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JohnP

The objective of the tax overhaul ?

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Let's be honest. The tax overhaul has one beneficiary in mind. Corporations.

 

Im not necessarily against that.

 

After all Corporations are owned by Main Street Americans. So the tax break is going back to Main Street Americans.

 

Sorta.

 

The money must pass through banks and investment advisors first, who will take their cut. So they benefit again.  The other big time beneficiary would be senior executives of corporations. The 1 percent. They are highly compensated in company stock. Rights and options. The theory is that they should be 'rewarded' for doing 'superior work' in getting the share price up. But in this case they didn't do jack. They still get a bigly pat on the back.  But it is what it is. They lobby, the rest of the country does not. 

 

Another way to think about the tax overhaul is sources and uses of cash. Where is it coming from? Main Street Americans. Perhaps half of the money will come from a growing government IOU, as more borrowing will be needed as the deficit grows by at least a trillion over the next 10 years. More of YOUR federal budget will go toward servicing the debt. A lot of the rest will come from double taxation by not allowing deductions for local taxes. This especially impacts states that didn't vote for Trump anyway. I get it. 

 

But these are also the industrial and innovation hubs. Will this promote those 'movers and shakers' to move to low tax locations? Maybe. Will there be disruption as this dynamic is sorted out? Maybe 

 

So does this help the economy?  Maybe. A corporation would need to increase wages and capital spending. Corporate Finance 101 tells us the company should return the money to shareholders (stock buybacks and increased dividends) if there are no attractive investment or expansion opportunities.

 

What evidence suggests they will plow that money back into expansion and wages?

 

Now, before you respond to this thread 'ha ha, winning, go Trump, sorry for your butthurt' I personally do benefit.  I come out a winner.

 

anyway 

 

What  do you think?

 

How do you reason the tax overhaul willl help the economy?

 

And is this the best we can do on tax policy?

 

 

 

 

Edited by JohnP

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You have to believe Corporations will expand and bring back off-shore money.  If you do, then you accept that this creates additional revenue for the Citizen which is reflected in tax revenue(Volume) for the Feds.

 

Alternatively, we could increase taxes with no possibility to pay off the debit without massive government cutbacks.

 

Boils down to Government solution (increase in taxes) or Business growth

 

Don't mean to over simplify but that's the way I see it.

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2 mins ago, Harf said:

You have to believe Corporations will expand and bring back off-shore money.  If you do, then you accept that this creates additional revenue for the Citizen which is reflected in tax revenue(Volume) for the Feds.

 

Alternatively, we could increase taxes with no possibility to pay off the debit without massive government cutbacks.

 

Boils down to Government solution (increase in taxes) or Business growth

 

Don't mean to over simplify but that's the way I see it.

 

Yes, economic growth is reportedly built into the tax revenues which is why the projected deficit is not even larger.

 

id agree with trickle down if there were growth plans discussed at quarterly earning reports. I don't see so much of that now, and not seeing CEO surveys suggesting they would be increasing hiring. 

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John, the objective is to make the USA attractive to business to stay and return to if they left already. This keeps and brings back good paying jobs for USA citizens. More jobs, more businesses paying taxes, more USA citizens off entitlements and back to making money and paying taxes, more money transferring hands in goods and services, and a overall health economy. 

 

Business is what makes a countries economy strong. The more we have the stronger we get. Case in point look at those countries who have been picking up our companies over the past 20 years. They went from agriculture based impoverished countries to thriving industrialized nations while we got weaker with all the loss of business. 

 

The rest of the tax deal is just window dressing with little overall economic benefit it any. It’s the crumbs the big results come from making the USA attractive to world businesses.

Edited by Jim DE

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Part of this  allows for the repatriation of offshore funds.  Somewhere between $3-4TT.  I love hearing the pundits saying that this will just go into the coffers and buy back shares, etc.  So what?  It comes back and gets taxed.  It wasn't going to get taxed sitting there.  And if it creates JUST ONE JOB, that is one more job than was created by it sitting idly overseas.

 

Rich people spend money.  Lots of it.  Paul Manafort (hardly extremely wealthy) was reported to have spent $800,000 on landscaping.  That's a lot of money being redistributed to workers.

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These sentiments are going to look awfully foolish in the future when the economy is buzzing away full throttle as a result. 

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If the sole purpose or beneficiary of the proposed tax cuts was to the advantage of big business, I would venture to say that the state and municipal workers of California would be ecstatic.  Certainly CALPers, alone, would be.

 

Google CALPers - Wikipedia. Here are a few snippets what is provided:

 

The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families".


...CalPERS derives its income from investments, from member contributions, and from employer contributions.

 

...Investment Income has fluctuated in the last 15 years, 1999–2013, with five years of losses and 10 years of gains. There were investment income gains of $17 billion in 1999, $16 billion in 2000 and five billion dollars in 2003. The stock market declines in 2001 led to investment income losses of 12 billion in 2001 and 10 billion in 2002. Thus, the five-year period 1999 to 2003 period had a cumulative income of 16 billion dollars, or about three billion a year on an investment portfolio of over $200 billion.

 

My impression is that anything that adversely impacts big business, in general, and/or the economy, including consumer confidence, is likely bad for big business and bad for CALPers, and bad for populace.  We can probably extrapolate the CALPers investment portfolio to other states, as well.  I bet CALPers was upset the other day when the Market tanked 350 points due to an unfounded MSM news report.


 

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34 mins ago, JohnP said:

 

Yes, economic growth is reportedly built into the tax revenues which is why the projected deficit is not even larger.

 

id agree with trickle down if there were growth plans discussed at quarterly earning reports. I don't see so much of that now, and not seeing CEO surveys suggesting they would be increasing hiring. 

My company is building our Network capacity to address our planned growth

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If the objective was to make the US more attractive to business , why not keep it simple and  just give them the1 trillion in tax breaks over the next 10 years and call it a day?

 

dont need 600 pages of new tax law for that, and we end up in the same spot 

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13 mins ago, J said:

These sentiments are going to look awfully foolish in the future when the economy is buzzing away full throttle as a result. 

 

The bigly boost in economic activity is already baked into the projections of increased tax revenue.

 

Let’s hope so, otherwise that ballooning deficit will be far worse 

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Just now, Maine Guide said:

 

 

Rich people spend money.  Lots of it.  Paul Manafort (hardly extremely wealthy) was reported to have spent $800,000 on landscaping.  That's a lot of money being redistributed to workers.

Were the landscapers illegals?    :D

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7 mins ago, JohnP said:

If the objective was to make the US more attractive to business , why not keep it simple and  just give them the1 trillion in tax breaks over the next 10 years and call it a day?

 

dont need 600 pages of new tax law for that, and we end up in the same spot 

Wouldn’t it be easier for the next Admin to reverse it if done that way?

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If the turds in power don't make the needed cuts to spending all of this tax cut crap is just window dressing.

 

The house is falling apart but the windows look nice.     :dismay:

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