT type tax would do some of the same things. However, it is a horribly regressive tax, and generalizing it to the rest of the economy, a much larger percentage, would be a hard thing benefiting only a wealthy few.
Other countries started the VAT because of extreme tax evasion problems. Despite its weaknesses is it one of the only ways they can collect tax at all. See Greece, Italy, and even Germany as examples.
The idea spread from there, and has become a way to do a regressive sales tax at a very high level. We need to avoid that. The limited progressiveness of our tax scheme is one of the few good things about it.
Other countries started the VAT because of extreme tax evasion problems. Despite its weaknesses is it one of the only ways they can collect tax at all. See Greece, Italy, and even Germany as examples.
The idea spread from there, and has become a way to do a regressive sales tax at a very high level. We need to avoid that. The limited progressiveness of our tax scheme is one of the few good things about it.
4
Dear Manufacturer who makes his clothes in other countries, I don’t want your clothes at any price. I want good jobs for my fellow country men and women. One reason is that most of the imported clothes and textile home goods I now buy are of inferior quality. If I could again have the wonderful products of old made in this country I would be happy to have far fewer of them. I also resent the system of globalization that has given the top 20% of the population vast wealth and left the rest of us at a good old $30,000 wage per year if we are lucky enough to be employed. In the days before the media zombified the population revolutions started over these sort of economies. In fact, it seems one just started and now we have the results lurching around in Washington. Remember, no Justice, no Peace and I’ll wear my old clothes.
22
I make my living importing and distributing farm products from western Europe, so obviously this law would be a disaster for me personally. My modestly profitable business would see its tax bill quintupled as I would be required to pay taxes on $4 I didn't really make for every dollar I actually did make. Even money losing businesses would be faced with large tax bills once their payments to their suppliers were magically deemed to have somehow not really been made.
But we need to find some way of equalizing the profitability of domestic manufacturing and offshoring.
The market, left to its own devices, will always choose the profits that can be made with cheaper labor. 150 years ago we had to outlaw slavery because as far as the free market was concerned slavery was the best way of "lowering costs and keeping prices affordable for consumers."
Offshoring, like slavery, is an evil committed against society in order to maximize profits for the "planter" class.
This border adjustment scheme probably isn't the way to do it. (How would we even CALCULATE, much less PAY our taxes?) But something needs to be done to raise the price of American goods produced outside our borders until it's equal to the price of American goods produced in America.
The people know that even if they can't articulate it very well, and in their desperation . . . well we all know what they've done.
It would be a good idea to get this fixed before they empower him even more.
But we need to find some way of equalizing the profitability of domestic manufacturing and offshoring.
The market, left to its own devices, will always choose the profits that can be made with cheaper labor. 150 years ago we had to outlaw slavery because as far as the free market was concerned slavery was the best way of "lowering costs and keeping prices affordable for consumers."
Offshoring, like slavery, is an evil committed against society in order to maximize profits for the "planter" class.
This border adjustment scheme probably isn't the way to do it. (How would we even CALCULATE, much less PAY our taxes?) But something needs to be done to raise the price of American goods produced outside our borders until it's equal to the price of American goods produced in America.
The people know that even if they can't articulate it very well, and in their desperation . . . well we all know what they've done.
It would be a good idea to get this fixed before they empower him even more.
111
Business responds to even small cost advantages, and shifts in those, and even risks of shifts.
Actually imposing a broad high percentage is overkill. We could inch up to it by degrees, announced well in advance, and watch to see how supply chains adjust.
As this says, a tax bill might quintuple under this proposal. That much is not necessary. Shock therapy is not necessary, and the disruption of it would have many other bad consequences in the reliability of supply for several years at least.
Better to make it 2% now, with announced rises to 4% and maybe 6% in successive years. Stop when the desired change is seen.
Actually imposing a broad high percentage is overkill. We could inch up to it by degrees, announced well in advance, and watch to see how supply chains adjust.
As this says, a tax bill might quintuple under this proposal. That much is not necessary. Shock therapy is not necessary, and the disruption of it would have many other bad consequences in the reliability of supply for several years at least.
Better to make it 2% now, with announced rises to 4% and maybe 6% in successive years. Stop when the desired change is seen.
Clearly, to the extent that the Border Adjustment Tax causes goods and services to be produced in other than the most efficient and least costly manner it will lower living standards and productivity. By picking winners and losers, crony capitalism in our view, these are exactly what is accomplished by a Border Adjustment Tax or an outright border tax.
Several points are worth emphasizing. First, with a Border Adjustment Tax retaliation could be well coordinated. The World Trade Organization permits border adjustments for indirect levies such as sales taxes and value added taxes, but not for income taxes. A sales tax or value added taxes tax consumption by the residents of the country which imposes it, but not the residents of other countries. So disallowing the cost of imports for tax purposes would violate World Trade Organization rules as well as most other free trade agreements signed by the United States. World Trade Organization rules also require approval for any direct tariffs in excess of 2.5%. Thus, enacting a Border Adjustment Tax or say an across the board 5% border tax could invite sanctions on the United States unless of course the U.S. simply decided to withdraw from the World Trade Organization.
Looking internally there are various potential distortions that could arise from a Border Adjustment Tax. Wal-Mart and Home Depot could not deduct amounts paid to buy imported products, raising their total tax bill. But Sea..."
http://seekingalpha.com/article/4039655
Several points are worth emphasizing. First, with a Border Adjustment Tax retaliation could be well coordinated. The World Trade Organization permits border adjustments for indirect levies such as sales taxes and value added taxes, but not for income taxes. A sales tax or value added taxes tax consumption by the residents of the country which imposes it, but not the residents of other countries. So disallowing the cost of imports for tax purposes would violate World Trade Organization rules as well as most other free trade agreements signed by the United States. World Trade Organization rules also require approval for any direct tariffs in excess of 2.5%. Thus, enacting a Border Adjustment Tax or say an across the board 5% border tax could invite sanctions on the United States unless of course the U.S. simply decided to withdraw from the World Trade Organization.
Looking internally there are various potential distortions that could arise from a Border Adjustment Tax. Wal-Mart and Home Depot could not deduct amounts paid to buy imported products, raising their total tax bill. But Sea..."
http://seekingalpha.com/article/4039655
LB, tariffs might lower the living standards of Tim Cook and Christie Walton, but businesses don't pass the savings from cheap foreign labor to the consumer; they pocket them. Corporate profits are the highest they've ever been.
1
Taxes, smaxes. I have no problem with my hard earned money going to help those who are struggling. And, I am grateful that I earn enough to donate 8% of my income to deserving charities and institutions, but I do have a problem when my tax dollars provide subsidies to the well heeled and well connected. Why does my dentist get a deduction for buying a truck? Why are investors able to depreciate assets that actually go up in value? Why are global companies able to manipulate their income to then pay $0 in taxes? And why are hedge fund managers and other captains of finance able to pay a tax percentage that is less than half of what I pay on incomes that are a hundred times greater than mine? I understand that taxes are the price that we pay to live in a civilized society, however the burden needs to be more evenly and fairly distributed.
84
The proposed "corporate income" tax reform is really a version of a value-added-tax. VATs operate by imposing the tax on inputs (or finished goods) from abroad. If they did not, they would not tax the value added already embedded in the import. Correspondingly, the exporting country does not impose its VAT so as to prevent a double tax on the export's value.
No one really knows with certainty who bears a VAT (incidence). In highly competitive markets, it's probably a tax on labor and capital on their value added. Maybe some gets pushed forward on the consumer. A VAT is just a sophisticated sales tax. As with a sales tax, or for that matter, a corporate income tax, incidence is uncertain. And then there's currency appreciation that tends to return matters to their previous equilibrium between imports and domestic made products. Read Krugman in these very papers.
What's clear, however, is that the proposal is doomed to failure because it's "too complicated." Too bad since it's probably better than today's collapsing corporate income tax.
No one really knows with certainty who bears a VAT (incidence). In highly competitive markets, it's probably a tax on labor and capital on their value added. Maybe some gets pushed forward on the consumer. A VAT is just a sophisticated sales tax. As with a sales tax, or for that matter, a corporate income tax, incidence is uncertain. And then there's currency appreciation that tends to return matters to their previous equilibrium between imports and domestic made products. Read Krugman in these very papers.
What's clear, however, is that the proposal is doomed to failure because it's "too complicated." Too bad since it's probably better than today's collapsing corporate income tax.
16
The last time I read Krugman, he said global stock markets were going to collapse and never recover. How's that playing out?
1
Relative to oil specifically as an example, freeing oil exports of taxes would substantially increase the profits of oil producers as either their earnings would soar free of tax or the price of domestic oil would soar to reflect the oil users suddenly hit with the import tax. In either case, wealth would flow from oil users (say of home heating or gasoline) to oil producers, and the value of domestic oil producing properties would also soar. Sounds like more money for those already having high incomes and less for everyone else (because in commodities there are virtually no worker jobs to create), and therefore this is a zero sum game of taxing the poor to pay the rich.
61
jpriestly-- this is the strategy for every economic policy since Reagan:"taxing the poor to pay the rich." And voila-- dangerously high wealth equality gap.
We've gotten so used to paying low, low prices for stuff we've forgotten that the prices are low because the makers of the stuff get paid low, low wages.
I'm not a fan of redressing this through tariffs, which I think historically lead to a non-virtuous cycle, with international ill will thrown in for good measure. I much prefer some version of a Value Added Tax on consumables with certain necessities excluded. We already do this to a certain extent with sales taxes exempted on most foodstuffs; we could expand the exemption category and slap larger VAT's on luxury items (i.e., jewlery, certain vehicle classes, even homes of large square footage).
And, while this is so obvious is may not even be worth discussing, a series of TRULY progressive income tax brackets on very high income--and capital gains treated as ordinary income for tax purposes--would go a long ways towards rectifying our revenue problem. And we DO have a revenue problem when it comes to public funds, not a spending problem. (I have no qualms about simplifying the tax codes, both personal and corporate, but affluent people, and corporations, have to pay a bigger share--complaints that the corporate tax rates are too high mean nothing when the law structure allows most corporations to avoid the rates.)
I'm not a fan of redressing this through tariffs, which I think historically lead to a non-virtuous cycle, with international ill will thrown in for good measure. I much prefer some version of a Value Added Tax on consumables with certain necessities excluded. We already do this to a certain extent with sales taxes exempted on most foodstuffs; we could expand the exemption category and slap larger VAT's on luxury items (i.e., jewlery, certain vehicle classes, even homes of large square footage).
And, while this is so obvious is may not even be worth discussing, a series of TRULY progressive income tax brackets on very high income--and capital gains treated as ordinary income for tax purposes--would go a long ways towards rectifying our revenue problem. And we DO have a revenue problem when it comes to public funds, not a spending problem. (I have no qualms about simplifying the tax codes, both personal and corporate, but affluent people, and corporations, have to pay a bigger share--complaints that the corporate tax rates are too high mean nothing when the law structure allows most corporations to avoid the rates.)
14
These are good examples of the damage that the U.S. middle class will suffer under Chump-onomics.
In a nutshell, the U.S. has a massive trade deficit that cannot be 'mandated away' without triggering an equally massive recession through hyper-inflation and probably stagflation. Nor can Trump wave a magic wand to eliminate losses as he did with his Vegas casinos that left him unscathed but his suppliers with unpaid bills.
It is indeed a zero sum game. If he wants to replace imports with U.S.-manufactured goods he has to ensure they are manufactured as cheaply and as well as the replaced imports. This is impossible. It will face the same obstacles and disappointments as his visa Executive Order which
-- targeted the wrong people
-- exonerated the real targets of his order
-- sowed confusion in its execution
-- achieved the opposite effect
Now when his economic mistakes create the anticipated (by me and many other economists) Depression he will claim:
-- "Everything's going according to plan"
-- "The Treasury Department's data are wrong"
-- "Americans have never had it better"
-- "It's the media's fault for shattering consumer confidence"
He may even state, as with every other major catastrophe for which he wishes to apportion blame, that it is the fault of the refugees and illegal immigrants who robbed him of the popular vote.
As an Iranian living in Iran, I suffered through this gobbledegookspeak during 8 years of President Ahmadinejad. The two are eerily similar.
In a nutshell, the U.S. has a massive trade deficit that cannot be 'mandated away' without triggering an equally massive recession through hyper-inflation and probably stagflation. Nor can Trump wave a magic wand to eliminate losses as he did with his Vegas casinos that left him unscathed but his suppliers with unpaid bills.
It is indeed a zero sum game. If he wants to replace imports with U.S.-manufactured goods he has to ensure they are manufactured as cheaply and as well as the replaced imports. This is impossible. It will face the same obstacles and disappointments as his visa Executive Order which
-- targeted the wrong people
-- exonerated the real targets of his order
-- sowed confusion in its execution
-- achieved the opposite effect
Now when his economic mistakes create the anticipated (by me and many other economists) Depression he will claim:
-- "Everything's going according to plan"
-- "The Treasury Department's data are wrong"
-- "Americans have never had it better"
-- "It's the media's fault for shattering consumer confidence"
He may even state, as with every other major catastrophe for which he wishes to apportion blame, that it is the fault of the refugees and illegal immigrants who robbed him of the popular vote.
As an Iranian living in Iran, I suffered through this gobbledegookspeak during 8 years of President Ahmadinejad. The two are eerily similar.
18
Thank you for this comment. Well said.
There are no easy solutions for our current economical dilemma. Our nation,
for decades, has followed the economical globalization model & distributed our wealth freely with the hopes that we will reap the rewards. Our leaders believed that economic globalization ("EG") will spur competition which will reduce prices & improve our lives. The reality of EG is being felt by the less educated who are depended on the jobs which are lost to EG initially. The second stage of EG has already begun and that is automation spurred by innovation. This stage is pronounced by the acceleration of menial job loss & the growth of financial desperation. The final stage is usually marked by global traumatic events that reduces the population & reinvigorates education. Historically we can learn from our past but we are unwilling or uneducated enough to do so.
Education and dependable healthcare are the great equalizers within western societies. We lack both in this country.
Education is far more important to other nations and the results can be seen within our own schools. Although we can unequivocally say that we have one of the best healthcare system in the world we find ourselves falling behind other nations when we view our system from a public health perspective.
There are no simple solutions for our economical dilemma but we can be assured that history repeats itself.
for decades, has followed the economical globalization model & distributed our wealth freely with the hopes that we will reap the rewards. Our leaders believed that economic globalization ("EG") will spur competition which will reduce prices & improve our lives. The reality of EG is being felt by the less educated who are depended on the jobs which are lost to EG initially. The second stage of EG has already begun and that is automation spurred by innovation. This stage is pronounced by the acceleration of menial job loss & the growth of financial desperation. The final stage is usually marked by global traumatic events that reduces the population & reinvigorates education. Historically we can learn from our past but we are unwilling or uneducated enough to do so.
Education and dependable healthcare are the great equalizers within western societies. We lack both in this country.
Education is far more important to other nations and the results can be seen within our own schools. Although we can unequivocally say that we have one of the best healthcare system in the world we find ourselves falling behind other nations when we view our system from a public health perspective.
There are no simple solutions for our economical dilemma but we can be assured that history repeats itself.
48
The US definitively does not have "one of the best healthcare systems in the world." The paradox is that the US might very well have the best healthcare science in the world, but it unfortunately translates into one of the most expensive and defective healthcare systems in the world. This, mostly due to two intermediaries: insurance and pharma companies, and regulations which are in constant change depending on the political party in charge. This is a recipe for disaster in any healthcare system.
Education in the US might be good, but it is expensive, and available to the elites only. Healthcare in the US is expensive and bad. And neither Republicans nor Democrats, not even Trump, will fix it because their pockets are lined with money from the insurance and pharma companies.
Education in the US might be good, but it is expensive, and available to the elites only. Healthcare in the US is expensive and bad. And neither Republicans nor Democrats, not even Trump, will fix it because their pockets are lined with money from the insurance and pharma companies.
1
First let me say I did not vote for Trump. Second, building this wall and creating an import tax is, I believe, a waste of time and resources. However, I agree in principle on taxing imports. I believe that this sort of tax is a long time coming, and can be used to offset the lower costs (ie, lower wages and living standards) of overseas manufacturing.
Two points I want to make regarding Mr. Nakios's letter. If American's want decent paying jobs and products manufactured in the USA, then we are going to have to pay that bit extra for them.
And with regards to Mr. Nakios's assertion that "American mills are either outdated or too small, and American production costs are too high", I can respond to that in two sentences. First, if the mills are outdated, that is because manufacturers have not re-invested their profits into their factories; they have built shiny, modern facilities overseas. Second, American production costs are the wages and benefits of American workers, as well as regulations that benefit the American consumer as well as worker.
I believe that all imports should be taxed to bring their cost to consumers up to a level equal with American produced items, and the funds then reinvested in American cities and workers.
But punitivie taxes on another countries imports, to pay for a wall that will NOT resolve the underlying issues, is a waste of resources and time.
Two points I want to make regarding Mr. Nakios's letter. If American's want decent paying jobs and products manufactured in the USA, then we are going to have to pay that bit extra for them.
And with regards to Mr. Nakios's assertion that "American mills are either outdated or too small, and American production costs are too high", I can respond to that in two sentences. First, if the mills are outdated, that is because manufacturers have not re-invested their profits into their factories; they have built shiny, modern facilities overseas. Second, American production costs are the wages and benefits of American workers, as well as regulations that benefit the American consumer as well as worker.
I believe that all imports should be taxed to bring their cost to consumers up to a level equal with American produced items, and the funds then reinvested in American cities and workers.
But punitivie taxes on another countries imports, to pay for a wall that will NOT resolve the underlying issues, is a waste of resources and time.
90
I bought a cheap portable air pump for my car tires, to carry in the trunk.
Actually I have so far bought five of them, all made in China, because they don't last.
My father had one that he used for many years, made here. It cost more, but not five times more. Its quality was obvious, on any inspection.
Why? Poor quality has consequences for a local manufacturer. What can one do about a Chinese manufacturer? Even the wholesalers know little about them, except the price offered.
Actually I have so far bought five of them, all made in China, because they don't last.
My father had one that he used for many years, made here. It cost more, but not five times more. Its quality was obvious, on any inspection.
Why? Poor quality has consequences for a local manufacturer. What can one do about a Chinese manufacturer? Even the wholesalers know little about them, except the price offered.
5
The overlords (wealthy 1%-ers of the major corporations) such as the Waltons, Gerald Rubin, Elon Musk, Mary Barra, etc. aren't going to see their compensation packages decrease. The American consumers who can ill afford another hit to the pocket book will be the ones who will bear the burden of this tax. What happened to the Republicans' "no new tax" pledge? Joke, like everything else. If this is taxation WITH representation, I want to recall my representatives.
1
What you propose is a contradiction. The core of Capitalism is supposed to be "freedom." Manufacturers produce and sell their goods the best way they see fit. How are you going to force manufacturers to produce, hire, and buy locally and then to reinvest their profits locally, when they see better options elsewhere? We cannot have our cake and eat it too. Either we are for Capitalism and the freedom and downsides it implies, or we are for a more regulated economic system in which manufacturers' choices are restricted. A tax on imports will not deter manufacturers to produce abroad. It will only make goods more expensive to consumers inside the US.
The Republican President's tax proposal shows some promise. It attacks a tax abuse that creates a preference for imported goods over domestically produced goods. Your example is misleading. The savvy fashion designer make much more than the $1 million you assert.
The dresses your fashion designer markets in the United States are imported at a cost of $5 million in your example. Since those dresses are her designs, your designer is not a simple retailer who buys and resells finished goods at a profit. She needs a foreign presence to take bids from foreign manufacturers, inspect dresses for quality do the numerous things that dress manufacturers must do to produce attractive, well-fitting dresses. A savvy dress designer sets up a foreign corporation to do all those
When the finished dresses are imported, the designer must determine the "cost" of those dresses. If she is savvy, she alone the price at which she will buy those dress from her foreign corporation. That price may include a reasonable profit for her foreign corporation. So that $5 million in cost may actually include the $4 million paid to the foreign manufacturer, the $500,000 spent on contraction administration and shipment and $500,000 in profit earned by her foreign corporation. Sure she will pay some foreign income tax, say 20% or $100,000.
The result is $1 million in profit taxed in the US and $400,000 in a bank account in a foreign country that escapes US taxes.
Don't mislead your readers.
The dresses your fashion designer markets in the United States are imported at a cost of $5 million in your example. Since those dresses are her designs, your designer is not a simple retailer who buys and resells finished goods at a profit. She needs a foreign presence to take bids from foreign manufacturers, inspect dresses for quality do the numerous things that dress manufacturers must do to produce attractive, well-fitting dresses. A savvy dress designer sets up a foreign corporation to do all those
When the finished dresses are imported, the designer must determine the "cost" of those dresses. If she is savvy, she alone the price at which she will buy those dress from her foreign corporation. That price may include a reasonable profit for her foreign corporation. So that $5 million in cost may actually include the $4 million paid to the foreign manufacturer, the $500,000 spent on contraction administration and shipment and $500,000 in profit earned by her foreign corporation. Sure she will pay some foreign income tax, say 20% or $100,000.
The result is $1 million in profit taxed in the US and $400,000 in a bank account in a foreign country that escapes US taxes.
Don't mislead your readers.
15
There are already mechanisms in the tax code to address the transfer pricing described here. The hypothetical "profits" cited in this example do not change the fact that the Republican tax proposals are an effort to drive up costs for consumers and thereby subsidize uncompetitive and inefficient domestic producers. The idea that we will have a stronger economy if we all pay more for domestically produced goods was long ago been debunked by virtually every respectable mainstream economist.
2
it works for Donald and Ivanka Trump who import the goods they sell.
You assume that all who assemble in America are also producing abroad: such a delightful picture of the vitality of the American entrepreneur!! Seems a little implausible, but I am pleased though that you lean towards the Democrats' idea that American corporations should be taxed here on their foreign earnings.
First of all, can I assume you didn't vote for Trump? Secondly, while your last sentence is no doubt meant to sound fair, do you really believe Trump's administration and the GOP congress are actually "pro-business"? If you're talking about their own business, I'm with you. Otherwise, no.
I was raised in a small Southern town, and my parents taught me to "buy locally" as often as possible, and our family always did so. However, it struck me during the campaign that the segment of US voters most attracted to Trump because of his (empty) promise to bring back US manufacturing jobs was the same group most often seen at the likes of Walmart, not at locally-owned stores. Of course, that was mainly due to price, and I get the effort to stretch hard-earned dollars. But, the fact is, the solution to trade imbalances has been available to us all along, but we went for the lowest price. In the short run anyway. We're definitely about to pay the full price now - more than, and not just at the cash register.
I was raised in a small Southern town, and my parents taught me to "buy locally" as often as possible, and our family always did so. However, it struck me during the campaign that the segment of US voters most attracted to Trump because of his (empty) promise to bring back US manufacturing jobs was the same group most often seen at the likes of Walmart, not at locally-owned stores. Of course, that was mainly due to price, and I get the effort to stretch hard-earned dollars. But, the fact is, the solution to trade imbalances has been available to us all along, but we went for the lowest price. In the short run anyway. We're definitely about to pay the full price now - more than, and not just at the cash register.
77
Ross Pierrot warned of this several decades ago.
"We have got to stop sending jobs overseas. It's pretty simple: If you're paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor,...have no health care—that's the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don't care about anything but making money, there will be a giant sucking sound going south.
...when [Mexico's] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it's leveled again. But in the meantime, you've wrecked the country with these kinds of deals."
"We have got to stop sending jobs overseas. It's pretty simple: If you're paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor,...have no health care—that's the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don't care about anything but making money, there will be a giant sucking sound going south.
...when [Mexico's] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it's leveled again. But in the meantime, you've wrecked the country with these kinds of deals."
1
Well said, Michael.
Let me say also that all the commenters who sneak in a diagnosis of mental illness for Donald Trump just haven't read history. They do not understand that Trump, money-hungry and power-hungry, is a canny operator who's playing by a rule book long in use. In the 20th century we had Stalin and Hitler, and in the 21st century we have Erdogan and Putin, reading that rule book.
Donald Trump knows what he's doing. His tax reforms will benefit his and his family's businesses. After that, he'll feed a few crumbs to his base.
("Daddy, we are being audited by the IRS!" exclaimed Ivanka, despondently.
("Oh, honey, don't worry. I will gut the investigative power of the IRS." Then, with inspiration, her father declared, "I shall become President.")
Let me say also that all the commenters who sneak in a diagnosis of mental illness for Donald Trump just haven't read history. They do not understand that Trump, money-hungry and power-hungry, is a canny operator who's playing by a rule book long in use. In the 20th century we had Stalin and Hitler, and in the 21st century we have Erdogan and Putin, reading that rule book.
Donald Trump knows what he's doing. His tax reforms will benefit his and his family's businesses. After that, he'll feed a few crumbs to his base.
("Daddy, we are being audited by the IRS!" exclaimed Ivanka, despondently.
("Oh, honey, don't worry. I will gut the investigative power of the IRS." Then, with inspiration, her father declared, "I shall become President.")
Perhaps, the end result is a smoke screen ... while shaking out marginal producers, better established companies retain stronger market share ... domestic manufacturing will forced to expand to compete ...while consumers take on the added expenses of VAT. No one wins except the larger corporations with a stronger market share.
Smaller producers close shop. Domestic production gets no help. Consumers pay the freight,
Three option result and no meaningful reform ...it's all trumpy.
Smaller producers close shop. Domestic production gets no help. Consumers pay the freight,
Three option result and no meaningful reform ...it's all trumpy.
24
Consider that almost ever small business pays tax as an S corporation. This means that profits will be taxed at the personal income rate not what C corps pay.
It's very likely that the border adjustment will be an excuse to lower the corporate tax rate below income tax rates. This will be a huge advantage to large companies.
Not only are we going to protect US large caps from foreign competition we are going to protect them from new US entrants with the tax code.
It's very likely that the border adjustment will be an excuse to lower the corporate tax rate below income tax rates. This will be a huge advantage to large companies.
Not only are we going to protect US large caps from foreign competition we are going to protect them from new US entrants with the tax code.
1
HL -- A small S corp rarely pays any tax at all. It does not retain the earning at year end, but passes them on to the individual. Good accountants are careful about that.
"domestic manufacturing will forced to expand to compete"
Who do you think will have to be hired to allow that expansion? Domestic workers, that's who. I guess if you're determined to ignore the upside, you won't see it...
Who do you think will have to be hired to allow that expansion? Domestic workers, that's who. I guess if you're determined to ignore the upside, you won't see it...
1
Businesses such as these are highly hypocritical. They want the bargain labor and wrote offs. Yet at the other end of their mouth they say buy American and American labor. I bet these people do not pay healthcare for their full time employees as it would put them financially out of business. They (like others of their ilk) put the maximum hour at 39 hours or whatever to get out of it. Just another slanted journalistic article.
19
A full time employee typically works 40 hours a week. Anything over that is normally time + 1/2 time (money). If they can't afford healthcare for their employees, I'm sure paying over time would not be something they would encourage. Details.
I bet you're wrong. Many business owners of import companies have sick family members. In order to get decent health care access into the best facilities you need a group plan. The individual market prior to the ACA made these employers and their families uninsurable. The ACA networks are so narrow if you have a sick family member they may not be able to be treated in a good facility.
I'm a perfect example. I represent companies both in the US and abroad. I insured all my domestic employees when my wife got sick. The cost 8K per month. Not only will they lose their insurance but they will lose their high paying jobs.
Trump doesn't want a minimum wage. I suspect these new factory jobs making underwear are going to pay about what Walmart and McDonalds pays. They get around giving these employees health care by making them temporary workers who don't have the hours to get health benefits and profit sharing pensions.
I'm a perfect example. I represent companies both in the US and abroad. I insured all my domestic employees when my wife got sick. The cost 8K per month. Not only will they lose their insurance but they will lose their high paying jobs.
Trump doesn't want a minimum wage. I suspect these new factory jobs making underwear are going to pay about what Walmart and McDonalds pays. They get around giving these employees health care by making them temporary workers who don't have the hours to get health benefits and profit sharing pensions.
1
It's an opinion piece for gods sake. It expresses the opinions of the author, therefore, by definition, it is slanted just as your comment is. Think critically, it's very important these days.
1
This makes no sense at all. The author is saying that imported inventory will no longer be treated as cost of production. This is nuts! It's insane! It will absolutely crush the domestic electronics industry.
Virtually all electronic component parts are made overseas. I'm talking about all the little things that mount on circuit boards that are inside products. There is no production capacity in the US. In fact, the nations that do produce these parts supply the entire world.
I own a small electronic manufacturing operation. I have my sheet metal parts and circuit boards made here in the US. But everything that goes into the products is made out of the country. All domestic electronic manufacturers operate under the same conditions. We have no choice.
If any of us could not count these parts as cost of inventory, then we are all out of business. We are all gone.
So either the author is wrong and doesn't understand how the proposed law is supposed to work, or this is the most ridiculous, short sighted, anti-business, anti-manufacturing law ever proposed in the history of the world. There is no way any manufacturer would stand for such a law. The auto industry, the appliance industry, the electronics industry would have to all shut their doors.
Virtually all electronic component parts are made overseas. I'm talking about all the little things that mount on circuit boards that are inside products. There is no production capacity in the US. In fact, the nations that do produce these parts supply the entire world.
I own a small electronic manufacturing operation. I have my sheet metal parts and circuit boards made here in the US. But everything that goes into the products is made out of the country. All domestic electronic manufacturers operate under the same conditions. We have no choice.
If any of us could not count these parts as cost of inventory, then we are all out of business. We are all gone.
So either the author is wrong and doesn't understand how the proposed law is supposed to work, or this is the most ridiculous, short sighted, anti-business, anti-manufacturing law ever proposed in the history of the world. There is no way any manufacturer would stand for such a law. The auto industry, the appliance industry, the electronics industry would have to all shut their doors.
96
Bruce, I'm no economist, but I doubt the author is wrong. ConsiderIng the complete lack of thought applied to Friday's travel ban by the chaotic clown car that is our current "presidential administration," I'm going with this being just another stupid move by the same "administration."
21
Clearly it is time to actually read the proposed rule. If it does prohibit the deduction of the cost of imported goods it is a disaster! No company that imports goods and raw materials can absorb having to PAY tax on the cost of their inventory instead of their profits.
Surely there is a mistake. Surely even the Trump administration isn't that ignorant.
Surely there is a mistake. Surely even the Trump administration isn't that ignorant.
6
"So either the author is wrong and doesn't understand how the proposed law is supposed to work, or this is the most ridiculous, short sighted, anti-business, anti-manufacturing law ever proposed in the history of the world."
It is the latter. According to the Tax Foundation, a conservative group (so it must be right, right?)
"In order to make the corporate tax border adjustable, the revenue from sales to nonresidents would not be taxable, and the cost of goods purchased from nonresidents would not be deductible. So if a business purchases $100 million in goods from a supplier overseas, the cost of those goods would not be deductible against the corporate income tax."
It is the latter. According to the Tax Foundation, a conservative group (so it must be right, right?)
"In order to make the corporate tax border adjustable, the revenue from sales to nonresidents would not be taxable, and the cost of goods purchased from nonresidents would not be deductible. So if a business purchases $100 million in goods from a supplier overseas, the cost of those goods would not be deductible against the corporate income tax."
4
We're a long way from 1970 when a college friend's father was a coal miner while his mother worked in a shirt factory.
Currently, I've got a few items of clothing from the US, including shorts, and t-shirts and older jackets. Pants made in the US are more or less unfindable, except for unaffordable jeans. I've got a couple of US shoes, but for some reason, shoes from other developed countries are more available (mainly Italy and Portugal). Apparently robotic sneaker factories will soon churn out vast quantities of goods with only a few employees.
The military, which has to buy clothing made in the US, might perhaps find some technological advances for garment assembly. Welded seams rather than sewn?
A lot of men's clothing comes from small independent brands that design and sell in the US (and/or similar countries like Australia) with manufacturing in China. A few do some or all of their manufacturing in the US and even fewer are all-US (Farm to Feet socks, for example). I share Nakios's concern that import taxes could ruin small businesses far beyond clothing.
Currently, I've got a few items of clothing from the US, including shorts, and t-shirts and older jackets. Pants made in the US are more or less unfindable, except for unaffordable jeans. I've got a couple of US shoes, but for some reason, shoes from other developed countries are more available (mainly Italy and Portugal). Apparently robotic sneaker factories will soon churn out vast quantities of goods with only a few employees.
The military, which has to buy clothing made in the US, might perhaps find some technological advances for garment assembly. Welded seams rather than sewn?
A lot of men's clothing comes from small independent brands that design and sell in the US (and/or similar countries like Australia) with manufacturing in China. A few do some or all of their manufacturing in the US and even fewer are all-US (Farm to Feet socks, for example). I share Nakios's concern that import taxes could ruin small businesses far beyond clothing.
14
My work shoes are made in America (SAS, great shoes, by the way) but the others are made overseas. I have one jacket made in America, all the rest of the wardrobe is made overseas. I do know a place where I can get socks made in America (via online). Don't know anyplace for skirts and shirts. I am really grateful I know to sew.
5
What struck me from your comment is perhaps the way it will go. While the material you use to sew your own clothes is probably produced overseas, your labor is your own, and the Trump clown car is not bright enough to tax that. My granddaughter sews, but is the only one of her friends who does. Maybe that's what it will come down to - at the family level making our own clothing, because it will be much cheaper to do so, and we'll have plenty of time in the Trump Depression coming soon.
1
And all of the cloth you buy is manufactured in overseas mills, mostly these days, from China.
1
For the fashion world, I think the America-first policy is: let them wear Etsy.
18
Oh stop. I hear all the arguments from those fixated on "bringing the JOBS back" - arguments that do have mother and apple pie aroma but sorely lack rigorous counterpoint considerations.
But put that aside.
I write here to express my outrage that we have bought propaganda that demands our being scared little victimized people whose only path to salvation is a strongman - any strongman - any strongman idea.
OK cutting to the chase - the problem is not loss of JOBS! No, job churn is just the physics of a HEALTHY innovative capitalistic system.
The problem IS we allowed the powers that be to decimate our RIGHTS AND POWERS AS WORKERS and thus income inequality to grow. And any simplistic or complex, and/or indeed demagogue self-serving, plan to "bring BACK the JOBS" is nothing but a placebo that misses the real problem by miles.
Overseas jobs are NOT our problem - "curing" that just promotes a race to the bottom near-term while jeopardizing our future.
Trumpsters take the placebo and allow Trump and his Party to decimate us more.
Me - I want these things:
- make the tax code MUCH more progressive increasing revenue while burdening more appropriately
- redistribute revenue to ensure ALL a viable bottom and to allow States to move off counter progressive land/goods based taxes while providing better education, services, and infrastructure
- provide medicare for all with help to close gaps and $ debt free modern HIGHER education (including technical) for all
But put that aside.
I write here to express my outrage that we have bought propaganda that demands our being scared little victimized people whose only path to salvation is a strongman - any strongman - any strongman idea.
OK cutting to the chase - the problem is not loss of JOBS! No, job churn is just the physics of a HEALTHY innovative capitalistic system.
The problem IS we allowed the powers that be to decimate our RIGHTS AND POWERS AS WORKERS and thus income inequality to grow. And any simplistic or complex, and/or indeed demagogue self-serving, plan to "bring BACK the JOBS" is nothing but a placebo that misses the real problem by miles.
Overseas jobs are NOT our problem - "curing" that just promotes a race to the bottom near-term while jeopardizing our future.
Trumpsters take the placebo and allow Trump and his Party to decimate us more.
Me - I want these things:
- make the tax code MUCH more progressive increasing revenue while burdening more appropriately
- redistribute revenue to ensure ALL a viable bottom and to allow States to move off counter progressive land/goods based taxes while providing better education, services, and infrastructure
- provide medicare for all with help to close gaps and $ debt free modern HIGHER education (including technical) for all
138
Megaducks those thoughts are right on the money, unfortunately they couldn't be more over the heads of this administration. Excellent post.
10
Megabucks, we had a chance for all or at least some of what you are proposing. His name is Bernie Sanders.
3
In other words, become more like Finland, for those uninterested in reading through the details. You don't have to import their weather, just their policy structure.
It's time for a VAT tax coupled with support for low income earners
9
Any policy that has the effect of pricing televisions out of the hands of the lower earning segments of society is a good thing. Like cigarettes, TV is detrimental to one's health - mental health. Further, "fashionable" shoes and clothing are of no importance as a consumer good. Let those whose lives are wrapped up in appearance, adoration of airhead hollywood types, or selfie-gratification pay through their plasticized noses for overpriced, nonsensical fashion. Those with their feet on the ground rather than their heads in dark places will find the necessities at affordable cost. American based mills will be given tax subsidies to combat the foreign made. Tax policies will provide deductions, based on income, for an annual clothing allowance. Those than can't stomp feet; those than can, think. In short, we will trump your play.
11
Really, Mona ? Televisions wouldn't be the only thing affected.
Mona, with no TVs or other electronics, what will keep the underclass pacified?
With that suggestion, you had better hope that the return to 'Murican manufacturing doesn't start with pitchforks...
With that suggestion, you had better hope that the return to 'Murican manufacturing doesn't start with pitchforks...
Not the most persuasive person to write on the issue. However, the border tax as replacement for corporate income tax is largely a bunk idea. Several economists address this better than Mr. Nakios, including NYT's own Paul Krugman. Like how climate scientists will walk anybody who wants to pay attention the steps they took to get to their conclusion of climate change, economists like Kurgman will and do explain why Trump's border tax is a bunk idea. Sadly, in this age of Trumpian ignorance, I doubt many will make much of an effort to try to understand. Far easier to just listen to Sean Spicer promise you happy times are here again.
33
Many Americans are barely getting by on cheap goods from Walmart. Adding a VAT tax simply raises the cost of goods people sometimes have to Buy in order to survive.
You just know that with any tax reform coming from Washington, the spoils will be to the wealthy and the slops given to consumers at higher prices.
That way Trump gets to have his cake and eat it too:he can brag about lowering corporate and high-earner tax rates under the rubric of tax reform. Then He won't have to worry until a year or two later when consumers realize there's no such thing as a free lunch.
As if we needed further evidence of how bumbling this administration is, be very careful when you hear Trump promising the moon to struggling middle and lower income groups. The devil is in the details of ill considered tax plans that as usual dump the cost on consumers and those least likely to be able to pay.
You just know that with any tax reform coming from Washington, the spoils will be to the wealthy and the slops given to consumers at higher prices.
That way Trump gets to have his cake and eat it too:he can brag about lowering corporate and high-earner tax rates under the rubric of tax reform. Then He won't have to worry until a year or two later when consumers realize there's no such thing as a free lunch.
As if we needed further evidence of how bumbling this administration is, be very careful when you hear Trump promising the moon to struggling middle and lower income groups. The devil is in the details of ill considered tax plans that as usual dump the cost on consumers and those least likely to be able to pay.
77
You seem to be totally missing the point. It isn't about pricing Walmart customers out of "goods people sometimes have to Buy in order to survive", just to level the playing field for US made goods to be competitive. By the way, you must be kidding: most of the Walmart customers you're speaking of are buying flat screen TVs and video games, and go to fast food joints for their meals, not desperately 'trying to survive". If you can afford McDonald's already, you're sitting on disposable income. I have had to drastically reduce expenses, and nothing beats home-cooked meals, nutritionally or cost-wise. By comparison, spending money on fast food is akin to throwing dollar bills down the toilet.
Either we keep on losing jobs to outsourcing, thus adding numbers to the unemployed, the ill-employed, and the gig survivors who distract from the actual unemployment figures while emphasizing the necessity for more cheap goods for the new poor class to survive on; or we get these people working again, thus giving them the means to buy the domestic products they're making.
Outsourcing has demonstrated that trying to compete with slave wage countries is a losing proposition (not for everyone; mostly for the working class which has at last been able to express itself in this past election). Our past Democrat and Republican presidents have all been complicit in this state of affairs; whether you appreciate Trump's character & other policies or not, kudos to him for at least trying to respond
Either we keep on losing jobs to outsourcing, thus adding numbers to the unemployed, the ill-employed, and the gig survivors who distract from the actual unemployment figures while emphasizing the necessity for more cheap goods for the new poor class to survive on; or we get these people working again, thus giving them the means to buy the domestic products they're making.
Outsourcing has demonstrated that trying to compete with slave wage countries is a losing proposition (not for everyone; mostly for the working class which has at last been able to express itself in this past election). Our past Democrat and Republican presidents have all been complicit in this state of affairs; whether you appreciate Trump's character & other policies or not, kudos to him for at least trying to respond
1
Americans having to pay more (because Trump blew up NAFTA and the TPP), of course they will. That's the whole point of free trade, your economy spends less money buying more goods from elsewhere (Milton Friedman always characterized it as a great deal for the economy). That's also the whole point of taxation, to leverage excess demand for some goods by raising prices until demand levels off. All of the recent decisions of our man-child president are purely for the optics as seen by his rabid followers. They think they are seeing stuff get done that will advantage them or make them more secure. The sad truth is that their lives are about to get a whole lot harder and more expensive.
50
Many producers of consumer goods source both domestically and internationally and for the last twenty years the playing field has been tilted dramatically in favor of international sources and as a result domestic producers have disappeared. Leveling the playing field back in the direction of the domestic manufacturer will encourage entrepreneurs in manufacturing and support rebuilding our economy.
While a small number of small businesses will be hurt it is the Walmarts and Ivanka Trumps that will pay the largest share of the price.
While a small number of small businesses will be hurt it is the Walmarts and Ivanka Trumps that will pay the largest share of the price.
8
Trump's policies are like his personality: petty, inchoate, and impulsive. If he can get a crowd to cheer his idea, he is in favor of it. He is governing by a folly of crowds approach where emotion and impulse substitute for knowledge and reason. His actions have prompted a response in the streets as people gather to shout "Stop" when he tries to trample on our values. But the substitution of an adoring crowd with an angry one is not governance. However, it may be a necessary response to a would-be tyrant.
23
I'd be willing to pay a little more for something if that item had been manufactured or build here and that meant that my neighbor was employed, paying taxes, and prospering in my community. You see Mr. Nakios, it's not all just about your bottom line. I believe Americans are finally seeing that corporate globalism and trickle down economics does not care about them.
48
"Buy American" is not new. And, given the choice, people have bought cheaper. So it is nice to hear that some commentators are ready to pay more so as to help their country's industry - but the market does not agree. Some here suggest that "sourced in America" would sell at a higher price; but do you really think that no one has tried, and not failed? Thus the reason for the proposed import tax: to affect our buying decisions.
The real question is: does the Welfare of the country improve or decline as a result of reducing the flow of goods across our borders - being careful to account for the reduction of exports as well as imports?
The answer until this week was: free trade good, protectionism bad; one fears that the new religion is crafted by amateurs rather than by realists.
The real question is: does the Welfare of the country improve or decline as a result of reducing the flow of goods across our borders - being careful to account for the reduction of exports as well as imports?
The answer until this week was: free trade good, protectionism bad; one fears that the new religion is crafted by amateurs rather than by realists.
45
I do pay more for goods made here in the U.S. whenever I can find them. Most Trump supporters won't be able to do that.
1
How it was 70 years ago, everything was made here. Workers made a living wage, companies made a profit, CEO's made a multiple a few times that of staff and it all worked. We proudly had the highest standard of living on the planet and anyone could afford a higher education. Yes, we owned less stuff but it all worked.
2
Of course a border adjustment tax would make the things we buy more expensive. That is the whole idea - to raise the cost of imports sufficiently to make manufacturing in country more attractive.
The flaw is that it may make good more expensive to sell here, but not by enough to spur investment in US manufacturing. Or might cause trading partners to place taxes on our exports, making it too expensive to manufacture and export here.
We'd be a lot better off with a VAT on all goods and the elimination of payroll taxes to reduce the cost of US labor. Universal healthcare - removing the cost from US labor costs - would help too. But we are so busy considering these things socialist that we don't look at them as solutions to reducing the cost of US labor to make US manufacturing more competitive.
And nothing will change the fundamental reality that most manufacturing is going to be located where the primary markets for raw materials and finished goods are. We won't be making and exporting many things simply because a huge market for them exists closer to cheaper labor and raw materials.
The idea is great - make the US manufacturing more competitive. The problems is that the simplistic solutions are likely to not work out.
The flaw is that it may make good more expensive to sell here, but not by enough to spur investment in US manufacturing. Or might cause trading partners to place taxes on our exports, making it too expensive to manufacture and export here.
We'd be a lot better off with a VAT on all goods and the elimination of payroll taxes to reduce the cost of US labor. Universal healthcare - removing the cost from US labor costs - would help too. But we are so busy considering these things socialist that we don't look at them as solutions to reducing the cost of US labor to make US manufacturing more competitive.
And nothing will change the fundamental reality that most manufacturing is going to be located where the primary markets for raw materials and finished goods are. We won't be making and exporting many things simply because a huge market for them exists closer to cheaper labor and raw materials.
The idea is great - make the US manufacturing more competitive. The problems is that the simplistic solutions are likely to not work out.
17
I have absolutely no sympathy for outsourcers like you. The American manufacturing supply chain is "spotty" because you and your kind made it so. I grew up with quality clothing with American union labels sewn inside. Sure it cost more, but I didn't need ten coats or dozens of shirts, just a few quality pieces while I focused on more important matters.
I detest everything Trump stands for and hope he goes down in flames but for decades I've been bewildered by this increasingly consumer-based economy built on endless imported junk. We don't need cheap clothing, tchotchkes, or televisions every few months. What we need is our basic needs met, health care for all, and massive investment into knowledge, science, the arts, and medicine. Most of that and everything else we could need or want can be done right here in the US as it once was in the mid-20th Century. Sure, unimportant things like today's "it" fashion will be more expensive but we're already paying the exorbitantly high cost of a poorly educated, unhealthy, and struggling society.
Rather than complain about paying extra for offshoring to labor-abusing, environmentally-destructive countries, why not work to support local manufacturing and restructure your thinking to make do with less.
I detest everything Trump stands for and hope he goes down in flames but for decades I've been bewildered by this increasingly consumer-based economy built on endless imported junk. We don't need cheap clothing, tchotchkes, or televisions every few months. What we need is our basic needs met, health care for all, and massive investment into knowledge, science, the arts, and medicine. Most of that and everything else we could need or want can be done right here in the US as it once was in the mid-20th Century. Sure, unimportant things like today's "it" fashion will be more expensive but we're already paying the exorbitantly high cost of a poorly educated, unhealthy, and struggling society.
Rather than complain about paying extra for offshoring to labor-abusing, environmentally-destructive countries, why not work to support local manufacturing and restructure your thinking to make do with less.
329
Well put. There is everything wrong with Trump, but a fashion manufacturer is definitely the wrong messenger. Fashion is an industry that adds nothing to the quality of people's lives.
3
I'm going to play devil's advocate here for a moment. I essentially agree with you, i lve in New England where the textile industry has been decimated. But. Without knowing anything about Mr. Nakios' clothing or the fabrics that he uses, i'm going to give some in the fashion industry a benefit of doubt. I share your rage about domestic textile manufacturing shipped overseas, produced for slave wages, and shipped back. But many, many countries have their own vibrant native textile industries. To source these sort of fabrics takes nothing from our own, and in fact this is what fair trade is and should be. I'm also going to be glad that he, and as of late many more boutique fashion companies, are electing to at least manufacture domestically as well.
3
leftcoastfinch ** you make a good argument. But I don't think it's a little increase. We might pay as much as double for some of these things. This author sounds like they are trying to make a quality product at a decent price and still use some U.S. labor. Manufacturing cost here are just to high. Probably starting at three times that of say, Mexico. Plus health care has to be provided here. And strict regulations at every level. You also assume because it's made somewhere else it's not as good and won't last. That may or may not be true. I don't know how much is right or wrong here, as far as trade and tax policy. And there are many angles to this, that's why these trade deals take years to work out. The end of the 3rd paragraph in this essay is very important, I think. I also think this tax sounds like another crazy idea to support a different horrible idea ( the wall ). That is the immediate concern, a madman child in the white house.
Orange, NJ
Orange, NJ
2
There are millions of Americans who would LOVE to pay more for shoes, shirts and TVs, if only they had a job that earned the MONEY to afford them; or any job at all. Those are the millions who went into the manufacturing production jobs on which their fathers built reliable middle-class lives, only to see those jobs disappear to other societies.
The liberal panacea of a “universal income” doesn’t replace gainful employment and the satisfaction of buying a TV with what one EARNS before which an entire family can grow fat.
Trump’s ideas about trade are not intended to pull back ALL jobs lost to both globalization and automation … just SOME of them. He seeks in renegotiating trade deals to find a better BALANCE between legitimate interests; and a better balance between middle-class jobs that pay good benefits and cheap goods.
That “typical” NYC fashion designer with $1 million gross profit on $10 million in sales who believes a “border adjustment tax” would consume his profit might consider sourcing a greater percentage of his raw materials here in the U.S., and start up a “Made in USA” line that will be pricier but likely to be in some demand as Trump’s new jingoes are introduced to GET people to buy American.
But saving American middle-class jobs IS something whose cost needs to be distributed among ALL Americans. That doesn’t mean we give up the advantages of cheaper goods, it simply means that the balance is more intelligently and sustainably struck.
The liberal panacea of a “universal income” doesn’t replace gainful employment and the satisfaction of buying a TV with what one EARNS before which an entire family can grow fat.
Trump’s ideas about trade are not intended to pull back ALL jobs lost to both globalization and automation … just SOME of them. He seeks in renegotiating trade deals to find a better BALANCE between legitimate interests; and a better balance between middle-class jobs that pay good benefits and cheap goods.
That “typical” NYC fashion designer with $1 million gross profit on $10 million in sales who believes a “border adjustment tax” would consume his profit might consider sourcing a greater percentage of his raw materials here in the U.S., and start up a “Made in USA” line that will be pricier but likely to be in some demand as Trump’s new jingoes are introduced to GET people to buy American.
But saving American middle-class jobs IS something whose cost needs to be distributed among ALL Americans. That doesn’t mean we give up the advantages of cheaper goods, it simply means that the balance is more intelligently and sustainably struck.
28
@ Richard the L: the "liberal panacea" of universal income advocated by such Alinsky-ite radical leftists as Milton Friedman and Frederick Hayek.
Alternative facts.
Meanwhile, back in the real world, everyone keep your eyes on Bannon and off the man-baby.
www.remember-to-breathe.org
Alternative facts.
Meanwhile, back in the real world, everyone keep your eyes on Bannon and off the man-baby.
www.remember-to-breathe.org
26
The richest 1% take 99% on national income.
Only in America.
Only in America.
2
Don:
You flog a dead horse -- for at least 4-8 years. Focus instead on what you an salvage that aligns with your own convictions out of what Trump is likely to do with this Congress. You have an obligation to do that.
You flog a dead horse -- for at least 4-8 years. Focus instead on what you an salvage that aligns with your own convictions out of what Trump is likely to do with this Congress. You have an obligation to do that.
It will be interesting to see how much the president's cherished base will like paying $20.00 for a tee shirt from Walmart that used to cost them $6.00. Or will Walmart be excluded from this tax because they have promised the president they will add 10,000 jobs in the future.
This does seem to be the way this administration does business.
This does seem to be the way this administration does business.
29
$6 to $20: is that a 20% increase? Yikes, I guess I should have attended Liberal Econ 101
8
The price of those nifty Make America Great caps will go up too ;)
9
If it's made in the US where minimum wages, for starters, are 4000% higher (80 dollars a day at 10 dollars an hour vs 2 dollars a day) without including benefits yes it would be probably be more than a 20% increase.
1
Good I am completely in favor, we can pay a little more for material possession to avoid this race to the bottom. For those Americans who can't afford clothing for their children, we can offer government support.
Are we really unwilling to pay for our luxury items, and even for our food, the amount it actually costs to produce the items using labor that makes a good living, following environmental regulations here at home?
It's okay to import some stuff because it's not available at home (imported ethnic food or clothes) or if people who want it are willing to pay extra, but Americans import it because making it overseas is cheap.
Absolutely, let's pay the actual cost of what we buy or don't buy. If a liberal was pushing that very liberal idea, the NYT would be all for it. Accomplish the income distribution via the tax codes, not on the backs of slave labor.
Are we really unwilling to pay for our luxury items, and even for our food, the amount it actually costs to produce the items using labor that makes a good living, following environmental regulations here at home?
It's okay to import some stuff because it's not available at home (imported ethnic food or clothes) or if people who want it are willing to pay extra, but Americans import it because making it overseas is cheap.
Absolutely, let's pay the actual cost of what we buy or don't buy. If a liberal was pushing that very liberal idea, the NYT would be all for it. Accomplish the income distribution via the tax codes, not on the backs of slave labor.
22
KTT:
The Republicans will just love to provide "government support" to buy clothing for children whose parents cannot afford it. You can see what they want to do with people who cannot afford expensive health care, expensive education, expensive food.
Furthermore, it is NOT just luxury items that will be affected. It will be fruit and vegetables that cannot be grown in great numbers in the US in the winter. It will be those shoes that you mentioned that I believe most people would not consider a luxury item.
I hope you will generously (in fact) take in 100 people that cannot afford things and buy them everything they NEEED, not the things they just want.
The Republicans will just love to provide "government support" to buy clothing for children whose parents cannot afford it. You can see what they want to do with people who cannot afford expensive health care, expensive education, expensive food.
Furthermore, it is NOT just luxury items that will be affected. It will be fruit and vegetables that cannot be grown in great numbers in the US in the winter. It will be those shoes that you mentioned that I believe most people would not consider a luxury item.
I hope you will generously (in fact) take in 100 people that cannot afford things and buy them everything they NEEED, not the things they just want.
16
esp, then the democrats could have done something about the situation while they were in office. Notice that they didn't. Notice they let all these problems fester to the point of exploding, and now they blame the deplorables and xenophobia for very real problems they should have fixed but didn't.
Get back in power, but if the democrats don't realize they need to fix these problems, they won't be in power for very long. There'd have been no Trump if democrats had admitted and addressed the real consequences of their policies.
Get back in power, but if the democrats don't realize they need to fix these problems, they won't be in power for very long. There'd have been no Trump if democrats had admitted and addressed the real consequences of their policies.
1
I do think we need some adjustment to the tax code to incentivize production at home and create jobs. I recognize that it means certain things (at least) will be more expensive, and I'm willing to bear the expense.
I just don't think this administration has the necessary intelligence or patience to pull it off without causing a major disruption and intensifying economic hardship.
Also, regarding those domestic environmental laws you mentioned? Trump wants to get rid of most of them, judging by some of his own statements his choice of Scott Pruitt for head of the EPA.
I just don't think this administration has the necessary intelligence or patience to pull it off without causing a major disruption and intensifying economic hardship.
Also, regarding those domestic environmental laws you mentioned? Trump wants to get rid of most of them, judging by some of his own statements his choice of Scott Pruitt for head of the EPA.
1
Over decades worker's rights have gone away, unions have lost standing, and pay has stagnated. But cheap imports made this less apparent to the average Joe who still had a job. Now we'll "fix" the cheap imports and consumer prices will rise. But will pay + worker's rights be "readjusted"? Remember: they are against raising the minimum wage.
142
Yes.
There is nothing written anywhere that says manufacturing jobs must be well-paying jobs.
If and when manufacturing jobs return in numbers to the US, who's to say people working them will get benefits and decent salaries? As the history of labor in the US shows, manufacturing jobs weren't guaranteed to come with those things. They had to be fought for. often literally and violent. Workers' weapon in the fight is called unionization.
Is assembling electronics somehow magically connected to a middle-class wage and health care, in a way that driving a truck or working in a restaurant isn't? No.
But that makes you wonder: why aren't the jobs that are actually here, now, middle-class jobs with benefits?
There is nothing written anywhere that says manufacturing jobs must be well-paying jobs.
If and when manufacturing jobs return in numbers to the US, who's to say people working them will get benefits and decent salaries? As the history of labor in the US shows, manufacturing jobs weren't guaranteed to come with those things. They had to be fought for. often literally and violent. Workers' weapon in the fight is called unionization.
Is assembling electronics somehow magically connected to a middle-class wage and health care, in a way that driving a truck or working in a restaurant isn't? No.
But that makes you wonder: why aren't the jobs that are actually here, now, middle-class jobs with benefits?
1
Perhaps it is time to consume less and focus on quality. That will not only eliminate trash and the pollution it causes but make us think about value befroe we make purchases. Fewer companies and fewer products will not mean that we are need to do without. Maybe we will start to understand the value of the labour that goes into producing products - as well as the overvalued marketing (expense) that companies think is needed to sell them not to mention some of the extravagant profit margins being realised nowadays. Perhaps the fahion cycle will return to two or three main collections a year so there will be time to be sure things fit and are properly made. That is good news. Yes, maybe it is time to separate the wheat from the chaff in many sectors of the economy.
129
That's what I'll do. Buy less, I already don't buy that much of the products we're talking about here. That's the silver lining here--this might be better for the environment. But it's not better for the workers. If we buy little, it will NOT increase employment.
6
On this issue, I am afraid the genie is out of the bottle. It has been well known for some time and with few exceptions, in addition to lower labor costs, "planned obsolescence" has become an integral part of a companies ability to maintain and increase profits. For several years now we have seen it in many products in that in order to bring the price down for a consumer, companies have drastically reduced warranties and products are constantly being replaced more frequently by what are categorized as newer and newer technologies. Apple is a perfect case in point, do the existing designs really have to be replaced that often and what extras do they really offer that makes it necessary to get rid of its predecessor?
As a former Maytag employee once told me, like the lonely Maytag repairman, they made their products so well and so reliable that the company could not replace and sell enough of them often enough, hence, they got in trouble and were eventually purchased by Whirlpool Corporation.
As a former Maytag employee once told me, like the lonely Maytag repairman, they made their products so well and so reliable that the company could not replace and sell enough of them often enough, hence, they got in trouble and were eventually purchased by Whirlpool Corporation.
Yup, Mr. Great Businessman does not have a clue about business, commerce and trade. And, he just got shut down by that leader South of the Border. Some negotiator. I'd love to see his tax returns, let's see how he runs his businesses.
259
Tales abound about how Trump the builder always left the heavy lifting (like negotiations, numbers and basic math) to his squad of professionals who worked for his dad. Trump himself rarely "made the deal" but he was always the one who violated or reneged on the terms of his deals.
So, Mr Nakios is concerned that tariffs might make it harder for him and his associates to brutally exploit desperate workers around the world and pay them starvation wages to build absurdly cheap products for constant American consumption. You'll excuse me if I'm not exactly concerned over the potential lost profits of a slave master.
Mr Nakios claims that producing clothes in the US is too expensive. How and why, then, is my home town of Los Angeles a major producer of textiles in the United States. Our textile industry has helped LA become the city with the greatest manufacturing output of any in the United States (a fact that virtually no one realises). If we can do it, why can't the US as a whole?
I think selective import tariffs can be a critical tool in reversing the trend over the past 40 years of multi-national corporations achieving size and influence greater than that of nation states (TPP would have enshrined corporate supremacy into international law!). Combined with trade deals written to favour workers rather than billionaires, and severe penalties for hiding profits overseas via inversion or other sleights of hand we can start to cut income inequality and improve living conditions for workers all over the globe.
I do not think Trump is the man to lead this effort. He is neither intelligent nor focused enough for so complicated a task. That does not mean tariffs are the enemy. Terrifying to see so many Dems here sounding like Republicans re: free trade!
Mr Nakios claims that producing clothes in the US is too expensive. How and why, then, is my home town of Los Angeles a major producer of textiles in the United States. Our textile industry has helped LA become the city with the greatest manufacturing output of any in the United States (a fact that virtually no one realises). If we can do it, why can't the US as a whole?
I think selective import tariffs can be a critical tool in reversing the trend over the past 40 years of multi-national corporations achieving size and influence greater than that of nation states (TPP would have enshrined corporate supremacy into international law!). Combined with trade deals written to favour workers rather than billionaires, and severe penalties for hiding profits overseas via inversion or other sleights of hand we can start to cut income inequality and improve living conditions for workers all over the globe.
I do not think Trump is the man to lead this effort. He is neither intelligent nor focused enough for so complicated a task. That does not mean tariffs are the enemy. Terrifying to see so many Dems here sounding like Republicans re: free trade!
47
I lived in LA for thirty years. The LA Times has done various articles on undocumented workers, exploitation, wage theft, and other abuses in the local garment industry.
Other than that, I definitely agree with your sentiments about Trump.
Other than that, I definitely agree with your sentiments about Trump.
7
You're right the garment industry has had all sorts of problems, but they are not universal, nor are the problems unique to that industry. Unfortunately, the abuse of illegal labour makes the southwest especially prone to producing horrible managers who exploit their workers (legal and otherwise).
It doesn't have to be that way, though.
It doesn't have to be that way, though.
2
Those foreign workers sure will thank you for taking away the jobs you think they should hate.
Now THAT's elitism.
Now THAT's elitism.
4
Trump is clearly motivated by xenophobia, which is abhorrent. But I have noticed that I am disgustingly wasteful. My children have more stuff than we can fit in a 1800 sq ft home. The junk comes into my house, gets abused and neglected, and then thrown in the trash. When I was a kid, we had 4 pairs of pants, two pairs of shoes, and a bit more than 1 week's worth of shirts. We didn't stain our clothes or leave them in boxes stacked up in the basement. We didn't trash a computer that needed a new power supply. We didn't throw out a bicycle that needed a new chain. I would gladly pay more for American-made goods and return to that model. Am I motivated by xenophobia? No. I am motivated both to reduce how much I contribute to landfills and to make my home something more than an extension of the landfill. Also, I believe that a person should earn more than a few cents per hour to toil away making my clothing.
276
Edward- if you live in an 1800'ft home in Manhattan you obviously have money to afford these luxuries. How do you buy a $50 pair of sneakers for your child on $7.25 an hour. My son earns $23 an hour. Could he afford your home in Manhattan? He lives outside of Boston and can't afford his own place. It's either rent or a modestly priced car. He can't afford both. I have small feet and buy children's shoes. They last maybe 3-4 months. As a 58 year old grandma I am not putting them through the rigors a child would yet they still don't last. Children outgrow their clothes. They get ripped and stained. Should they wear clothing that is too small, or torn to shreds because their parents can't afford a pair of US made pants? It's easy for those of means to disparage the working poor. Median income in this country is $50K yet 25% of our children live in poverty. Retail businesses employ the bulk of our work force. Many earn only minimum wage. Unless these factories are willing to pay a living wage, how will these workers afford to buy the items they produce? Or is your answer that they go without to assuage your guilty conscience? I'm very frugal. I sew, I cook. I made my children's clothing when they were young. The quality was superb, but it cost far more to make than to buy at War-mart. It's delusional to believe we can bring these industries back to the USA, produce items at a competitive price and pay the workers a decent wage. Do you support slave wages since we can't do both?
1
Edward. I do think a consumption tax across the board would help to stall the waste and be a better solution. You could also give incentives or tax breaks to domestic corporations and those that relocate here.
uofcenglish wilmette
"You could also give incentives or tax breaks to domestic corporations and those that relocate here."
The Obama administration proposed this very thing a few years ago. Every republican in Washington voted it down. The hypocrisy is sickening.
"You could also give incentives or tax breaks to domestic corporations and those that relocate here."
The Obama administration proposed this very thing a few years ago. Every republican in Washington voted it down. The hypocrisy is sickening.
What Mr, Nakios fails to mention is just how low his costs are for foreign labour. Is he paying children in underdeveloped countries pennies a day in order to keep his profit margins high enough on low-priced goods?
32
This is a good point. But his point is valid too - prices will rise significantly for American consumers.
This is not the simple problem it is made out to be. A lot of work is done in countries that are very poor - and the loss of paying work will not make them richer. Meanwhile, a lot of the skills in America disappeared long ago - there is no massive pool of labor that can do the jobs.
It's not 1972 any more.
This is not the simple problem it is made out to be. A lot of work is done in countries that are very poor - and the loss of paying work will not make them richer. Meanwhile, a lot of the skills in America disappeared long ago - there is no massive pool of labor that can do the jobs.
It's not 1972 any more.
16
Sasha: I was involved mainly as a listener as six young men who were in college in the United States and came from impoverished countries. They were equally split with some feeling as you do that the workers in countries make a hardly any money and work in substandard conditions. The other three reminded the others that at least they had jobs and if they didn't have those jobs they would be unable to eat.
So from the mouths of 6 educated young men who live in those countries there were two clearly opposing points of view.
So from the mouths of 6 educated young men who live in those countries there were two clearly opposing points of view.
3
Mr. Kite- how true. I am 58 and learned to sew at 5. Most women I know don't know how to even hem a pair of pants. Of my 4 daughters only one was interested in learning this craft. How trump, in his delusion, believes he can scale up production to meet the needs of 330M Americans is beyond laughable. It is not going to happen. The mills are gone. Not shuttered, GONE. The looms are gone. The know-how is gone! Does he honestly believe that one can just look at a sewing machine and learn how to sew? Build a plant and manufacture televisions, computers, furniture, tools for the trades that will be affordable to the average worker? My son earns $23 per hour and can not afford both a modestly priced car and an apartment. He can't afford clothing in higher end retail shops like Macy's, Sears, J C Penneys where a pair of children's sneakers manufactured in China cost $50!! Do his children go without shoes? Do we all go without basic necessities we can't afford because corporate greed is at obscene levels? How will we buy these higher priced goods on slave wage pays? Or will trump advocate a living wage? trump is an idiot. That he is now the "president" of the United States and wields enormous power makes him an extremely dangerous idiot. How soon will we see a world-wide depression with this arrogant know-nothing in the most powerful position in America, and the world?
His idiotic supporters gloat. Will they still be gloating when they can no longer afford to feed their children?
His idiotic supporters gloat. Will they still be gloating when they can no longer afford to feed their children?
2
"Her 20-employee company has $10 million in annual sales; her cost of goods sold is $4 million; and expenses like payroll and rent are $5 million. "
You have some mighty high expenses for a 20 person company.
The tone and the word use in this piece are characteristic of people who consider themselves cognoscenti and knowledge workers in their field. Use of the word "mills" is atypical. Where workers are just a number in a supply chain and no compassion or responsibility for how goods are produced or the environmental impact is required. No sorrow felt here; the election was won by forgotten America's vote. Good-bye, -luck
You have some mighty high expenses for a 20 person company.
The tone and the word use in this piece are characteristic of people who consider themselves cognoscenti and knowledge workers in their field. Use of the word "mills" is atypical. Where workers are just a number in a supply chain and no compassion or responsibility for how goods are produced or the environmental impact is required. No sorrow felt here; the election was won by forgotten America's vote. Good-bye, -luck
13
Since when do Trump supporters care about "environmental impact?" Or the welfare of foreign citizens, the poorest and most desperate of which are currently being turned away at our airports? How much time have you spent in Chinese factories or European fabric mills or North African flax fields? Do you know where the cotton in your Make American Great Again t-shirt is grown? How about the barrels of red white and blue dye? Do you know how much it costs to ship the threads to the mill, and then the finished fabric to the assembler?
I'm guessing that like your Dear Leader you don't know much but have a lot on your mind. That's not a criticism: no one is an expert on everything, which is why we teach our children to listen to others before releasing the safety latch on our mouths.
I'm guessing that like your Dear Leader you don't know much but have a lot on your mind. That's not a criticism: no one is an expert on everything, which is why we teach our children to listen to others before releasing the safety latch on our mouths.
42
@Max: You seem to confuse die-hard Trump supporters, and the mass of people who couldn't fathom continuing to barrel down the same downward spiral by supporting Hillary's "more of the same" promises; and in an obvious move to stereotype them into a bunch, to believe they have 1-track minds. Fine: nobody's falling for the propaganda, except the propagandizers themselves.
It's your prerogative to care more for foreign workers and economies than our own, but do understand there's no excessive empathy to be expected in return.
z2010m has a point, whatever bias you want to find behind it: that Mr. Nakios cares no more about foreign workers than you profess Trump supporters do, and that he's not interested in employing fellow citizens if that means it's going to disturb his supply chain and bottom line.
It's your prerogative to care more for foreign workers and economies than our own, but do understand there's no excessive empathy to be expected in return.
z2010m has a point, whatever bias you want to find behind it: that Mr. Nakios cares no more about foreign workers than you profess Trump supporters do, and that he's not interested in employing fellow citizens if that means it's going to disturb his supply chain and bottom line.
9
Trump supporters can see through all of these liberal conspiracies to obstruct President Bannon's quest to make America great again.
First, you have to remember that the real unemployment rate is 42%, as candidate Trump helped us to understand.
That means tens of millions of eager workers, ready to take up sewing piece work wherever they live, like nursing homes.
I can see the ads now, "work from home, be your own boss, unlimited hours!"
Just remember what Fearless Leader Trump said that inspired us to vote for him:
"We’re going to win so much, you’re going to be so sick and tired of winning" (as reported by the Billings Gazette)
Really tired.
First, you have to remember that the real unemployment rate is 42%, as candidate Trump helped us to understand.
That means tens of millions of eager workers, ready to take up sewing piece work wherever they live, like nursing homes.
I can see the ads now, "work from home, be your own boss, unlimited hours!"
Just remember what Fearless Leader Trump said that inspired us to vote for him:
"We’re going to win so much, you’re going to be so sick and tired of winning" (as reported by the Billings Gazette)
Really tired.
336
Nursing home? Who'll be able to afford such luxury?
14
I laughed out loud at this tongue in cheek scenario. Seriously, though, while what trump is doing is abhorrent and will manage to hurt both workers in America as well in cheaper labor countries (good job trump--not!) it is important to remember what New York was like before the manufacturing side of the industry went over seas. I've forgotten the figures but it's something like 95% of the business (jobs) including millions from NYC. Some were sweat shops but most weren't and that's just a matter of geography. The sweat shops still exist but just where they don't muss up our new safer cities attractive to millineals.
I happen to have the full set of fashion skills from machine sewing to production development. During the recession, even if I didn't find design work, I would have rather sewn rather than for instance my last job, pack sugar into boxes, stack boxes on pallets and ready them for shipping all for $10/hr no benefits while also ruining my hands from repetitive low range movement of a product that one box of retail product of the more than 500 I moved per hour paid my salary.
We should think about a middle way. One that brings back fashion as a respectable way of earning a living. Do we really need the crap at Walmart choking our closets, thrift stores and trash dumps that cover our obesity from unhappiness and despair at work?
Or would fewer better clothes be a better economic diet for all? I think the latter.
I happen to have the full set of fashion skills from machine sewing to production development. During the recession, even if I didn't find design work, I would have rather sewn rather than for instance my last job, pack sugar into boxes, stack boxes on pallets and ready them for shipping all for $10/hr no benefits while also ruining my hands from repetitive low range movement of a product that one box of retail product of the more than 500 I moved per hour paid my salary.
We should think about a middle way. One that brings back fashion as a respectable way of earning a living. Do we really need the crap at Walmart choking our closets, thrift stores and trash dumps that cover our obesity from unhappiness and despair at work?
Or would fewer better clothes be a better economic diet for all? I think the latter.
3
42% if you include toddlers and great-grandmothers in the ranks of the unemployed...
3
A country can either have high economic costs and low social costs, as was the case in Japan, Korea and a number of EU countries until a couple of decades ago, or low economic costs and high social costs, which is what the US has had since the 1960's. Both sorts of costs are relative, of course. Economic costs can be ameliorated by fiscal policy; social problems are much more intractable, as they are also largely economic in origin, else mirror existing socio-racial divides that determine who gets what share of the pie. What the US is experiencing at the moment is the result of knowing the price of everything, the value of nothing, and the short-sightedness of CEOs who think no further than their stock price.
255
Pie of The Month - The last week in June the meatpacking plant fired all Mexicans. The government said it was not safe to have foreigners, people of unknown, undocumented backgrounds, motives and sympathies, at work in the sensitive area of food supply. Many of the Mexicans just disappeared. It was hard to get new workers to replace them. The worst job in the world wasn't at SuperStuff, in spite of what Margery said. Everyone knew the worst jobs were in the meat marking plant, in the slaughter room, or the hide room, or the rendering room. The Texas Bank that had already bought up a lot of the farms took over the plant and cut back on the shifts.
Mrs. Colley found that she missed the Mexicans. Some people said they must have done something criminal, clearing out like that, but Mrs. Colley wondered if they weren't just afraid. The Lutheran pastor, young Reverend Higgs, gave a speech about charity and brotherhood and overcoming differences, which made everybody feel better since that was exactly what they'd done....(Author Jean Thompson - Illinois)
Mrs. Colley found that she missed the Mexicans. Some people said they must have done something criminal, clearing out like that, but Mrs. Colley wondered if they weren't just afraid. The Lutheran pastor, young Reverend Higgs, gave a speech about charity and brotherhood and overcoming differences, which made everybody feel better since that was exactly what they'd done....(Author Jean Thompson - Illinois)
8
CEOs aren't shortsighted; they merely have selfish goals, which they pursue effectively. The problem is that society started valuing people by only one metric: money. Basic decency and morality has been relegated to a footnote, at best. That's given us Trump, pharmaceutical companies that make lavish profits on the backs of the sick, corporations that use loopholes and offshoring to get the lowest taxes and cheapest labor, and the relentless efforts to reduce help for the poor, who have little value in a society that rates people by wealth.
2
So we are supposed to feel sorry for you? By exporting your costs, you do two things:
- depress domestic manufacturing and employment, leaving the US government holding the bag to pay unemployment, medicare etc. Not to mention social costs of depressed unemployed, broken families, alcoholism
- then you go abroad, get labor on the cheap, no regulation for your factories, no US oversight, hire and fire at will
That's not just you Mr. Nakios, that's you Apple, GM, Nike, and thousands of others on this very, very long list. What you see as low costs in your model has actually been and always been, cost-shifting. Out of your balance sheet, into the US government's.
30 years later Uncle Sam wakes up, throws a fit, and says the party is over. Problem? I_don't_think_so.
- depress domestic manufacturing and employment, leaving the US government holding the bag to pay unemployment, medicare etc. Not to mention social costs of depressed unemployed, broken families, alcoholism
- then you go abroad, get labor on the cheap, no regulation for your factories, no US oversight, hire and fire at will
That's not just you Mr. Nakios, that's you Apple, GM, Nike, and thousands of others on this very, very long list. What you see as low costs in your model has actually been and always been, cost-shifting. Out of your balance sheet, into the US government's.
30 years later Uncle Sam wakes up, throws a fit, and says the party is over. Problem? I_don't_think_so.
65
A tax bill cannot "exceed her profits." Taxes are paid on profits, not sales.
And, if by this statement, you are counting ALL sorts of taxes and obligatory charges, it is completely normal that they exceed profits.
And, if by this statement, you are counting ALL sorts of taxes and obligatory charges, it is completely normal that they exceed profits.
13
It is my understanding that import taxes are NOT paid on profit; they are paid on stuff arriving in the United States.
5
Philadelphia has a gross sales tax. Even you have losses you still owe the Gross Receipts Tax.
Actually, if the cost of the product cannot be deducted from sales price, then the 'profit' exceeds the actual profit and the taxes on 'profit' may exceed the actual profit. Say you are in a low margin business like distribution of an imported product. Vastly simplified, say the tax rate is 20%, and your margin is 10%. A product you sell for $10 costs $9.10 to import. The actual profit is 90 cents, with a tax of 18 cents. If you cannot deduct the cost of the item imported, the 'profit' is the whole $10, and the tax is $2, more than double what it is at present.
Now, my company produces scientific instruments here, almost solely for export. Good, you say, but all the most expensive bits built into them are imported--not being made in the US at all or extremely expensive specialty units with specs much higher than required. So Trump would have us buy components at a higher price from importers, only to make us have to raise prices to our overseas customers. In detail it is complex, but the bottom line is that it makes us less competitive exporters. Plus the value of the dollar will increase, worsening the problem. We are having enough problems already with the fall of the euro in the past couple of years. Same thing happened in the early 80's when the dollar rose sharply.
Trump hasn't a clue. He is only selling his name, which his parents gave him.
Now, my company produces scientific instruments here, almost solely for export. Good, you say, but all the most expensive bits built into them are imported--not being made in the US at all or extremely expensive specialty units with specs much higher than required. So Trump would have us buy components at a higher price from importers, only to make us have to raise prices to our overseas customers. In detail it is complex, but the bottom line is that it makes us less competitive exporters. Plus the value of the dollar will increase, worsening the problem. We are having enough problems already with the fall of the euro in the past couple of years. Same thing happened in the early 80's when the dollar rose sharply.
Trump hasn't a clue. He is only selling his name, which his parents gave him.
5
Mr. Nakios, many of us are willing to pay more for quality merchandise that is made in U.S.A. "Assembled in U.S.A." is misleading. Make your clothing here, it will sell.
43
Remember the bailout for the American car industry? Buy America was not working so well then.
2
You have a short and selective memory. Buy American does not eliminate the need for a responsive management and attention to the market. Buy American made America great, can do so again.
3
Or American Apparel? Made in the US, more expensive, and now bankrupt
1
Tariffs are just another GOP regressive tax scheme that helps transfer wealth away from average people to the most wealthy. That's pretty much the only major thing they're really interested in doing, even though centuries of history have proven that philosophy simply doesn't work at all.
Tariffs worked great for the Soviets, though, because everybody enjoyed empty grocery store shelves and no toilet paper, I guess.
Tariffs worked great for the Soviets, though, because everybody enjoyed empty grocery store shelves and no toilet paper, I guess.
155
I get that you're just trying to throw an anti-GOP quip out there, but where does your theory about Soviet store shelves being empty because of Western (US?) policies come from? You do understand that the Eastern bloc was an early form of the globalization Liberals cherish so, right? Empty stores were the result of mismanaged agrarian reform, misengineered production plans, mismanaged supply chains, frequent power outages (mismanaged energy sector), and the widespread fear of technocrats to question or comment on orders coming from above. The mess was widespread throughout the bloc because the whole bloc was organized the same way, with orders coming from the central Kremlin command (kinda reminds you of the coastal cities elites stateside deciding policies for the rest of the nation; until now, that is). NOTHING to do with taxes or imports.
2
My software company currently pays foreign taxes (VAT) and domestic taxes (U.S. income) on exports. All added up about 65%. Our foreign competitors selling into the U.S. typically pay no U.S. taxes and are sometimes exempt from foreign income tax on their U.S. sales. It's ridiculous and Trump is absolutely right to change it. Domestic textile mills were decimated by the shift to imports in the 80s causing drug addictions and poverty in mill towns. New York fashion designers will learn to thrive under Trump's law.
22
Oh, yes. Mill towns, doesn't that sound like a Utopia that we yearn for? The very name conjures up a picture of a Leave it to Beaver town without even one Eddie Haskell in sight. The Company Store has so many bouncy songs in it honor too. How could we have been so stupid to let go of it all?
5
Mill towns were not Utopia, but they were an important part of the American landscape. Those mills provided jobs that were not replaced when they disappeared. My relatives worked in mills and were able to support their kids who grew up and went to college. Many towns and cities never recovered socially or economically from losing their mills, and those depressed towns are now supporters of this horrible man leading our country to ruin.
13
While company towns and factory floors were certainly not utopia, it's far better than chronic unemployment and draw checks.
2
Thank you, Mr. Nakios, for the primer on international trade and finance. It's a thousand pities that the new administration has no one in either the cabinet or in the Oval Office who understands the bewildering, complex interplay of exports and imports.
You leave out the main argument, if you will, for the confusion in Donald Trump's administration about taxation and profits from exports and imports. Neither does he, businessman that he is, nor his base, understand anything about international finance. He ran a smooth game on his rubes, otherwise known as "deplorables."
He was going to make dark-skinned Mexico the focus of both his racial superiority and animosity as well as trashing the domestic economy. He saw the discontent among white workers, their jobs and families now in disarray, being cut out of the expanding technology markets by educated immigrants who are at home in Silicon Valley, the international community's future. No more, and gone forever, are the automobile plants and steel and textile mills that were the spine of the white working class. Their vision went no further than their entitlement to splendid-paying blue-collar jobs. The future--progress--ripped them away, almost overnight.
So Trump, sensing the disaffection, tossed them a bone with little gristle on it: their white skin. The bedraggled masses went at the chum in the water that he rightly predicted would stoke their anger, all to his benefit.
Why, Mr. Nakios, do you think he's president?
You leave out the main argument, if you will, for the confusion in Donald Trump's administration about taxation and profits from exports and imports. Neither does he, businessman that he is, nor his base, understand anything about international finance. He ran a smooth game on his rubes, otherwise known as "deplorables."
He was going to make dark-skinned Mexico the focus of both his racial superiority and animosity as well as trashing the domestic economy. He saw the discontent among white workers, their jobs and families now in disarray, being cut out of the expanding technology markets by educated immigrants who are at home in Silicon Valley, the international community's future. No more, and gone forever, are the automobile plants and steel and textile mills that were the spine of the white working class. Their vision went no further than their entitlement to splendid-paying blue-collar jobs. The future--progress--ripped them away, almost overnight.
So Trump, sensing the disaffection, tossed them a bone with little gristle on it: their white skin. The bedraggled masses went at the chum in the water that he rightly predicted would stoke their anger, all to his benefit.
Why, Mr. Nakios, do you think he's president?
123
spot on
1
I don't agree with Trump's proposals at all, but this article points to the very reasons for them. We pay less for goods because we aren't willing to pay for American labor costs. Forty years ago clothes cost about the same that they do now and were mostly made in non Union states in our own country. Inflation has raised the costs of almost everything else but even these what were once low paying but relatively high skill jobs are gone. If prices go up, it would be competitive once again to pay Americans to make these clothes. The question is whether we prioritise decent jobs or low prices. For years, we have emphasised the latter, but there are Trump voters, and indeed others, who would be glad to see the jobs.
165
I believe, and I have no statistics to back it up, but, I believe many (most?) of those people shopping for low low low prices at Walmart are Trump voters. Go Figure!
15
The jobs part is a very big if. As prices rise, demand will fall. If there are retaliatory tariffs or duties from other countries, then export demand may be even lower. That does not just affect manufacturing industries. It affects agriculture and service industries. The US has a net trade surplus in services right now.
Trump's plan makes a lot of very dubious assumptions. For example, it presumes the value of the dollar will strengthen to off-set the decreased purchasing power of the American consumer. But quite a few economists consider that a big if. Because we live in the age of ignorance, warnings from economists are being dismissed as part of grand conspiracy to steal away American manufacturing jobs.
Trump's plan makes a lot of very dubious assumptions. For example, it presumes the value of the dollar will strengthen to off-set the decreased purchasing power of the American consumer. But quite a few economists consider that a big if. Because we live in the age of ignorance, warnings from economists are being dismissed as part of grand conspiracy to steal away American manufacturing jobs.
7
If we had an actual "Safety Net" -- that didn't look like Swiss cheese and was as robust as Every. Other. Modern. Democracy. In. The. World. -- with single-payer (efficient and affordable) health care, guarantees for child-care, family leave and sick leave, Overtime (GOP killing this Obama-gift as I write) and Free Education past Grade 12), and pro-union labor law enforcement. ... Many of these labor issues -- at least at this end -- would not be issues at all.
5
Trump says he loves to spend OPM - other people's money. No cost, no risk for him. This time it's our money, not once but twice for the same item.