Friday, September 08, 2006

Taxes and Comparative Advantage

Greg Mankiw broadly states that Bush kept his promise to see that no American pay more than one-third of his Income in Taxes. I would like to state I agree with Greg Mankiw in his view of the Democratic, Liberal pursuit of unionization and Minimum Wages, though it can be statistically proven that increases in Minimum Wage reviberate upwards throughout the Wage and Salary structure as the shelves of Merit Pay and Seniority seek their incentive position. Greg is also one of those Conservative economists who are blind to the difference between Salary and Wage Income and Total Income. Labor, whose Salary and Wage Income equals their Total Income might not notice the difference either, except possible in the amount of their Take-Home Pay. This Author regrets one can so rarely find the Percentage rates of taxation on Total Income.

Brad DeLong and Marginal Revolution enlighten on differing views on Devaluation of the Yuan.
Tyler's taxation of foreign funds investment was of excellent craft, dedicated to the alienation of every side of the debate, due to the loss of Comparative Advantage by All participants. American Consumer, American Government, Chinese Government, and Chinese labor would all suffer economic duress, and both American and Chinese growth would be stunted. I must adjudge this was Cowan's intent.

Tyler, though, did bring discussion of Comparative Advantage to the table, for which he should be applauded. Forms of Taxation should be utilized to alter Comparative Advantage, but in the direction of American Production for the American Consumer market. This could take the forms of high Port fees, high Ship fueling fees, a 2% Purchase fee on Imports placed on all Importers, Fuel fees on all foreign Goods using American transport media--Trucks, Railways, and Airlines, and simple Education and Welfare tax of 2% on all foreign Goods to maintain Social Services in this Country. Artificial Comparative Advantage creation may seem to some Conservatives to be as bad as Welfare transfers, but as long as American Government must foot the bill for all American Production failures in the form of Support payments, why not? lgl

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