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 Richmans' Trade and Taxes Blog



Great op-ed by Ken Davis and Will Wilkin about the Korea-US trade treaty in Samford Advocate on Wednesday
Howard Richman, 3/21/2014

The op-ed (Conn. suffers losses under U.S.-Korea trade treaty) discusses the effects upon Connecticut jobs of the US.-Korea Free Trade Agreement. The authors are a former Assistant Secretary of Commerce who is also a former VP of IBM and the co-owner-operator of a solar company. They have founded an organization called "Balanced Trade Associates." That's an organization we'd like to join!

They take the Obama administration to task for misrepresenting the U.S.-Korea Free Trade Agreement and point out that the new agreement (Trans Pacific Partnership) being negotiated with 11 Asian countries is modeled upon that disaster. Here's how they begin:

Creating more American jobs should be Congress' priority, which is why we cannot afford any more-of-the-same trade deals.

The latest evidence: Two years after the Obama administration's major U.S.-Korea Free Trade Agreement (FTA) went into effect, new government data show U.S. monthly trade deficits with Korea have ballooned 47 percent relative to before the agreement, which represents the loss of at least 50,000 additional American jobs in the FTA's initial 24 months....

They point out that the agreement with Korea actually reduced U.S. exports to Korea:...

Read more...

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End the Corporate Income Tax; Integrate the Corporate and Personal Income Taxes
Raymond Richman, 3/12/2014

This paper is an attempt to decide the best way to tax the owners of corporations. First is to tax the corporation on the basis of its earned income and capital gains, which is the present treatment.  Dividends that shareholders receive are included in their personal income subject to the personal income tax. Second is to tax corporate income as partnership income is taxed, namely shareholders would include their share of the earnings of the corporation in their personal income subject to the personal income tax, which is the way we tax income from partnerships and other limited liability companies. Third is to tax corporations not on their earnings but on the market value of the outstanding shares of each corporation at the end of the year.  Each has its advantages and disadvantages but of the three alternatives, the present Corporate Income Tax is the worst.

The Corporate Income Tax, as it exists at present, violates most of the principles of taxation developed by economists over the past two centuries. Those principles are:

1. Equal treatment of equals. Persons of equal taxable capacity should bear the same burden of the tax. Taxing corporate income at the same rate, e.g., 25%, taxes the low income shareholder at the same high rate as the most wealthy.

2. Progressivity. The burden of a tax should fall with greater weight on persons with greater taxable capacity than on those with lesser taxable capacity. They should never be lest than proportional to income.

3. Economic effects. The negative economix effects should be minimized.   ...

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How to Reform and Change the Corporate Income Tax
Raymond Richman, 3/12/2014

This paper is an attempt to decide the best way to tax the owners of corporations. First is to tax the corporation on the basis of its earned income and capital gains, which is the present treatment.  Dividends that shareholders receive are included in their personal income subject to the personal income tax. Second is to tax corporate income as partnership income is taxed, namely shareholders would include their share of the earnings of the corporation in their personal income subject to the personal income tax, which is the way we tax income from partnerships and other limited liability companies. Third is to tax corporations not on their earnings but on the market value of the outstanding shares of each corporation at the end of the year.  Each has its advantages and disadvantages but of the three alternatives, the present Corporate Income Tax is the worst.

The Corporate Income Tax, as it exists at present, violates most of the principles of taxation developed by economists over the past two centuries. Those principles are:

1. Equal treatment of equals. Persons of equal taxable capacity should bear the same burden of the tax. Taxing corporate income at the same rate, e.g., 25%, taxes the low income shareholder at the same high rate as the most wealthy.

2. Progressivity. The burden of a tax should fall with greater weight on persons with greater taxable capacity than on those with lesser taxable capacity. They should never be lest than proportional to income.

3. Economic effects. The negative economix effects should be minimized.   ...

Read more...

Comments: 0


Donald Trump leads off with China's currency manipulation in his CPAC speech yesterday
Howard Richman, 3/7/2014

Here's his March 6 speech

Trump was referring to the recent action by the People's Bank of China which brought the yuan down from 16.38 cents on February 5 to 16.31 cents on March 1. You can see graphs of the yuan-dollar exchange rate at the following website:...

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Climategate: Revolt of the Physicists -- Revisited
Howard Richman, 3/4/2014

With Niagara Falls close to freezing, I thought it might be a good time to look back at my Nobember 30, 2009 commentary (Climategate: Revolt of the Physicists) on the Seeking Alpha website:

Climate science seemed settled in the 1990s. The only theory around was that the increase in CO2 and other greenhouse gases was causing the increase in world temperatures. But then physicists got involved. My guess is that the average physicist has an IQ of somewhere between 150 and 200. The progress that they have been making is incredible.

If you have a scientific background and you still believe in man-made global warming, get out a cup of coffee, a cup of tea, or a glass of brandy, whatever helps you think best, and watch the following lecture from the Cern, one of Europe's most highly respected centers for scientific research:...

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    Wikipedia:

  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]