Um, do you mean “non-white workers”?
1 Like
Yes, yes I do 
The GOP economic solution was formulated by Reagan long ago. Trickle down. Make it easier for the job creators to accumulate capital. Lower taxes at the top and cut government regulations and oversight. After 40 years of hollowing out the middle class, the whole theory is BS. That economic program does exactly what you expected. It makes the rich richer.
You’d think at least some Rs would begin to question the whole plan. But nope. Conservatives are very hierarchical. They toe the party line and follow the leaders. Even if the leader is a nutball like Trump.
Just about the opposite for the Ds where they splinter off and run all over the place - Green Deals, defund police, critical race theory, and trans gender rights. All over the map. The left seems to attract passionate believers in causes that don’t enjoy large popular support among all voters.
So here we are. A federal legislature that has no direction and even less ability to actually design an economic plan to address the obvious problems of inequality , infrastructure repairs, and absurd spending on Healthcare and military. I am not hopeful, truth be told.
3 Likes
Or it might get people to look the other way on increased immigration.
Why? It’s extremely sensitive to demographic shifts. The entire graph you linked is just illustrating when the baby boomers were the majority of the working population. The various unemployment measurements (U-3, U-6, etc) are far superior to LFPR.
It’s almost purely correlation.
Deficit spending is a tool we can use to prevent economic crises from being as bad as they could be. So it was the right thing to do after the 2008 crash (although we were too timid back then) and it’s the right thing to do for the COVID crisis. It was the wrong thing to do in 2017. The economy was cruising along and we should have reduced deficit spending then.
At this point we are running into an annoying cycle where the GOP inherits a presidency with a strong economy and decide to increase the deficits at the wrong time. Then when we have a crisis the democrats take the presidency and have to further increase the deficits before starting to reduce them. Its getting tiresome.
1 Like
Then on top of it - the GOP gets to complain about the Dems always raising the deficit and everyone believes them.
1 Like
The current inflationary pressure would indicate that now is not the time to be doing significant additional government spending. The COVID crisis is effectively over at this point as far as government fiscal policy is concerned. Uptake on the vaccines in he US will be near complete by the end of the summer and mass restrictions have already been lifted in a lot of the country. Let the economy finish recovering on its own at this point.
In fairness that’s why the recent proposal (at least the family/preschool one) includes tax increases to offset the spending, so it’s not a fiscal stimulant (roughly speaking)
So take money out of the private sector economy and put it into the government sector?
That would be fine except for the fact that the spending is in all the wrong places.
Universal pre-school when most research shows that pre-school has no effect on academic outcomes by the 3rd grade.
Increased subsidies to low income families with children, based on the number of children. Just encourages more kids they can’t afford. (How about family planning instead?)
Increased Pell grants and free community college. The high levels of government backing of student loans is one main reasons for absurd price inflation at universities. So lets double down on that. (You can find my reasoning for tracked high schools, trade schools, and restoring the expectations for high school diploma’s in other threads.)
That’s certainly not the case based on what I’ve read. Preschool has benefits across the map from reduced crime to increased high school graduation rates.
To provide some source:
What should governments be doing to encourage family planning, that they aren’t already doing?
Try this article. It argues that the primary benefits are more from health interventions and day-care aspects rather than the school part. It also includes more up to date results.
Thanks for sharing. It does show at best mixed evidence for expanding pre-K, will need to read more about it.
This isn’t a bad argument.
If it makes sense, absolutely.
I’m all in favor of ending abstinence only education and replacing it with a more robust education that included family planning.
2 Likes
In other words, early childhood education may change children’s lives not by teaching them things they’ll retain in elementary school, but simply by being in a safe, predictable, and consistent environment for them to play in — and by providing their parents with the stability to get and keep better jobs.
Reminds me that, back in the day, we didn’t care if kindergarteners learned to read. Just give them an environment where they can learn social skills and explore by play.
there’s already some research into which Head Start programs are best suggesting teacher education, class size, and curriculum don’t matter, while program hours matter a lot.
Expansions to Head Start have focused on requiring teachers to have more advanced degrees and qualifications, which raises the cost of the program and shouldn’t affect outcomes if the outcomes are a consequence of having reliable child care rather than of teaching children to read early.
It’s always so interesting the fight between progress and restraint. The arguments both sides come up with are fascinating.
You can offset the US taxes with foreign taxes.
If you pay less than $300 in foreign taxes then you get a dollar-for-dollar reduction in your US taxes, even if the foreign taxes are higher than what you would have paid on the gain in the US.
Like if a similar US investment would have generated $200 in capital gains tax but you pay Germany $300 in taxes, you can reduce your federal tax bill by $300. So not only is the US not getting its $200 tax revenue, but it’s losing another $100 in tax revenue on top of that.
If the German tax was only $150 and the US tax was $200 then you just have to pay $50 to the US, not the whole $200. So the US is still losing out on $150 of tax revenue compared to investing in a similar company in the US.
Now if your foreign taxes on your investments are more than $300 then you can only deduct what your US taxes would have been, not what you paid to Germany (or whomever).
So big investors end up paying the higher of US tax or the foreign tax. So there’s not a tax savings to investing abroad for the investor. But if investors can get a better return investing in a German company than an American one then they might as well do that. And it will lower US tax receipts.
About the only time it would help the tax receipts is if there is no foreign tax at all AND better returns than the US, or a tax that is so low and gains so high that the modest tax offset still results in more tax revenue to the US than a US-based investment because the foreign return was so much higher.
That said, US citizens can’t (legally) pay less total tax than the US CG rate. So the difference would be that higher-taxed / higher return foreign investments would now be more attractive.
Like suppose that you can invest in American Co or Foreign Co.
American Co has a 20% return and a 15% CG tax for an after-tax return of 17%.
Foreign Co has a 22% return and a 25% foreign CG tax for an after-tax return of 16.5%.
You may as well invest in American Co.
But now if the US CG rate goes up to 20% you’re now better off investing in Foreign Co.
It could also drive some foreign investors away from US investments.
Thanks. I didn’t know the rules.
I’ll try to state the philosophy.
– When Americans invest in other countries, the US is fine with collecting no cap gains tax as long as the other country is collecting as much or more than the US would.
– If the other country collects less, we tax enough to make up the difference.
Those seem like good ideas to me.
The second rule protects the US from “race to the bottom” foreign countries that might try to gain investments from US citizens by offering lower tax rates. That’s a good idea.
I would expect foreign countries to do the same. If the US has a lower rate than Germany, do Germans have to make up the difference on their German tax returns? It seems to me that German laws should say that, and I wouldn’t have any problem with it.
I don’t think the US should participate in race-to-the-bottom contests. If raising our rates means that we lose some investments to other countries that have even higher rates than ours, that’s fine. I think capital should go where the before-tax returns are highest.
So, I’m still fine with raising the rates, even though it’s more complex than I assumed.
Fair enough, as long as you understand the downside. (Namely, less tax revenue for the US and less investment in US companies. The latter probably also means fewer jobs in the US.)