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If you lower taxes to encourage overseas profits to come home then won't you drive what you already consider to be a strong dollar even higher. Tax policy is t

by dageshi 10y ago

If you lower taxes to encourage overseas profits to come home then won't you drive what you already consider to be a strong dollar even higher. Tax policy is typically used in the opposite way, if the dollar drops and the US government wants to shore it up, it will alter tax policy to encourage repatriation. The Bush administration did it in the early 2000's if I recall correctly to help strengthen the dollar.

drawkbox 10y ago
The policies to drive down the dollar are probably less likely to happen long-term (reserve currency, oil pricing, military purchasing, manufacturing offshore cheaper and to get around labor/environment/healthcare issues, Bush doing it also raised the cost of oil during war which benefits some people), lower taxes has wide support. If more money/investment is back in the US then it may actually help wage stagnation and get people raises. It will at least happen in the small/medium business arena which would also love to have healthcare removed from employment. To help small/medium business, lower taxes and remove benefits from employment. They will have more to pay employees.
valuearb 10y ago
Better to have a strong dollar with lots of capital and high productivity, than the inverse.
- dageshi 10y ago
  Forgive me but the dollar is already relatively strong, interest rates are the lowest they've been in centuries, there is no lack of capital floating around the US economy for those who can use it. I am questioning what the point of encouraging overseas profits to come back under such a situation? You drive the value of the dollar even higher which at a certain point forces companies to offshore faster.
  - valuearb 10y ago
    You are using the word "relative". I'd say the US has gradually become capital starved, our tax system is eating our seed corn. Our growth rates have been pathetic the last 40 years. More capital is always better. It lowers the bar for investment. It increases productivity, allowing us to get more of the best jobs. The strong dollar is a sign of success. And don't forget that reprinted profits aren't always revinested, lots of it is paid out to shareholders who consume some of them, creating demand.
    - tostitos1979 10y ago
      Your "seed corn" argument is not obvious to me, especially since we are talking about corporate taxes. Care to elaborate? I think one of the unintended effects of the loose monetary policy at home and abroad is the extreme rise in home prices in all major cities. I think most of this was not intended by the policy makers. But investor dollars follow safety and returns - real estate has been an amazing investment since 2008 (look at major cities like Toronto, Vancouver, SF, etc.). We're talking about doubling you capital in less than 10 years. This is not stopping ... I don't think it will until rates go much higher.
      - ericd 10y ago
        We could always raise property taxes and enact laws that encourage the treatment of homes as the necessity of life they are, rather than as investments to be bid up in the hopes that a greater fool will come.

by dageshi 10y ago

drawkbox 10y ago

The policies to drive down the dollar are probably less likely to happen long-term (reserve currency, oil pricing, military purchasing, manufacturing offshore cheaper and to get around labor/environment/healthcare issues, Bush doing it also raised the cost of oil during war which benefits some people), lower taxes has wide support. If more money/investment is back in the US then it may actually help wage stagnation and get people raises. It will at least happen in the small/medium business arena which would also love to have healthcare removed from employment. To help small/medium business, lower taxes and remove benefits from employment. They will have more to pay employees.

valuearb 10y ago

Better to have a strong dollar with lots of capital and high productivity, than the inverse.

dageshi 10y ago
Forgive me but the dollar is already relatively strong, interest rates are the lowest they've been in centuries, there is no lack of capital floating around the US economy for those who can use it. I am questioning what the point of encouraging overseas profits to come back under such a situation? You drive the value of the dollar even higher which at a certain point forces companies to offshore faster.
- valuearb 10y ago
  You are using the word "relative". I'd say the US has gradually become capital starved, our tax system is eating our seed corn. Our growth rates have been pathetic the last 40 years. More capital is always better. It lowers the bar for investment. It increases productivity, allowing us to get more of the best jobs. The strong dollar is a sign of success. And don't forget that reprinted profits aren't always revinested, lots of it is paid out to shareholders who consume some of them, creating demand.
  - tostitos1979 10y ago
    Your "seed corn" argument is not obvious to me, especially since we are talking about corporate taxes. Care to elaborate? I think one of the unintended effects of the loose monetary policy at home and abroad is the extreme rise in home prices in all major cities. I think most of this was not intended by the policy makers. But investor dollars follow safety and returns - real estate has been an amazing investment since 2008 (look at major cities like Toronto, Vancouver, SF, etc.). We're talking about doubling you capital in less than 10 years. This is not stopping ... I don't think it will until rates go much higher.
    - ericd 10y ago
      We could always raise property taxes and enact laws that encourage the treatment of homes as the necessity of life they are, rather than as investments to be bid up in the hopes that a greater fool will come.