The reduced capital inflow will tend to reduce the gaps between domestic investment and saving and government expenditures and tax revenue the deficit in question.
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If he does so, without any compensating benefits for the victims (who, in the end, are pensioners, normally a key Labour constituency), it will be seen as an opportunistic, short-termist raid that undermines Labour's claims to want more investment and saving.
That has required us to make up the difference between our national investment and national saving by borrowing abroad in the form of the capital inflow that finances our trade deficit.
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Other things equal, the reduction in the trade deficit due to fracking will reduce imported capital and put pressure on investment relative to saving and government spending relative to taxing.
To understand why, one needs to focus on an accounting relationship: by definition, the sum of net private-sector saving (saving less investment) and public-sector saving (the budget balance) must be equal to a country's current-account balance.
Squeezing down current consumption and encouraging maximum saving and investment produces a higher growth rate and higher standard of living some time in the future.
Meanwhile, the 3.8-percent tax on unearned income, like capital gains, dividends, and interest, will discourage saving and investment.
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Margo Thorning is Senior Vice President and Chief Economist for the American Council for Capital Formation (ACCF), a nonprofit, nonpartisan organization advocating tax, energy, regulatory and environment policies that facilitate saving and investment, economic growth and job creation.
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Higher tax rates involve counterproductive disincentives for production, borrowing implies future tax increases and interest costs, and inflation further discourages saving, investment, and production.
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Because the long term returns from real savings and investment are so much higher, saving and investing over a lifetime the 2.9% Medicare payroll tax in the personal accounts would produce an income stream in retirement roughly three times as large as the uninvested, tax and spend, purely redistributive, pay-as-you-go Medicare payroll tax today.
An even stricter test of capital-market integration, and the one on which the flows of saving and investment really depend, is that real (ie, inflation-adjusted) interest rates should be equal across countries.
It is based on the fact that the sum of the budget deficit, the capital inflow to finance the trade deficit, and the difference between domestic saving and domestic investment equals zero.
Those three forms of national saving fall short of national investment and have to be supplemented by an inflow of foreign saving.
"Chancellor Merkel's coalition government has made an important contribution to the economic upswing by introducing investment programmes for energy-saving technologies, and measures to encourage small business investment, " said Gustav Horn, director of the Macroeconomic Policy Institute.
Despite this plunder of the pension pots, China has no shortage of saving and investment.
Any economic expansion that does not result from increased voluntary saving and investment cannot be sustained.
Taxing consumption rather than productivity would encourage saving and investment, in turn stimulating production and economic growth.
Japan's higher saving and investment has helped to make up for its relatively low return on capital.
The mismatch between saving and investment will eventually push up interest rates, making some previous investments unprofitable.
It diverts energy away from producing forward thrust by channeling it out of saving and investment into consumption.
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If economic growth is the objective, the money should be left in private hands for saving and investment.
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But it operates as a tax-rate hike for those in the phase-out range, discouraging work, saving and investment.
Done correctly, the flat tax eliminates all double taxation of saving and investment.
Without sufficient saving and investment, our stock and quality of capital goods cannot even be maintained, let alone increase.
Income taxes generally do more economic harm because they are a direct penalty on saving, investment and labor that create new wealth.
The bank produces cartoon books explaining the rudiments of saving and investment in 11 local languages, and hands them out in schools and post offices.
In other words, Obama claims to be concerned about jobs, but he is proposing a big tax hike on the saving and investment that is necessary to create jobs.
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One way to demonstrate this is to remember that the gap between domestic saving and investment must be equal to the current-account balance, which is probably measured more accurately.
The deficit is created by the rational saving and investment decisions of private firms and individuals: there is no reason why the government should know any better than they do.
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