Why shouldn't we tax (or cost-adjust) imports from China?

$250 billion of our trade deficit comes from China. Unless we want to continue to ramp up unemployment, hunger, lack of medical care, and homelessness we need to bring jobs to America. But how do we do that without dropping pay to American workers to $2.00/hour?

The new green tech industry was supposed to be the great new hope for American jobs. But instead, companies are using up their tax incentives then moving to China anyways. At this rate, there won’t be enough people employed to sustain most services in the country unless we totally revamp our society to be full-on socialist. Obviously 50% of America does not want that, so why aren’t we cost-adjusting goods from any country that don’t play by the rules? For example:

  1. China lacks the same environmental regulations we do making goods cheaper to produce there.

  2. China doesn’t offer the same quality of life for it’s manufacturing populace as the rest of the Western World making it cheaper to produce good there.

  3. Chinese government directly subsidizes their own industries.

  4. Chinese government subsidizes gas and electricity to make production in China cheaper.

  5. Chinese people are taxed more than Americans giving the Chinese government much more sustainable revenue than the US which in turn goes back to subsidizing manufacturing and tech in China.

  6. As it is, 47% of Americans have no savings for retirement because after working, raising a family, and paying bills there is nothing left. Ironically the average Chinese person is able to save 25-50% of their meager income. http://money.cnn.com/2010/03/09/pf/retirement_confidence/

Americans will never be able to compete with this, and as India expands, they will do the same. Vietnam is probably the next big sector for cheap labor. The myth of the “service industry” taking the place of manufacturing is just that… a myth. Information Technology jobs which is the biggest applicable service industry are being moved overseas. Programming was often called “untouchable” due to the need for English speaking requirements. But we all know how that is working out.

The only end-product of this cycle is there will be small % of extremely wealthy Americans, and small % of Americans involved in multinational business and trade, and the rest of the American populace taking a massive quality of living plunge. Working long hours for little pay, few (or zero) benefits, and no hope for upward mobility. As was mentioned before, the American Dream is more myth than reality and if you want true prospects of upward mobility you’re better of living in Germany.

The average 30-year old male makes less money than the previous generation, and as you factor in growing unemployment that figure is getting worse. http://nationaljournal.com/njmagazine/nj_20091017_8120.php

The only answer I see, is we’re still giving away $250 billion dollars a year to China which they turn around and lend to us. This increases our loan payouts and decreases what we can spend on our own country. Why don’t we break the cycle now while we still have a chance?

But Jeff, if we have free trade than the global economy will be more efficient. If that means that a lot of other nations get richer while the average American is screwed, that’s just the cost of efficiency.

So you’re suggesting that the way to help our economy is to make Chinese imported goods more expensive to the folks buying them?

Not sure that really works. If your goal is to close the trade deficit, sure, but raising prices doesn’t help the economy.

The way to save our economy is to throw away all of our competitive advantages and try to force people into no-pay jobs making toys? That’s news to me.

I’m not talking about toys, nor did I reference them. I’m talking about everything else.

A Match Made In Heaven Breaks Up (solar panel manufacturing)

On paper, it was a match made in heaven. Evergreen moved in and began to reap millions of dollars in fringe benefits, from tax breaks to free rent and cash grants. Evergreen grew from 100 to 800 employees. This month, the state woke up to what was basically a note on the kitchen table saying Evergreen was leaving.
“I was in shock for about a week,” says Eric Grieman who works as a wafer fabricator at the company. “I have no clue what I’m going to do next.”
“There was shock at every level,” echoes Jack Burroughs, an environmental health and safety engineer, who got the news just one week after starting work at Evergreen. “I left a very good job in order to come here. I thought this was a more long-term career opportunity.”

The trade deficit with China is not just a flat $250 billion. It’s more like $500 billion per year when you consider what we borrow from them to make up this disparity. And yes, I’d be more than happy to pay more for toys, electronics, and everything we use if it means economic stabililty around us and a healthier China. If people here actually had jobs, they too could afford an increase in the cost of goods.

The pollution in the industrial areas of China is staggering and they don’t want to fix it because the economic incentive of “no EPA” is massive. The idea here is not to cut EPA protection of the planet, but to increase it so our children don’t grow up in a toxic cesspool. The cost to human and animal life in the form of cancer and pulmonary disease is massive.

Something like this could be part of a US carbon tax. Then tax applies against entering goods which are not comparably taxed. So if the Chinese aren’t reducing emissions, their products will be more expensive and it will work as a sort of VAT.

Idea cribbed from this post on another forum: http://arstechnica.com/civis/viewtopic.php?p=224218#p224218

Under GATT, we have a right to levy this tax against entering goods which are not comparably taxed. (This is like VATs.) And now it is really simple: “China implements no controls? The goods the US imports will face offsetting carbon taxes.” And if you examine the international law and theories on same these offsetting tax penalties can recover the advantage the originating country gets from internal economies of scale which are not taxed too.

  1. As it is, 47% of Americans have no savings for retirement because after working, raising a family, and paying bills there is nothing left. Ironically the average Chinese person is able to save 25-50% of their meager income. http://money.cnn.com/2010/03/09/pf/r...nt_confidence/

so american who doesn’t save is blamed on chinese people who save? should you be putting money in the bank when you are working?

I facepalm when I read this part, most of my coworkers doesn’t put money in their 401k when the company offer 20% bonus to the amount you put into your 401k. most people out of college have no idea how to save money or manage money, it’s really the fault of american culture.

I was somewhat shocked listening to NPR a few weeks ago, when someone was applauding how US average saving is 4 cents per dollar…I’m like WTF!!!

Reality check… A huge segment of the population (growing by the minute) do not work for a company that offers incentived 401k’s. More and more companies no longer offer any retirement investment options. Furthermore, most people live paycheck to paycheck because they’re income doesn’t cover the cost of living - so even if they had 401’k options they couldn’t invest in it. That would mean turning off the electricity. It is silly when people don’t invest in the 20% bonus 401k options. But that option doens’t do you much good if you’re making $10/hr and don’t have anything left over.

60 years ago the average father could afford to raise a 4-person family on his salary alone. Enough so he could save for retirement and his wife could stay at home. 30 years later Mom’s had to go to work to help raise the family… 30 years later we’re seeing more people who can’t make it even with 2 parents trying to work. Much of this is due to the unrestricted transition of wealth to other countries. The problem here is that wealth is not coming from the people making those decisions (wealthy stockholders and corporate boards). The top 1% make way more than they used to by a factor of 400. The transfer of wealth is coming from the Lower and Middle Class and our future kids.

Perhaps you should do some research on the Smoot-Hawley Tariff Act, and its repercussions on the US and world economy of the 1930s.

Reality check? Standard of living in the United States is up across the board over 60 years ago, 30 years ago, and basically any other time you care to choose, except perhaps right before the recession hit.

jpinard - I’d encourage you to buy a used Econ 101 text book off of Amazon and read it. Not really trying to be snarky, but I think it’d be enlightening to you, and I think/hope you have an open enough mind to take some good stuff away from it.

We also have far more dual income households don’t we? I think most indicators look at things like the price of manufactured goods, home size, etc (at least when people try to argue standard of living increases). But what about the cost of education, number of people receiving healthcare (or government subsidies), the state of savings, debt, and retirement?

I been living in West LA since I was 11, I worked the $9/hr job when I was young during college while living in Santa Monica(I had 2 roommates), now I’m making a lot more than before but I’m still sharing a 2 bedroom with a roommate.

My average saving rate never changed much comparing back then and now, I had saving before and I’m still saving now, around 30-40%.

But that option doens’t do you much good if you’re making $10/hr and don’t have anything left over.

are you telling me that 47% of American makes minimum wage their entire life that’s why they couldn’t save??

Obviously that’s false, but you’re also not raising a family (to my knowledge) with your roommate. It’s much easier to save 30-40% of your income as a single person.

Anyway, I agree, we’ve lost the ability to save in the US. Unfortunately, our economy is propped up by a zero percent savings rate, debt, and dual income homes on top of it. If we all dropped to 20% saving’s rate, it’d be felt across the board, and we’d see even higher unemployment.

Addressing the saving’s rate is important in the medium to long run, but immediately, it’s a bit of a catch 22 for the economy.

it’s probably much easier to save with dual incoming, since you basically double your income which most likely allow you purchase an home/house, interest you pay on your house mortgage is tax deductible as well as the property tax.

Also single with 0 dependent like me pays highest comparable tax bracket, which sucks.

Well there’s a bunch of a assumptions there (not all dual income homes have people making twice as much money for instance, not all families have dual incomes, etc), but I’m not sure what you are arguing.

It is easier to save as a single person without a family. There’s a lot of considerations and expenses that are simply missing. There’s a lot of sacrifices you can make personally, that you wouldn’t necessarily put on your kids (or at least other people don’t).

For instance, If both parents are working, there’s the cost of daycare, if both parents aren’t working… then that second income is gone. Generally, they aren’t going to double up families to be “roommates.” Both incomes (assuming it’s a two income family) are going to put that family in a higher tax bracket. They are paying expenses for their kids (clothes every year, tutoring, health expenses and checkups, etc, etc). And those tax breaks aren’t as a big as you think.

But you seem to be thinking I’m arguing it’s impossible for households to save more. I don’t think that, but rather that shift if it happens dramatically (at the levels you save) will leave people like you out of a job as demand suddenly shrinks across the economy.

you assuming dual income actually have kids though, kid is probably the biggest cost in a family, but if the family consist of just 2 incomes minus the kid, easily double their individual income.

the biggest tax bracket, if you are filing single, you pay 15% bracket if you making 35k or less, but 25%(10% increase if you making more), but if you are filing together, the cap at 15% is 70k, that’s literally double of single filing income.

That’s not a family, that’s a couple. When I say, “raising a family” that includes kids. The phrase is nonsense if I just mean having a spouse.

So yes, a dual income household where the income doubles and they have no other increased expenses, the couple can probably save more. That’s not what I was arguing.

I guess I can agree about the how family is used. I always assume family can be use for both couple with kid or without kid.

That’s fine, but I don’t think a solution to a society not saving enough is to stop having kids. That seems kind of absurd. Yes, individually, that may be a solution and certainly with lower birth rates people are making that choice… but as a broad economic solution at a societal level… choosing not to have children is literally not sustainable.