Economics

美国增长契约

Nov 5, 2014 Glenn Hubbard

纽约—美国将再次迎来分裂的政府，民主党保有白宫，共和党控制国会两院。但这并不一定意味着奥巴马总统任期的最后两年一定会在僵局和互相指责中度过。

选民渴望改变、害怕低增长持续，此乃共和党在本周国会中期选举中获胜的原因，也不可避免地激起了关于提高增长、就业和收入的政策选择的讨论。当然，美国过去的政府分裂经验或许让人对两党形成妥协的前景感到悲观，但是，墨西哥的三大政党最忌在市场导向的“墨西哥契约”（Pact for Mexico）上形成了一致，这表明，即使是极端对立的两党也可以克服猜疑，共同实施需要的改革。

有利于美国的潜在政策行动很多，包括贸易自由化、全面监管改革、移民和教育改革等。但在“美国契约”中，只有两项政策最有希望：联邦基础设施支出和公司税改革。实施这些改革将令每一方都受益，取得双赢效果。

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0 Comments on this paragraph, 11 Comments on this article

Lance Brofman Nov 16, 2014

In free-market capitalism, capital generates income for the owners of the capital which in turn is used to create additional capital. This is very good. Sometimes, it can be actually too good. As capital continues to accumulate, its owners find it more and more difficult to deploy it efficiently. The business sector generally must interact with the household sector by selling goods and services or lending to them. When capital accumulates too rapidly, the productive capacity of the business sector can outpace the ability of the household sector to absorb the increasing production.

The capitalists, or if you prefer, job creators use their increasing wealth and income to reinvest, thus increasing the productive capacity of the business they own. They also lend their accumulated wealth to other business as well as other entities after they have exhausted opportunities within business they own. As they seek to deploy ever more capital, excess factories, housing and shopping centers are built and more and more dubious loans are made. This is overinvestment. As one banker described the events leading up to 2008 – First the banks lent all they could to those who could pay them back and then they started to lend to those could not pay them back. As cash poured into banks in ever increasing amounts, caution was thrown to the wind. For a while consumers can use credit to buy more goods and services than their incomes can sustain. Ultimately, the overinvestment results in a financial crisis that causes unemployment, reductions in factory utilization and bankruptcies all of which reduce the value of investments.

If the economy was suffering from accumulated chronic underinvestment, shifting income from the non-rich to the rich would make sense. Underinvestment would mean there was a shortage of shopping centers, hotels, housing and factories were operating at 100% of capacity but still not able to produce as many cars and other goods as people needed. It might not seem fair, but the quickest way to build up capital is to take income away from the middle class who have a high propensity to consume and give to the rich who have a propensity to save (and invest). Except for periods in the 1950s and 1960s and possibly the 1990’s when tax rates on the rich just happened to be high enough to prevent overinvestment, the economy has generally suffered from periodic overinvestment cycles.

It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer.

Since 1969 there has been a tremendous shift in the tax burdens away from the rich on onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers. ..."
http://seekingalpha.com/article/1543642
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philip meguire Nov 10, 2014

Tax all value added by business. the wages and interest paid by state & local govt., and Social Security and unemployment benefits by 30%. Value added would include all proceeds of asset sales, net of the cost of asset purchases. Net from the flat tax liabilities all FICA and Medicare tax paid by employees, and by employers on behalf of their employees. Pay all legal residents of the USA $100/week. This "demogrant" would replace the current standard deduction, personal exemption and refundable tax credits. Reduce the minimum wage to $4.20/hour net of tax. This flat tax on all value added would be a consumption tax in disguise, thanks to the deductibility of asset purchases.
All tax returns would be 1 page long. The only individuals filing tax returns would be the self-employed.
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philip meguire Nov 10, 2014

Tax all value by business and Social Security and unemployment benefits by 30%. Value added includes all proceeds of asset sales, net of the cost of asset purchases. Subtract for these flat tax liabilities all FICA and Medicare tax paid by employees, and by employers on behalf of employees. Pay all legal residents of the USA $100/week. The self employed would be the only individuals filing a tax return.
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Andrew Zimin Nov 8, 2014

To live by a new rules every Monday is gentleman’s great rule.
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Nathan W Nov 7, 2014

It is not the case that ever lower taxes will contribute to higher revenues or even higher growth. Where are we at now?

Having first home buyers mortgage deductions when millions are saddled with ginormous student loans, for example, seems more than a little likely to contribute to higher consumer/household debts levels. Is that a good thing or a bad thing or both?
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Paul Daley Nov 7, 2014

How does this call for a consumption tax square with concerns about excess savings, secular stagnation and rising inequality. Higher public infrastructure spending makes sense, but it might be better funded with taxes on capital and capital income.
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E Walker Nov 6, 2014

The percentage of federal revenue raised by the corporate tax has fallen like a rock since the Reagan era. Most corporate stock is owned by the top 10%.
Corporate tax cutting is a fetish with conservatives of both parties, but all it does is line the pockets of the already rich at the expense of the ability of the government to operate at the global scale they demand. To make up for the shortfalls, the conservatives cut funds for science and infrastructure maintenance, repair and for new construction.
The idea that this crowd of wreckers will do anything positive is absurd.
- Curtis Carpenter Nov 7, 2014
  
  I'm afraid that the wreckers, at the end of the day, are the American voters. And my bet is that elected Republicans will (continue to) do as little as possible over the next two years, for fear of ruining their chances in 2016.
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Gary Tucker Nov 6, 2014

Even as a Democrat I completely agree with the proposal to replace our current Corporate Repatriation Tax with the Territorial Tax System. The sooner the better.

I also agree on lowering the overall corporate tax rate after eliminating many individual corporate loopholes.

What I would like to see, however, is a change to the Social Security payroll tax deduction paid by businesses. Currently workers pay 6.2% which is then matched by the employer at also 6.2 % up to a current cap of $117,000.

Both employees and employers pay an additional current 1.45% for Medicare coverage. This amount has no upper limit.

I would suggest that the employers, instead of just matching current employee amounts, should really just have a 6.2% levy on their entire payroll amount. This would be computed as a matching amount for all employees up to the set amount, currently $117,000. After that the 6.2% would just go into the Social Security general fund.

For those people who are self employed the same matching amount is figured to I believe $200.000 before cutting off. Here again I would say that the cut off should just be for 6.2% while the matching 6.2% would have no limit.

Thus if some corporation wishes to pay someone $50 million that is fine. That employee still owes $7,254 for their part while the company owes $3,100,000 to the Social Security fund.
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Truong Chung Nov 6, 2014

These kind of articles have no effect of convincing whatsoever. It's all painful political talking points. Why write it at all?
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Walter Gingery Nov 5, 2014

Hubbard was the godfather of the infamous, irresponsible Bush tax cuts. His proposals therefore deserve an extremely skeptical scrutiny.

Why public works now, after 6 years of rabid Republican resistance? Although veiled in compromise, what It clearly reveals is that the corporate agenda has been the real motor of the Republican Party all along.
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美国增长契约

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