A CPA raises his hand
Russ Coburn, a certified public accountant, adds this to our ongoing discussion of wealth, taxes, disparity in income levels and the current mess:
"I ran an accounting business in Maryland for 20 years; I subsequently sold it and operated as a Controller/CFO for several years until last year when I retired. I probably am someone who benefited from the policies you described.
Consider the following:
1. America has been shipping its jobs overseas for decades under the banner of free trade;
at the same time we do not have the same rule book for those shipping to us; America should be Insisting that our trade partners use the same rules they apply to us, or Vice-versa;
2. One impact of free trade is to ship jobs overseas and switch America from a nation that produces physical products to one that consumes others products. It is done under the banner of upgrading our work forces skills. Problem is that those jobs were out-sourced or immigration encouraged to stop the price mechanism from working here. As more was out-sourced or imported, our employees' pay scales were kept lower, thereby reducing the incentive to train new and better employees;
3. Since we do not produce what we consume, it will be very difficult in a bad recession to recover, because our people will not be able to obtain jobs upon which to start a true recovery.
4. Since our debt is so high, it will be very difficult for us to maintain our independence as a nation, and ultimately our pre-eminence in the world, if we have not already lost it.
5. I do not hear anyone talking about the underlying foundation upon which a recovery is to be built. Why isn't this discussed more by our political leaders?
The trickle-down theory does not work; nor has anyone produced proof that it does. Also, traditional economics suggests that incomes are taxed in good times to offset the deficit spending in bad times.
As a nation, we have spent more than we have in both and have been reluctant to ask anyone to pay for it, poor or rich. It seems to me that some of the spending such as defense should be weighted to the people that benefit more from it. Those with more to lose, should pay more. If so, then they would have a greater interest in whether to spend their treasure on it.







Comments
As much as I agree with author on all the points, I have to disagree with the statement that "immigration encouraged to stop the price mechanism from working here".
I came to this country as a "skilled immigrant worker". Before hiring me, the US company had to go through the lengthy recruiting process and my wages had to be at least above average for my profession in the area of recruitment. Not a single time I have been hired instead of an American citizen or because my rate was lower. I think that my compensation is completely adequate for the type of work I do. If someone wants to earn more, he/she will need to get better skills, not just be born in the US.
Unfortunately, I see many unqualified people in the IT industry, for example. Many of them jumped on board in the late 90s and had very little training and no real interest in their job. When they get fired, they cry that those immigrants are taking their jobs. Sorry, but you were fired only because you were lazy and stupid.
The wave of outsourcing was indirectly caused by insufficient quota for immigrant worker visas. Professionals, who come to work in the US, also spend their money here and we pay the same exact taxes as the US citizens, while we don't qualify for all the same benefits. (It's not a complaint, just a fact.) We support the US economy. Outsourcing supports only the foreign economies and corporate "fat cats".
Posted by: Jelena | October 23, 2008 2:20 PM
I love the comment, "Those with more to lose should pay more.' I'm sorry, but today, the top 5% of american taxpayers pay 60% of federal taxes. Obviously, the comment isn't an original thought.
Secondly, "the trickle down theory does not work" is an interesting conclusion. Under current economic theory, a dollar delivered to someone or some company who creates jobs or capital has a higher multiplicative effect in the economy. For example, it goes into property, plant or equipment to increase production, which employ more people, who earn more money, who spend in local stores, yada, yada, yada. A dollar given to the end user is used to buy food, or clothing. Good, but not as good economically as a business or employer. Now, that's not mean it's economics. During the Reagan era, this economic theory drove the federal tax receipts 100% in eight years, from 500 billion to one trillion dollars. How is that for proof.
Posted by: eddiebees | October 23, 2008 2:51 PM
ALL Americans, and for that matter the rest of the world, benefit from defense spending by the United States. Because someone has made more money and has more to lose, doesn't mean they should pay more than their fair share. In this country, it's promised that we all have equal opportunity, not equal results. Those that have attained greater "treasure" shouldn't be asked to "spread the wealth around". Why didn't he spread his wealth around when he sold his business? I'm sure the federal government would have greatly appreciated some extra revenue.
As for there being no proof that "trickle down" works...I say- where do you live? Look around, man This prosperous country is living proof that it works.
As for saving tax revenues in good times to offset deficits in bad times-that would work if the liberal tax-and-spenders didn't get their hands on it first and spend it like drunken sailors.
Posted by: CFP | October 23, 2008 3:34 PM
Russ Coburn agrees with Dan Rodricks. Russ Coburn's ideas receive Rodricks'' endorsement.
I disagree with Russ Coburn's conclusions and green eye-shaded recitation. I don't buy ink by the carload, but must piggy-back on this blog with my criticism.
Life ain't fair. Hair is fair, sometimes. Complexions can be fair. For real fair, look to the county and state fairgrounds.
Posted by: Bruce Robinson | October 25, 2008 11:31 AM