Regulations and mandatory reporting, which are often federal rather than state, add to small business costs. Large corporations have economies of scale to address all the regulations, small businesses don't. Thus, cost savings by operating in a low/no-tax state is a significant advantage particularly when the small business serves customers in multiple states.
Similarly, the proposed international minimum tax hurts all companies. While the current administration claims an international minimum tax prevents a 'race to the bottom' it also reduces exports/import trade and the opportunity for corporations to grow through cost minimization. and business innovation. If the Europeans want a minimum tax, that's their decision; it should not be a reason for the US to follow. In addition, Congress is responsible for taxing. Delegating taxing authority to a non-US entity (or to the Secretary of Treasury) is a violation of the US Constitution.
The bureaucrats in the federal government need to pay attention to their duties and focus on improving value for US Citizens rather than themselves.
Great points Ted. The big companies like regulation because, as you say, they have the scale/scope economies that small companies do not have. In other words, they have a competitive advantage. A very good reason for the giant companies to support growth and job killing overregulation and the Democrats that support it. The Biden administration and the administrative state has bypassed congress time and time again...a clear violation of the US Constitution.
An idea has been bouncing around in my head and I haven't finished developing the logic and gathering the data to prove it yet, maybe you can run with it.
I'm not a member of the 'war party'; I prefer peace. However, I am a member of the 'strong military party' because as Reagan showed (most recently) and other good leaders did, a strong military is the best means to prevent war. But there are other reasons of late to have a strong military which is getting weaker under the present leadership.
China has been growing stronger over the last decade or two; strengthened in part by the push for international trade and finding more economical ways of delivering products to the US consumer. The noise about the trade deficit with China has been a distraction; more recently the supply chain reliance on China for essential materials, electronics, drugs/medications, rare earth elements necessary for the 'green economy', etc. The reliance on China for products and materials necessary for our modern economy is a current concern because General Secretary Xi Jinping has made statements, in China and Chinese, that he wants the world (or the US) to become dependent on China for essential products so China can threaten (or actually) cut off the products when they need to apply leverage on the US. There’s no secret that China wants to be recognized as an international power and to have the Yuan as the recognized international monetary standard replacing the US Dollar.
The US, in part due to the irrational reaction to the COVID-19 pandemic but also due to politicians’ desire to hand out benefits without regard to the revenue necessary to support their largess. Under normal circumstances, that’s not a big deal. The US Treasury can sell bonds to fund the debt. It’s been a successful approach as recognized by the $31 Trillion dollar-plus debt now outstanding. The Treasury, when a bond matures, doesn’t retire the borrowed principle, reducing the actual debt, it simply reissues that debt in a new bond at current rates. Ergo, as some Republicans have emphasized, the debt is getting so large that it cannot be handled. The counter argument is that the growing debt can be managed if the economy is growing, i.e., holding the ratio of government spending to total GDP or debt to total GDP at reasonable levels is manageable just as any citizen balances personal debt against annual income. However, the ratios are meaningless if China achieves a significantly stronger military or achieves its monetary goal of having the Yuan as the internationally recognized currency.
If the Yuan replaces the USD as the international monetary standard the US debt will become unsustainable overnight. Instead of being recognized as the international monetary standard the US will be in a position like Argentina, Greece, or other nation that has experienced significant financial disruption due to uncontrolled spending and debt. China will hold all the cards. They will have a strong military, control essential products necessary for the modern US economy, and the monetary standard used by nations to manage their debt. Whether the US debt is $35 T or $50 T won’t really matter; it may not matter if we’re able to get the debt down to $20 T (or less). Ceding the international monetary standard to China, as Xi wants, will be extremely disruption to the US. I expect some billionaires and World Economic Forum elites, may do just fine (the upper 0.01%), the vast majority of the US will be in serious trouble.
My concerns may be irrational and extreme. I prefer to be wrong. But I’m not hearing anyone express similar concerns or provide me with an explanation as to why my data or logic is wrong. The fact that these secondary economic effects are not being discussed either means the politicians are oblivious or are afraid of mentioning it because it will be politically disadvantageous for them. Telling voters we’ve been racing down the wrong path on the politician’s commendations is a tough message to deliver.
So, what do you think? Am I irrational and extreme? Your feedback with a better understanding of financial machinery will be appreciated.
You bring up a lot of important points. Give me a few days to go over each and evaluate your arguments and thesis. I'll dig into the possibility that the Yaun could replace the USD as the international monetary standard.
Regulations and mandatory reporting, which are often federal rather than state, add to small business costs. Large corporations have economies of scale to address all the regulations, small businesses don't. Thus, cost savings by operating in a low/no-tax state is a significant advantage particularly when the small business serves customers in multiple states.
Similarly, the proposed international minimum tax hurts all companies. While the current administration claims an international minimum tax prevents a 'race to the bottom' it also reduces exports/import trade and the opportunity for corporations to grow through cost minimization. and business innovation. If the Europeans want a minimum tax, that's their decision; it should not be a reason for the US to follow. In addition, Congress is responsible for taxing. Delegating taxing authority to a non-US entity (or to the Secretary of Treasury) is a violation of the US Constitution.
The bureaucrats in the federal government need to pay attention to their duties and focus on improving value for US Citizens rather than themselves.
Great points Ted. The big companies like regulation because, as you say, they have the scale/scope economies that small companies do not have. In other words, they have a competitive advantage. A very good reason for the giant companies to support growth and job killing overregulation and the Democrats that support it. The Biden administration and the administrative state has bypassed congress time and time again...a clear violation of the US Constitution.
Vaughn,
An idea has been bouncing around in my head and I haven't finished developing the logic and gathering the data to prove it yet, maybe you can run with it.
I'm not a member of the 'war party'; I prefer peace. However, I am a member of the 'strong military party' because as Reagan showed (most recently) and other good leaders did, a strong military is the best means to prevent war. But there are other reasons of late to have a strong military which is getting weaker under the present leadership.
China has been growing stronger over the last decade or two; strengthened in part by the push for international trade and finding more economical ways of delivering products to the US consumer. The noise about the trade deficit with China has been a distraction; more recently the supply chain reliance on China for essential materials, electronics, drugs/medications, rare earth elements necessary for the 'green economy', etc. The reliance on China for products and materials necessary for our modern economy is a current concern because General Secretary Xi Jinping has made statements, in China and Chinese, that he wants the world (or the US) to become dependent on China for essential products so China can threaten (or actually) cut off the products when they need to apply leverage on the US. There’s no secret that China wants to be recognized as an international power and to have the Yuan as the recognized international monetary standard replacing the US Dollar.
The US, in part due to the irrational reaction to the COVID-19 pandemic but also due to politicians’ desire to hand out benefits without regard to the revenue necessary to support their largess. Under normal circumstances, that’s not a big deal. The US Treasury can sell bonds to fund the debt. It’s been a successful approach as recognized by the $31 Trillion dollar-plus debt now outstanding. The Treasury, when a bond matures, doesn’t retire the borrowed principle, reducing the actual debt, it simply reissues that debt in a new bond at current rates. Ergo, as some Republicans have emphasized, the debt is getting so large that it cannot be handled. The counter argument is that the growing debt can be managed if the economy is growing, i.e., holding the ratio of government spending to total GDP or debt to total GDP at reasonable levels is manageable just as any citizen balances personal debt against annual income. However, the ratios are meaningless if China achieves a significantly stronger military or achieves its monetary goal of having the Yuan as the internationally recognized currency.
If the Yuan replaces the USD as the international monetary standard the US debt will become unsustainable overnight. Instead of being recognized as the international monetary standard the US will be in a position like Argentina, Greece, or other nation that has experienced significant financial disruption due to uncontrolled spending and debt. China will hold all the cards. They will have a strong military, control essential products necessary for the modern US economy, and the monetary standard used by nations to manage their debt. Whether the US debt is $35 T or $50 T won’t really matter; it may not matter if we’re able to get the debt down to $20 T (or less). Ceding the international monetary standard to China, as Xi wants, will be extremely disruption to the US. I expect some billionaires and World Economic Forum elites, may do just fine (the upper 0.01%), the vast majority of the US will be in serious trouble.
My concerns may be irrational and extreme. I prefer to be wrong. But I’m not hearing anyone express similar concerns or provide me with an explanation as to why my data or logic is wrong. The fact that these secondary economic effects are not being discussed either means the politicians are oblivious or are afraid of mentioning it because it will be politically disadvantageous for them. Telling voters we’ve been racing down the wrong path on the politician’s commendations is a tough message to deliver.
So, what do you think? Am I irrational and extreme? Your feedback with a better understanding of financial machinery will be appreciated.
You bring up a lot of important points. Give me a few days to go over each and evaluate your arguments and thesis. I'll dig into the possibility that the Yaun could replace the USD as the international monetary standard.