'Note, however, that the right-hand chart below shows that this relationship does not exist for multinational enterprises (MNEs). When faced with higher taxes, they simply shift production to other countries without the need to increase productivity.'
Because wages are lower.
So the recipe is: raise taxes to weed out the weak, tighten your immigration policy (and 'asylum' which is for a great deal an immigration channel in disguise), and select for cultural affinity to protect your society from parallel communities.
For those living in theory: Ricardo's libertarian idea of free trade does not hold in modern times. Free trade theory holds that two things are held constant: the labour pool while capital can’t move. Today capital is mobile and the labour pool is fed immigrants 24/7. I do expect though that now that AI is more a threat to white collar jobs than blue collar, frankly talking about immigration all of a sudden becomes a lot less unsavory to the all decent & neat classes. Just like the good people of Piddington, who gave the Lib Dem a majority, got second thoughts when UK immigration policy will make THEM a local minority.
Meanwhile capital, business expansions and the best and the brightest move to the US…
There's more migration from the US to Europe now that vice versa, but in any case, Ricardo's theory of comparative advantage actually holds even if there is free movement of both capital and labor. In fact, it holds within regions of the same country, where there is free movement of both. None of what you say actually flows from Ricardo's theory of comparative advantage. It merely expresses your prejudices.
Yes, we have plenty Americans here in A'dam who are enthusiastically trumpeted - pun intended - as Trump refugees (they're such good people!. As are we for likng Trump refugees so much). And then they go do the marketing somewhere or open a muffin catering service from home...
It's about the kind of people who are migratng. As for businesses: Germany's industry more and more is on gov life support, hence the need for invading Russians ('no really, any moment now') to keep the B flowing. In he NL the only industrial sector still growing is the chippers ie ASML. And that's because of the Amercan AI frenzy.
Free trade in the same country. Really? That's your argument when discussing internatonal free trade? Doesn't that sound more like 'trade in a country' period. Instead of 'doing business under different legal, tax and labor regulation'?
"For the fitter companies, higher corporate taxes lead to higher productivity and more growth."
I would be careful with that interpretation because the author measures productivity growth, not absolute growth. A firm's productivity can grow for example if it closes less productive business lines or operations. So the results do not necessarily show that higher taxes make productive firms grow faster.
Great thoughts and analysis. I wonder, increased productivity as a result of higher taxes? Is that causation established? And if so, that would mean it is extra pressure. So any moderate extra pressure would have brought this out of these companies?
Depends on how you define "superior". Companies can become more productive in the short-term by cutting R&D and thus become leaner. But that may not actually be good for a company or country long-term.
for this post , i guess we are limiting to success in high tax regimes, not perpetual success in all universes.
regardless of what's being said, most non-owner c-suites are hoping AI will cut headcount for short-term productivity\efficiency gains. full employment rates seem to make this more popular.
This insight suggests that tax policy could be a tool to reward efficiency, but it also raises questions about how to help less productive firms adapt without stifling innovation.
Always assuming fair competition and a level playing field, especially from overseas suppliers
You avoid the more tricky part of the discussion:
'Note, however, that the right-hand chart below shows that this relationship does not exist for multinational enterprises (MNEs). When faced with higher taxes, they simply shift production to other countries without the need to increase productivity.'
Because wages are lower.
So the recipe is: raise taxes to weed out the weak, tighten your immigration policy (and 'asylum' which is for a great deal an immigration channel in disguise), and select for cultural affinity to protect your society from parallel communities.
For those living in theory: Ricardo's libertarian idea of free trade does not hold in modern times. Free trade theory holds that two things are held constant: the labour pool while capital can’t move. Today capital is mobile and the labour pool is fed immigrants 24/7. I do expect though that now that AI is more a threat to white collar jobs than blue collar, frankly talking about immigration all of a sudden becomes a lot less unsavory to the all decent & neat classes. Just like the good people of Piddington, who gave the Lib Dem a majority, got second thoughts when UK immigration policy will make THEM a local minority.
Meanwhile capital, business expansions and the best and the brightest move to the US…
There's more migration from the US to Europe now that vice versa, but in any case, Ricardo's theory of comparative advantage actually holds even if there is free movement of both capital and labor. In fact, it holds within regions of the same country, where there is free movement of both. None of what you say actually flows from Ricardo's theory of comparative advantage. It merely expresses your prejudices.
Yes, we have plenty Americans here in A'dam who are enthusiastically trumpeted - pun intended - as Trump refugees (they're such good people!. As are we for likng Trump refugees so much). And then they go do the marketing somewhere or open a muffin catering service from home...
It's about the kind of people who are migratng. As for businesses: Germany's industry more and more is on gov life support, hence the need for invading Russians ('no really, any moment now') to keep the B flowing. In he NL the only industrial sector still growing is the chippers ie ASML. And that's because of the Amercan AI frenzy.
Free trade in the same country. Really? That's your argument when discussing internatonal free trade? Doesn't that sound more like 'trade in a country' period. Instead of 'doing business under different legal, tax and labor regulation'?
US states most definitely have different legal, tax, and labor regulations.
"For the fitter companies, higher corporate taxes lead to higher productivity and more growth."
I would be careful with that interpretation because the author measures productivity growth, not absolute growth. A firm's productivity can grow for example if it closes less productive business lines or operations. So the results do not necessarily show that higher taxes make productive firms grow faster.
Great thoughts and analysis. I wonder, increased productivity as a result of higher taxes? Is that causation established? And if so, that would mean it is extra pressure. So any moderate extra pressure would have brought this out of these companies?
and good companies should also show superior growth in higher rate environments.
somehow i dont think CEOs will vote for either higher taxes or rates, just in case things may actually be their fault.
Depends on how you define "superior". Companies can become more productive in the short-term by cutting R&D and thus become leaner. But that may not actually be good for a company or country long-term.
for this post , i guess we are limiting to success in high tax regimes, not perpetual success in all universes.
regardless of what's being said, most non-owner c-suites are hoping AI will cut headcount for short-term productivity\efficiency gains. full employment rates seem to make this more popular.
This insight suggests that tax policy could be a tool to reward efficiency, but it also raises questions about how to help less productive firms adapt without stifling innovation.