Comment by mattthebaker | Hacker News Reader

Comment by mattthebaker | Hacker News Reader

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Taxing for regulation differential would only make a small change. Labor and associated costs, health insurance, taxes, etc will still dominate.

The views fail to recognize that US is not the only world market. More than half of Apple's revenue for example, is oversees. Exports to elsewhere in the world will be even more difficult to bring back, and harm the worldwide competitiveness of our businesses. His plan to encourage repatriation of overseas revenue for taxation is smart though.

It also overlooks the fact that we have outsourced the labor to those countries, but the US still captures most of the value. i.e. For every iPhone sold, how much money goes to Apple and how much to their suppliers? This applies to most consumer industries. The investments and trade deals mostly allow US businesses to go in and extract value from other countries, and most of the profits still come back to the top. We really don't need to capture the last mile of value.

We also can not overlook the fact that the market is already voting against US production with their wallets. The market is free to pay a premium for US made products, but clearly prefers lower cost goods.

His statements are really just feel good for a group of workers that has not adapted to the new economy.

> We also can not overlook the fact that the market is already voting against US production with their wallets. The market is free to pay a premium for US made products, but clearly prefers lower cost goods.

So the rest of the country pays more food good and services in aggregate. Big deal. We do it with whatever tools are necessary, even tariffs.

EDIT:

> It would be much better to use the funds to re-educate this part of the population to work higher value jobs.

This opinion got Trump elected, and why drug use and death in rural America is epidemic. There are no higher value jobs coming to replace those lost to globalization. I know people with Masters degrees working at Starbucks and a Bail Bond shop.

Get off your high horse about market inefficiencies and realize "Let them eat cake" is what's taking us down the wrong path. Direct efforts must be made to help the most vulnerable members of our society, or they will burn the place down.

At the end of the day, it is about subsidizing an inefficient labor market. For the tariff to bring low value jobs back, it will have to be significant. Offshoring will still be more resource efficient, so you are better off paying back the tariff fees as welfare than bringing the jobs back. It would be much better to use the funds to re-educate this part of the population to work higher value jobs.

It is also disregarding the externalities of enacting a tariff. So we put something in place to bring electronic manufacturing back from China. They still control most of the raw materials, and can put their own tariff in place on export of those materials, further reducing our competitiveness. International politics are not so simple.

"We" don't capture most of the value though. Most of the value goes to a tiny percentage of Americans at the very top and everyone else loses their jobs. (Ironically many of the rich I've spoken with agree, while it's often the middle and upper middle class who argue this point.)

The simplest thing to do would not be to try to measure regulation differential legally speaking, but to measure and tax two more direct things: pollution and cost-of-living-adjusted wage differential.

Pollution could be taxed at the aggregate national level, e.g. via CO2/$GDP differential. This is a direct measure of the energy and resource efficiency of an economy, and it likely correlates with other kinds of pollution as well.

https://en.wikipedia.org/wiki/List_of_countries_by_ratio_of_...

Imports from countries below the USA on that list would be levied an offshore externality tax.

Wages would actually be harder to assess since that gets complicated, but honestly the pollution tax alone would make a massive difference in leveling the playing field. Higher efficiency in that area also probably correlates positively with wages in more developed countries, so CO2/$GDP might be all you need to start with for a differential fair trade tax.

Some countries that are high on that list (low pollution) are there because they are largely undeveloped and don't use much energy. They'd get free trade with us that would help them develop, but as they developed they'd be incentivized to do so in a more sustainable and cleaner way to avoid incurring tariffs. Developing by screwing the environment as China and others have done would be disincentivized.

I'd also love to see human rights included, but that's harder to measure objectively and probably also correlates with wages and pollution-efficiency. Countries that don't give a damn about their population's rights probably also don't care if they huff heavy metal laden coal ash, and vice versa.

"We" in the way used was intended to mean an American or Americans as opposed to the foreign entity. That it goes directly to the top is a separate issue, and suggestive of increased taxation, which Trump is generally against. Obviously a tariff is an option here, but it won't automatically bring jobs back.

Pollution and other externalities accounting is interesting, of course Trump has denied climate change so I would not expect much progress here.

Have to consider how trading is working with most of these countries as well. We're not selling entirely foreign products, especially when it comes to the ones offshoring American labor. The American companies go in to make use of the labor, and then "they", the American company is importing those products for sale on the American and global markets. "We" again meaning Americans in aggregate, are mostly reaping the benefits.

To have an effective trade strategy which builds in externalities you would have to have a widespread agreement between many countries. Otherwise, if say, an American company operating in China exporting to Africa had to pay those taxes, but a Polish company for example did not, we would be losing.

Ultimately, trying to bring those jobs back is trying to force a sub optimal solution. As it is, Americans are winning, in aggregate. It would be better to focus on redistributing our increased winnings.

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