New WaylandRecent commentary has expressed concern that investors are “taking their money out of America”. Such claims invoke the idea of capital flight, a concept historically relevant under fixed exchange rate systems. However, applying this term to modern floating exchange rate systems is misleading. While significant shifts in investment preferences can have major economic impacts, no actual “flight” of capital, in the sense of a net reduction, can occur—only balanced exchanges....
Capital Flight: A Misconception
NeilW
11 comments:
"Why the Perception of ‘Flight’ Persists?"
For the same reason that the perception of selling bonds equates to borrowing: Ignorance. Myth. Inapplicable paradigms.
Figurative language rather than scientific abstraction..,,
Euthanize the Art degree morons and all this goes away….
AAPL makes iPhone in Asia free trade zone for $100 … AAPL imports iPhone from its Ireland division to its USA division for $800 …. AAPL sells phone for $800 in USA and makes zero profits in USA so pays zero corporate tax (21%) in USA… AAPL makes $700 profit taxed in Ireland (17%)…, AAPL takes $580 retained earnings in Ireland and buys USTs in its Ireland account at the Fed…. Trump puts 37% tariff on Ireland imports… all AAPL has to do is import the phone at its original $100 cost of production and the tariff adds $37 to the phone cost.., most people keep their phone for 3 years so it adds $12 per year to the cost of iPhone .., big deal.,, whole ”tariff!” thing is a SCAM..,,
Then the Art degree morons say “Ireland is lending us money and capital is flying out!!”…. 😂😂😂
Because they are TOO STUPID to understand the accounting abstractions…
But if AAPL imports from Ireland at $137 to USA Division and then sells at $800 don't they now have to pay corporate tax?
Yes they pay 21% to US instead of 17% to Ireland .. then perhaps trump will use that to eliminate personal income taxes.,,
https://budgetmodel.wharton.upenn.edu/issues/2024/10/14/the-end-of-the-double-irish
“ This disparity is even more striking considering Ireland’s statutory corporate tax rate of 12.5%, which is significantly lower than the US rate of 21%. Moreover, the effective tax rate in Ireland is likely even lower than the statutory rate due to various tax incentives and exemptions.”
I’ve read it’s 17% but this says it’s even lower..,
Please create a post with this link Tom. Interesting idea? Rotating tethers in space made of zylon and web of redundant fibers balance loads on and off instead of rockets: https://www.youtube.com/watch?v=dqwpQarrDwk
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