About that "middle class" tax cut

[PeoplesElbow]

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.

Many companies base bonuses on that years profit. Teva pharmaceutical bases it on the divisions profits.

 

[littlelady]

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.

Consider who you are dealing with.

 

[Starman]

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.

Again, you're simply arguing for supply-side economics. There's nothing wrong with that as a theory, but it simply ignores that the biggest factor for growth facing a capitalist economy is that of aggregate consumer demand. Simply paying less taxes will not in and of itself provide R&D for a firm. If there is no one buying their stuff, if aggregate demand is anemic, none of that matters. That's a large reason why the Fed has been hoping that there would be upward pressure on inflation before tightening monetary policy. Inflation means that people are buying things. But none of it happens in a vacuum. It demonstrates a naive view of the world of economics simply to state that less corporate taxes means a better economy. It's far more complicated that that.

Also, please explain why businesses haven't invested in R&D or invested in plant in equipment over the past 7-8 years or so since they have been flush with cash?

 

[Bird Dog]

Again, you're simply arguing for supply-side economics. There's nothing wrong with that as a theory, but it simply ignores that the biggest factor for growth facing a capitalist economy is that of aggregate consumer demand. Simply paying less taxes will not in and of itself provide R&D for a firm. If there is no one buying their stuff, if aggregate demand is anemic, none of that matters. That's a large reason why the Fed has been hoping that there would be upward pressure on inflation before tightening monetary policy. Inflation means that people are buying things. But none of it happens in a vacuum. It demonstrates a naive view of the world of economics simply to state that less corporate taxes means a better economy. It's far more complicated that that.

Also, please explain why businesses haven't invested in R&D or invested in plant in equipment over the past 7-8 years or so since they have been flush with cash?

http://www.heritage.org/taxes/commentary/reagans-tax-cutting-legacy

 

[Starman]

http://www.heritage.org/taxes/commentary/reagans-tax-cutting-legacy

 

[Bird Dog]

Also, please explain why businesses haven't invested in R&D or invested in plant in equipment over the past 7-8 years or so since they have been flush with cash?

Did you simply forget who was President during that time.......

 

[Starman]

Did you simply forget who was President during that time.......

Oh I see. So now you’re moving the goalposts and suggesting that businesses won’t invest in expanding their business depending on who the president is. I thought your position was that if only we could lower taxes for businesses they would be flush with cash and magical things would happen.

Businesses have been sitting on lots of cash. So what was the problem?

 

[Bird Dog]

Oh I see. So now you’re moving the goalposts and suggesting that businesses won’t invest in expanding their business depending on who the president is. I thought your position was that if only we could lower taxes for businesses they would be flush with cash and magical things would happen.

Businesses have been sitting on lots of cash. So what was the problem?

First we do have a President that businesses feel has their back, rather one that scorns it. So yes businesses wii I invest based on a President.
Guess you’re not familiar with all the overreach on regulations the Obama administra put on business, you would not see that writing code.

Why does Apple, flush with cash, have to go out and borrow 30 Billion for dividends and stock buy backs?
I’ll give you a hint.....they pay 2.5% on borrowing and 35% tax if they bring cash back in the USA....

With all the automation in manucturing these days, labor is no longer the main issue in plant locations.......we need a government that lets business make money, hire people, pay reasonable taxes and stay out of their way.

 

[Starman]

First we do have a President that businesses feel has their back, rather one that scorns it. So yes businesses wii I invest based on a President.
Guess you’re not familiar with all the overreach on regulations the Obama administra put on business, you would not see that writing code.

Why does Apple, flush with cash, have to go out and borrow 30 Billion for dividends and stock buy backs?
I’ll give you a hint.....they pay 2.5% on borrowing and 35% tax if they bring cash back in the USA....

With all the automation in manucturing these days, labor is no longer the main issue in plant locations.......we need a government that lets business make money, hire people, pay reasonable taxes and stay out of their way.

:blessyourheart:

 

[Bird Dog]

Gone fishing ....go write some code

 

[Clem72]

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.

Not that I think I can speak for lefties (or righties), but I think I have an honest partial answer if you are willing to listen.

You both are arguing the opposite margins of the same issue.

The left is arguing to tax corporations with record profits that will always pay employees the absolute minimum they can (fiduciary responsibility to investors et. al) regardless of how much profit they currently make. Would replace employees in a heartbeat with automation or outsource jobs to third world countries even if it only saves 1%.

Righties is arguing to ease taxes on the struggling businesses. The ones that have a product that rides the line of profitability in the face of growing overhead costs driven by taxes, healthcare requirements, etc. They cant afford to automate (or automation doesn't make sense), but they also cant afford to grow their workforce because it would tip the scales from barely profitable to unprofitable. They may also argue that even those large profitable corporations that save every nickel do not put that money to work back in our economy because they are busy hiding it overseas in tax shelters, something they wouldn't have to do if they were taxed less.

.
.
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I think both sides of the argument have some merit, and there should be a way compromise. I thought this tax reform might be a good first step, but it does seem to very heavily favor one side to the (hopefully minor) expense of the other.

 

[Starman]

First we do have a President that businesses feel has their back, rather one that scorns it. So yes businesses wii I invest based on a President.
Guess you’re not familiar with all the overreach on regulations the Obama administra put on business, you would not see that writing code.

Why does Apple, flush with cash, have to go out and borrow 30 Billion for dividends and stock buy backs?
I’ll give you a hint.....they pay 2.5% on borrowing and 35% tax if they bring cash back in the USA....

With all the automation in manucturing these days, labor is no longer the main issue in plant locations.......we need a government that lets business make money, hire people, pay reasonable taxes and stay out of their way.

BTW, I think corporate taxes should be zero. That's right zero. Corporations don't vote, and if you don't have the privilege of voting you shouldn't pay any taxes. But this notion that cutting taxes so businesses can grow is elementary and myopic. And a wedge issue to keep class warfare alive and well.

It's all our money anyway (the consumers). Just think how much less our goods and services might cost if a component of the price didn't include the legalized theft that is the income tax.

 

[GURPS]

I find it interesting, the US has the 3rd highest Corp Taxes, but socialist EU does not .......

 

[GURPS]

BTW, I think corporate taxes should be zero. That's right zero. Corporations don't vote, and if you don't have the privilege of voting you shouldn't pay any taxes. But this notion that cutting taxes so businesses can grow is elementary and myopic. And a wedge issue to keep class warfare alive and well.

It's all our money anyway (the consumers). Just think how much less our goods and services might cost if a component of the price didn't include the legalized theft that is the income tax.

I can agree with this ....

 

[Gilligan]

But this notion that cutting taxes so businesses can grow is elementary and myopic. .

Growth - or not - aside, there still remains the fundamentals underlying why corporations move where they do. Both sides of the aisle recognize that....and have for some time.

American firms have moved overseas at a time when a growing number of countries have reduced tax rates. These "inversions" have been taking place as Congress remains at odds over lowering the corporate tax rate of 35 percent, one of the highest rates in the world.

https://www.washingtonpost.com/news/wonk/wp/2014/08/06/these-are-the-companies-abandoning-the-u-s-to-dodge-taxes/?utm_term=.0efaa66e4f24

 

[Starman]

Growth - or not - aside, there still remains the fundamentals underlying why corporations move where they do. Both sides of the aisle recognize that....and have for some time.



https://www.washingtonpost.com/news/wonk/wp/2014/08/06/these-are-the-companies-abandoning-the-u-s-to-dodge-taxes/?utm_term=.0efaa66e4f24

There is zero doubt that, all else equal, higher taxes cause capital to flee. It's logical and it's also borne out by data. But what's the issue with legally doing what one can to avoid paying taxes? In a world with zero corporate taxes, should money be able to move freely throughout the planet? Why is there a notion that money earned here should stay here -- just so the government can get their taste?

 

[Gilligan]

But what's the issue with legally doing what one can to avoid paying taxes?

I've seen some on the left opine about that being an "issue". I'm not one of those; I think anyone who pays a penny more than they owe, after taking every legal measure available to minimize that amount, is a fool.

So governments/countries compete for businesses. Makes perfect sense to me. They've been doing that for a long time, and the US was the perennial loser in recent decades.

 

[PeoplesElbow]

I find it interesting, the US has the 3rd highest Corp Taxes, but socialist EU does not .......

Are you including the VAT taxes?

 

[Gilligan]

Are you including the VAT taxes?

? VAT is a consumption tax..

Sure, it gets applied to "corporate" goods, but not equally by any stretch of the imagination.

 

[Bird Dog]

Are you including the VAT taxes?

VAT taxes are nothing more than sales tax. When the data about the say we are the over taxed it’s not even included....
Like..........Property taxes
Gas taxes
State taxes
Taxes on every energy bill, every plane ticket, every bottle of whiskey, wine or beer
Cigarettes
All utilities
Marina taxes
The priveledge of using the Internet
Death tax
Hunting and fishing licenses
Dog tags
I could go on but you get my drift.....