Okay, they didn’t word it that way, but their recent “complaint” sounds to me like an unqualified endorsement. The complaint? Get this.
The GOP tax plan will cause companies to flee Europe and return to the US.
The plan will cause companies to move operations to the US, creating jobs for American workers, creating more demand for American labor. And in increase in demand invariably (this is really basic economics here) drives up the price meaning American workers, on balance, can be expected to be paid more. (Acme corporation can only get away with paying starvation wages so long as there isn’t a Bdnf corporation down the street that would love to have their skilled workers and is willing to pay a bit more to hire them away from Acme.)
More companies doing their business in the US rather than overseas is almost by definition growth in the US economy. And economic growth means a larger base for the taxation that remains which offsets the reduced rate.
In short, what Europe is complaining about is that the tax reform will do exactly what the GOP promised for it. The Democrats can scream about “the one percent” and “tax breaks for the rich” (tax break, as a percentage is actually mostly on the middle class, but they never let truth stop them, neither the Democrat politicians nor their cheering section in the major media). Meanwhile finance ministers in Europe fear not the claims of the Democrats, but that it will actually do what the GOP promised.
So what do they do? Do they look at their own tax policies and step up to compete? Nope. They expect the US to hobble itself back down to their level.
Well, I’ve got news for them. Donald Trump is President of the United States, not President of Europe. He was elected to pursue the interests of the United States of America, not those of Europe, China, Brazil, Kenya, or anywhere else. My Senators and Representatives were voted in to represent _my_ interests, not those of those other nations. I’m more than willing to have the US work with other countries in mutually beneficial ways. Mutually. That means that we benefit as well. If you (meaning the leaders of other countries) cannot deal with us on those terms, well, that’s your problem, not ours.
You know, there are a lot of people out there who keep trying to make the US more like Europe. And yet, we’re the world’s sole surviving superpower. We didn’t get that way by being like the rest of the world.
So instead of complaining when the US does something different, maybe you should consider being more like us? Or if we’re really making a mistake (as you often claim), then let us. You can always say “I told you so” later.
But I suspect the reason that folk in Europe keep “advising” us to do things differently is not because they think we are wrong, but because they fear we are right.
14 thoughts on “EU endorses GOP tax reform.”
Why am I picturing the Euros and Trump in an English Pub. . .
Trump: “Manners . . .maketh. . . Man. Do you know what that means ????”
The complaint also illustrates the zero-sum thinking that permeates the Left. In their worldview, every job that America gains is a job Europe loses.
In fact, as America gains jobs, the first effect is that the prices of American products will fall, simply because it’s become cheaper to make them in America. That lowers the price of those products in Europe, at the very least because the demand for imports into America has dropped, increasing the local supply.
As the prices of products drop, any alternative uses that had been priced out of consideration become profitable, and any jobs that involve those alternative uses now become worth doing. So people will do them. So the second effect is an increase in the size of the economic pie — in this case, the total number of jobs available.
As Thomas Sowell would put it, the European complaint is an example of failing to think beyond stage one.
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Heh, I was all ready to comment, “Been reading Sowell, haven’t you” when you went and preempted me in the last sentence.
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The EU is rapidly running out of other people’s money, and crashing and burning, so they have to do SOMETHING to stem the hemorrhage, after all.
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“They expect the US to hobble itself back down to their level” is incorrect, the effective tax burden in the US will be close to the EU average (20.9 per cent).
1) You’re absolutely right that the EU is thinking more companies will “move” to the US. Most likely, rather than move current jobs, they will be creating new, more interesting jobs in the US, while the older jobs stagnate. The EU is more likely to lose future possible job growth from those companies, with gradual reductions of the workforce, rather than very very expensive lay offs. My big company is doing some of that, and some of expanding to Slovakia, and other lower cost European countries outside of the expensive Western Europe places.
2) For middle class folk like ex-pat me, the mediocre quality almost free health care, and the ok, better than US average (?) free college for the kids are huge benefits. I wish there more vouchers & loans from the gov’t for such stuff, but having “free stuff” from the gov’t is certainly nice when one can get it.
3) I fully understand that there’s no “free lunch”, but when the gov’t pays for lunch (with Other People’s Money), I’m willing to go “all you can eat”. The fact that so many democracies are addicted to OPM is a flaw in democratic education, with too many educators supporting the socialist stupidities.
(second attempt to comment)
Good thing you put a question mark on that. When I went to college I noticed that we had more foreign students, including students from places with “free” college then we have folk from the US. And this wasn’t some high-prestige school like MIT or Princeton. Just little-old University of Akron (good polymer science department, but I in physics, not the polymer science department).
This isn’t a scientific survey by any means, but I think it’s an important “sniff test” on how great this “free” college is overseas. People are willing to spend money to come here to some little Podunk school in flyover country rather than take advantage of their “free” college back home.
On the one hand you have TANSTAAFL. On the other you have “You get what you pay for.”
I’m not sure how the US compares to the rest of the world. Around here I see quite a few foreign students, mostly from Asia. The biggest contributors seem to be from India, Pakistan, Bangladesh, Sri Lanka, China and South Korea. The various engineering programs and also the chemistry, bio-chemistry and polymers & coatings programs seem very popular among these students. Surprisingly, we have more students from Iran (20) than Canada (17) and Mexico (2). About an hour up the interstate UND has an excellent flight program that brings in loads of foreign students (once again seems very popular with those from Asia).
Not everyone who wants to go to college in the EU is ‘allowed to’. And oddly enough, if your parents went to college you’re more likely to be allowed to.
I got my first degree at a top 25 University in the US, and I was from a very poor family. I later got advanced degrees from a ‘directional’ (East, West, North, South, Central state U) that had a top department in my field. I got assigned to ‘assist’ a new grad student from Germany. He was appalled at the undergraduates. “You’ll let anyone in” was his complaint. My answer was, “You sort them out before allowing them to end. We let all of them in and let them sort themselves out. We even let the fail out and come back much later and finish.”
I now teach at a directional university. We let a lot in and a lot drop out. One of my favorite students pretty much came right out of being homeless on the streets, improved steadily steadily until graduating, tried my grad program, left that to go to law school, went to a second tier school, passed the state bar in the top 2% (beating a great many students from a top 10 school), became an assistant US Attorney, left that to work for a bank, and now is a top-level corporate lawyer probably making six figures. And he comes back every year to help and talk to students. That could not possibly happen in the EU with “free” college.
Many other of my most accomplished students have been in their late 20s or early 30s and returned after dropping out much earlier.
I tell all my students, of the many “rights” you have in the US, one of the most precious, least known, and most useful is the right to fail . . . and then try again. Or to try something new after failing. You don’t learn to ride a bike the first time you try. Why should anything else work differently?”
President and Congress Members elected to do what’s best for the United States of America. Too bad we can’t impress that message on certain members of the Supreme Court who think the highest form of jurisprudence is to base their decisions on constitutionality by comparing our laws to the laws and practices of Europe. If we had wanted to be Europe, we would have never kicked out the Brits in 1776, now would we?
Excellent post, thank you!
“Starvation wages?” Really?
Read it again. The line was part of an illustration of why the oft made claim that businesses, left to their own devices and not forced to do otherwise by government, will pay those “starvation wages” and specifically why an increase in demand for labor will lead to an increase in the price paid for labor. Businesses compete for workers every bit as much they do for customers.