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2017-12-21 11:06 AM

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Subject: Just something to think about


2017-12-21 5:46 PM
in reply to: Oysterboy

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Subject: RE: Just something to think about

Originally posted by Oysterboy Life is all about unintended consequences https://www.cnbc.com/2017/12/03/gop-tax-plan-is-a-gift-to-china-japa...

Is this where I'm supposed to mock the source.  I'm trying to be more progressive in my debating skills.  ;-)

Seriously though, this would absolutely be the case "if" only consumers were given tax cuts and nothing else changed.  However, it completely ignores the fact that the new corporate tax rates will allow a lot of these businesses to come back to America and thereby reducing the overall trade imbalance drastically.

China pretty much buys nothing from us today, so the imbalance is off the charts.  I'm sure there will be a slight uptick in some industries to China, but overall they are not fans of these changes at all.

Here's the other point of view on China:
China And Europe See What U.S. Critics Don't: A U.S. Tax-Cut Boom Is Coming

So many liberals like to look at these tax plans through a very tiny lense and look at little pieces while ignoring the big picture.  In the big picture this will be devastating to China.

 

2017-12-21 9:48 PM
in reply to: tuwood

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Subject: RE: Just something to think about

Tax rates aren't the reason for our trade imbalance with China - it's the cost of labor (mostly), and infrastructure (to a lesser degree) - now that they've had that manufacturing base for many years.

2017-12-22 9:20 AM
in reply to: spudone

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Subject: RE: Just something to think about

Originally posted by spudone

Tax rates aren't the reason for our trade imbalance with China - it's the cost of labor (mostly), and infrastructure (to a lesser degree) - now that they've had that manufacturing base for many years.

There's definitely more to it than just taxes, but it all plays a part.  One aspect of the taxes many don't realize is that companies sell all their products overseas based out of countries overseas because those profits can be taxed at better rates through those companies.  So there's the manufacturing of the products and then there's the sale of those products.  The sale of those products will likely come back in big chunks.
As for the manufacturing of products, labor is cheaper in China, but the level of productivity is lower, the quality of work is lower, the theft of intellectual property is greater, the costs to ship are greater, the customer experience is lower, etc.  Companies have to look at the whole picture to decide where to manufacture their products and as I mentioned earlier they will not all come back but a significant chunk will.

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