“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Thursday, December 21, 2017

This is what America First looks like

MORE WINNING: Germans Fear Huge Loss of Jobs from U.S. Tax Cuts


German economists are warning that the tax overhaul bill that now awaits the signature of President Donald Trump will mean  “significant amounts of new investment and jobs will shift from Europe to the United States,” according to the German business news publication Handelsblatt.

The United States has had a much higher tax rate for businesses than Germany and most of Europe. Under the tax reform bill, the corporate rate in the U.S. will fall to 21 percent, lower than the estimated 28.2 percent effective rate in Germany and close to the European average of 20.9 percent.
Handelsblatt reports:
“The tax competition will have a new dimension,” said Christoph Spengel, chairman of the corporate tax department at the University of Mannheim. Mr. Spengel, who is also a research associate at the Center for European Economic Research, and a group of tax experts at the university have done a detailed comparison of the two countries’ tax systems and published a report under the heading, “Germany loses out in US tax reform.” 
Clemens Fuest, who heads the Ifo economic think tank, also said he believed German business would suffer. “Investments and jobs will migrate to the US,” he said.
The potential capital influx could be as high as $42.29 billion, or 39 billion euros, according to Handlesblatt.
Gavin Ekins, a research economist at the Tax Foundation in Washington, argued that it is not only the tax rate that will make the US more attractive. He told Handelsblatt Global that in figuring out their “service cost,” a metric that measures the cost of capital, companies also have to consider local labor costs, regulatory burdens, and things like energy prices and the cost of land.The US has the advantage in almost every category, he noted, but until now firms were deterred by the high corporate tax. 
“Now you get a windfall for having capital in the US, so that causes investors to invest,” Mr. Ekins says. The change in the capital investment rules gives US firms “a tremendous advantage,” he said. “It’s a pro-capital formation tax bill and this is why other countries are so wary about what the investment landscape will look like.” 
Using direct investment figures from the period 2008-2012, the German specialists calculated that the value of German foreign direct investment in the US could rise by €39 billion with the tax reform. It said US direct investment in Germany would also rise, but by a much smaller amount: €6.3 billion.
Handlesblatt’s reporting highlights the shallowness of much of the U.S. media’s coverage of the tax bill, which has focused on claims that U.S. corporations are likely to use much of the windfall from tax cuts to pay dividends and buy back shares.


  1. It's the Trump Way or the Byway.

  2. Some of the biggest companies in the Australian sharemarket will receive a financial windfall from US corporate tax cuts due to be signed into law by Donald Trump next month. In the most sweeping …

  3. Quirk is hiding under his bed so he doesn't hear about all the winning.

    1. .

      Bob, how friggin stupid are you?

      Read the headline, MORE WINNING: Germans Fear Huge Loss of Jobs from U.S. Tax Cuts.


      One group of German educators.

      All the winning? What winning? You've seen none. I've seen none.

      You accept this shit with zero evidence to back up that they are right. Come back in a year or two and we can talk.

      It's the same with the $250 billion trade deal with China Trump bragged about. It may have been an agreement to pursue that much trade but there were no contracts signed. There were no guarantees. There was no talk about what the US firms will have to give up in order to get that process finalized.

      I've been through those negotiations. The Chinese don't gift anyone anything. They will be demanding their pound of flesh at some point. Trump says he will stop the technology transfer to the Chinese. Good luck. That's the first thing the Chinese go after in these deals.

      Stick to you faux farming and your cheerleading.


  4. Quirk is hiding under his bed so he doesn't hear about all the winning.