Monday, February 27, 2006

Assessment adjustments

None of these adjustments were in Warren Buffett's original proposal. I believe that this first one, export assessments should be adjusted to exclude the value of precious or scarce stones and minerals inherent to or within the materials of assessed goods is imperative. Otherwise entrepreneurs would be exporting gem encrusted cast gold paper weights to acquire transferable Import Certificates in order to import more labor or technologically intensive goods. This would evade the proposal's purpose. It is a "deal buster".

Excluding the value of specified rare or scarce natural materials inherent to goods decreases but generally do not compltely eliminate the goods net assessed value. Such goods as jewelry, cut or polished stones, refined oil products all would retain some their assessed value. It’s generally preferable, (but not an absolute necessity) to draft laws and regulations in a consistent manner. It would be desirable to have both imports and exports of the same goods be assessed in the same manner.

I prefer we exclude the value of fossilized materials from our exports. We can not readily replace such material. Encouraging their export would be contrary to our best interest.

The USA is an increasingly greater net importer of fossilized materials and products. Requiring Import Certificates for their full value increases the certificate’s market price. This additionally increases the USA consumers’ price of both domestic and imported refined oil products and all other imported goods. It also increases the certificate’s subsidy affect upon USA exports.

Americans consider oil and gas a necessity. It is politically rather than economically more palatable to exclude the value of fossilized material from import assessments. (If the USA chooses to discourage oil consumption, we could increase the tax on oil, gas and gas guzzlers. All of the additional price will be government revenue).

Importing USA price supported commodities are currently restricted. The USDA subsidizes their production and additionally subsidizes their export. I prefer that we not grant them an additional export subsidy. The USDA could modify their regulations of these commodities to consider the Import Certificates. The decreased government expense would benefit the general budget and thus our taxpayers.

Artifacts, antiques or memorabilia (if assessed at all), should not be authenticated. Their assessment should be based upon their quality as replicas rather than as genuine. There’s no economic advantage from last century’s production. Exports produced more than two years prior to shipment from the USA should not be assessed. The tourist industries will lobby for some reasonable exclusion for goods brought into the USA by tourists. All of this is not economically significant.

If canned fish enters the USA we can assume that it was transported from a foreign port. We may be able to treat processed and/or packaged sea food similar to our treatment of other imported goods. If a USA fishing vessel enters USA waters, can we assume that its cargo of fresh sea food was obtained by her crew? Couldn’t the cargo have been transferred at sea from a foreign vessel? I don’t know the answer to this question.

Various government agencies will complain that this trade proposal denies them international negotiation discretion. Often government agencies have traded away the interests of some USA industry(s) in order to acquire what’s (in the government’s opinion) a greater national benefit. Under this proposal, USA negotiators (in regard to global trade) would be forced to shrug and reply “We’re not empowered" or "We lack the legal discretion to grant what you’re requesting”. IMO the Presidential power to utilizing “fast track” negotiation has done our nation much more harm than good. I’m opposed to granting government any more discretion than is reasonably required.


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