[HN Gopher] U.S. senators propose 25% tax credit for semiconduct...
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U.S. senators propose 25% tax credit for semiconductor
manufacturing
Author : elorant
Score : 251 points
Date : 2021-06-19 15:20 UTC (7 hours ago)
(HTM) web link (www.reuters.com)
(TXT) w3m dump (www.reuters.com)
| jeffbee wrote:
| The government should not be throwing money at the world's
| richest companies. Intel, Apple, Nvidia, AMD, IBM etc can all
| afford to do this without my assistance.
| georgeburdell wrote:
| Only the first company on the list owns enough semiconductor
| equipment for this proposed legislation to matter.
| GoOnThenDoTell wrote:
| But would they choose to build in the US without the enticement
| jeffbee wrote:
| If the problem is that Asian governments subsidize the fabs,
| the answer is not to match their subsidies. The answer is to
| tax imports to even the score.
| underseacables wrote:
| After years and years of pushing American manufacturing overseas,
| suddenly Congress wants to entice them back with a tax credit.
| Why not just lower the tax rate for corporations altogether, or
| better, close the loopholes that allow them to offshore their
| profits. Tax credits seem to be a a short term, ersatz panacea.
| 1e-9 wrote:
| Because politicians have realized that semiconductor
| manufacturing capability is especially critical to our national
| security and prosperity. Having the bulk of it located overseas
| is risky during a time of war and potentially provides
| unacceptable economic leverage to others during a time of
| peace. It's the same reason why we have massive farm subsidies.
|
| A lower tax rate for corporations altogether would also
| incentivize the relocation of noncrucial capability. Limiting
| the incentive to critical capability is less expensive.
| XIVMagnus wrote:
| I've noticed that the U.S. government usually only fixes issues
| in a short term mindset.. Same way they only gave stimulus
| checks and unemployment for a temporary time. I wish they would
| start working on long term solutions instead.
| kingaillas wrote:
| >U.S. government usually only fixes issues in a short term
| mindset
|
| That's part of the problem - Representatives get elected
| every 2 years so they have a short term mindset.
|
| But, the government isn't the only player here. U.S.
| Corporations hold some amount of responsibility for moving
| production overseas.
|
| Corporations have even a shorter mindset - they need
| quarterly numbers to look good for Wall Street, so they don't
| think much past 3 months!
| frankbreetz wrote:
| They only gave temporary unemployment and stimulus because
| the pandemic was temporary
| cj wrote:
| One could argue that there could be a permanent structure
| (safety net) in place that sufficiently handles incidents,
| such as temporary mass unemployment, without the need to
| hastily scramble together and spin up stimulus programs
| like PPP and direct checks to everyone.
| Rapzid wrote:
| Sure but even then it was single checks to individuals when
| even Mnuchin was advocating for reoccurring payments.
| specialist wrote:
| Yes and:
|
| Govt has become increasingly risk adverse. Any proactive
| misstep is ruthlessly pilliored. So we're left with cycles of
| neglect, crisis, and oversteer.
|
| Just one example: Michael Lewis' latest book Premonition
| details how the CDC went from proactive to hyper risk
| adverse. And we've just seen how that played out.
| sdenton4 wrote:
| Good luck with that. The process at the national level is
| completely broken, so nothing substantial gets passed but
| budget reconciliations.
| datameta wrote:
| Pointing out a machine in disrepair to those who are
| looking at it does nothing to fix it.
| kwdc wrote:
| Governments and organizarions in general tend to also operate
| knee-jerk style as well. Its almost like there's a threshold
| that must be exceeded until a need for change appears
| necessary. That threshold could be lives lost, money lost,
| significant opportunities lost etc.
| syshum wrote:
| Right now that would be politically untenable as majority in
| the House and Senate have the position that Corporations are
| evil and do not pay their fair share(tm), they are actively
| working on rolling back Corporate tax cuts from previous
| administration.
|
| Further there is a large amount of political power that is
| openly hostile to manufacturing believing the US should move
| beyond manufacturing as it is seen as "dirty" and not viable
| instead they put their stock in the "service" and "information"
| economies which have yet to prove their viability absent a
| strong mfg base.
|
| In the short term given all the news about chip shortages being
| a national security and economic security issue many
| politicians will look the other way for a small concession to a
| critical industry but still remain openly hostile to
| manufacturing in general
| fennecfoxen wrote:
| > Why not just lower the tax rate for corporations altogether
|
| And use market pricing mechanisms? To what end? An efficient
| market? You madman! How will we be able to consolidate our
| power and command hefty campaign contributions if we cannot
| pick winners and losers, rewarding our supporters while meting
| out punishment to those who dare oppose us?
|
| If we go down this road, moreover, we might then have to admit
| that, besides taxes, our regulations and our multi-decade
| environmental reviews are there to cause problems, not just to
| solve them -- that safety, pollution, justice, are all well and
| good themselves, but even more importantly, they are tools for
| us to express political favor and disfavor, to bend society to
| our will, and our advantage.
|
| No. We must feed the machine. Shakedowns today, shakedowns
| tomorrow; shakedowns forever.
| ajmadesc wrote:
| Yeah but how does a society deal with negative externalities
| like poisoning the water table, ecosystem destruction etc
| EarthLaunch wrote:
| One way is making the areas damaged into property. If you
| own land, you generally don't want it polluted because it
| would lower the value. In those examples, make the water
| table and ecosystems into something people can own in
| portions. This is done with "views" that skyscrapers would
| otherwise block.
|
| Should be done with orbits to prevent space debris.
|
| The trouble is it seems impossible to turn certain
| externalities into property. It would require hard thinking
| and innovation. And just like regulations, it would lag
| behind industry and miss unknowns (lead, micro plastics).
| treeman79 wrote:
| Oh my, next people will do basic research
| (https://www.amazon.com/Basic-Economics-Thomas-
| Sowell/dp/0465... ) and start making sane decisions.
| voisin wrote:
| Offshoring profits is not related to manufacturing offshore.
| ketzo wrote:
| I mean, not currently, but you could _make_ them related with
| legislation. Which is kind of the idea of this tax credit in
| the first place, I guess.
| crazygringo wrote:
| > _After years and years of pushing American manufacturing
| overseas, suddenly Congress_
|
| How has Congress pushed American manufacturing overseas...?
|
| Manufacturing has moved overseas simply because labor is
| cheaper abroad. Congress didn't have to push anything. It's
| just natural economics at work.
|
| At most you could say Congress has been part of reducing
| tarriffs and promoting free trade, which makes everybody
| involved wealthier. But that's no "push". It's just letting the
| free market do its job.
| [deleted]
| HWR_14 wrote:
| Manufacturing hasn't even moved overseas! It hasn't even
| really moved to Canada or Mexico either. The US manufacturing
| base has tripled since NAFTA.
| matwood wrote:
| Labor is only one part. The externalities are cheaper to deal
| with/pawn off overseas.
| lumost wrote:
| Arguably, Congress made/authorized the trade deals which were
| designed to move manufacturing over seas.
|
| There was a theory that US firms would sell higher end goods
| and services to developing nations who did the manufacturing.
| Treaties were made with countries that occasionally had
| asymmetric tariffs in favor of the developing nations
| (Columbia had such a deal) based on this theory.
|
| While debatable, the belief now is that the majority of those
| service jobs were actually worse than the old manufacturing
| jobs which provided stable 9-5 employment, benefits, and a
| career path. There is further concern that trading partners
| who took up the manufacturing side of things are now
| developing and exporting the supposedly advanced services and
| technology companies the "knowledge economy" was meant to
| provide (e.g. TikTok). In the case of some industries like
| semiconductor manufacturing it's also posing existential
| national security questions.
| crazygringo wrote:
| I haven't heard of this so I'd like to learn more.
|
| Do you have some sources you can point me to? I've studied
| economics and history quite a lot and have never heard of
| the idea that Congress _intended_ to migrate manufacturing
| jobs to service jobs, or that the US would intentionally
| give another country an advantage in order to achieve this.
| What is the name of the Columbia deal you 're referring to?
| And is there any specific time period or administration
| you're describing? Or economists whose views provided the
| theoretical underpinning of why shifting from manufacturing
| to services would be desirable national policy?
| dantheman wrote:
| How about not taxing offshore profits, and allow them to bring
| that cash back to the US and lower taxes overall.
| HWR_14 wrote:
| Because then you end up in situations where all of your
| patents are held by a subsidiary in the Cayman Islands and
| 100% of their domestic sales happen to go to paying off the
| patent license fees.
| koheripbal wrote:
| Then, frankly, we should just incorporate the Cayman
| Islands into the USA
| HWR_14 wrote:
| I mean, the US Government just suggested a new taxation
| at the G7 to prevent this. The EU and US (and UK) are
| going to fix the issue. But it will probably take a few
| years.
| dmoy wrote:
| The British might object to that...
| duped wrote:
| Tax the foreign company on their revenue within the United
| States then.
| nickff wrote:
| We're already in that situation, and the USA could use a
| re-capitalization.
| dclowd9901 wrote:
| How does that help the US, as a country, at all?
| gnarbarian wrote:
| Because Trump did that. And as we all know anything that Trump
| did has to be wrong.
| 23B1 wrote:
| You're not wrong, but I'm guessing there's some motivation
| right now to accelerate this given the amount of time it might
| take to stand up the manufacturing capability.
| darth_avocado wrote:
| Simple, lower tax rate doesn't Guarantee industrial investment.
| It can lead to bunch of things like share buybacks, higher CEO
| pays etc. However, targeted tax breaks can help guarantee
| industrial investments.
| wolverine876 wrote:
| > Why not just lower the tax rate for corporations altogether
|
| You're assuming it's true that manufacturing has moved overseas
| because of tax rates. Remember that it used to be blamed on
| labor costs.
|
| All those arguments suit the arguers, who don't want to pay
| taxes or wages. There are many reasons, including that
| Americans can have better paying jobs than what they did 50
| years ago.
|
| Another issue is that Americans have to pay for things, and if
| the corporate tax rates are lowered (they are already pretty
| low), then other people have to pay a greater share. Who?
| dv_dt wrote:
| Having a more even internal tax treatment with a minimum
| corporate tax baseline was discussed at the G7.
| alexashka wrote:
| Because this is the easiest way.
|
| It's like adding extra code as opposed to changing code within
| a spaghetti codebase.
|
| Make no mistake, politics is a giant spaghetti codebase no
| politician really understands.
| duped wrote:
| It requires significantly less political capital to create a
| new tax cut or subsidy than to raise taxes or allocate new
| spending directly.
|
| Furthermore American tax policy w.r.t foreign profits is a
| rounding error when it comes to building up semiconductor
| manufacturing infrastructure.
|
| No American company is happy they have to go to China or Taiwan
| to tape out a new design. There simply isn't the infrastructure
| to do it affordably on this side of the Pacific, unless it has
| critical technologies that cannot be offshored for fear of
| industrial espionage.
| whakim wrote:
| > It requires significantly less political capital to create
| a new tax cut or subsidy than to raise taxes or allocate new
| spending directly.
|
| This is an incredibly important point, and one that I wish
| would come up more often. The reason that the US tax code is
| such a cluster@%&$ is because we insist (for reasons of
| politics) on conducting our fiscal policy almost entirely
| through the tax code, rather than just, you know, _spending
| money directly_ on the stuff we want to invest in.
| xwolfi wrote:
| But something nobody talks about are the sacrifices the
| population has to do to churn those things out of factories
| at the same scale as nations desperate to rebuild and feed
| their people. China succeeded because they went all in, their
| factory employees are still told today they have to sacrifice
| their youth to the nation.
|
| Will american factory workers work the same way ? Will you
| proudly join a factory and start building stuff, at the cost
| of your health?
|
| The solution, long term, can only come from China changing
| their mindset somehow, and then the next few places taking
| over the gap (I suppose Africa one day will wake up, India is
| starting a bit)
|
| Also, even if America start pulling out, this doesn't make
| their products automatically superior. Taiwan especially
| showed they can outpace in execution, maybe in design and
| even if the US stop buying there, now Taiwan itself can
| compete and lead where the US will follow: is it better to be
| independent on bad design or co dependent on good ones ?
| duped wrote:
| Semiconductor fabrication is almost entirely automated and
| any new fabs in the US will be on the cutting edge of new
| automation technologies, so I don't think there will be
| quite so many workers involved.
|
| It's also rather specialized labor.
| anonuser123456 wrote:
| Why not just eliminate taxes on corporations all together?
| Corporations are _groups_ of people cooperating. If you want to
| make up revenue, tax individual capital gains / dividends as
| ordinary income.
|
| This removes the distortionary effects of taxation on
| corporations, but maintains tax revenues in a somewhat
| progressive structure.
| ineedasername wrote:
| _Corporations are _groups_ of people cooperating._
|
| That doesn't change anything about why corporations should be
| taxed, unless you also believe that individual people should
| _not_ be taxed either. Because after all the company is only
| people so it should be taxed because it 's people that we
| tax. To break it down into pieces:
|
| 1) Corporation are made up of people.
|
| 2) The money those people receive directly from the company
| is taxed
|
| 3) The money received by the company is _also_ received by
| people because the company is, after all, only a group of
| people.
|
| 4) Since money held by the company is also just people's
| money, and people's money is taxed, the company's money
| should be also be taxed.
|
| Why should money received by an individual be taxed but when
| it's pooled & received by a group of people it remains
| untaxed?
|
| I actually know the next response in this chain: If it's
| taxed at the corporate level and then given to individual
| people who are also taxed, it has been double taxed. There's
| an easy solution to that: The company shouldn't hold on to
| the money long enough to have it taxed. Keep giving it back
| to people, pay higher salaries, or invest in R&D.
|
| In that way, it's not even a tax on profits as much as it's a
| penalty for keeping the money stagnant. By keeping it
| stagnant you keep it from contributing further to the economy
| and from receiving enough taxes from individual taxation to
| pay for all of the infrastructure & other services provided
| by the government.
| ineedasername wrote:
| A zero corporate tax rate would highly disincentivise
| corporate reinvesting into things like capex for expansion or
| R&D. Right now if they don't plow money back into such things
| then they would have to book it as profit and pay taxes on
| it. Zero tax rates would remove that incentive. If there were
| no taxes on them at all then it would just sit there as
| people at the top find even more creative ways to give it to
| themselves while still avoiding a lot of personal taxes.
|
| There's also the fact that corporations are only made
| possible in the first places because of the infrastructure
| and services provided by the government, and those must be
| paid for. If we moved to a model where companies were
| responsible to building and maintaining the proportion. Of
| infrastructure resources they used then indirect funding of
| such things via taxes would be required as much.
| anonuser123456 wrote:
| >A zero corporate tax rate would highly disincentivise
| corporate reinvesting into things like capex for expansion
| or R&D
|
| This is simply not true. The investment equilibrium would
| change in favor of less investment in _lower_ return
| expenditures. Corporate managers would likely distribute
| more capital, which would then be reallocated efficiently
| in the market. The only hitch here is that the government
| would likely collect higher tax receipts, and thus lower
| total investment. But that's an argument for lowering the
| tax rate on investment income, not creating bad incentives
| for corporate managers to spend money with a lower marginal
| rate of return than their core business.
|
| >There's also the fact that corporations are only made
| possible in the first places because of the infrastructure
| and services provided by the government, and those must be
| paid for.
|
| Corporations pay property taxes, use taxes and payroll
| taxes already (e.g. truckers pay gas taxes, and that's
| reflected in retain prices etc). And since the proposal is
| for revenue neutrality, the delta revenue is still
| collected on the distribution end.
|
| >Of infrastructure resources they used then indirect
| funding of such things via taxes would be required as much.
|
| You can simply look at the budget. The vast majority of
| government spending is on income transfers, administrative
| expenses for social programs and jobs programs (the largest
| of which is bombing people in foreign countries). A very
| tiny sliver is infrastructure that corporations use. And as
| pointed out above, most of that can be paid for via use
| taxes they already pay.
| ineedasername wrote:
| Your viewpoint is fairly well contradicted by recent
| experience with corporate tax cuts that were not
| reinvested back into the company and were instead used
| for massive stock buy backs that gave the money to
| investors and upper management with their own shares to
| sell back into the rising prices, which is what I said
| happens with zero tax rates. Do you think if they went
| even lower that would change?
|
| The use taxes you're referring to are mostly going to
| state-level entities and state infrastructure. They're
| not going to pay for the federal resources, and I
| mentioned services, not just infrastructure. Heck, the
| amount of resources they use in government legal
| services, courts etc alone are significant costs that
| companies pay practically nothing but miniscule filing
| fees to use. Further, even those state level taxes are
| often minimal in the race to the bottom of states giving
| massive tax cuts that negate much of the revenue for the
| sources you mention.
|
| As for annual spending on infrastructure: yes, that is at
| least partially right and is exactly why we have an
| infrastructure crisis in the country with aging
| facilities, bridges, etc and no money to pay for it.
| Whatever companies are paying in use taxes, it's
| certainly not enough to keep pace with our needs. Are you
| an advocate for use taxes, or was that just a rhetorical
| device? Because if you really believe they are
| appropriately paying use tax, and given the
| infrastructure crisis, you should be all for increases to
| those use taxes.
| [deleted]
| cj wrote:
| > A zero corporate tax rate would highly disincentivise
| corporate reinvesting into things like capex for expansion
| or R&D.
|
| Valid point, but are there other ways to incentivize
| companies to reinvest profits without the incentive being
| tax avoidance?
|
| I would be a proponent of 0% tax on small-ish corporations,
| perhaps with profits under $1 million (or maybe $5-10
| million), so that small businesses who can't afford an army
| of accountants to hide profits are brought up to a slightly
| more level playing field with bigger corps.
| ineedasername wrote:
| The problem with taxing based on profits is they can be
| obfuscated in too many ways. I'm not opposed to what
| you're saying in theory, but I think there would need to
| be massive changes to the tax code to make that work.
| ajmadesc wrote:
| spending on RnD is equally incentivised. RnD increases
| share price which would tax free increase net worth.
|
| >find even more creative ways to give it to themselves
|
| This is not a good argument.
| tomrod wrote:
| Acknowledging real behavior is not a good argument?
| ineedasername wrote:
| > _This is not a good argument._
|
| That is not a good rebuttal, it ads nothing to the
| conversation except to say "I disagree" in a slightly
| more adversarial tone.
|
| It need more explanation: Is it a bad argument because
| you think giving it to themselves is okay?
|
| Or is it a bad argument because you don't think that
| would happen?
|
| If it's the later, recent events show you're incorrect:
| corporate tax reductions were used in stock buybacks that
| significantly benefited upper management by selling their
| own stock back into the stock price increases.
|
| And clearly R&D was not incentivised under those tax
| reductions. Also R&D is a long term investment. There's
| no reason to believe the short term thinking that often
| governs corporate decisions wouldn't also win out here.
| Companies that try value R&D would continue, and those
| using it simply to avoid taxes would reduce or stop
| investing in it.
| [deleted]
| pydry wrote:
| > Corporations are _groups_ of people cooperating
|
| With limited liability.
| crispyambulance wrote:
| > After years and years of pushing American manufacturing
| overseas, suddenly Congress wants to entice them back with a
| tax credit.
|
| It wasn't "Congress" behind the push to outsource everything to
| the point where many once mighty American corporations have
| become little more than a veneer of supply-chain specialists,
| the C-level suite and their finance finaglers. This was done
| deliberately and systematically by corporate leadership and
| driven by greed. I suppose some might attribute the root-cause
| to the rise of neoliberalism and the globalization of the
| economy. Whatever it was, it took decades to unfold and it will
| take decades to reverse (if that's even possible).
|
| Congress won't be able to fix this mess by giving away a few
| freebies to rich, powerful, and profoundly self-interested
| corporations. They'll take the money, of course, in whatever
| form it's given. What they do with that money is literally
| "their business" and it's not going to serve anyone's interest
| other than the shareholders.
| ineedasername wrote:
| Offshore profits are why it's nearly useless to lower taxes and
| expect the wealthiest US companies with international holdings
| to pay more than they already do.
|
| Comparing nominal corporate tax rates between the US and other
| companies is nearly useless. As things stand now, for every
| dollar in corporate tax collected the US people pay about $18.
|
| Nominal corporate tax rates have pretty much zero to do with
| manufacturing moving overseas. That was always about lowering
| labor and other operating costs.
| nickff wrote:
| Tax rates have a lot to do with the location of
| manufacturing; highly automated manufacturing can really
| minimize the impact of labor rates, and operating costs are
| frequently lower in the USA. One of the best recent changes
| made to the tax code was to allow for 100% depreciation of
| some capital expenditures within one year; reducing corporate
| tax rates would have the impact of extending this effect.
| imglorp wrote:
| A global would also reduce the incentive. If it's the same
| all over, might as well stay home.
|
| https://www.washingtonpost.com/us-
| policy/2021/06/05/g7-tax-u...
| ineedasername wrote:
| Are costs like rent & utilities and construction of
| facilities really much more expensive elsewhere? I can't
| imagine that a lot of automobile manufacturing would move
| to Mexico if it cost more to operate. Unless you mean the
| labor savings more than offset other cost increases?
|
| I completely agree on capex, but changes there mean
| literally nothing for large multinationals that already pay
| close to zero taxes already. For me though, running a (very
| small) business on the side, I took advantage of that
| myself to make a few big ticket purchases (relative to the
| scale of the business)
| [deleted]
| an_opabinia wrote:
| A few products, like GPUs, already have a 25% tariff added
| to them. Consumers bore 100% of the costs. Nothing changed.
| They are still being made in China for the foreseeable
| future.
| [deleted]
| andyana wrote:
| Don't we trash the Chinese for subsidizing their industries?
|
| I'm not against it, but if this helps people, why aren't we doing
| it for everyone?
| fma wrote:
| The US subsidizes industries pretty frequently - especially
| agricultural.
|
| https://www.thebalance.com/farm-subsidies-4173885
|
| The US got sued by Brazil for it.
|
| https://en.wikipedia.org/wiki/Brazil%E2%80%93United_States_c...
| WalterBright wrote:
| Amusing that while there's proposed legislation to punitively tax
| tech companies and break them up, there's also proposed
| legislation to have huge tax credits for tech companies.
| zamadatix wrote:
| Eh, the issues seem largely orthogonal. If anything
| semiconductor manufacturing subsidies propping up companies
| that are primarily software driven is an argument for breaking
| them up not an opposing idea.
| WalterBright wrote:
| It's the same thing. Breaking up large tech companies will be
| a golden opportunity for foreign companies to step in and
| take those positions. Ever wonder if the public support on
| social media for breaking up the tech companies isn't
| actually coming from the US?
| swagasaurus-rex wrote:
| What about reversing acquisitions?
|
| I'd love if the Occulus headset didn't require me to
| associate a facebook account and send telemetry to Zuck's
| servers.
| zamadatix wrote:
| Which 2 "it"s are being referred to in "It's the same
| thing"?
| specialist wrote:
| Public equity.
|
| US Govt should invest (by whatever means) and then retain some
| reasonable ownership.
|
| Direct action with direct results. Moot the whole taxation
| culture wars food fight.
|
| Edit: aka sovereign wealth funds. Sorry, brain cramp, forgot the
| phrase.
| narrator wrote:
| Maybe they should have some deal where the military gets
| semiconductors at cost or something. Having politicians messing
| around with the management decision making will just screw
| stuff up.
| qbasic_forever wrote:
| Do any of the big companies that could be enticed to build here
| actually pay enough taxes to care about a tax break? There are
| already plenty of ways for them to skirt paying taxes.
| lanevorockz wrote:
| Too little, too late ? Asia at the moment produces almost
| everything we consume.
| bbarley wrote:
| After China annexes Taiwan, we will be much more reliant on other
| sources of computer chips. Ideally for national defense concerns,
| these sources should be domestic.
| markus_zhang wrote:
| TBH it's more of US interest to try to get China into hitting
| Taiwan instead of China's interest.
| vagrantJin wrote:
| > National defence concerns
|
| Honest question.
|
| Do US citizens honestly think National Defence os a top
| priority above all else? If so, why?
|
| The reason I ask is because its quite rare to find any other
| democratic country, barring Israel, that mentions national
| defence in almost every discussion about most things
| ajmadesc wrote:
| Those democracies are protectorates
| alexashka wrote:
| The greater the military budget, the more you have to justify
| it.
| Hnrobert42 wrote:
| Because they don't have to as long as they are under the US
| defense umbrella.
| analognoise wrote:
| Above all else? No, but it's definitely a top priority.
| logicalmonster wrote:
| > Do US citizens honestly think National Defence os a top
| priority above all else? If so, why?
|
| Ultimately, being able to guarantee that you can defend
| yourself ensures you can seek out your other values in life,
| whatever they might be. In fact, I'd argue that many
| countries have the privilege to not even think about their
| national defense too much because they rely on American
| military guarantees for protecting their borders and trade.
|
| Americans certainly do quibble about the size and scale of
| the American military machine and its role in the world
| though. This is a very frequent topic of discussion in
| political discussions with a number of friends.
| Ankaios wrote:
| Here are results of a poll from last summer that asked
| American voters about which issues they consider "very
| important:"
|
| https://www.pewresearch.org/politics/2020/08/13/important-
| is...
|
| "Foreign policy" as a whole was in sixth place, with 57 %
| saying it was very important.
| Darvokis wrote:
| Go back a hundred years and "national defense" was just a
| part of European culture. What's changed is that in the post-
| World War period, Europe was necessarily domesticated (aside
| from the UK and France) and made to be solely dependent on
| the US for all geopolitical and defense needs. The UK
| absolutely still talks about national defense issues. Germany
| chooses to ignore the issue because for the past 70 years,
| the US was tasked with dealing with these pesky minor details
| and Germany could pretend that any global geopolitical issues
| could be solved with pacifism and trade deals.
| shepherdjerred wrote:
| Other democratic countries don't have the influence and power
| that the United States does (for better or worse).
|
| Consider the Cold War (which really wasn't that long ago)
| where there was a real possibility of the destruction of the
| country, or 9/11 where the country banded together to fight a
| perceived threat. Keeping the United States as a top world
| power is obviously going to be of interest to Americans, and
| national defense is a part of that.
| mymanz wrote:
| Indeed. Many in the military suspect we only have six years
| before annexation. Many such articles
| https://www.nbcnews.com/news/world/china-could-invade-taiwan...
| javajosh wrote:
| Yep. Abandoning HK is just the beginning. When the rot gets
| too bad in an empire the only outcome is fall. Ask Rome, or
| any of the 100s of lesser empires that have come and gone.
| The era of Chinese-brand communism, super-charged by free
| markets (!) and the ruthless use of technology, is upon us.
| It's a keep-your-mouth-shut-and-you'll-be-fine era, and I for
| one will not survive in it, and I will mourn the passing of
| our cultural of praising dissent and whistleblowers and the
| trouble-makers that, more often than not, contribute far more
| than anyone else.
| systemvoltage wrote:
| Purely from a technological standpoint (not humanitarian or
| geopolitical), I see annexation of Taiwan as a great thing to
| get US out of it's current laissez faire in Semiconductors, esp
| Intel. It would be a good wakeup call for Silicon Valley to
| stop working on Ad-Tech and start semiconductor startups to
| live up to its legacy dating back to 1970s. I am afraid, it
| won't be SV doing this, it will be Austin (R&D, currently
| Apple/Samsung SoC) and Phoenix (Manufacturing - currently,
| Fab-42 in Ocotillo).
| randomopining wrote:
| Lol what kind of comment is this.
| dang wrote:
| Please keep political and nationalistic flamebait off this
| site. If you want to make a thoughtful comment about
| geopolitical risks to semiconductor supply, that's fine.
| Leading with "After China annexes Taiwan" is trolling--by
| effect, if not intention: https://hn.algolia.com/?dateRange=all
| &page=0&prefix=true&sor.... We're trying to avoid that here.
|
| https://news.ycombinator.com/newsguidelines.html
| 88840-8855 wrote:
| I know you are just trolling, but I still reply:
|
| Past: Mao had the chance to conquer Taiwan, however, the
| causalties appeared him as too high, hence, this "goal" was
| never persuaded.
|
| Present: Despite some very loud hardliners wishing for the
| Chinese invasion of Taiwan, there is currently no indication
| that China is preparing for it:
|
| "Milley added that he thought China had little intention to
| take Taiwan by force: There's no reason to do it militarily,
| and they know that. So, I think the probability is probably
| low, in the immediate, near-term future."
|
| "The PLA currently lacks the required amphibious lift,
| logistics, and materiel for a robust cross-Strait invasion and
| shows no urgency to achieve it," Andrew Erickson, a professor
| at the US Naval War College"
|
| "https://www.ft.com/content/f68c3fdf-5f3b-4cd3-9fcf-03b7a19ea..
| .
|
| I know it is boring for many that wish the evil China to do
| something really evil. But this won't happen, it seems.
| throwaway4good wrote:
| Agreed. Also in their thinking, they have time on their side,
| for every year, for every decade, mainland China grows bigger
| in relative economic terms.
| onlyrealcuzzo wrote:
| Wouldn't it be pretty easy for Taiwan to cause irrevocable harm
| to China?
|
| Why would you assume that they'll just sit around and be
| conquered?
|
| Hong Kong didn't have a military - and even if they did - they
| share a border with China.
|
| It wouldn't exactly be a walk in the park for China to get
| airplanes over Taiwan or to land boats for an invasion.
|
| And if they tried, I can't see the world blaming Taiwan for
| blowing up the Three Gorges Dam - which for China would be
| literally catastrophic.
| whatshisface wrote:
| I am pretty sure that China would lose more trying to take
| the heavily guarded island than they could ever get back from
| occupying it afterwards. Unfortunately that's not enough to
| stop major powers from invading for irrational reasons. If
| major powers only invaded when they had something to gain,
| Saddam would still be in office.
| foobiekr wrote:
| For China, it's an emotional issue. No amount of losses
| would be to steep once it starts.
| wolverine876 wrote:
| > For China, it's an emotional issue. No amount of losses
| would be to steep once it starts.
|
| That's a negotiating position portrayed by China, the
| same simplistic one used by lots of people: 'I'm so
| emotional that you'll just have to back down.'
|
| The risk is that having lit the fire of nationalism among
| their population (as many people are doing), the
| resulting forest fire can be hard to contain.
| hayst4ck wrote:
| I find this statement hard to take. It feels like
| propaganda to me. Emotional issues are not without
| context.
|
| Is it being an "emotional" issue more correct than it
| being an issue of (1) educational indoctrination, (2)
| explicit media based propaganda, and (3) lack of access
| to opposing view points? Clearly there is some systemic
| explanation for people's emotions.
|
| If the Chinese government preached the values of "do unto
| others as you would have done to you" rather than "we
| must right the wrongs of the century of embarrassment"
| would we see this being an "emotional issue." If the
| issue of Taiwan were cast in the light of "if you were
| Taiwanese, how would you feel about China?" do you think
| it would still be an "unstoppable irrational force"? If
| the Chinese government preached values like tolerance and
| diversity, do you think the Chinese people would have the
| stomach for dominating another people?
|
| China, rightfully, was angered by colonial transgression
| against it, but then wishes to be a colonial power
| itself, committing the very same evils it faced against
| less powerful countries. By Chinese standards, it appears
| that might makes right, so should the world not exercise
| might against and colonize China, an action that is right
| under Chinese morality? Or is it a matter of Han
| Supremacy, where the moral system is built upon the idea
| of Han superiority and rules for other nations that don't
| apply to China itself.
|
| How should I feel empathy for "the Chinese people" when
| from the outside it appears that they wish to dominate
| another people?
| whatshisface wrote:
| > _If Chinese people are so [...]_
|
| This is where you are mistaken, thinking that the
| characteristics of Chinese people have anything to do
| with the behavior of the Chinese government.
|
| Edit: it appears that the sentence I was quoting was
| removed from the parent comment.
| [deleted]
| [deleted]
| randomopining wrote:
| CCP has too many missiles. That was their strategy the whole
| time, overwhelming numbers of short to medium range missiles.
| MeinBlutIstBlau wrote:
| What point is conquering a people if you level it to the
| point that people can live there? It defeats the point of
| annexation. I guarantee Taiwan has seen that day coming
| that they've got bunkers galore kind of like Switzerland.
| Believe it or not, it's a mountainous island.
|
| At best, it'd be a drawn out Afghanistan with a diplomatic
| sanction frenzy worldwide. China would be painted by global
| media outlets as evil if they took a total war approach.
| They'd have to do it like Russia with Crimea or Milosevic
| in Yugoslavia with paramilitary groups. Everyday the
| Taiwanese identify less Chinese making it that much harder.
|
| The only thing that will make them do it is if the US and
| EU are in a weak state and can't be bothered with policing
| that. Like another depression and global war elsewhere.
| nyokodo wrote:
| > The only thing that will make them do it is if the US
| and EU are in a weak state and can't be bothered with
| policing that.
|
| If that were the case then neither would they be reigning
| in Japan, Vietnam, the Philippines, South Korea, and
| India. All Chinese strategic adversaries right on their
| doorstep. India alone could shut down oil shipments to
| China that all have to sail close by. Japan's navy is
| stronger than China's and they have formidable air
| defenses. China might just spark a regional war which
| they probably wouldn't win. I hope they're not suicidal
| enough to test this though.
| hindsightbias wrote:
| The worlds outrage would last as long as their iPhone
| supply.
|
| Cook didn't take Trump as a threat enough to justify
| diversifying his supply chain much, he isn't losing any
| sleep about Taiwans upcoming annex.
| MeinBlutIstBlau wrote:
| It won't happen. It would be like Russia in Afghanistan. The
| US would funnel supplies through almost all of their Asian
| allies in the Pacific as well as deploy a UN peacekeeping
| force much like in the Yugoslav wars.
|
| You can be damn sure that an American politician would use
| that as rhetoric to bring jobs back. I can assure you
| republicans would leap for this opportunity. It would be the
| best PR they could ever get.
| ericmay wrote:
| It would be more than that. The U.S. would actively attack
| Chinese forces attempting to invade Taiwan. There is very
| little doubt about that.
| MeinBlutIstBlau wrote:
| I highly doubt they'd get involved at that scale. You're
| talking about a major conflict. One in particular the US
| would not like to get involved in. The US never even did
| that with Russia. What makes you think the US would
| protect Taiwan? US military strategy for the allied Asian
| countries has always been "treat them as a buffer" and
| hasn't changed. If they got involved it would be an
| international incident seeing as two major nuclear powers
| are at war. There would enumerable politicians also
| hesitant to instigate that conflict. The US sat by while
| Britain was being invaded in WW2 and needed ridiculous
| political cozying up to even get troops over to the front
| in WWI. Why would they stick their necks out for Taiwan?
| ericmay wrote:
| Because the U.S. of 2021 is a vastly different country on
| the international stage than it was in 1939, let alone
| 1916.
|
| The U.S. barely had standing armies for either of those
| wars and a _highly_ no-involvement mindset that came
| directly from the sentiments of the American population.
|
| Flash forward to today. Why do you think the U.S. has ~ a
| dozen aircraft carriers if not to defend its interests?
|
| The U.S. would absolutely go to war with China over
| Taiwan. For better or worse. Ground troops? Highly
| unlikely. Air and naval assets? Yea no doubt about that.
|
| The U.S. interactions with the Soviet Union are
| interesting but it's just not quite the same. Had the
| Soviet Union attacked, directly, a key U.S. ally then the
| U.S. might have simply retaliated with nuclear weapons.
| Not worth the risk. There isn't a sense that this is how
| a war with China would progress. A lot has changed.
|
| But overall, there won't be a war unless something
| catastrophic happens to Chinese leadership (like they get
| a real Hitler type of figure), because they're not stupid
| and the status quo works fine for everyone, despite the
| rhetoric.
| jakeinspace wrote:
| Taiwan is one of the most important allies the US has
| against China. I think that a straight-up
| bombing/invasion of Taiwan would be met with a massive
| naval response from the 7th fleet (pretty much total war,
| short of nuclear). China is still at least a decade away
| from naval superiority, so I don't see why they would
| tempt fate. They'll simply continue their buildup in the
| South China Sea, and hope that the US in the meantime
| weakens or loses interest for political reasons.
| cycrutchfield wrote:
| > US military strategy for the allied Asian countries has
| always been "treat them as a buffer"
|
| Is that why there are so many bases and troops in South
| Korea and Japan? Any invasion of either of those two
| countries would likely trigger an instant war with the
| US.
| bpodgursky wrote:
| Taiwan isn't Afghanistan.
|
| It doesn't have a marital culture. It isn't large. It
| doesn't have especially rugged or inhospitable terrain. It
| doesn't have religious fundamentalism. It doesn't have a
| bottom-heavy population pyramid full of young men willing
| to fight a decades-long insurgency.
|
| There's not going to be a Taiwanese insurgency after the
| deed is done. If China takes control of Taipei, the game is
| over. We need to help Taiwan before it gets to that point.
| MeinBlutIstBlau wrote:
| It's Afghanistan in the sense that it's gonna be an
| attritional war. It's a mountainous island so that
| signifies a naval invasion which can be spotted very
| quickly. They may not be prepared but it's not like they
| wouldn't have time to mobilize.
|
| The PRC has asserted their claim over Taiwan for half a
| century at this point. The PRC is China and Taiwan has
| been a part of China for over 100 years. Taiwan is still
| a government in exile as far as diplomacy is concerned.
|
| Why exactly do we need to get involved? You do realize
| that it's a declaration of war? How many Americans
| eligible for the draft do you think right now are going
| to voluntarily sign up for a fight against China?
| Especially if it's just for the defense of some small
| nation like Taiwan? Nobody would be pro draft for what
| would be another Vietnam but instead is an actual fight
| against China.
|
| It's not just a matter of "We should." It's very easy for
| you to say that when you or your children aren't going to
| fight the Chinese in a war that we most definitely do not
| need to be involved in.
| shkkmo wrote:
| > The PRC is China and Taiwan has been a part of China
| for over 100 years.
|
| I think this is not factually accurate. In the last 100
| years, Taiwan and Mainland China have been controlled by
| the same government only between 1945-1949.
|
| China (Qing Dynasty) controlled Taiwan for ~220 years
| before losing it to Japan. Japan ruled Taiwan for ~50
| years. RoC ruled both Taiwan and the mainland for ~5
| years before losing the mainland in the revolution.
| (Edit: RoC has not ruled the mainland for ~60 years,
| which is almost twice as it ruled the mainland.)
|
| I think you are correct that no draft would be
| instituted. We have plenty of military assests that
| certain people would love to justify the maintenance of
| so there would absolutely some fighting by US personel on
| behalf od Taiwan, regardless of how smart or winnable
| that war would be.
| nairboon wrote:
| There will never be a UN peacekeeping mission in Taiwan
| because China will veto it.
| thysultan wrote:
| HTF(how the fuck) is Taiwan going send missiles beyond its
| own airspace let alone over China's to blow up the three
| gorges dam?
|
| If China is serious Taiwan will be encircled with s-400's in
| little islands(artificial or otherwise) surrounding it before
| the first shot is ever fired, at which point the conclusion
| is already a forgone tale.
|
| When it does happen the rest of the world(by which i mean the
| U.S) will be pre-occupied with domestic issues, cyber space
| issues and possibly another pandemic.
|
| Not to mention the backdrop of the fact that the U.S
| launching missiles to China might trigger the MAD doctrine of
| Russia because missiles heading in that general direction
| might as well be heading to Russia, or be assumed to be as
| much.
|
| >"Russia will perceive any ballistic missile launched at its
| territory as a nuclear attack that warrants a nuclear
| retaliation" - Russian military chief warned last year after
| round of reforms
|
| Ergo the U.S president at that time will leave Taiwan out to
| dry instead of risking World War 3.
|
| We're living in interesting times.
| shkkmo wrote:
| > Ergo the U.S president at that time will leave Taiwan out
| to dry instead of risking World War 3.
|
| I don't think (or atleast I hope not) the US would use
| nuclear weapons to defend Taiwan, but I have a hard time
| believing that the US wouldn't offer atleast token military
| resistance. At the very least, the US has a lot of standing
| to lose with it's many allies accross the globe that would
| make leaving Taiwan out to dry very costly.
| thysultan wrote:
| The fact that it need not be nuclear, complicates their
| possible response because
|
| >"Russia will perceive any ballistic missile launched at
| its territory as a nuclear attack
|
| and based on recent historical data in ukraine, it's not
| beyond the states course of action to not do anything of
| consequential note, and instead opting for token
| gestures.
| lettergram wrote:
| Why not just do 25% corporate tax, with a reduction of 5% for
| every 1/4 of your workforce in the US.
|
| The added taxes from people working in the US more than makes up
| for the loss in corporate tax. Further, we can then export the
| goods and make a buck on that.
|
| I really don't get what our gov is doing besides trying to do the
| worst job possible.
| stdbrouw wrote:
| This sort of thing is very easily gamed using transfer pricing.
| There's a worldwide effort to see whether it's possible to tax
| using some combination of where profits are made, where the
| workforce is, etc. (OECD BEPS) but you can't "just" introduce a
| new bit of tax law and hope that it will survive the scrutiny
| thousands of tax lawyers eager to get their clients to pay as
| little as possible.
| howmayiannoyyou wrote:
| Because when you are paying zero (or close to zero) corporate
| taxes by offshoring your revenue recognition, a 25% rate is a
| big increase.
| HWR_14 wrote:
| > The added taxes from people working in the US more than makes
| up for the loss in corporate tax. Further, we can then export
| the goods and make a buck on that.
|
| The US government makes zero dollars on exports. And there's no
| reason to believe that the people working in the US would make
| up for corporate tax dollars. That logic is frequently thrown
| around to justify large corporate tax breaks but to the best of
| my knowledge, no review of the results has shown it to be true.
| Turing_Machine wrote:
| > The US government makes zero dollars on exports.
|
| The companies that make the exports pay taxes. Their
| employees pay taxes.
| HWR_14 wrote:
| > The companies that make the exports pay taxes.
|
| Except this thread is about doing away with those taxes
| because somehow "exports" make up for it.
|
| > Their employees pay taxes.
|
| Yes, they do. And this person suggests cutting corporate
| taxes by 5% for every 25% of the the employees located in
| the US. Do those additional employee dollars pay for the
| corporate tax cut?
| chiefalchemist wrote:
| Worst job possible? From whose perspective?
|
| The larger corporations and associated financial elite aren't
| complaining about the current status quo. In fact, by most
| accounts, it's all working quite well for them.
|
| Based on your observation perhaps the better question is: Who
| exactly is the gov working for? But perhaps just having to ask
| that means we already know the answer?
| dkjaudyeqooe wrote:
| Great. I'll just add a minimum wage whatever department to
| scale up the number of employees.
|
| So create many minimum wage US jobs, and highly paid jobs
| elsewhere.
|
| Nice!
| vegetablepotpie wrote:
| You can also just hire them part time so you don't have to
| pay benefits. Also change their schedules weekly so that the
| "employees" can't find additional work. That way, whatever
| taxes you do pay would just pay for EBT and Medicaid, you
| would have otherwise paid for with higher pay and health
| coverage had you hired full time.
| [deleted]
| Animats wrote:
| How about starting with a 25% tariff on imported consumer
| electronics? And make it for at least 5 years, so plants get
| built in the US.
| wolverine876 wrote:
| Isn't that regressive and unfair to everyone but consumer
| electronics corporations? Force consumers to pay more for
| consumer electronics, in order to direct more money to specific
| corporations (and they are uncompetitive corporations).
|
| Perhaps we should invest more in people who will create
| competitive businesses, such as in education.
| Ericson2314 wrote:
| It's also regressive to cut taxes on some new privately owned
| businesses.
|
| The right way to do this stuff is raze wages in Taiwan and
| Korea. Supply side subsidy race to the bottom when we have an
| aggregate demand issue is stupid.
| wolverine876 wrote:
| > It's also regressive to cut taxes on some new privately
| owned businesses.
|
| What does this refer to? Did someone suggest that?
|
| > The right way to do this stuff is raze wages in Taiwan
| and Korea.
|
| Is it a wage issue? Also, if we education and train
| American workers, maybe they can have higher paying (and
| physically and mentally better) jobs than manufacturing.
| Ericson2314 wrote:
| > What does this refer to? Did someone suggest that?
|
| I mean the original propose. Hopefully it's not just
| Intel and TSMC getting the tax break?
|
| > Is it a wage issue?
|
| Yes, see
|
| https://news.ycombinator.com/item?id=26996090
|
| https://phenomenalworld.org/interviews/trade-wars-are-
| class-...
|
| https://newleftreview.org/issues/ii125/articles/aaron-
| benana...
|
| The last is a critique of the book, but one that
| disagrees about wages being too low in the exporting
| countries.
|
| > Also, if we educat[e] and train American workers, maybe
| they can have higher paying (and physically and mentally
| better) jobs than manufacturing.
|
| Also, manufacturing is fairly automated for quite some
| times now. Boosting manufacturing to create jobs no
| longer makes sense, as much as the nostalgics wish it
| would.
|
| I don't think education is the problem here. The last 10
| years were a credentials rat race because the labor maket
| was too slack. That does cause a "skills are going to
| waste, degrading education" problem, but that's very
| different.
|
| If we can't boost demand enough without more environment
| destruction, then we must to cut working hours. (And we
| should do that anyways.) Either of those will create a
| genuine need for skills to increase productivity, not
| just to have the best resume.
| wolverine876 wrote:
| > The last 10 years were a credentials rat race because
| the labor maket was too slack. That does cause a "skills
| are going to waste, degrading education" problem, but
| that's very different.
|
| I believe people in the HN demographic perceive a
| credentials rat race (and perception may or may not be
| accurate, of course), but my understanding is that for
| most of the population, higher education became less
| affordable. Also, I read several times that businesses
| needed more skilled workers than they could find; in SV,
| good programmers have a lot of economic power, as one
| example.
| bsder wrote:
| I wouldn't automatically say 25% as that's pretty steep, but
| certainly there should be some level of tax on almost
| everything that gets imported that isn't pure raw material.
| jollybean wrote:
| If foreign goods are subsidized, the most obvious thing to do
| would be to raise a levy to the amount of the subsidy, and
| probably to enact other anti-dumping measures.
|
| To the extent that business was confident those measures would
| remain in place, the 'free market price' (heavy quotations) may
| be enough to provide for material investment.
| pydry wrote:
| It seems that the 90s free trade zealotry from the US is finally
| dead and buried now that there's a rival out there.
| gjsman-1000 wrote:
| I have seen some economists say that the best corporate tax
| would, ironically, be 0% Corporate Tax. Why should we double-tax
| income with Corporate Tax and then Income Tax when it goes to
| individuals? Plus, the corporate tax tends to cause all sorts of
| shenanigans.
|
| And this isn't a radical idea. Both right-wing and left-wing
| publications (such as The Washington Post) have proposed it.
| anonuser123456 wrote:
| I would love to see a compelling, good faith argument against
| the revenue neutral 0% corp tax rate. I've never seen a
| compelling counter argument.
| epistasis wrote:
| I think double taxation is a fantastic thing, it allows far
| more granular taxation.
|
| However, I also think we need a land tax, and part of that land
| tax includes the economic land of intellectual property.
|
| IP is one of the biggest roadblocks for new entrants to the
| space, which greatly limits expansion of production capacity.
| This is also very true for things like pharmaceuticals in the
| developing world. There's a tradeoff to be made between
| allowing the creators of new economic land to charge rent for
| the land, and the need to reduce that rent in order to improve
| economic efficiency.
| HWR_14 wrote:
| Why is "double-taxation" bad? What act do you think should be
| taxed where it is being taxed twice?
|
| > The Washington Post) have proposed it.
|
| Leaving aside the idea that a paper owned by the world's
| richest man (with unrealized billions in gains) is neutral on
| the topic of taxation can you cite this?
| zdragnar wrote:
| Corporate taxes directly impact consumers and employees.
| Corporations just increase prices or cut costs to manage
| it... Or, if they are multinational, play accounting
| shenanigans and choose not to remit money back to the US.
| rsj_hn wrote:
| > Why is "double-taxation" bad?
|
| It's not that double-taxation is bad but people are claiming
| that corporate profits aren't taxed or are taxed at very low
| rates (I've heard people use numbers like 5%) and so need to
| be taxed more on general fairness grounds. Pointing out that
| they are already taxed negates that argument.
|
| In general, all "fairness" arguments (this tax is "bad") to
| taxation are quite awful, because they tend to be made by
| people who have no idea of what the actual incidence of
| taxation is. (Really most fairness arguments of any kind are
| awful and suffer from similar problems about people not
| understanding the consequences of their proposals and thus
| not being qualified to decide on what is fair and what is
| not).
|
| For example the same people enthusiastically argue for taxes
| on corporations but not sales taxes, when these have the same
| incidendence and thus are the same tax. The difference is
| primarily one of shifting the burden of who fills out the
| paperwork and a lot of marketing.
|
| And that tendency to view taxation on grounds of fairness
| (e.g. emotion) rather than economic concerns (the ultimate
| cost of the tax) is what opens the door to massive tweaks of
| the tax code by various lobbyists. A simpler tax code that
| treated all sources of income in the same way and did not
| distinguish between expenditures would be a much better
| system than we have now. No tax deductions for any purpose
| and no separate treatment of wage or capital income, or
| inheritance income, etc. Just put it all into one pile and
| apply the tax rate for that pile. Similarly consolidate all
| corporate and sales taxes together into a single VAT that
| does not distinguish by industry or product type.
|
| Then if the government wants to give money for fab
| construction (a foolish policy, IMO) they can do that
| directly. It would be great if we had taboos against tweaking
| the tax code entirely.
| crb002 wrote:
| This is in line with State tax credits on large data centers. At
| least a credit wouldn't favor Intel over AMD. Companies like
| Tesla, Deere, Ford would abuse the credit shifting as much cost
| as they can on their unit that manufactures and tests boards.
| throwaway4good wrote:
| I wonder what the deeper thinking is here.
|
| So right now China consumes most of the world's semiconductors
| but only produces a modest fraction of them. China is going
| through a whole of society effort to expand its semiconductor
| sector in order to not be dependent on anything the US can cut
| off via sanctions. China will expand its semiconductor sector,
| regardless whether it is economical feasible, because it is a
| matter of national security.
|
| The countries that are going to be hurt by these US semiconductor
| subsidies are going be Taiwan, South Korea, Japan ... not China.
| pretendscholar wrote:
| >China will expand its semiconductor sector, regardless whether
| it is economical feasible, because it is a matter of national
| security.
|
| Isn't that the same justification for U.S. re-shoring of
| semiconductor manufacturing? Tighter control over security and
| not being vulnerable to some conflict in the pacific
| endangering everything from automobiles to cloud services.
| Today, everything relies on some chip so domestic production
| reduces vulnerability to fragile global supply chains. Covid-19
| highlighted that vulnerability so I think both the private and
| public sectors in the US are looking to do more of all sorts of
| production at home.
| throwaway4good wrote:
| It is the same words, but not the same reality: The US's
| killing of Huawei was a quite real thing compared to some
| speculations about a future major conflict involving Taiwan
| or South Korea.
| cartoonworld wrote:
| >The countries that are going to be hurt by these US
| semiconductor subsidies are going be Taiwan, South Korea, Japan
| ... not China.
|
| I think I may agree here, and it gets complicated -- fast.
|
| I suspect you might be referring to larger parts like CPUs, but
| you should take this excellent opportunity to investigate
| china's semi industry a bit. China has a very interesting local
| manufacturing economy of parts and suppliers that is mostly
| invisible to outside observers.
|
| It's fascinating that in China, there is a totally divergent
| supply chain to support the cheap consumer electronics
| industry. Granted, it isn't CPUs. However, they sure are
| cranking out semis, its just that they never leave China but
| for inside of another product. The datasheets are all in
| Chinese, they aren't exported, they serve to support China's
| unique manufacturing culture.
|
| Here's a previous submission that delves into this: The
| "terrible" 3 cent MCU - a short survey of sub $0.10
| microcontrollers https://news.ycombinator.com/item?id=20686727
|
| You can also check out Dave from EEVblog's 3-cent
| microcontroller[0] video about the same series of dirt cheap
| micros.
|
| [0] https://www.youtube.com/watch?v=VYhAGnsnO7w
| throwaway4good wrote:
| This stuff (the 10 cents MCUs) is fantastic but probably an
| example of something that will never again be produced in the
| US or Europe.
|
| I was refering to the various statistics you can find on
| this, and I think they count by monetary value. Because the
| US, Taiwan, and South Korea sits on the expensive high-value
| add stuff, they weigh the most.
|
| China has been entering the industry from the lower end, but
| now after the tech war, they are forced into the higher end,
| even if it is not economical viable. So together with this
| made-in-america policy, traditional allies like South Korea
| and Taiwan are being squeezed.
|
| I personally believe that the tech war will deescalate
| drastically at some point, but if this continues we are going
| to end up with a complete parallel world of semiconductors
| all in Chinese.
| audunw wrote:
| I don't agree that China won't be hurt by this. China has had
| some spectacular semiconductor bankruptcies. They've poured
| billions into companies, giving extravagant salaries to
| engineers from Taiwan etc., only for the whole thing to go
| belly up, while the engineers from Taiwan go home to retire on
| a fat stack of cash.
|
| Sure, they've got SMIC, and they have some decent semiconductor
| processes, but they're pretty far behind the state of the art.
| With US ramping up competition, and continuing the pressure
| that prevents China from gaining access to cutting edge
| lithography machines, it's really hurting them.
|
| If TSMC can finally start to build some fabs in the US, I don't
| think it will hurt Taiwan much. There's not much space for more
| than 3 cutting edge foundry companies, but there's definitely
| space for TSMC/Taiwan to have some of their fabs outside
| Taiwan, and doesn't hurt them more than it hurts Intel/US to
| have some outside the US.
|
| Some Global Foundries foundries wouldn't hurt them much either,
| since Global Foundries is specialising on low power, and is a
| bit orthogonal to TSMC/Samsung.
| shkkmo wrote:
| In an actual military conflict with China, all those countries
| are more vulnerable to infrastructure damage than the US.
|
| I believe the thinking is to shore up the supply chain so that
| the US is in a stronger negotiating situation if relations with
| china deteriorate to the point where the threats are less
| implicit.
|
| There is also a significant "America First" mentality that
| wants to boost our economy, no matter what it costs our allies.
| throwaway4good wrote:
| The major military conflict scenarios sounds unlikely to me,
| whereas the cost allies South Korea and Taiwan seems quite
| real.
| shkkmo wrote:
| I think it is less about the likelihood of a major conflict
| and more about the position of strength in negotiations to
| prevent a major conflict.
|
| Edit: Any major military conflict would come at a large
| economic cost to both sides (which is why I agree it is
| pretty unlikely.) However there is an element of
| negotiating strength that comes when the economic costs to
| your side is relatively lower than the economic costs to
| the opposing side.
| elihu wrote:
| That's a lot of money. Perhaps it's good policy, but the idea of
| transferring large amounts of money from taxpayers to private
| industry seems a little sketchy if the government isn't requiring
| anything in return.
|
| What could the government ask for in return? Perhaps an assurance
| that the fab will give priority of at least 10% of its output,
| including its most modern process, to foundry service with
| reasonable and non-discriminatory pricing for at least twenty
| years.
|
| Perhaps there are other ways the government could ensure these
| fabs will be used in ways that are beneficial to all local
| electronics manufacturers and not just the one company that owns
| the fab?
|
| (It's possible these details might be in the actual bill already;
| the article doesn't say.)
| cartoonworld wrote:
| I know this is so different, but I can't help but think of the
| 1950's DoD Heavy Press Program[0]. I think about these special
| industrial monsters a lot when I read about semi fabs.
|
| In WW2 after examining the components from aircraft kills, german
| wing spars would often survive. It was discovered that Germany
| used unique forged alloy wing spars to achieve their excellent
| aircraft performance, perplexing allied engineers. These wing
| spars' strength and weight is critical to the structural
| properties of modern air frames. Without them, jet air craft like
| the f-15 would have been impossible.
|
| Machining these advanced alloy parts proved difficult, expensive,
| error prone, and impossible to manufacture but a die forged alloy
| wing spar was stronger, lighter, cheaper and beyond the
| industrial capability of every allied nation. We did not have the
| metallurgical technology to create such a large forged alloy wing
| spar in 1945.
|
| After the war, the US and Soviets recovered designs for the
| extremely large press assemblies required for advanced air
| frames. In the 1950s, a huge national program was geared up to
| create absolutely massive Heavy Press machines. The Soviets had a
| massive 30,000lb press for these parts, and we created a couple
| of monstrous 50,000lb machines[1] that _are still in operation
| today_. These things are older than we are and still out there
| cranking out air frame parts today for modern air frames in 2021.
|
| Without this kind of national investment in this kind of unique
| manufacturing, we would be unable to fly without importing 747
| parts from wherever they could be created.
|
| [0] https://en.wikipedia.org/wiki/Heavy_Press_Program [1]
| https://www.youtube.com/watch?v=iZ50nZU3oG8
| aww_dang wrote:
| These presses were necessitated in Germany by a shortage of
| materials, abundant magnesium and limitations of the Treaty of
| Versailles
|
| https://www.forgemag.com/articles/84706-invisible-strength-f...
|
| The conclusion about the inability of the market to develop
| alternative or similar manufacturing techniques isn't
| established by observing that the state did.
| [deleted]
| cartoonworld wrote:
| There was a shortage of materials and manpower in late
| Germany, that is another benefit of the forge and extrusion
| process.
|
| The alternative to forging the wing spars is to create a sub
| assembly from a dozen or more smaller components. The
| fasteners, drilling, and overlapping joints create a
| mechanically weaker, larger, and heavier assembly with worse
| material properties than a one-piece forged part.
|
| In addition, assembling a wing spar from a dozen parts
| creates wasted materials from additional steps in the process
| (machining, forging, drilling, riveting a dozen parts) which
| takes much more time, requires skilled technicians, and
| decreases tolerances in the resulting assembly.
|
| Machining titanium has different and worse metallurgical
| properties than a single forged part. You can heat treat the
| forged titanium part which has totally uniform mechanical
| properties, where in an assembly each part might have
| different inclusions and defects that are much harder to
| control for in process. This aids QC as well, as you can just
| X-ray the forged titanium part once.
|
| So yes, they did, but its much more than that. The forged
| wing spars improve dozens of manufacturing, QC and
| engineering problems in addition to the material savings.
| Even without that, the forged parts are still a prerequisite
| for modern air frames.
|
| EDIT: sorry, I didn't notice your edit. It may be that the
| market would provide these Heavy Press machines, and I mean
| the DoD partnered with ALCOA and other existing experts to
| build and run the presses, and the private market owned and
| profited from them, but in 1945 there wasn't a market for
| this except to the Air Force. That's why the DoD funded it.
| I'm sure the market could have also invested the absurd
| dollar sums, I mean the things are _still used today_ , what
| was the total ROI on the Iron Giant presses... its
| incalculable.
|
| But I'm almost certain today's globalized manufacturing would
| do what they are doing now: Make them in Taiwan, China,
| developing nations, and ship them across the ocean. The point
| is that the Air Force recognized the value of making the wing
| spars in country, so you can't bomb, flood, or capture the
| presses. We should definitely be able to crank out i7's on
| our continent, I don't care how.
| aww_dang wrote:
| >We should definitely be able to crank out i7's on our
| continent
|
| Agreed. I'd add that the export of dollars is related to
| central bank policy.
| cartoonworld wrote:
| Yes it gets rather complicated, is Breton Woods good or
| bad, so to speak? Well, I'd like my non-irradiated cake
| and eat it too.
|
| Its mind blowing how much that the post war era is still
| affecting current affairs.
| specialist wrote:
| Terrific analogy, thanks.
|
| I support most any kind of national policy. Industrial,
| agricultural, transportation, education, etc.
|
| Sure, use markets, incentives, competition.
|
| Use some combo:
|
| - private & public orgs
|
| - private & public capital & finance
|
| - top down & bottom up organizations, ranging from risk
| minimizing to hail mary.
|
| Basically, whatever basket of strategies works.
|
| But mostly I simply support directed, sustained investment in
| ourselves and our future.
| wolverine876 wrote:
| > But mostly I simply support directed, sustained investment
| in ourselves and our future.
|
| But who chooses the investment? While I'm not anti-tax, I
| generally think the aggregated intelligence of the free
| market makes the best decisions, in most cases.
| mkr-hn wrote:
| It seems like the free market created the problem we're
| trying to solve here.
| throwaway316943 wrote:
| The government should also invest its capital in the
| projects that it believes will benefit the country. The
| people should have a say in the matter, they're technically
| the investors after all.
| [deleted]
| [deleted]
| specialist wrote:
| Try everything. Why not? Just like science, progress
| requires a lot of failures.
|
| Throwing good money after bad makes me grumpy. So we need
| feedback loops, post mortems, etc.
|
| Currently, every bit of legislation requires a fiscal note.
| Expected costs, projected impact, ROI, etc.
|
| We'd all benefit if society worked harder to do the obvious
| followup steps.
| [deleted]
| laurent92 wrote:
| Sure, but which technology should USA reproduce. Just chips,
| and then be late on everything else?
|
| No. There is a gigantic machine in China, its name is Shenzen.
| Its magic is that you can find any part and people who can
| rebuild them differently.
|
| This is the entire "valley" that USA should bring back home.
| USA should bring back the construction of the Macbooks, phones,
| servers and routers, and the entire ecosystem of tinkering that
| comes with it. This is the backbone of USA's national security.
|
| We just have to acknowledge that having local industries means
| having poverty and dirty waste disposal at home instead of
| 9000km away. Which is not necessarily a bad thing either, so we
| can innovate on efforts.
| azernik wrote:
| > Sure, but which technology should USA reproduce. Just
| chips, and then be late on everything else?
|
| Whichever ones are essential to national security.
|
| The ability to manufacture local, trusted hardware is
| important for military purposes, just like the ability to
| manufacture high-performance aircraft parts was and is
| important in the case that overseas suppliers are hostile or
| cut off.
| petra wrote:
| There's a lot of talk about the tinkering culture of Shenzen,
| but is it really related to innovation?
|
| Has Shenzen become a startup hub? What large startups have
| come out of it?
| [deleted]
| frisco wrote:
| Tencent, Bytedance, Huawei, DJI, SenseTime, ZTE? At least
| back in ~2015 when I visited, it was definitely a major
| startup hub.
| jollybean wrote:
| Shenzen has elements which are probably not reproducible.
|
| But 1) subsidies are what we would call a 'distortion' and
| those should be dealt with, possibly with anti-dumping
| tariffs;
|
| 2) There is such a thing as 'strategic investment' in key
| industries where the bar is very high and $10M from a VC
| won't help. This is where we need coordinated leadership.
|
| 3) There are other ways of 'building stuff'. Automation, AI
| etc. present opportunities for creating substitutes for those
| value chains.
|
| In particular, I think what the DARPA should push for is a
| robotic 'pair of hands' - i.e. a very easily programable set
| of very nimble robotic hands with accompanying vision, that
| can be made to do specific tasks within parameters i.e. 'pick
| up that part, add this other part' and handle most of the
| weird things that can go wrong.
|
| 4) In germs of geopolitics ... it may be more ideal to push
| for more diversity in sourcing and to help develop India,
| Malaysia, Mexico etc. towards doing at least more of those
| things. That's hard though.
| Qub3d wrote:
| Here's a great video essay on the program:
| https://www.youtube.com/watch?v=hpgK51w6uhk
| lumost wrote:
| There is an interesting corollary here. Given a narrow market
| and the high capex of such industrial machinery, it doesn't
| make sense for anyone to build a second machine.
|
| The owner of the machine can effectively charge all customers
| the marginal cost to build a new machine in perpetuity as a
| natural monopoly.
|
| Odds are Semi is heading in the same direction where it doesn't
| make sense to build new fabs except for national security
| reasons, and whoever controls the massive fab can charge the
| marginal cost of building a new one to each of their customers
| indefinitely.
| darig wrote:
| Why couldn't the owner of the machine simply be suicided?
| shkkmo wrote:
| > it doesn't make sense for anyone to build a second machine.
|
| Maybe it doesn't make sense for private parties, since it
| clearly makes sense for nations to not rely of adversaries
| for their supply chains.
|
| I would also argue that it your ability to rely on a
| competitor that is critical to your supply chain depends on
| which laws that prevent anti-competive practices are present
| in the relevant jurisdictions.
| tomp wrote:
| This doesn't make rational sense.
|
| Investments aren't financed by customers, they're financed by
| investors.
|
| I reckon in today's money-printing world it's easy to get
| even $1bn if you can credibly say to the investors that you
| can charge each customer 90% of the full investment (hell,
| even for 10% it's still a great business!)
| [deleted]
| ArkanExplorer wrote:
| Heavy industry and chip manufacturing are not really comparable
| though. The cutting edge nodes are only relevant for a few
| years, maybe a decade for rudimentary components.
|
| The major problem the US, and the West, face right now is that
| its more profitable to speculate on financial and real estate
| assets than it is to actually produce anything.
|
| In 20201 in Sydney and Vancouver for example, the average house
| price has increased more per day than the average daily salary
| for a worker...
|
| The other issue is that the West (particularly the Anglosphere)
| is intent on importing as many low-cost workers as possible,
| from countries with poor records of innovation, who then bring
| their own problems such as caste favoritism and high in-group
| preferences.
|
| The simplest solution would probably be to import Taiwanese
| engineers en-masse, and formally create new chipset companies
| (which are _not_ Intel), which it seems only China is really
| doing.
|
| A direct policy approach could be for the USA to offer anyone
| with a university degree or trade skill and under the age of
| 40, from non-oil countries with a HDI of over .85 the ability
| to permanently migrate to the USA for a nominal fee:
|
| https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...
|
| And at the same time, deporting all illegal immigrants (to free
| up housing) and building walls along the southern border - the
| shortage of cheap labour will encourage automation and
| innovation.
| jiofih wrote:
| Damn, it started well but you went into some really deep
| prejudice. I'll take note that Taiwanese are the best ROI for
| low cost immigrants - apparently much better than Mexicans.
|
| How about putting some reins on the real estate and trading
| markets instead of "getting better immigrants"? Sounds a
| little bit more logical.
| l33t2328 wrote:
| > but you went into some really deep prejudice
|
| Can you elaborate what deep prejudice you got from that
| comment?
| CameronNemo wrote:
| Building a wall to keep the Mexicans out. Seems pretty
| fucked up from my POV, somebody who has lived in SoCal
| for nearly 25 years.
| jiofih wrote:
| For reference, 50000lbs is 22 tons. Tesla is now using 6000 and
| 8000 ton casting machines to build the Model Y and Cybertruck
| chassis. And they come from Europe again!
| mcabbott wrote:
| The big Alcoa press is 50_000 tons, not lbs. There are
| slightly larger ones now, 60, 75ktons. (22 tons is, of
| course, force that any rail yard could produce a century
| ago.)
| durge wrote:
| I think that is a mistyping - the Alcoa presses are 50,000
| tons, not lbs.
| [deleted]
| [deleted]
| fpoling wrote:
| Soviet Union tried that with semiconductor industry in 1970s
| and 1980s. They managed to clone 8086 CPU but failed with 286
| even after Soviet intelligence had stolen detailed blueprints
| for Intel manufacturing processes. Similarly Russia failed to
| create anything close to F22 engines.
|
| What is important is manufacturing culture. Without that one
| can clone a factory, but it will not help with the next
| generational process.
|
| And it is known how to build such culture in relatively short
| time frame, culture. Just look at Japan, South Korea or Taiwan.
| jollybean wrote:
| Good point, but 'manufacturing culture' is also dependent on
| the prevailing 'regular culture' and also 'conditions'.
|
| Japan, SK and Taiwan are the kinds of places where you could
| convince a lot of people to 'do this and that for the good of
| the country' - especially since they were flat on their backs
| and rebuilding from nothing, at the same time facing
| existential external powers.
|
| 'Post-War' was a quasi-authoritarian national strategy almost
| as much as the actual war or preparation for it was.
|
| In North America especially, we live in a 'Safe Bubble' we
| don't really have the sense of existential angst that a place
| like Korea might have, what with a direct record of thousands
| of years of war and tumult from any number of neighbours
| which still exist today.
|
| Even in W. Europe the living memory of that stuff seems
| rather fargone.
| SkyMarshal wrote:
| _> And it is known how to build such culture in relatively
| short time frame, culture. Just look at Japan, South Korea or
| Taiwan._
|
| Indeed. To expand on that, there is an economist Richard
| Werner [1] who has studied that process in depth.
|
| The TLDR is that new money/credit creation needs to be
| allocated primarily toward production and innovation, vs
| consumption or asset speculation (the three things money can
| be allocated toward).
|
| In post-WWII Japan this process was called "Window Guidance"
| [2], an informal system by which the BoJ directed the banking
| system to fund industrial development.
|
| The Asian Tigers and then China all copied the model in their
| development program too, so it's clearly portable, but
| interestingly remains informal. You would think an effective
| model like this would be formalized into law at some point.
|
| [1]:https://professorwerner.org/;
| https://www.researchgate.net/profile/Richard-Werner
|
| [2]:http://princesoftheyen.com/central-bank-money-creation/
| (scroll down to Window Guidance section).
| eplanit wrote:
| Hopefully it will happen. And, while we're properly reversing
| course on bad policy, let's start building some nuclear power
| plants, too.
| Traster wrote:
| As others have pointed out, the US has completely shot itself in
| the foot. Large corporations and their biggest shareholders have
| been systematically moving themselves out of the tax base. So now
| when the US tries to use the tax code to encourage certain
| industries and behaviours, but everyone points out that the tax
| code doesn't exist for the companies they're trying to have
| leverage over.
|
| So what's left? Move the rich back into the tax system? You
| can't, the money you let them keep turns out to be a pretty
| effective tool for preventing that. Or the next natural step,
| take money from that schmuck working a 60 hour week in starbucks
| and hand it over to the world's most profitable companies so they
| fulfill some ill thought out requirements.
| wizzwizz4 wrote:
| > _So what 's left? Move the rich back into the tax system? You
| can't, the money you let them keep turns out to be a pretty
| effective tool for preventing that._
|
| Or just fund the tax collectors, so they can go after the
| bigguns in court. The richest usually wins a legal fight.
| Justin304 wrote:
| ...The lawyers always win in a legal fight.
| javajosh wrote:
| How about a 100% tax credit? That would shift some serious
| capital into this space.
| EnlightenedBro wrote:
| How does one start a semiconductor manufacturing company?
| breck wrote:
| Copyright and patent laws make it near impossible except for a
| few thousand people.
| xbmcuser wrote:
| Starting a semiconductor manufacturing company is 1 thing
| starting 1 that will be competitive will require 100s of
| billions of dollars.
| whatshisface wrote:
| First, find several dozen billion dollars.
|
| More seriously, find a low-performance niche application and
| make chips on old technology for it. Differentiate yourself on
| the basis of being easy for your customers to work with, a
| natural advantage for US-based companies. Then you only need
| several dozen million dollars.
| an_opabinia wrote:
| > First, find several dozen billion dollars.
|
| Some electric car companies have not had trouble tapping into
| capital markets. Even Transmeta, a fabless IC maker, could
| tap $275m in _2000_.
|
| If you were a super talented engineering firm with the
| ability to spend $2b on a fab, you could tap finance for it.
|
| > More seriously, find a low-performance niche application
| and make chips on old technology for it.
|
| This seems like the opposite of any winning strategy, and the
| opposite of what the government should subsidize. TSMC is so
| successfully because it relentlessly focuses on performance
| chips. If you are enjoying American subsidies it better be
| for the cutting edge, what the hell else are we paying for?
|
| > Differentiate yourself on the basis of being easy for your
| customers to work with
|
| The only customer that matters is Apple, and your only
| competition is Samsung and TSMC. Everyone else is using
| "foreign chip manufacturers" as a way to launder low Chinese
| labor costs, not because there is inadequate supply or poor
| competition in specifically semiconductor manufacturing.
|
| Perhaps that's what people want - a manufacturing hub, i.e.,
| assembly of chips, not the chips themselves. I don't know if
| that's super important.
| qbasic_forever wrote:
| Starting from zero and competing directly with TSMC's top
| end processes right now is basically being at the
| "President Kennedy said we're going to the Moon" stage of
| landing on the moon. You are going to need many, many
| billions and billions of dollars and years of engineering
| and manufacturing (and failures) to get there. This is not
| something you just turn on the money spigot and solve the
| problem overnight. It is spectacular engineering at the
| smallest atomic level to produce in mass quantity the chips
| from TSMC today.
| Ekaros wrote:
| They have spend decades to fine tune the process to be
| just right. Just money isn't enough, and then we can also
| look Intel and their 10nm and that is company with
| experience, history and some workforce in place. Reaching
| that level from fresh isn't simple thing.
| javajosh wrote:
| The US has an overabundance of brilliant physics PhDs
| most of which are probably pretty sick of academia's
| bullshit at this point. Let's give 2000 of them a
| 100k/year job plus $5B, cheap/free access to federal
| land, energy, and water, and see what kind of fab(s) they
| could make. I bet they'd get to TSMC's level pretty
| quick. If we offered Taiwan a mutual defense pact, we
| might even get their help to get there.
| an_opabinia wrote:
| This is the right idea. But like I said, most of the
| value is in exploiting cheap Chinese labor, not the
| chips, which is why really none of that would work
| accounting wise - like you're talking about a valuable
| economic enterprise but not one that would produce a lot
| of profits for shareholders.
| qbasic_forever wrote:
| They'll turn it down because they can make $250k a year
| writing code for Facebook/Google/etc.
|
| And it's really more talent in process engineering that
| you need, not in the physics of chip building. We already
| know what has to be done to make transistors. It's the
| how to do it at scale and with high enough yield that's
| impressively difficult.
| ajmadesc wrote:
| >What the hell else are we paying for?
|
| Are chips for industrial equipment or cars? When you say
| cutting edge I think desktop / phone / servers.
| willis936 wrote:
| This question makes me think of another question: is there a
| difference between a rich tax credit and a poor tax?
| lisper wrote:
| Yes. The difference is in how it is perceived, but in an
| economy, perceptions actually matter. If you give a tax
| credit to the rich, the poor don't _perceive_ it as a tax on
| them even though the strict monetary effect is the same in
| both cases i.e. a wealth transfer from the poor to the rich.
| But because the poor don 't perceive rich tax credits as a
| tax on them they are less likely to object.
| Ericson2314 wrote:
| That type of thinking is political suicide in the long
| term. Big meddling government that doesn't attack the fact
| that we have far more _demand_ than supply problems is
| going to get thrown out.
| zdragnar wrote:
| They aren't related at all, because the federal budget and
| revenues don't need to balance. They rarely ever do.
|
| On the other hand, tax credits _can_ be (but arent guaranteed
| to be). That is, if a tax credit incentivizes creating jobs
| that would not have existed (in the US) otherwise, those jobs
| end up also stimulating other economic activity. Tax
| incentives at the state level tend to be closer to zero sum
| (or a net loss) if the jobs would have been created anyway,
| or when thr incentives aren 't strictly tied to quantifiable
| completion metrics like factory completion, number of
| positions filled, etc. (Much ado about Foxconn in Wisconsin,
| etc)
| Ericson2314 wrote:
| Huh? Yes federal debt doesn't matter but that's why they
| are similar--they are both shifting power to capital away
| from labor.
|
| The fact that governments try to do Keynesian by making
| manufacturing jobs in 2021 kills me. We're decades past the
| point where those sectors were sufficiently unproductive to
| benefit the workers as they did in the glory days. Boost
| demand directly (UBI), keep an ey on imports, and let
| private capital fend for itself.
| zdragnar wrote:
| > they are both shifting power to capital away from labor
|
| This doesn't make sense to me. There _wouldn 't_ be labor
| to empower if the tax credit was one of the factors that
| determined whether the plant would be opened here or not.
|
| Zero-sum would imply that, were the tax credits not
| handed out, the revenue would instead go to some other
| program- except that in this scenario, _there is no
| revenue without it_.
|
| Sure, we could get into a trade war with the rest of the
| world by taxing or banning imports, but that would
| definitely leave everyone worse off.
| Ericson2314 wrote:
| Really the US should pay for UBI in Germany, south Korea,
| etc. to boost export prices there so it's a race to the
| _top_.
| bob1029 wrote:
| Very carefully. And as of 2021, also with the aid of a time
| machine.
| xony wrote:
| useless move..
| DSingularity wrote:
| Wow, I always thought Intel will go bankrupt but I guess it's
| clear that US is going to back them.
|
| Gotta give Intel a lifeline because the longtime strategy of in-
| house design+manufacturing no longer works when you lost the
| manufacturing edge, when you missed the transitions to mobile and
| GPU, and when you are stuck with the same crappy designs for the
| one market you dominate: server.
| eulers_secret wrote:
| How would Intel go bankrupt when their net income is still $20
| billion?
|
| Sure they're loosing some ground, but I see no indicators
| they're at risk of a near-term bankruptcy...
| DSingularity wrote:
| Once they stutter it's game over. You have to research and
| build fabs years before you start using them. What happens
| when they get stuck and fall behind TSMC for a few
| generations?
| 0x456 wrote:
| Intel can just use TSMC to build their chips:
| https://9to5mac.com/2021/01/08/bloomberg-intel-
| considering-o...
|
| If second place wasn't fatal for TSMC, AMD, or ARM, perhaps
| it won't be for Intel either?
| klelatti wrote:
| But TSMC and ARM have very different business models.
|
| AMD divested their manufacturing capability in order to
| compete.
|
| The question I think isn't whether Intel will be around -
| they will - but what will their business look like in
| 5-10 years time.
| klelatti wrote:
| I don't think bankruptcy is likely at all but they have more
| competition than for a long time (if ever) in their most
| profitable markets. I don't think backwards looking measures
| like historic earnings are that useful - if you look at the
| price / earnings ratio of 12 that tells you that the market
| is sceptical about Intel's prospects.
| b9a2cab5 wrote:
| If Sapphire Rapids and Meteor Lake fail they might be in
| danger. Increasingly the threat is not AMD but Arm, since
| cloud hyperscalers can bring CPU design in house and undercut
| x86 and Arm's fixed length instruction encoding is
| fundamentally better for very wide decoders.
| MangoCoffee wrote:
| >Intel will go bankrupt
|
| why and how? Intel still have a good share of x86 market.
| Turing_Machine wrote:
| I'd be surprised if x86 is still a major thing in 5 years,
| and very surprised if it was still a major thing in 10 years.
| It's had a good run, but it's 40 years old (with, granted,
| many extensions and improvements). Sometimes you need to
| start with a fresh sheet of paper.
|
| Apple's M1 was the first shot across the bow, and I believe
| AMD has an ARM-like architecture in development as well.
| ChuckNorris89 wrote:
| _> I'd be surprised if x86 is still a major thing in 5
| years_
|
| Then get read to be surprised. X86 ain't going nowhere in
| the next 5 years.
| passivate wrote:
| I've been hearing that about ARM for more than a decade.
| Whats different now?
| sofixa wrote:
| A consumer company started selling laptops with ARM
| chips, so obviously everything will change! /s
|
| More seriously, companies like AWS have developed ARM-
| based chips in-house, and they seem to be very good
| (cheaper, faster than x86 equivalents) for specific
| workloads. That will certainly help with adoption, but i
| sincerely doubt x86 will stop being the dominant
| architecture. Maybe the consumer market will see a
| significant shift towards ARM. But not the real money
| maker, datacenter.
| Miraste wrote:
| Nothing's different, this is the culmination of the last
| decade's work. These changes are slow, but ARM is now as
| fast or faster than x86 in several contexts while being
| vastly more efficient, and looks likely to continue
| improving at a better rate. ARM has started appearing in
| laptops, desktops, and servers. x86 is running out of
| bastions.
| spiderice wrote:
| > Whats different now?
|
| It's powering the laptops and desktops of the most
| valuable tech company in the world and outperforming even
| the best predictions from a year ago.
| KronisLV wrote:
| In contrast, i'd be surprised if x86 were to disappear in 5
| or 10 years from the mainstream. Personally, i think that
| there's too much similarly old software that's build first
| and foremost for x86, porting which would take bunches of
| time and effort.
|
| Furthermore, ARM is only big in the consumer markets as a
| part of SoC designs, which are bad for a variety of
| reasons, notably, limited upgrade possibilities. For
| example, i cannot go to an Internet store within my country
| and purchase an ARM-compatible motherboard and buy an ARM
| CPU separately. As for Apple's M1 offering - i think it's a
| good start to demonstrate the feasibility of ARM, but i'd
| say that ARM will most likely remain popular mostly for
| phones and tablets.
|
| I'd bet on maybe another 20-40 years as the timeframe for
| ARM to replace x86 and for the latter to become irrelevant.
| Turing_Machine wrote:
| > Personally, i think that there's too much similarly old
| software that's build first and foremost for x86, porting
| which would take bunches of time and effort.
|
| I just got an M1 iMac this week. So far I haven't found
| any of my old x86 stuff that won't run. I'm positive that
| such software exists, but nothing I use on a regular
| basis.
|
| While I haven't done any formal benchmarks, most of it
| feels faster _under emulation_ than it did on my previous
| iMac (which, to be fair, was a few years old).
| KronisLV wrote:
| Then why does Windows lag behind with its x86 emulation
| capabilities when running on ARM? For example:
| https://www.techspot.com/review/1599-windows-on-arm-
| performa... and
| https://www.windowslatest.com/2018/03/27/windows-10-on-
| arm-b... (disclaimer: these are from a few years back,
| because seemingly there isn't a lot of interest in the
| topic)
|
| I feel like there's more to Apple's success, in part
| because of them having full control over the whole
| ecosystem, from the hardware, to the OS, to the languages
| that they'd like to support within their platform. Doing
| that for near-arbitrary hardware (e.g. everything for
| server hardware, to regular workstations, to budget off-
| brand laptops) would be far less likely to succeed on
| such a scale.
|
| Unless everyone ditches Windows in favour for other OSes
| that would play nicely with ARM, or unless Windows
| manages to make leaps in regards to emulation technology,
| i don't see ARM going mainstream for the kind of personal
| computing that people do on their PCs (as opposed to
| mobile devices, where ARM clearly dominates).
|
| Plus, there's an argument to be made that we shouldn't
| even need emulation in the first place, just software
| that's sufficiently portable to be compiled for a new
| target, or written in a platform-agnostic enough way that
| it can be easily ported over to a new architecture.
| heartbreak wrote:
| Even if Intel was at risk, bankruptcy doesn't mean the company
| evaporates off the face of the earth.
| tolbish wrote:
| Can we also offer tax credits to encourage making the next
| hardware innovation hub somewhere other than _Phoenix, Arizona_?
| I thought the southwest is being ravaged by the effects of
| climate change (120+ degree weather, massive droughts)
| bgorman wrote:
| The water used by a chip factory is almost 100% recycled
| KingMachiavelli wrote:
| So they would be OK paying a 10x price premium? at least that
| would be the easiest way to determine if the claim is true.
|
| At least in Taiwan earlier this spring was facing a drought
| which came close to impacting semiconductor production.
| [deleted]
| [deleted]
| farco12 wrote:
| Do you mind providing a source for that claim?
|
| I've seen several articles[1] mentioning that the current
| Taiwanese semiconductor shortage has a lot to do with water
| rationing due to drought. Do semiconductor manufacturers in
| Taiwan not recycle water like semiconductor manufacturers in
| Phoenix?
|
| [1] https://www.wsj.com/articles/the-chip-shortage-is-bad-
| taiwan...
| franknine wrote:
| Semiconductor manufacturers in Taiwan are mostly around the
| Hsinchu area. They paid a premium to truck water from other
| areas and the government limited agricultural activities in
| Hsinchu as well. They almost got affected, but then there
| was a heavy rain in late May and the water rationing was
| lifted for Hsinchu.
|
| Currently COVID poses a larger threat to semiconductor
| production as multiple COVID clusters are detected in
| packaging/testing plants.
| BlueTankEngine wrote:
| Pretty sure the OP is right, not sure about Taiwan
|
| Source: https://www.cnbc.com/2021/06/04/why-intel-tsmc-are
| -building-water-dependent-chip-plants-in-arizona.html
| pretendscholar wrote:
| It says page not found.
| bellyfullofbac wrote:
| You should notice that the text after the URL still looks
| like a URL, so there must've been an extra space in the
| middle of it...
|
| Feel free to burn this comment to the ground, but is this
| really the level of HN reader nowadays? Can't even notice
| a spurious space...
| GoOnThenDoTell wrote:
| Seismic stability is apparently a big plus for the area
| andrewmcwatters wrote:
| We might be on fire, but doing business here is excellent. I'm
| fine being quoted on that.
|
| It's just about a joke anywhere else I've seen. Such as annual
| fees just to maintain an LLC. As if you're not already paying a
| high effective tax rate.
|
| The cost of living and cost of doing business doesn't make much
| sense in other major metros. Unfortunately, so many people are
| coming here that it's raising our COL, too.
| CameronNemo wrote:
| _The cost of living and cost of doing business doesn 't make
| much sense in other major metros._
|
| Then explain all of the people living and doing business in
| other metros out west? Must have made sense for them...
| wolverine876 wrote:
| > It's just about a joke anywhere else I've seen.
|
| Wow, you encompass a lot of very successful communities and
| businesses with that statement.
|
| > Such as annual fees just to maintain an LLC.
|
| I don't know what you mean exactly, but I've never heard a
| businessperson complain about such fees.
| andrewmcwatters wrote:
| Well, hello then. Here I am, complaining. Operating costs
| for a business to simply exist should be nothing. Free.
| Nada. It should cost 0 for some database entry to exist in
| a corporation directory. Oh, and if you're interested in
| that, welcome to Arizona.
|
| You're already paying taxes. You're already paying
| insurance. You're already taking on risk. There should be
| absolutely no friction to take on risk and start an
| enterprise. Leave that friction to all the other places
| that make sense like taking out a loan, building your
| brand, establishing a network.
|
| And yet, if you wanted to expand to other countries, you
| have to pay sometimes thousands of dollars annually just to
| exist as a foreign corporate entity. It's nonsense. It's
| just a money grab for certain regions. As if you paying
| those contractors or employees isn't directly injecting
| capital into those economies.
| CameronNemo wrote:
| If you can't scrounge up a few hundred to register an LLC
| ($140 in Washington from what I read), how the hell are
| you going to order any kind of computer hardware?
| Prototypes can cost thousands.
| rapind wrote:
| This sounds like a really good point to me. If a
| politician wants to encourage small businesses, why not
| remove all fees to get up and running? Maybe provide free
| lawyering and business plan consulting as well?
|
| Too often incentives are locked behind a bunch of
| paperwork and hoops which require up front capital to
| take advantage of. Which creates a market for third
| parties to benefit from by charging for these services,
| instead of founders benefiting directly.
|
| A great example of a horrible incentives program that
| results in this is SR&ED in Canada. I guess you could
| argue it employs a bunch of service providers to assemble
| SR&ED claims... so jobs?
|
| You also pay at least $600 to incorporate in Canada and
| most often employ a lawyer to do it for you ($1,200+).
| Seems pretty counter intuitive if your goal is to promote
| startups and small business.
| wolverine876 wrote:
| An argument in theory, but in practice it has no bearing
| on starting a business. You can complain all you want,
| but in my entire career you are the first.
|
| In theory, a business receives very many services from
| government, such as entire systems of infrastructure
| (which itself is composed of systems of transport,
| energy, etc.) and law. The fees are a fantastic deal.
| bpodgursky wrote:
| That requires individual states to be tax and business
| friendly. The Northeast and Pacific rim no longer make any
| attempt at this. The rust belt tries sometimes, but flip
| politically too often for companies to make big investments.
|
| There's nothing meaningful congress can do to order states to
| be friendly to business.
| wolverine876 wrote:
| That depends on your definition of tax and business friendly.
| Note that the Northeast and Pacific Rim have produced far
| more success and wealth in business than other places,
| probably more than any places in the history of the world,
| without exaggeration.
|
| Taxes are the front end transaction of investment, in
| education, infrastructure, courts, support for workers and
| families, etc. Those things are very business friendly. Low
| tax areas, which lack this investment, don't have a great
| history with businesses.
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