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Politics : PRESIDENT GEORGE W. BUSH
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To: Bill who wrote (455479)9/9/2003 2:55:18 PM
From: Lizzie Tudor  Read Replies (2) of 769670
 
wrong Bill, your argument which is essentially a zero sum game in terms of taxes to the US if labor costs collapse due to increased corporate receipts... only works if corps and labor paid the same percentage today. They do not.

We would need to increase earnings 5-fold to compensate for the loss. Which won't happen, except in some trickle down economist's theoretical classroom.

If you had a situation that was more balanced, where TODAY corps paid 50% of the tax burden and wages 50%- and you offshored the majority of jobs, then the equation might work. But with wages at 3/4 or 4/5 of total taxes, the numbers don't add up.

But lets see how it pans out, shall we?

We both agree we are in something of a recovery mode now. By your logic, we should see a flatening and reduction in the deficit going forward if we net out the Iraq costs, is that what you think?

I believe that due to the labor drag, the deficit will continue to rise.

We will find out soon enough, right?

If the deficit gets ratcheted up to say 650 billion that means receipts are continuing to decline doesn't it. Only so much of the shortfall is Iraq.

BTW Cisco can certainly afford to keep their US workers but have chosen to offshore a substantial portion of them. Its not a question of "not being able to afford it".
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