Germany's new boom: making money by making stuff

[Phokus]

I don't understand how VAT should have anything to do with it. Germany has a VAT of 19% that is added to all products, domestic or foreign. How does that favor domestic products?

Along with that, Germany's other taxes are so high that it makes up 40% of their GDP... in comparison to the US, which makes up 28% of GDP.

Their arguments hold no water. The fact that Germany has relatively higher taxes should mean business should be leaving in DROVES from Germany to other countries with a more 'favorable' business climate, based on Conservative arguments. If Tea Party idiots think US taxes are too high, they'd think Germany is the USSR or something.

 

[sandorski]

Along with that, Germany's other taxes are so high that it makes up 40% of their GDP... in comparison to the US, which makes up 28% of GDP.

Their arguments hold no water. The fact that Germany has relatively higher taxes should mean business should be leaving in DROVES from Germany to other countries with a more 'favorable' business climate, based on Conservative arguments. If Tea Party idiots think US taxes are too high, they'd think Germany is the USSR or something.

The problem is largely that the term "Business" is BS. At least in the way it's being used. There's a tendency to use the hypothetical Economic ideal of Business from a particular Economic model/philosophical sense, but that's not what exists in the real world. This hypothetical "Business" may exist in the US, but it is not a universal definition of what a Business is.

The difference seems to be more related to the Morals/Responsibility differences between the 2 Nations peoples. German Business has a stronger sense of responsibility for its' fellow German Citizen and seeks to fulfill that Responsibility. There are limits to that, but obviously their limits are higher than US Business limits.

 

[SparkyJJO]

At this point, Reaganomic idiots are too embarrassed to use their famous bullshit about how supply side is going to trickle down to everyone else. Now they just scream socialism without much argument about the benefits to the middle class anymore. Their policies have been a complete failure.

Well when the government regulates everything to death it doesn't surprise me things move overseas. I'm not saying we need no regulation (because we all know what happens if you don't have anything in place) but it's beyond reasonable, it's insane.

That is the Republican designed plan.

They also want wages to roll back to $2 hr for the manufacturing they do bring back here to compete with India and China.

I know you've been told this by numerous people, but I think it needs said again - you're delusional.

 

[WhipperSnapper]

That may all be true, but it is still true that those with a college degree on average make more and have unemployment rates 1/2 of what the general population does.

The question is, is that because of the college education or is it that people who obtain college educations have certain "virtues of character" that would help them be more successful than mere high school graduates even if they had only graduated from high school themselves? Is it causation or correlation?

I think it's a mixture of both.

Right now the Internet is chock full of anecdotal stories about people who have college degrees and even advanced and professional degrees who are unemployed or underemployed-and-involuntarily-out-of-field. The cost of higher education has also skyrocketed, dramatically decreasing people's return-on-investment.

These two articles, authored or co-authored by a pro-free market economist who is probably a conservative, may be of interest to you:

Why Did 17 Million People Go to College?

From Wal-Mart to Wall Street: Why College Graduates Are Not Getting Good Jobs

Here's a great blog post about the negative effect of globalism on the U.S. written by a guy who seems like a conservative of some sort:

Global Economy? 23 Facts Which Prove That Globalism Is Pushing the Standard of Living of the Middle Class Down to Third World Levels

 

[Phokus]

The problem is largely that the term "Business" is BS. At least in the way it's being used. There's a tendency to use the hypothetical Economic ideal of Business from a particular Economic model/philosophical sense, but that's not what exists in the real world. This hypothetical "Business" may exist in the US, but it is not a universal definition of what a Business is.

The difference seems to be more related to the Morals/Responsibility differences between the 2 Nations peoples. German Business has a stronger sense of responsibility for its' fellow German Citizen and seeks to fulfill that Responsibility. There are limits to that, but obviously their limits are higher than US Business limits.

That only works up to a point.

Market Forces > Moral Responsibility

Assume that Germany is a completely free market Liberatrian utopia with little or not taxes/regulation/completely free trade. Say there's a market for widgets in Germany and there's 4 main producers. Those 4 producers all decide to treat their employees well out of patriotic duty or whatever it is you want to call it, pay them an efficiency wage (a wage that's actually higher than an equilibrium wage). I, as an entrepreneur, see that they're 'inefficient' because they employ too many Germans at too high a cost. I create a competing firm that uses cheaper labor (hell at the amount that German manufacturing workers are making, i could probably save money moving manufacturing even to the US or another European country) and undercut everyone else, thus making my product more attractive to consumers... forcing the other competitors to also employ the same tactics.

Obviously, Germany has some regulations/taxes/whatever that prevents this and allows German businesses to be more generous to their employees.

Well when the government regulates everything to death it doesn't surprise me things move overseas. I'm not saying we need no regulation (because we all know what happens if you don't have anything in place) but it's beyond reasonable, it's insane.

Yet a country like China has subsidies for the companies, manipulates their currency, has import duties, and externalizes the cost of doing business by allowing free pollution. I didn't even mention rock bottom wages. You could get rid of all regulations and you still couldn't compete unless you turned America into some dystopian nightmare.

 

[Infohawk]

Dude, stop putting words in my mouth. I was putting your excerpt into perspective, Germany's taxes are still some of the highest in the world, WAY higher than the US. Just think about the implications of that: If high taxes are supposed to cause capital to flee or cause slow/negative growth, why hasn't it in Germany? Why do conservatives here bitch about taxes when Germany seems to be doing much better than we are with higher taxes? Why aren't *WE* doing better when we have a freer market AND have lower taxes than Germany?

Germany:

1) MUCH MUCH higher manufacturing wages than the US

2) MUCH higher taxes

3) More regulations giving power to the workers, less power to capital/owners of capital.

Your argument makes no sense whatsoever. There's every reason for Germany's manufacturing base to crumble based on conservative America's arguments.



http://www.prospect.org/cs/articles?article=business_is_booming

Has anyone ever told you are a sloppy thinker? You're all over the place. You're just making nonsensical arguments against hypothetical conservative arguments.

Why don't you focus on the article. It suggests that conservative reforms in Germany are paying off. If you dispute that, then why?

 

[amyklai]

. It suggests that conservative reforms in Germany are paying off.

Those "conservative reforms" (aka Agenda 2010) were made under Schröder by the Social Democrats and the Greens...

 

[Phokus]

Has anyone ever told you are a sloppy thinker? You're all over the place. You're just making nonsensical arguments against hypothetical conservative arguments.

Why don't you focus on the article. It suggests that conservative reforms in Germany are paying off. If you dispute that, then why?

Are you shitting me? For one thing, you misrepresent the article, that was one of THREE possible explanations with no real definitive conclusion drawn, yet you only quoted one of them and it's an opinion piece. The next thing is, you still won't address the fact that Germany, despite it's tax cuts, is still one of the most heavily taxed countries in the WORLD. They make the US look like some libertarian utopia by the same comparison. Is it the fact that they brought their taxes down from extremely high to very high the fact that they are experiencing a miracle? WHEN THEIR RELATIVE TAXATION TO EVERYONE ELSE IS STILL VERY HIGH THAT MAKES NO SENSE. Again, taxes account for a whopping 40% of GDP in Germany, while only 28% in the US. Using your argument, maybe we should raise taxes to 90% for a year, then cut it down to 40% the next year, and we'll experience a miracle like Germany (even though we'd still be taxed higher at 40% than what we are now?). You can't claim Germany's success is due to low taxes (they're high) and you can't even claim that their taxes are RELATIVELY low either (they're much higher than the US and higher than most countries).


-------------------------------------------------------------------

Yet their taxes are STILL higher than ours are and they have a very high VAT tax to boot:

http://en.wikipedia.org/wiki/File:Income_Tax_Germany_2010.png

The rate of value-added tax rate generally in force in Germany is 19%. A reduced tax rate of 7% applies e.g. on sales of certain foods, books and magazines, flowers and transports.

And they have something called a 'trade tax' which i've never even heard of here:

Entrepreneurs engaging in business operations are subject to trade tax as well as income tax/corporation tax. In contrast to the latter, trade tax is charged by the local authorities, who are entitled to the entire amount. The rate levied is fixed by each local authority separately within the range of rates prescribed by the central government. As from 1 January 2008, the rate averages 14% of profits subject to trade tax.

Their taxes are still really frigging high compared to ours AND they pay a HELLUVA lot more for their manufacturing workers than we do.

In fact, taxes are 40% of their GDP, while only 28% of GDP in America:

http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

Now explain to me why, even though many/most of our corporations dodge the responsibility of paying taxes via loopholes and we've cut the personal income tax to ludicrously low levels that our manufacturing jobs haven't come back since we're doing 'much' better taxwise?

 

[1prophet]

http://mjperry.blogspot.com/2011/01/we-should-take-more-pride-in-our-global.html

Yup, we dont make anything.

http://yhoo.it/egt0pt


So who is telling the truth?

 

[Infohawk]

Are you shitting me? For one thing, you misrepresent the article, that was one of THREE possible explanations with no real definitive conclusion drawn, yet you only quoted one of them and it's an opinion piece. The next thing is, you still won't address the fact that Germany, despite it's tax cuts, is still one of the most heavily taxed countries in the WORLD. They make the US look like some libertarian utopia by the same comparison. Is it the fact that they brought their taxes down from extremely high to very high the fact that they are experiencing a miracle? WHEN THEIR RELATIVE TAXATION TO EVERYONE ELSE IS STILL VERY HIGH THAT MAKES NO SENSE. Again, taxes account for a whopping 40% of GDP in Germany, while only 28% in the US. Using your argument, maybe we should raise taxes to 90% for a year, then cut it down to 40% the next year, and we'll experience a miracle like Germany (even though we'd still be taxed higher at 40% than what we are now?). You can't claim Germany's success is due to low taxes (they're high) and you can't even claim that their taxes are RELATIVELY low either (they're much higher than the US and higher than most countries).



-------------------------------------------------------------------

Yet their taxes are STILL higher than ours are and they have a very high VAT tax to boot:

http://en.wikipedia.org/wiki/File:Income_Tax_Germany_2010.png



And they have something called a 'trade tax' which i've never even heard of here:



Their taxes are still really frigging high compared to ours AND they pay a HELLUVA lot more for their manufacturing workers than we do.

In fact, taxes are 40% of their GDP, while only 28% of GDP in America:

http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

Now explain to me why, even though many/most of our corporations dodge the responsibility of paying taxes via loopholes and we've cut the personal income tax to ludicrously low levels that our manufacturing jobs haven't come back since we're doing 'much' better taxwise?

You're acting like the only two variables we're looking at is tax rate and manufacturing jobs. There are tons of other variables. It could be that if Germany had even lower taxes its manufacturing jobs could increase those jobs even more. And we could drop our tax rate to nothing and it still might be too expensive for employers compared to China.

I'm not really interested in defending weird straw mans you have thought up. It sounds like you think there is some official conservative position that I agree with and want me to defend it. All I'm saying is that there is nothing in this article to suggest that there is some sort of vindication of left-wing economic policies.

I don't buy into the "Europe is economically left-wing and America is economically right-wing" that you and other hardcore partisans on both sides buy into. It's much more complicated.

 

[ShawnD1]

Those "conservative reforms" (aka Agenda 2010) were made under Schröder by the Social Democrats and the Greens...

Sometimes liberals do conservative things. Bill Clinton is a democrat but he's the one responsible for sending jobs to China, which is more of a right wing libertarian idea.


Also, pay between countries cannot be directly compared. Different prices of goods, different cost of living, different things provided by the government. Example: healthcare in the US might be considered part of your wage, but it's not part of your wage in France because French people pay for healthcare in a different way. Also works with things like pensions and education. In the US you build your own 401k and the money used to build that is considered part of your wage; people in Sweden have hardcore government pensions and it's generally not considered part of their wage.

 

[Inspector Jihad]

http://yhoo.it/egt0pt


So who is telling the truth?

interesting. i wonder where the data for that original chart is from. also, might the recent exchange rates have something to do with it?

 

[charrison]

http://yhoo.it/egt0pt


So who is telling the truth?

They both are. That graph is slightly more recent.

 

[Jhhnn]

This thread is a circle jerk of planned-economy supporters acting like this somehow vindicates their outdated preferences. Not sure why they feel vindicated when they fight tooth and nail against the type of measures Schroder implemented over there.

The author did a good job of fluffing the Scroder initiative, I'll give him that. If that's a dominant factor, then why haven't the implementation of such over the last 30 years in this country had the same effect?

Obviously, it's because they're not a dominant factor at all. Germany has developed a partnership between workers and capitalists that was discarded by American capitalists 30 years ago with the election of Reagan, sacrificed on the altar of greed, enabled by massive propaganda campaigns and deficit spending.

The US GINI index is the extreme highest of any first world nation as a consequence, exceeded in general only by the worst shitholes on the planet.

Now that the economy is in a tailspin Righties are calling for austerity and sacrifice, but obviously not for the wealthiest among us. Hell, they just held extended unemployment benefits in the worst financial downturn since the 1930's hostage to continued tax cuts for the wealthiest, and have set out to create even more unemployment with reduced govt spending.

They gotcher trickledown economics swingin' in their boxers, and Righties are pushin' each other out of the way to get some of it...

 

[Infohawk]

Nice partisan rant. Phokus already had that covered though. If you had kept reading you could see my response to the ranting.

 

[Phokus]

You're acting like the only two variables we're looking at is tax rate and manufacturing jobs. There are tons of other variables. It could be that if Germany had even lower taxes its manufacturing jobs could increase those jobs even more. And we could drop our tax rate to nothing and it still might be too expensive for employers compared to China.

I'm not really interested in defending weird straw mans you have thought up. It sounds like you think there is some official conservative position that I agree with and want me to defend it. All I'm saying is that there is nothing in this article to suggest that there is some sort of vindication of left-wing economic policies.

I don't buy into the "Europe is economically left-wing and America is economically right-wing" that you and other hardcore partisans on both sides buy into. It's much more complicated.

You're obfuscating/dodging the question. YOU (dishonestly i might add) presented a portion of the article that somehow should tax cuts jump started Germany's miracle, yet the article never mentioned where the taxes were before and it never mentioned the CURRENT taxes in Germany which are quite high and it offered a couple other suggestions without any definitive answer.

Answer the following questions:

1) Do you believe that the US taxes are high?

2) Do you believe Germany's taxes are higher than the US? (literally no way you could think of this in subjective terms)

3) Do you believe high taxes hurt the competitiveness of a country when it comes to trade, especially if they are higher than who you're trading with?

4) Can you draw the logical conclusion that higher taxes (coupled with Germany's GROSSLY higher manufacturing pay than America's) would necessitate pressure to offshore/outsource like the US has been doing and slower growth... based on conservative (and perhaps even mainstream economic) arguments?

This only works if you a) Answer honestly and b) Stop dodging the question

Remember, YOU are the one who trumpeted Gerhart's tax cut reforms as the reason for Germany's miracle


edit:

It could be that if Germany had even lower taxes its manufacturing jobs could increase those jobs even more. And we could drop our tax rate to nothing and it still might be too expensive for employers compared to China.

This makes no fucking sense... again, German manufacturer pay is higher than the US... MUCH higher... and their taxes are much higher.

Germany is anything but a low-wage country: The average hourly compensation -- wages plus benefits -- of German manufacturing workers is $48, well above the $32 hourly average for their American counterparts. Yet Germany is an export giant while the U.S. is the colossus of imports.

Again, Germany's taxes = 40% of GDP while America's taxes = 28% of GDP

Top marginal tax rate of 40% and a VAT tax of 19%, etc. etc.

Stop obfuscating/dodging, start paying to actual FACTS.

 

[Jhhnn]

Nice partisan rant. Phokus already had that covered though. If you had kept reading you could see my response to the ranting.

You didn't "respond" to anything, merely attempted denial and obfuscation.

 

[Phokus]

You didn't "respond" to anything, merely attempted denial and obfuscation.

Seriously, he can't even admit Germany's taxes are much higher than America's (and one of the highest in the world) because it would pretty much wipe out his credibility on the argument he's making. He should fucking answer and stop trying to dodge the question.

 

[Infohawk]

I wasn't being persuaded by those drawings, but the art was fucking awesome and they're all over fire stations/police stations in Wisconsin.

YOU were implying that Germany cutting taxes was somehow responsible for their miracle, when it made no sense when their RELATIVE taxes were still MUCH higher than most everyone else's. Based on conservative arguments, capital should have fled because the 'high taxes' made them non-competitive (not to mention their much higher manufacturing wages). You didn't want to admit the fact that you just took the tax cuts at face value without even knowing what type of taxes they were paying before and after and you ran away like a little bitch because you KNEW you'd have to sound like a complete flipping moron to justify your conclusion. Not to mention that you were dishonest about how the article you were citing was portraying that argument.

You really are a dense moron. I'm not arguing that Germany has lower taxes. You are too stupid to realize that this issue has more than two variables.

Your argument boils down to:
"Germany has had more manufacturing jobs and higher tax rates than the USA. Therefore it can't possibly be lowering tax rates increases manufacturing jobs." What you're missing is that there are other factors that go into the rate of manufacturing jobs in both countries. It's not very fruitful to compare the two countries without compensating for those other variables. (Think regression analysis doofus.) What is more interesting is comparing job numbers in Germany pre and post the Schroder reforms, like the author did.

I gave up on you in this thread because you were arguing against strawman arguments. I'm not here to defend some generic conservative principles you have in your tiny brain.

 

[Phokus]

You really are a dense moron. I'm not arguing that Germany has lower taxes. You are too stupid to realize that this issue has more than two variables.

Your argument boils down to:
"Germany has had more manufacturing jobs and higher tax rates than the USA. Therefore it can't possibly be lowering tax rates increases manufacturing jobs." What you're missing is that there are other factors that go into the rate of manufacturing jobs in both countries. It's not very fruitful to compare the two countries without compensating for those other variables. (Think regression analysis doofus.) What is more interesting is comparing job numbers in Germany pre and post the Schroder reforms, like the author did.

I gave up on you in this thread because you were arguing against strawman arguments. I'm not here to defend some generic conservative principles you have in your tiny brain.

I didn't say you were arguing that Germany has lower taxes. I'm saying your argument that Germany's tax cuts has anything to do with their miracle because even with relatively lower taxes INTERNALLY, they have MUCH higher taxes EXTERNALLY. Your stupid argument would only work if Germany was a 100% protectionist country. Remember, YOU were the one who brought up taxes, without CONTEXT


Now answer the questions you coward:


Answer the following questions:

1) Do you believe that the US taxes are high?

2) Do you believe Germany's taxes are higher than the US? (literally no way you could think of this in subjective terms)

3) Do you believe high taxes hurt the competitiveness of a country when it comes to trade, especially if they are higher than who you're trading with?

4) Can you draw the logical conclusion that higher taxes (coupled with Germany's GROSSLY higher manufacturing pay than America's) would necessitate pressure to offshore/outsource like the US has been doing and slower growth... based on conservative (and perhaps even mainstream economic) arguments?

 

[Infohawk]

I didn't say you were arguing that Germany has lower taxes. I'm saying your argument that Germany's tax cuts has anything to do with their miracle because even with relatively lower taxes INTERNALLY, they have MUCH higher taxes EXTERNALLY. Your stupid argument would only work if Germany was a 100% protectionist country. Remember, YOU were the one who brought up taxes, without CONTEXT


Now answer the questions you coward:


Answer the following questions:

1) Do you believe that the US taxes are high?

2) Do you believe Germany's taxes are higher than the US? (literally no way you could think of this in subjective terms)

3) Do you believe high taxes hurt the competitiveness of a country when it comes to trade, especially if they are higher than who you're trading with?

4) Can you draw the logical conclusion that higher taxes (coupled with Germany's GROSSLY higher manufacturing pay than America's) would necessitate pressure to offshore/outsource like the US has been doing and slower growth... based on conservative (and perhaps even mainstream economic) arguments?

This is why it's useless to discuss anything with you. You didn't even address my post and yet you claim I'm a coward. I'll still respond to your stupid questions, where I can.

1) Are US taxes relative to what, moron? I'm sorry but I don't think in black and white doofus.

2) With respect to which kind of taxes? There are many kinds of taxes, doofus.

3) Not necessarily. There are a tremendous amount of factors that your black and white worldview is apparently incapable of considering.

4) That question doesn't even make sense and is ridiculously vague. What conservative and mainstream arguments specifically? Stop arguing against strawman arguments.

 

[Phokus]

This is why it's useless to discuss anything with you. You didn't even address my post and yet you claim I'm a coward. I'll still respond to your stupid questions, where I can.

1) Are US taxes relative to what, moron? I'm sorry but I don't think in black and white doofus.

2) With respect to which kind of taxes? There are many kinds of taxes, doofus.

3) Not necessarily. There are a tremendous amount of factors that your black and white worldview is apparently incapable of considering.

4) That question doesn't even make sense and is ridiculously vague. What conservative and mainstream arguments specifically? Stop arguing against strawman arguments.

1) Just answer if you think US taxes are high. I'm not asking about 'relative' in this question, you idiot. That's in the later question.

2) I listed the types of taxes MULTIPLE FRIGGING TIMES, you idiot. For example, the VAT tax of 19%. Are you blind?

3) I didn't ask if high relative taxes were the ONLY thing. Interesting, i'm going to keep this in mind the next time you bitch about taxes.

4) Strawman arguments? It's a simple conservative argument. If you have high taxes and workers who get paid too much, relative to someone who could do it more cheaply, that's 'inefficient'. Are you seriously going to go counter this argument?

STOP OBFUSCATING AND ANSWER LIKE A MAN

 

[Infohawk]

1) Just answer if you think US taxes are high. I'm not asking about 'relative' in this question, you idiot. That's in the later question.

2) I listed the types of taxes MULTIPLE FRIGGING TIMES, you idiot. For example, the VAT tax of 19%. Are you blind?

3) I didn't ask if high relative taxes were the ONLY thing. Interesting, i'm going to keep this in mind the next time you bitch about taxes.

4) Strawman arguments? It's a simple conservative argument. If you have high taxes and workers who get paid too much, relative to someone who could do it more cheaply, that's 'inefficient'. Are you seriously going to go counter this argument?

STOP OBFUSCATING AND ANSWER LIKE A MAN

Honestly you are too stupid and narrow-minded to have this discussion with. Think about how stupid 1) is. Magnitude is relative in nature. There's no official definition of a "high" tax rate that I'm aware of.

2) The US does not have a VAT. And what does VAT have to do with exports? Do you know what it is?

4) "If you have high taxes and workers who get paid too much, relative to someone who could do it more cheaply, that's 'inefficient'."
You're oversimplifying.
http://en.wikipedia.org/wiki/Economic_efficiency

 

[Phokus]

Honestly you are too stupid and narrow-minded to have this discussion with. Think about how stupid 1) is. Magnitude is relative in nature. There's no official definition of a "high" tax rate that I'm aware of.

2) The US does not have a VAT. And what does VAT have to do with exports? Do you know what it is?

4) "If you have high taxes and workers who get paid too much, relative to someone who could do it more cheaply, that's 'inefficient'."
You're oversimplifying.
http://en.wikipedia.org/wiki/Economic_efficiency

1) This is your personal opinion you moron. Do you feel American taxes are high?

2) Yes i know what VAT is and it's actually an argument to sometimes INCREASE certain taxes. That's the point.

Look up, i listed several taxes.


3) Not going to answer, figures

4) I'm not oversimplifying at all. If you compare Germany to either a low wage country like China or a higher wage/more advanced country (while still cheaper than Germany), it doesn't make sense in a free trade sense, that Germany's capital would remain fixed.

 

[Infohawk]

1) This is your personal opinion you moron. Do you feel American taxes are high?

2) Yes i know what VAT is and it's actually an argument to sometimes INCREASE certain taxes. That's the point.

Look up, i listed several taxes.


3) Not going to answer, figures

4) I'm not oversimplifying at all. If you compare Germany to either a low wage country like China or a higher wage/more advanced country (while still cheaper than Germany), it doesn't make sense in a free trade sense, that Germany's capital would remain fixed.

1) I don't form useless opinions. Are US taxes higher than what?

2) VAT's aren't an argument. They're a tax.

3) I did answer. You just didn't like the answer you dishonest sack of shit.

4) How did you get by without taking any economics courses? You are oversimplifying. Germany could have more productive or educated labor for example. Or it could have better infrastructure that explains why things are still being produced there as opposed to China.