About that "middle class" tax cut

[transporter]

The GOP tax plan on the cusp of becoming law diverges wildly from the promises President Trump and top advisers said they would deliver for the middle class — an evolution that shows how traditional Republican orthodoxy swamped Trump’s distinctive brand of economic populism as it moved through Washington.

The bill was supposed to deliver benefits predominantly to average working families, not corporations, with a 35 percent tax cut Trump proposed on the campaign trail as part of the “Middle Class Tax Relief and Simplification Act.”

“The largest tax reductions are for the middle class, who have been forgotten,” Trump said in Gettysburg, Pa., on Oct. 22, 2016.

and

All told, the plan would cut taxes for businesses by $1 trillion, would cut an additional $100 billion in changes to the estate tax for the wealthy, and spreads the remaining $300 billion over 10 years among all households at every income level.

https://www.washingtonpost.com/busi...te746pm:homepage/story&utm_term=.c6d7d4d80117

Now I realize that folks like Gilligan think a tax cut for corporation means that corporations will immediately increase wages and hire more people. I know many of you think like that because that is what the corporations tell Fox News (aka Trump News) to tell you. And of course you ONLY believe Trump News....everything else is fake...as this report must be since it comes from WaPo...right?

Why would you believe history ? Why would you believe the responses of the CEOs themselves? Why would you try to understand the basic principles of business?

It is so much easier and to just believe what Ace of Spades tells you. It is so much easier to just ignore the fact that Trump is unqualified...that Trump never gave a rat's ass about you or your needs...his campaign was all about him and his feud with Obama.

 

[Grumpy]

When you're dead, you don't know you are dead, but the people around you do. The same thing applies when you are an idiot.

 

[Monello]

Trump never gave a rat's ass about you or your needs...his campaign was all about him and his feud with Obama.

Record stock market
Illegal invaders crossing the border down significantly
Thousands of new jobs created
Low unemployment
Highest black homeownership ever
Restrictive business regulations eliminated
Congressional sexual harassers/abusers outed

I hope he continues to not care about us.

All Barry & Mooch have are their sour grapes.

 

[Gilligan]

Now I realize that folks like Gilligan think a tax cut for corporation means that corporations will immediately increase wages and hire more people..

That's beyond silly. You should look in to taking a first-level ECON class, sugar britches. Leave the discussion for the grown-ups, especially the ones that own and/or manage businesses.

 

[Gilligan]

...his campaign was all about him and his feud with Obama.

So much winning!

 

[vraiblonde]

What do lefties think people - and corporations - do with their money? That's a real question because I see them all the time insisting that "rich" people and "corporations" hoard money and stick it in a mattress or something. How do they not understand why layoffs and downsizing happen? Why don't they understand belt-tightening?

Those are real questions.

 

[Bird Dog]

What do lefties think people - and corporations - do with their money? That's a real question because I see them all the time insisting that "rich" people and "corporations" hoard money and stick it in a mattress or something. How do they not understand why layoffs and downsizing happen? Why don't they understand belt-tightening?

Those are real questions.

It like trying to describe the color red to a blind man.........

 

[Pete]

What do lefties think people - and corporations - do with their money? That's a real question because I see them all the time insisting that "rich" people and "corporations" hoard money and stick it in a mattress or something. How do they not understand why layoffs and downsizing happen? Why don't they understand belt-tightening?

Those are real questions.

Large corporations execute stock buyback plans to increase their value. Some will apply the extra revenue to dividends which benefit stock holders including 401K and investment accounts held by "people" who are not the poor.

A lot of times layoffs are not necessarily due to lack of revenue it is due to improvements in efficiency , elimination of non profitable product lines. Large corporations have the benefit of being able to leverage corporate bonds for revenue needed to expand whereas small companies do not. They must borrow from banks or other equity firms that charge them significantly higher rates.

Some companies do in fact hoard cash. Apple is an example of this.

Of course conservatives hope that businesses will 1. Increase wages, 2. Expand business creating more jobs, 3. lower prices since their margin is now greater since their tax burden is lower. There is no guarantee they do that vice what the liberals fear. Liberals see all companies as evil self serving entities, which they are just like you and I are self serving entities. We do things in OUR best interest given no ####s at all about how what "we" do effects the people down the block.

The issue is companies CANNOT 1. Raise wages 2. Hire more people, or 3 Lowering prices if the tax rate does not get lower. To me liberals do not fear the economy staying still as it has in the past. The fear is that lowering the tax rate will sap the revenue needed to fund their bloated programs, which is why they whine now about all the stuff that will presumably suffer, CHIP, Medicare, Social Security and there stuff. Many may believe in trickle down but hate it none the less because "trickling is slow and not guaranteed" like a 35% tax rate is.

 

[stgislander]

What do lefties think people - and corporations - do with their money?

 

[Gilligan]

View attachment 120791

I usually close the door to my office before I do that.

 

[MiddleGround]

Recently saw a video that was made at a convention of business owners regarding building and growing their business. The host was a renowned motivational business speaker.

A question was posed to the 200+ business owners in the room. The question was "Can you please raise your hand if you plan to use the new tax credits and deductions, posed by Congress and the President, to re-invest and/or grow your business OR to reward your employees?"

Sadly, about 5 of them raised their hands. In the entire room. Pretty powerful statement. And, before you say it. If they edited the video to pull a bait-n-switch, it was the best edit I have ever seen!

 

[Starman]

Of course conservatives hope that businesses will 1. Increase wages, 2. Expand business creating more jobs, 3. lower prices since their margin is now greater since their tax burden is lower. There is no guarantee they do that vice what the liberals fear. Liberals see all companies as evil self serving entities, which they are just like you and I are self serving entities. We do things in OUR best interest given no ####s at all about how what "we" do effects the people down the block.

The issue is companies CANNOT 1. Raise wages 2. Hire more people, or 3 Lowering prices if the tax rate does not get lower. To me liberals do not fear the economy staying still as it has in the past. The fear is that lowering the tax rate will sap the revenue needed to fund their bloated programs, which is why they whine now about all the stuff that will presumably suffer, CHIP, Medicare, Social Security and there stuff. Many may believe in trickle down but hate it none the less because "trickling is slow and not guaranteed" like a 35% tax rate is.

This is typical supply-side swill.

"The issue is companies CANNOT 1. Raise wages 2. Hire more people, or 3 Lowering prices if the tax rate does not get lower."

Bullcrap. All three of these things are driven by aggregate consumer demand. Companies will have no reason to raise wages, expand hiring, or lower prices if folks are not buying what it is you're selling.

 

[Bird Dog]

This is typical supply-side swill.

"The issue is companies CANNOT 1. Raise wages 2. Hire more people, or 3 Lowering prices if the tax rate does not get lower."

Bullcrap. All three of these things are driven by aggregate consumer demand. Companies will have no reason to raise wages, expand hiring, or lower prices if folks are not buying what it is you're selling.

You have probably never owned a business......so you just do not understand. I will explain it to you.

We raise wages as our business grows and we need better more qualified employees. We expand hiring as our business grows...we can't do it all by ourselves. Competition is the best motivator.

I know I am trying to describe the color red to a blind man.......

 

[Starman]

You have probably never owned a business......so you just do not understand. I will explain it to you.

We raise wages as our business grows and we need better more qualified employees. We expand hiring as our business grows...we can't do it all by ourselves. Competition is the best motivator.

I know I am trying to describe the color red to a blind man.......

Your business “grows” because there is demand for your product. You don’t grow your business simply because taxes were cut. That makes zero sense to people who actually run businesses, which doesn’t include you.

I’ve run several different businesses, including my current software development firm.

 

[PeoplesElbow]

Take Apple as an example, Apple really uses loopholes to save billions of dollars by instead paying taxes in the low single digit percents to Ireland instead of the US.

From the article

We can see the Ireland gets some tax money and we get none of it. So getting 5% of their tax would be far better than getting 35% of nothing.

Then Apple also does another slick thing to avoid paying Californias high tax by having an office in Nevada

Maybe if California's tax rate wasn't so high they would get something instead of nothing from Apple.

Countries and states with lower tax rates make out because they get something that they otherwise would not get.

 

[vraiblonde]

Your business “grows” because there is demand for your product. You don’t grow your business simply because taxes were cut.

You say you own a software development firm - how many employees do you have? And if your taxes are cut and it puts more money in your pocket, what will you do with it?

 

[Starman]

You say you own a software development firm - how many employees do you have? And if your taxes are cut and it puts more money in your pocket, what will you do with it?

We have about a dozen employees and about as many 1099s. We’re organized as an LLC. It’s not clear at all that Senate or House plans will put money in our pockets but if the reconciled and subsequently signed bill does it migt improve cash flow, but that’s about it. At best, it will just sit in cash reserves because it’s not likely to last.

 

[vraiblonde]

We have about a dozen employees and about as many 1099s. We’re organized as an LLC. It’s not clear at all that Senate or House plans will put money in our pockets but if the reconciled and subsequently signed bill does it migt improve cash flow, but that’s about it. At best, it will just sit in cash reserves because it’s not likely to last.

Okay, so because you would take your windfall and stuff it under a mattress to hoard, you think that's what everyone does? Because that is simply not true. Many business owners would give raises or bonuses, or hire more people. Even if they just put more money in their own pocket, they will spend it, putting money in someone else's pocket. That's how money works most of the time for most people.

 

[Starman]

Okay, so because you would take your windfall and stuff it under a mattress to hoard, you think that's what everyone does? Because that is simply not true. Many business owners would give raises or bonuses, or hire more people. Even if they just put more money in their own pocket, they will spend it, putting money in someone else's pocket. That's how money works most of the time for most people.

That’s not really how it works at all.

People need to by buying products before a company hires more people. Businesses don’t expand or invest in plant or equipment or r&d unless there is demand for their output. Why would they make more widgets just to store them in a warehouse?

Wages are set by supply and demand. Wages don’t increase simply because of a more favorable tax environment.

 

[Bird Dog]

Your business “grows” because there is demand for your product. You don’t grow your business simply because taxes were cut. That makes zero sense to people who actually run businesses, which doesn’t include you.

I’ve run several different businesses, including my current software development firm.

So you’re saying I do nothing to grow my business, the one which you say i don’t have because you know me so well.
....but for others here, not so well informed I’ll explain it to them.
More money not paid in taxes, goes to more R&D for new products that I hope my customers will like and buy. More investment in equipment and inventory to meet this demand. More employees to service this demand. When government takes more than they should that money goes in a big black hole and never gets reinvested in our economy.
As the economy heats up, demand for employees grows, driving up wages and benefits which again puts more money back in the economy.
....and yes if I make more personally I will either spend it in a growing economy helping that economy or invest it making it available to other businesses to help them grow.

Nothing I make goes into a mattress.........just sayin’
It’s really that simple.