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Comparisons between tariffs and import certificate policies

I'm Supposn

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Import Certificates Vs. Tariffs:

I’m a proponent of USA could adopt an Import Tariff policy somewhat similar to the policy described in the Wikipedia article entitled “Import Certificates”.
Refer to:
https://en.wikipedia.org/wiki/Import_certificates
or to
http://www.debatepolitics.com/economics/253134-import-certificates-4.html .

The subject of tariffs often arises within discussions of Import Certificates.

Comparisons between tariffs and import certificate policies:

Both tariffs and import certificate proposals would require importers of goods surrender something’s of value to the U.S. government before their goods are enabled to enter the USA and the policies can be drafted in a manner to be self-funded; (i.e. all direct costs due to the trade policy be eventually passed onto final USA purchasers of imported goods.
The values of what importers are surrendering (and thus the additional expense to the importers) are proportionally related to approximate values of their shipments being brought into the USA.
In both cases the net differences between goods costs to importers and their USA domestic market prices motivate the importation of goods into the USA; (availability is reflected within those market prices).

The nature of the Import Certificate policy significantly reduces (if not entirely eliminates) USA’s trade deficit of goods REGARDLESS of how small are the additions to prices paid by USA purchasers of imported goods. Only if tariffs were set to drastically increase prices of imports sold to USA purchasers, could we reasonably hope (but cannot assure) that USA’s trade deficits of goods could be reduced to similar extents as that due to an Import Certificate policy.

Rather than the proposed USA adoption of the transferable Import Certificates policy for USA’s global trade of goods, our existing trade practices and all other proposed USA trade policies are more rather than less subject to mischief upon our economy. Within the certificate policy, (with no additional pro-action by our federal government, USA’s economy would suffer less mischief perpetrated upon our global trade.

Effects upon prices of imported goods within USA’s domestic markets within an Import policy (rather than a tariff policy) are much more market and less government driven.
Also due to market forces an Import Certificate policy serves as an indirect but somewhat effective subsidy of USA’s exported goods.

Respectfully, Supposn
 

joG

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Import Certificates Vs. Tariffs:

I’m a proponent of USA could adopt an Import Tariff policy somewhat similar to the policy described in the Wikipedia article entitled “Import Certificates”.
Refer to:
https://en.wikipedia.org/wiki/Import_certificates
or to
http://www.debatepolitics.com/economics/253134-import-certificates-4.html .

The subject of tariffs often arises within discussions of Import Certificates.

Comparisons between tariffs and import certificate policies:

Both tariffs and import certificate proposals would require importers of goods surrender something’s of value to the U.S. government before their goods are enabled to enter the USA and the policies can be drafted in a manner to be self-funded; (i.e. all direct costs due to the trade policy be eventually passed onto final USA purchasers of imported goods.
The values of what importers are surrendering (and thus the additional expense to the importers) are proportionally related to approximate values of their shipments being brought into the USA.
In both cases the net differences between goods costs to importers and their USA domestic market prices motivate the importation of goods into the USA; (availability is reflected within those market prices).

The nature of the Import Certificate policy significantly reduces (if not entirely eliminates) USA’s trade deficit of goods REGARDLESS of how small are the additions to prices paid by USA purchasers of imported goods. Only if tariffs were set to drastically increase prices of imports sold to USA purchasers, could we reasonably hope (but cannot assure) that USA’s trade deficits of goods could be reduced to similar extents as that due to an Import Certificate policy.

Rather than the proposed USA adoption of the transferable Import Certificates policy for USA’s global trade of goods, our existing trade practices and all other proposed USA trade policies are more rather than less subject to mischief upon our economy. Within the certificate policy, (with no additional pro-action by our federal government, USA’s economy would suffer less mischief perpetrated upon our global trade.

Effects upon prices of imported goods within USA’s domestic markets within an Import policy (rather than a tariff policy) are much more market and less government driven.
Also due to market forces an Import Certificate policy serves as an indirect but somewhat effective subsidy of USA’s exported goods.

Respectfully, Supposn

The Germans seem to be able to run a surplus. Why do you think that the Americans are incapable, if appropriate domestic policies were enacted?
Also it would be interesting to know how you want to deal with the inefficiency that the no-tariff trade restriction would entail. It might be, you see, that there would be more jobs at lower wages or some such. In any event the inefficiency would reduce general welfare in some way or another. It is just not clear in what way.
 

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The Germans seem to be able to run a surplus. Why do you think that the Americans are incapable, if appropriate domestic policies were enacted?
Also it would be interesting to know how you want to deal with the inefficiency that the no-tariff trade restriction would entail. It might be, you see, that there would be more jobs at lower wages or some such. In any event the inefficiency would reduce general welfare in some way or another. It is just not clear in what way.

JOG, Germany is a member of the European common market and I would suppose they abide by all regulations and reap the benefits common to members.

I would also suppose that they have a sales tax using the VAT method. Value Added (sales) Taxes enables the identification of exactly how much sales taxes are being passed on within “each link of commercial transaction chains” and I would also suppose VAT is an important tax revenue source for Germany.
The advantage of this is that all importers of foreign goods contribute their full share of taxes to German government and German government waives the entire VAT’ accumulated within the prices of German exports to keep German exports more price competitive.
This is not a reason to disregard the proposal for an Import Certificate trade policy but our replacing a good portion of FICA and our lower income bracket income taxes with a sales tax and some additional compensation for our working poor would be to our nation’s net economic benefit.

Unlike USA goods and service producers, foreign producers of our imported goods contribute no federal taxes to the USA. Because we cannot identify the extent of federal taxes imbedded within USA exports, we cannot waive those taxes to enable our exports to be more competitive.
Germany has more respect and concern for training and upgrading of their laborers. Unions and labor are not despised but have a seat on all tables where public policy is being determined. Their government dies not simply grant labor “lip services” on Labor Day weekend, Germany puts government’s money and consideration to work with labor unions and educators and enterprises to upgrade skills and knowledge of Germany’s labor forces. I would suppose that Germany regards their sports teams with favor equal to that of American Society but I doubt if they shortchange the education and training of their population in order to provide tax incentives for professional sports teams’ stadiums.

Many, if not most modern industrial nations understand the economic value of public transportation and the supporting infrastructure. We spent for airports and airlines but ignored our railroads, tunnels and bridges. The rats in NY City subways ignore the noise and the people as they run along the stations. We’ve had too many deaths and explosions due to our lack of modern traffic control on our commuter and inter city railroads.

We have the most expensive healthcare in the world but the health of our population is poorer than that of many other industrial nations with government provided health care.

Germany has realized that it’s cheaper to use solar energy on the roofs of their buildings rather than building additional electric power generators

Yes, there are reasons why Germany does somethings well.

Respectfully, Supposn
 

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... Also it would be interesting to know how you want to deal with the inefficiency that the no-tariff trade restriction would entail. It might be, you see, that there would be more jobs at lower wages or some such. In any event the inefficiency would reduce general welfare in some way or another. It is just not clear in what way.

JOG, I don’t understand this question? A “no-tariff trade restriction” upon what?

Respectfully, Supposn
 

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JOG, Germany is a member of the European common market and I would suppose they abide by all regulations and reap the benefits common to members.

I would also suppose that they have a sales tax using the VAT method. Value Added (sales) Taxes enables the identification of exactly how much sales taxes are being passed on within “each link of commercial transaction chains” and I would also suppose VAT is an important tax revenue source for Germany.
The advantage of this is that all importers of foreign goods contribute their full share of taxes to German government and German government waives the entire VAT’ accumulated within the prices of German exports to keep German exports more price competitive.
This is not a reason to disregard the proposal for an Import Certificate trade policy but our replacing a good portion of FICA and our lower income bracket income taxes with a sales tax and some additional compensation for our working poor would be to our nation’s net economic benefit.

Unlike USA goods and service producers, foreign producers of our imported goods contribute no federal taxes to the USA. Because we cannot identify the extent of federal taxes imbedded within USA exports, we cannot waive those taxes to enable our exports to be more competitive.
Germany has more respect and concern for training and upgrading of their laborers. Unions and labor are not despised but have a seat on all tables where public policy is being determined. Their government dies not simply grant labor “lip services” on Labor Day weekend, Germany puts government’s money and consideration to work with labor unions and educators and enterprises to upgrade skills and knowledge of Germany’s labor forces. I would suppose that Germany regards their sports teams with favor equal to that of American Society but I doubt if they shortchange the education and training of their population in order to provide tax incentives for professional sports teams’ stadiums.

Many, if not most modern industrial nations understand the economic value of public transportation and the supporting infrastructure. We spent for airports and airlines but ignored our railroads, tunnels and bridges. The rats in NY City subways ignore the noise and the people as they run along the stations. We’ve had too many deaths and explosions due to our lack of modern traffic control on our commuter and inter city railroads.

We have the most expensive healthcare in the world but the health of our population is poorer than that of many other industrial nations with government provided health care.

Germany has realized that it’s cheaper to use solar energy on the roofs of their buildings rather than building additional electric power generators

Yes, there are reasons why Germany does somethings well.

Respectfully, Supposn

So, innovate a VAT. At least that is a more or less efficient tax that is not a non-tariff trade restriction.
 

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JOG, I don’t understand this question? A “no-tariff trade restriction” upon what?

Respectfully, Supposn

Of course, it's a non-tariff trade barrier. What else?
 

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Of course, it's a non-tariff trade barrier. What else?

JOG, what is IT that you describe as a “non-tariff barrier? Are you writing that an Import Certificate policy is a non-tariff barrier to their nation’s global trade?

I then agree with you that Import Certificates and tariffs are significantly different; but I wouldn’t bother to quibble with opponents of the Import Certificate policy that would state their difference is “a distinction without difference”.
I don’t wish to be involved in semantic discussions.

Respectfully, Supposn
 

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JOG, what is IT that you describe as a “non-tariff barrier? Are you writing that an Import Certificate policy is a non-tariff barrier to their nation’s global trade?

I then agree with you that Import Certificates and tariffs are significantly different; but I wouldn’t bother to quibble with opponents of the Import Certificate policy that would state their difference is “a distinction without difference”.
I don’t wish to be involved in semantic discussions.

Respectfully, Supposn

It's only that tariffs and non-tariff trade barriers are often treated differently in treaties. This is especially the case as the latter are sometimes difficult to measure or even define.
 

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It's only that tariffs and non-tariff trade barriers are often treated differently in treaties. This is especially the case as the latter are sometimes difficult to measure or even define.

Jog, thanks for your response.

All of the trade agreements within which USA participates are drafted in a manner that permit participants to arbitrate differences and/or mutually modify the agreement and/or resign from their participation within the agreement.
I consider resignation as a last resort if for some unforeseeable reason we could not reasonably arbitrate or modify any particular agreement to our satisfaction.

Respectfully, Supposn
 

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I then agree with you that Import Certificates and tariffs are significantly different;

they are not different. What don't you tell us what the difference is?
 

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they, [i.e. tariffs and import certificates] are not different. What don't you tell us what the difference is?

James972, comparisons between tariffs and import certificate policies:

Both tariffs and import certificate proposals would require importers of goods surrender something’s of value to the U.S. government before their goods are enabled to enter the USA. Tariffs can as the Import Certificate policy is to be drafted in a manner to be no greater than self-funding; (i.e. providing government with no net revenue).
Within both trade policies the values of what importers are surrendering (and thus the additional expense to the importers) are proportionally related to approximate values of their shipments being brought into the USA and those additional expenses are passed on to the eventual purchasers of imported goods.

Within an Import Certificate policy an exporter of USA goods is entitled, (i.e. not required) to choose to pay the federal fees that enable them to acquire transferable Import Certificates with face values equal to the assessed values of their USA export shipments. If they do not pay the fee, their shipments are not assessed and no certificates are issued.
Certificates with face values sufficient to cover the assessed values of goods imported into the USA must be surrendered before import shipments are permitted to enter our nation. Surrendered certificates are cancelled. This policy is an indirect but effective subsidy of USA’s exported goods.

Regardless of the transferable import certificates price rates within global markets, (i.e. even if the additional costs for importers to bring their shipment into the USA would be only a penny, USA’s annual trade deficits of goods would be entirely or almost entirely eliminated.
No tariff policy could provide such an assurance with any certainty but any tariff policy that could feasibly attempt it would have to be of the most extremely high tariff rates to be passed on to USA purchasers of imported goods. Such drastically high rates would almost entirely eliminate imported goods from USA’s domestic markets.

Because the Import Certificate policy is substantially market driven, if within the USA there exists an effective demand for any foreign item (that’s legally importable), that market demand will be satisfied.

Refer to Wikipedia's "Import Certificates" article.

Respectfully. Supposn
 

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why not just allow 100% market driven??????

James972, Import Certificate policy proposal's justification is similar to justifications of our laws and regulations governing building and zoning codes, health and food labeling, air, railroad, waterways and highway traffic.
We’ve identified and limited the extents of some practices that are contrary to society’s well-being; We should do the same with regard to our global trade deficits of goods.

Global trade transactions are mutually agreed upon by principles who perceive their own individual benefits but USA’s chronic annual trade deficits of goods are net detrimental to our entire nation’s economy. Excluding where and when full employment exists, trade deficits are ALWAYS detrimental to their nation’s GDP and numbers of jobs.

Respectfully, Supposn
 
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James972

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USA’s chronic annual trade deficits of goods are net detrimental to our entire nation’s economy.

so why not eliminate highest taxes in world that make it even harder to compete with low wage countries? 1+1=2
 

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so why not eliminate highest taxes in world that make it even harder to compete with low wage countries? 1+1=2

James972, I’m unaware of any tax cut that would consequentially entirely or almost entirely eliminate USA’s trade annual deficits of goods, but I suppose you will explain that to us all when you initiate a new thread that explicitly describes the specific tax cut proposal you’ve referred to. We all want to read exactly why your tax cut will not simply be a net reduction of tax revenue but will actually be to the net economic and social benefit to our nation.

Unless your tax cut would consequentially entirely or almost entirely eliminate USA’s trade annual deficits of goods, there will still exist a need for the Import Certificate trade policy.

2-2=0 and Mary had a little lamb.

Respectfully, Supposn
 

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James972, I’m unaware of any tax cut that would consequentially entirely or almost entirely eliminate USA’s trade annual deficits of goods,

of course you're joking!!! Ireland dropped it corporate rate to 11% and all or most of the world's major corporations moved there in whole or in part. We could drop ours to 0% to get pure capitalism and a huge huge economic boom. 1+1=2
 

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Originally Posted by Supposn:
James972, I’m unaware of any tax cut that would consequentially entirely or almost entirely eliminate USA’s trade annual deficits of goods,

of course you're joking!!! Ireland dropped it corporate rate to 11% and all or most of the world's major corporations moved there in whole or in part. We could drop ours to 0% to get pure capitalism and a huge huge economic boom. 1+1=2

James972, Ireland’s change of tax policy did not eliminate their nation’s trade deficit of goods. The nation did not have a trade deficit prior to changing their tax rates and they did not develop one after the rates were changed. They continued to enjoy annual global trade surpluses.

I’m a proponent of Import certificates which are only suitable for adoption by nations that otherwise suffer chronic annual trade deficits of goods and do not normally enjoy full employment; (i.e. nations such as the USA.)
Such a nation, regardless of the nation’s other economic conditions would enjoy net economic and social benefits from their adoption of the Import Certificate policy for their global trading.

How is your post germane to the discussion of Import Certificate policy or comparing it to a tariff policy? You're not joking?

2-2=0 and Humpty Dumpty sat on a wall.

Respectfully, Supposn
 

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James972, Ireland’s change of tax policy did not eliminate their nation’s trade deficit of goods.

Well, you might look at Ireland’s trade balance, which has been in surplus for years and is expected to reach a huge 19.5% of gross domestic product this year — not what you’d expect from a country that supposedly has a competitiveness problem.

But Ireland’s curious status as a European corporate tax haven skews that number. Here’s why: Many large multinational corporations have subsidiaries in Ireland because of its attractive 12.5% corporate tax rate.
 

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Well, you might look at Ireland’s trade balance, which has been in surplus for years and is expected to reach a huge 19.5% of gross domestic product this year — not what you’d expect from a country that supposedly has a competitiveness problem.

But Ireland’s curious status as a European corporate tax haven skews that number. Here’s why: Many large multinational corporations have subsidiaries in Ireland because of its attractive 12.5% corporate tax rate.

James972, nations’ corporate tax rate does nothing directly, and almost nothing indirectly to change those nation’s balance of global trade.

The act of a corporation relocating its corporate headquarters to take advantage of differing national corporate tax rates changes nation’s GDPs and numbers of jobs only to the extent that they change the payrolls office rents and other expenditures within each of those nations.
A corporation affects nations’ GDP and numbers of jobs to the extent that they produce goods or service products within those nations.
[I.E. if a nation appoints a representative to be their corporation’s “official representative” within that nation, the payroll or fees paid to the representative and his staff and all other expenditures to maintain the corporate headquarters within a particular nation all contribute to that nation’s GDP and numbers of jobs].

The extent of the corporation’s other contributions to a nation’s GDP and numbers of jobs are dependent upon the corporation’s other productions of goods and services within the nation and to the extent that the corporation contributes to the nation’s balance of global trade.
This doesn’t change the fast that due to a nation’s annual trade deficit, the nation’s annual GDP was less than otherwise; (otherwise being if the nation had not experienced that year’s trade deficit). Unless a nation enjoys full employment, a lesser GDP is reflected by a lesser number of jobs.

Respectfully, Supposn
 

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James972, nations’ corporate tax rate does nothing directly, and almost nothing indirectly to change those nation’s balance of global trade.

so if the USA eliminated its corporate tax and 500 $100 billion companies moved to the USA in whole or in part and employed 10 million Americans it would do nothing to help our economy and balance of trade?
 

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so if the USA eliminated its corporate tax and 500 $100 billion companies moved to the USA in whole or in part and employed 10 million Americans it would do nothing to help our economy and balance of trade?

James972, if 500 $100 billion companies currentlyheadquartered elsewhere, moved their headquarters to the USA only for tax purposes, that in itself would not affect USA’s balance of global trade. USA’s balance of trade is the net difference of products purchased, sold or traded between the USA and other nations.

Those 500 enterprise’s contribution to USA’s GDP would be the net difference they make upon USA’s production of goods and services.
To the extent that they’d pay USA corporate taxes, it’s reasonable to assume that some of that increased government revenue would cause some additional government spending for additional services.

A move that’s only a legal paper movement, (i.e. legal relocation of their global headquarters by simply changing their USA office signs from Toyota-USA Corp. to Global-Toyota) with no additional people hired, does not increase USA’s GDP. To the extent that they directly or indirectly increase their spending for USA products and/or USA workers, those enterprises would increase USA’s GDP.

Respectfully, Supposn
 

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James972, if 500 $100 billion companies currentlyheadquartered elsewhere, moved their headquarters to the USA only for tax purposes, that in itself would not affect USA’s balance of global trade.

Actually you would get benefits just by moving headquarters here if the corporate tax were 0%, and you'd get huge benefits by moving manufacturing here too. And don't forget, we only have the corporate tax to pander to the pure ignorance of liberals who don't know that the tax is passed on to consumers in the form of higher prices.
 

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Actually you would get benefits just by moving headquarters here if the corporate tax were 0%, and you'd get huge benefits by moving manufacturing here too. And don't forget, we only have the corporate tax to pander to the pure ignorance of liberals who don't know that the tax is passed on to consumers in the form of higher prices.

Posted by Supposn:
James972, if 500 $100 billion companies currentlyheadquartered elsewhere, moved their headquarters to the USA only for tax purposes, that in itself would not affect USA’s balance of global trade.

James972, commencing at 7:53 PM, 17Oct2016 you somewhat digressed from this thread’s topic, “xx” to commence discussing the relocation of corporations’ global headquarters beyond national borders. I do not perceive any contradiction of our opinions within our correspondence since then; until the topic of corporate income taxes was introduced into our posts.

How did you reach the conclusion that just the act of legally relocating a foreign corporation’s global headquarters to the USA and entirely eliminating USA’s corporate income taxes will be of net benefit to USA’s economy?
My understanding is that USA would benefit from such a move only to the extent that it also increases USA’s net tax revenues and/or net payrolls and/or products of value.

The “radical left” contends corporations do not pay sufficient income taxes and the “radical right” contends their tax burden is too high, but both of their viewpoints are based upon their belief that corporations somehow are forced to swallow the tax and defecating finally finishes the process.

Both the less radical left” and “right” fully acknowledge that enterprises pass on all of their normal (rather than extraordinary) expenditures onto their customers. I don’t know why you believe otherwise?

Corporate income taxes being passed on to their customers is not a compelling reason for justifying or for opposing corporate taxes as one of government’s tax revenue streams. If you wish to further discuss corporate income tax, let’s move that discussion to an appropriate thread for that topic.

Respectfully, Supposn
 

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Corporate income taxes being passed on to their customers is not a compelling reason for justifying or for opposing corporate taxes

of course it is!!! corporations move off shore and take million of jobs with them to avoid the liberal tax. Eliminate the tax and you'd have 10 million new jobs in America and a huge boost in exports.
 

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of course it is!!! corporations move off shore and take million of jobs with them to avoid the liberal tax. Eliminate the tax and you'd have 10 million new jobs in America and a huge boost in exports.

James972, trade deficits certainly drag upon their nation’s GDP and numbers of jobs.

The corporations bear the initial costs to convert their accounting systems to comply with the laws and regulations applicable to the new jurisdiction. This requires some employment of accounting and legal professionals familiar with the laws and regulations applicable within the new location; (i.e. it’s practical to engage the services of local tax attorneys and accountants).

Corporate expenditures due only to the legal relocation of corporate headquarters after the first year of relocation are much less than the expenditures for preparing and executing the move and the tax preparation expenses for the commencing year in the new location. The consequences of a good portion of all expenses due to a corporation relocating their global headquarters to another nation shift some GDP and a substantial amount of corporate income taxes to the corporate headquarters new legal nation.

When corporate income taxes and other legal advantages are a corporation’s only motive for relocating their headquarters, the entire benefit within the government’s jurisdiction of the relocated headquarters are only their legal, accounting and tax collecting enterprises. Those benefit will be reflected within the jurisdiction’s GDP and tax revenue statistics.

I am not degrading the benefits of attracting corporate headquarters but corporations’ production of goods and services, (their contributions to GDPs) are only attributed to the GDPs of the producing nation rather than to the headquarters of the corporations.

Your statement I’m quoting seems to be falsely implying otherwise. Similarly, nation’s balance of trade only considers international net trade of products with no consideration of corporation’s legal headquarters.

Your post’s simply incorrect.

Respectfully, Supposn
 
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