Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
The Planet Money team had a nice segment pointing on the Trans-Pacific Partnership (TPP). The piece pointed out that the TPP has no enforceable language on currency management.
While the deal is ostensibly about eliminating tariffs and other trade barriers, controlling currency values can be an effective way to impose barriers to trade. If a country intervenes in currency markets to lower the value of its currency by 10 percent it has an impact that is comparable to imposing a 10 percent tariff on all imports and giving out a 10 percent subsidy on all exports. There is nothing in the TPP that will prevent the parties in the agreement from protecting their industry through this mechanism.
The Planet Money team had a nice segment pointing on the Trans-Pacific Partnership (TPP). The piece pointed out that the TPP has no enforceable language on currency management.
While the deal is ostensibly about eliminating tariffs and other trade barriers, controlling currency values can be an effective way to impose barriers to trade. If a country intervenes in currency markets to lower the value of its currency by 10 percent it has an impact that is comparable to imposing a 10 percent tariff on all imports and giving out a 10 percent subsidy on all exports. There is nothing in the TPP that will prevent the parties in the agreement from protecting their industry through this mechanism.
Read More Leer más Join the discussion Participa en la discusión
The NYT devoted an article to a report put out by the British Bankers’ Association that claimed that new regulations were making the British industry less competitive internationally. This is presented as being a serious problem that should concern people.
In fact, people who believe in free trade should not care any more about the possibility that the U.K. will lose jobs in finance to foreign competition than if it loses jobs in textile manufacturing to foreign competition. The standard free trade argument — that all right-minded people are supposed to accept — is that the economy operates at full employment. This means that if bankers lose their jobs to international competition they will simply shift over to the sectors in which the U.K. has a comparative advantage. Only a knuckle-dragging Neanderthal protectionist would worry about losing jobs in textile manufacturing or banking to international competition.
It also would have been helpful if the NYT included the views of a critic of the banking industry in this article.
The NYT devoted an article to a report put out by the British Bankers’ Association that claimed that new regulations were making the British industry less competitive internationally. This is presented as being a serious problem that should concern people.
In fact, people who believe in free trade should not care any more about the possibility that the U.K. will lose jobs in finance to foreign competition than if it loses jobs in textile manufacturing to foreign competition. The standard free trade argument — that all right-minded people are supposed to accept — is that the economy operates at full employment. This means that if bankers lose their jobs to international competition they will simply shift over to the sectors in which the U.K. has a comparative advantage. Only a knuckle-dragging Neanderthal protectionist would worry about losing jobs in textile manufacturing or banking to international competition.
It also would have been helpful if the NYT included the views of a critic of the banking industry in this article.
Read More Leer más Join the discussion Participa en la discusión
Josh Barro had a very nice discussion of the issues involved in simplifying the income tax code, as proposed by most of the Republican presidential candidates. He concludes with a discussion of what would probably the greatest simplification for most taxpayers: have the I.R.S. prepare returns that could be corrected by taxpayers if they thought there was an error.
This is now done in some European countries, such as Denmark and Spain. As Barro explains, it could also be done here, for people who file the standard deduction, which is most taxpayers. Barro points out that the number using the standard deduction could be increased by eliminating some deductions. This is true, but it would also be possible to increase the number of people taking the standard deduction by increasing its size.
Unfortunately, because of the power of H&R Block, few politicians are likely to propose this simplification that would be an enormous benefit to tens of millions of taxpayers. As Barro points out, none of the Republican simplifiers have it on their agenda.
Josh Barro had a very nice discussion of the issues involved in simplifying the income tax code, as proposed by most of the Republican presidential candidates. He concludes with a discussion of what would probably the greatest simplification for most taxpayers: have the I.R.S. prepare returns that could be corrected by taxpayers if they thought there was an error.
This is now done in some European countries, such as Denmark and Spain. As Barro explains, it could also be done here, for people who file the standard deduction, which is most taxpayers. Barro points out that the number using the standard deduction could be increased by eliminating some deductions. This is true, but it would also be possible to increase the number of people taking the standard deduction by increasing its size.
Unfortunately, because of the power of H&R Block, few politicians are likely to propose this simplification that would be an enormous benefit to tens of millions of taxpayers. As Barro points out, none of the Republican simplifiers have it on their agenda.
Read More Leer más Join the discussion Participa en la discusión
I mention this because some of the reporting on this topic might have misled some people. For example, the NYT recently told readers:
“All three candidates [Clinton, O’Malley, and Sanders] support a financial transaction tax to limit high-frequency trading.” [emphasis in original]
While Clinton has proposed a tax on high frequency trading, which is almost certainly unworkable, the other two candidates have actually proposed financial transactions taxes. The taxes they have proposed would raise between $600 billion and $2 trillion over the next decade. Virtually all of this money would come out of the pockets of the financial industry, since its primary impact would be to reduce trading volume. For the vast majority of investors, the savings from reduced trading would be equal or greater than the taxes paid on their trades.
The taxes proposed by Sanders and O’Malley would be a huge hit to Wall Street, bringing it back to the size, relative to the economy, that it was at two or three decades ago. Secretary Clinton has explicitly chosen not to go in this direction.
It is important for the public to recognize this difference. While the other two candidates are proposing measures that would be a major hit to the financial industry, Secretary Clinton is not. Voters should recognize this distinction in their positions; the reporting almost seems designed to hide it. [The Wall Street Journal committed a similar sin, although the error was not quite as egregious.]
I mention this because some of the reporting on this topic might have misled some people. For example, the NYT recently told readers:
“All three candidates [Clinton, O’Malley, and Sanders] support a financial transaction tax to limit high-frequency trading.” [emphasis in original]
While Clinton has proposed a tax on high frequency trading, which is almost certainly unworkable, the other two candidates have actually proposed financial transactions taxes. The taxes they have proposed would raise between $600 billion and $2 trillion over the next decade. Virtually all of this money would come out of the pockets of the financial industry, since its primary impact would be to reduce trading volume. For the vast majority of investors, the savings from reduced trading would be equal or greater than the taxes paid on their trades.
The taxes proposed by Sanders and O’Malley would be a huge hit to Wall Street, bringing it back to the size, relative to the economy, that it was at two or three decades ago. Secretary Clinton has explicitly chosen not to go in this direction.
It is important for the public to recognize this difference. While the other two candidates are proposing measures that would be a major hit to the financial industry, Secretary Clinton is not. Voters should recognize this distinction in their positions; the reporting almost seems designed to hide it. [The Wall Street Journal committed a similar sin, although the error was not quite as egregious.]
Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión