Russia-US relations

[Muzh]

Jim, the Pope wrote over 200 pages about this. Not one paragraph.

[mendeleyev]

He did indeed, and I"m impressed that you knew that.

I picked out a key point of the Pope that is foundational to his misunderstanding of how money, economics, and governments work. If the foundation is weak, the entire building is suspect.

[ML]

What we have now in the US, and this started long before the current administration, is rapidly approaching the Russian model--favoured corporations based on their relationship to the government. That leads to decline.

Need some more discussion on this.  My training and work is more in the area of micro-economics rather than macro-economics; so I don't claim expertise here.

But I can't quite see the truth in what you  claim . . . favored corporations.

In USA, most all corporations  have a very dispersed ownership, unlike the  situation in Russia.

In Russia, there can be a personal relationship between a political leader and the head of particular companies, usually controlled by that person.

But in USA, CEOs come and go quite regularly, so the idea of favoritisim would be short lived in any case.

True, there are some fabulous individual and family wealths in USA, but the ones at the top are fairly new and I don't see that Gates, Waltons, Ellison, etc., get or need any favoritism from government.

Now if you want to modify a bit and talk not about favored corporations, but rather favored industries, then the topic is ripe . . . because most here (and anywhere) understand zilch about what so called 'tax breaks' for depreciation, R&D, depletion,  etc., are all  about, and why they are necessary.

And Jim, what's with this 'favoured' word.  Have you been away  from home too long?

The 'correct' spellings of these words are only found in the USA.
"Shape up or ship out" . . . well maybe you have already.   

[lordtiberius]

Pope Francis' remarks do not contravene Pope John Paul II's  "On the Hundredth Anniversary of Rerum Novarum from May 1, 1991."

http://www.newadvent.org/library/docs_jp02ca.htm

I am a laissez faire capitalist myself.

[mendeleyev]

ML, I will labour to understand your misspelling of the Tsar's English. 

As to favoured corporations:

GE paid 2.3% in taxes while posting an $81 Billion profit. Even in Putin's Russia they'd have paid the flat corporate tax of 20%. GE received some $36 Billion in the bailout yet moved their engineering division overseas to boot.

Can you spell Solyndra? Need one say more?

What we have in Washington is the creeping forward of the "too big to fail" mentality which frankly, let them fail. Nobody is too big to fail, including banks.

I like the flat tax of Russia. You don't need accountants to figure out where you fit and what you owe. Payroll deductions make it very simple and many Russians don't even need to file tax returns in the same fashion that has US citizens scrambling prior to April 15.

Corporations have a flat tax of 20% plus matching welfare (health and retirement) contributions for employees. In certain industries there is a maximum 4.25% reduction but most companies simply pay the 20%, 18% goes to federal and the remaining 2% to the regions, a sticking point with local governments.

However in Russia if you aren't in favour with the Kremlin, then you can be charged with tax evasion and sent to jail even if you paid the 20%. That is classic corruption.

[mendeleyev]

I am a laissez faire capitalist myself.

Mrs. M called me laissez just last week when I half-heartedly took out the garbage! 

[Muzh]

He did indeed, and I"m impressed that you knew that.

I picked out a key point of the Pope that is foundational to his misunderstanding of how money, economics, and governments work. If the foundation is weak, the entire building is suspect.

Understood. Clearly.

[ML]

As to favoured corporations:

GE paid 2.3% in taxes while posting an $81 Billion profit. Even in Putin's Russia they'd have paid the flat corporate tax of 20%. GE received some $36 Billion in the bailout yet moved their engineering division overseas to boot.

Can you spell Solyndra? Need one say more?

What we have in Washington is the creeping forward of the "too big to fail" mentality which frankly, let them fail. Nobody is too big to fail, including banks.

Sorry Jim, those still aren't examples of favored corporations.

GE just followed the arcane tax laws that are available to all  corporations.

Solyndra was a one shot deal.

Too big to fail is not showing favoritism to a particular company, just to big companies in general.

I still contend there is nothing in  the USA that compares to actual favoritism shown to particular companies in FSU owned by particular individuals.

[Boethius]

GE earns a significant amount of profit offshore.  That income is not taxed in the US until it is repatriated.

http://www.ibtimes.com/ge-pfizer-microsoft-apple-other-major-us-corporations-are-parking-more-cash-abroad-avoid-paying


GE has always been criticized for its tax lobbying efforts.  That goes back to at least the Reagan years.

Flat tax systems, at least for corporations, are not good for advanced economies, where tax policy is often geared to generating certain economic activities.

[lordtiberius]

We have tried socialism for over 100 years.  It doesn't work.  We in America at least need to go back to what does - lassiez faire capitalism.

[lordtiberius]

Stratfor on Russia:

[SANDRO43]

We have tried socialism for over 100 years.  It doesn't work.  We in America at least need to go back to what does - lassiez faire capitalism.

Yes, why not elect a wealthy capitalist into running the country? Capital idea . Almost 20 continuous years of Berlusconi's laissez-faire here didn't much work, either .

[lordtiberius]

Yes, why not elect a wealthy capitalist into running the country? Capital idea . Almost 20 continuous years of Berlusconi's laissez-faire here didn't much work, either .

There is nor was there with or without Berlusconi anything in Italy approaching laissez-faire economics.   

[SANDRO43]

There is nor was there with or without Berlusconi anything in Italy approaching laissez-faire economics.

No? Well, that may depend on the definition, but B tried to deregulate a lot, mostly or his own benefit . He even had bankruptcy fraud changed from a penal crime to an administrarive offense, which caused a few ongoing criminal trials he was involved in to be quashed .

The irony is that he also had a law enacted that kicks out of Parliament and bars from public office those members whose trials have reached their final, 3rd stage with a confirmed sentence. Thus he lost his Senate seat and is waiting to know whether he will serve his 2 years at house arrest or doing some community service .

[lordtiberius]

Berlusconi has his critics.  He also has his fans.


The Italian legal system is not known for its even handedness or predictability either.

[Boethius]

Berlusconi has his critics.  He also has his fans.

It is, I am certain, a mere coincidence that all his fans are young gold diggers and Berlusconi is one of Italy's richest men.  I assume those young female fans would be just as enamoured of Berlusconi were he a middle class accountant with several ex wives and children to support on a middling salary.

[lordtiberius]

He is old.  There are some things money can't buy.

for everything else there's mastercard