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  • The White Coat Investor
    replied
    Closing this thread. Not only because it gets very political and argumentative, but mostly just because the info in it is out of date.

    Leave a comment:


  • Medikit
    replied







    I wonder if they will fix the marriage tax penalty for dual income households.
    Click to expand…


    They’re not, despite the promise otherwise.

    35% starts at $200k for individuals, and $260k for married.  It should be $400k.

    On the other hand, the 12%, 25% and 39.6% brackets are doubled.

    It’s sort of like a slam on the upper-middle class, and a handout for those over $500k.

    I wrote to my rep and senators to complain, for whatever that’s worth.
    Click to expand...


    Updated bill still doesn't fix the marriage penalty.

    Leave a comment:


  • hightower
    replied
    Came across this little gem today.  It was written by Lawrence Summers who is a professor at and past president of Harvard University. He was treasury secretary from 1999 to 2001 and an economic adviser to President Barack Obama from 2009 through 2010.

    Some interesting points on what he feels the effects of slashing corporate tax rates would be:

    First, a cut in the corporate tax rate from 35 to 20 percent in the presence of expensing of substantial or total investment has very little impact on the incentive to invest. Imagine the case of full expensing. If a company is permitted to deduct all of its investment costs and then is taxed on all of its investment profits, the tax rate has no impact at all on the investment incentive. If investments are financed in part with deductible interest, as would be true even under the Trump plan (where expensing would be total), a reduction in the corporate tax rate could easily reduce the incentive to invest.

    ...a big cut in the corporate rate does not happen in isolation as a break for new investment..It means either increases in other taxes or enlarged deficits, both of which have adverse effects on households. It also means that capital moves out of the noncorporate sector into the corporate sector, tending to hurt workers in the noncorporate sector.

     

    https://www.washingtonpost.com/news/wonk/wp/2017/10/22/lawrence-summers-one-last-time-on-who-benefits-from-corporate-tax-cuts/?utm_term=.9282cdeb7f87

     

    Doesn't sound like the current administration has any interest in helping "the little guy" as they campaigned on.  I guess the silver lining here is that they would be committing political suicide for passing this. And they'll commit political suicide if they fail to pass anything.  So, for democrats, this could be a big victory either way. Alternatively, they could come up with a reasonable plan that actually helps the working class, perhaps modestly reduces corporate taxes, and doesn't add to the deficit or even helps reduce it.  They'd be heroes for that.  But, I think their greed is getting in the way.  0.5% of the population provides 68% of the money that flows into politicians hands (via PACs, etc).  So, they are doing this because their ultra-wealthy donors are demanding tax cuts that would help them.  It's sad and pathetic how they behave.  (and democrats have done the same, I'm not ignoring that fact)

    Leave a comment:


  • Antares
    replied




    Would be interested in hearing ideas about this:

    http://www.mrmoneymustache.com/2017/11/05/when-your-shitty-health-insurance-doubles-in-price/
    Click to expand...


    There was discussion of that here:

     

    https://www.whitecoatinvestor.com/forums/topic/41-increase-on-my-health-ins-for-2018-im-out-going-with-a-health-sharing/page/3/#post-72873

    Leave a comment:


  • ReFinDoc
    replied
    Would be interested in hearing ideas about this:

    http://www.mrmoneymustache.com/2017/11/05/when-your-shitty-health-insurance-doubles-in-price/

    Leave a comment:


  • Zaphod
    replied
















    I  will not personally benefit from a reduction in corporate tax directly.  I do not own and am not employed by a corporation.  I do however own a fair amount of stock.  It seems obvious to me that if us corporations pay less in taxes they have money to build more plants, hire more people, pay more benefits etc.  I see increasing productivity and higher stock prices with this which is good for everybody.
    Click to expand…


    Everyone who owns stocks, which is around 50ish% of people. Its an effect, albeit indirect. Just depends on what the effect is supposed to be. I wont say they ever really made any spectacle of hiding that its corporate first, and this is wholly in line with that. However, as a much more direct ‘middle class’ money in your pocket plan that is often hitting the media rounds, it stinks. There are so many much more direct ways to do this. For one decreasing payroll taxes, an immediate, obvious in every check directly in the hands of workers.

    Its all in how its done. I’d argue tax reform in general while nice, isnt actually a pressing concern and isnt holding the economy back in any obvious way. Healthcare, for sure, a clear and present danger.
    Click to expand…


    The goal is increased economic growth over time.  It’s not the minutia of how many dollars a middle-class class family of 4 saves in a year or how much Warren Buffett pays.

    We had a sharp, nasty recession in 2008-9 and normally sharp, nasty recessions are followed by vigorous and robust recoveries. Guess what?  It didn’t happen.  GDP growth was tepid and weak, despite the bull market in stocks, from 2010-2016.  The headline unemployment number fell nicely but much of the decline was due to millions working part-time and leaving the workforce altogether.  The prior administration is the only two-term one in American history to have not produced even a single year of 3% or greater GDP growth.  I’m going to avoid pointing fingers politically here and certainly there’s fault all around but it’s hard to ignore the tax and regulatory burden layered on by the prior administration as purely coincidental.

    Regardless, getting back to 3-4% growth makes facing “clear and present dangers” (entitlements, for example) a lot less daunting.  That’s what this plan, as well as the repeal of unnecessary regulation, is geared for.  I don’t know that it will work, actually no one knows that for sure.  But we know what hasn’t worked.  Obamacare has been an economic drag.  Excessive regulation is definitely an economic drag.  Having the highest corporate tax rate in the developed world seems pretty ************************ likely to be an economic drag.
    Click to expand…


     

    The goal of the tax legislation is? Thats preposterous. I dont believe you believe that. That is the excuse, the narrative of the story to sell tax cuts. The point of the tax cuts is to reward donors, lobbyists, and enrich friends and self. That highest tax rate in the world thing is statuatory/nominal, effective rate is much lower and in line with other countries. Should this dumb game of high rate/deductions be fixed, yes, but you cant argue with the success of american companies that its holding them back somehow. The rate in this bill takes the rate to nearly the bottom of oecd nominal with no word on any change in major deductions. Corporate tax revenues have fallen as gdp has grown and profit margins have soared these last decades.

    I would argue the slow steady recovery is safer and more sustainable than merely blowing another economic bubble up to have it summarily cause another recession. You cant just will 3-4% growth. The tax and regulatory burden had nothing to do with tepid growth, that is pure fiscal policy and other such decisions. Congress repeatedly defeated any fiscal policy that would give Obama a political ‘win’ in their eyes. Any of the infrastructure bills, an even larger monetary response earlier, larger deficit spending of almost any sort would have increased growth (these are temporary of course). Thats purely political and we are still there today. Now, the deficit apparently doesnt matter (it didnt then either, but a tool). Just like filibustering or blocking appointees is extremely hypocritical on both sides, these are just political games, which we unfortunately are the victims.

    Instead of trying to manufacture growth that no one actually ‘knows’ how to make happen consistently without inflating some sort of bubble, we should focus on making things work in the long run. That however requires actual legislative work and tough choices and unpopular decisions, but would be better off. We are currently in a demographic slump until mid 2020s or so, we do have a slight tailwind after that thankfully. If anything, the only long term truth in any economic sense has been demographic in nature, and thats a difficult beast to fight.

    For tax reform to promote growth the incentives have to aimed at that direction. I dont see how that is addressed in what we know about this bill. Its possible to do so, but this bill isnt it. Disincentivize going to college by repealing student loan deduction (small but thats the effect on its face). Big corporation tax break isnt promoting anything other than higher profit margins. If they really wanted to increase the economy it would have been directed at peoples take home pay and probably toward poorer americans since 70% of GDP is consumer based and they spend greater than 100% of their paychecks. The place where regulations and taxes are hurting business formation and growth is in the small business arena, which is not getting any breaks whatsoever with this particular bill.

     
    Click to expand…


    It must be hard to go through life being that cynical and pessimistic.  I am not satisfied with 1.8% growth but apparently you are.  The difference between that and even just 3% means a tremendous amount in terms of upward mobility and trillions of wealth over a decade.

    Newsflash:  Poor people don’t hire much of anyone.  It’s overwhelmingly likely than that your employer is a person(s) who are richer than you are.  And the idea that consumer spending is what propels growth is discredited Keynesian nonsense.  Investment drives growth and investment requires profit.
    Click to expand...


    Im not under the illusion you can will growth with taxes alone, doesnt matter if you prefer one or the other. I prefer 1000%/y CAGR as well, doesnt mean it happens.

    That the economy/gdp is largely based on spending isnt nonsense, a boring accepted fact by everyone regardless of political persuasion. Anyways, it doesnt matter so much right now as the economy, of the whole world really, is doing great. Theres no need to boost it at this time, the time to boost it was 2009-10. UE, gdp, etc...are not at juice the economy needed levels.

    Again, we are at historical record high profit margins. You're saying that it has to be greater than that or we're doomed?

    Economies are complex bottom up processes, like evolution. Pretending to make anything other than adjustments/refinements with top down processes like tax reform is misstating things.

    Im not against tax reform or investment. Both can be powerful. Just bs narratives. Its not like the ryan/mcconnell looked for the biggest problem in american business today and then designed the tax reform around those key issues. No, they first decided what they wanted to do and created a narrative afterwards. The likelihood that addresses the biggest choke point in the economy is very small and would just be happenstance. The likelihood they totally missed the groups that would contribute to the largest growth is exceedingly high. Small business and highly productive workers would have been a better target than fortune 500 companies.

    Leave a comment:


  • AZdoc68
    replied













    I  will not personally benefit from a reduction in corporate tax directly.  I do not own and am not employed by a corporation.  I do however own a fair amount of stock.  It seems obvious to me that if us corporations pay less in taxes they have money to build more plants, hire more people, pay more benefits etc.  I see increasing productivity and higher stock prices with this which is good for everybody.
    Click to expand…


    Everyone who owns stocks, which is around 50ish% of people. Its an effect, albeit indirect. Just depends on what the effect is supposed to be. I wont say they ever really made any spectacle of hiding that its corporate first, and this is wholly in line with that. However, as a much more direct ‘middle class’ money in your pocket plan that is often hitting the media rounds, it stinks. There are so many much more direct ways to do this. For one decreasing payroll taxes, an immediate, obvious in every check directly in the hands of workers.

    Its all in how its done. I’d argue tax reform in general while nice, isnt actually a pressing concern and isnt holding the economy back in any obvious way. Healthcare, for sure, a clear and present danger.
    Click to expand…


    The goal is increased economic growth over time.  It’s not the minutia of how many dollars a middle-class class family of 4 saves in a year or how much Warren Buffett pays.

    We had a sharp, nasty recession in 2008-9 and normally sharp, nasty recessions are followed by vigorous and robust recoveries. Guess what?  It didn’t happen.  GDP growth was tepid and weak, despite the bull market in stocks, from 2010-2016.  The headline unemployment number fell nicely but much of the decline was due to millions working part-time and leaving the workforce altogether.  The prior administration is the only two-term one in American history to have not produced even a single year of 3% or greater GDP growth.  I’m going to avoid pointing fingers politically here and certainly there’s fault all around but it’s hard to ignore the tax and regulatory burden layered on by the prior administration as purely coincidental.

    Regardless, getting back to 3-4% growth makes facing “clear and present dangers” (entitlements, for example) a lot less daunting.  That’s what this plan, as well as the repeal of unnecessary regulation, is geared for.  I don’t know that it will work, actually no one knows that for sure.  But we know what hasn’t worked.  Obamacare has been an economic drag.  Excessive regulation is definitely an economic drag.  Having the highest corporate tax rate in the developed world seems pretty ************************ likely to be an economic drag.
    Click to expand…


     

    The goal of the tax legislation is? Thats preposterous. I dont believe you believe that. That is the excuse, the narrative of the story to sell tax cuts. The point of the tax cuts is to reward donors, lobbyists, and enrich friends and self. That highest tax rate in the world thing is statuatory/nominal, effective rate is much lower and in line with other countries. Should this dumb game of high rate/deductions be fixed, yes, but you cant argue with the success of american companies that its holding them back somehow. The rate in this bill takes the rate to nearly the bottom of oecd nominal with no word on any change in major deductions. Corporate tax revenues have fallen as gdp has grown and profit margins have soared these last decades.

    I would argue the slow steady recovery is safer and more sustainable than merely blowing another economic bubble up to have it summarily cause another recession. You cant just will 3-4% growth. The tax and regulatory burden had nothing to do with tepid growth, that is pure fiscal policy and other such decisions. Congress repeatedly defeated any fiscal policy that would give Obama a political ‘win’ in their eyes. Any of the infrastructure bills, an even larger monetary response earlier, larger deficit spending of almost any sort would have increased growth (these are temporary of course). Thats purely political and we are still there today. Now, the deficit apparently doesnt matter (it didnt then either, but a tool). Just like filibustering or blocking appointees is extremely hypocritical on both sides, these are just political games, which we unfortunately are the victims.

    Instead of trying to manufacture growth that no one actually ‘knows’ how to make happen consistently without inflating some sort of bubble, we should focus on making things work in the long run. That however requires actual legislative work and tough choices and unpopular decisions, but would be better off. We are currently in a demographic slump until mid 2020s or so, we do have a slight tailwind after that thankfully. If anything, the only long term truth in any economic sense has been demographic in nature, and thats a difficult beast to fight.

    For tax reform to promote growth the incentives have to aimed at that direction. I dont see how that is addressed in what we know about this bill. Its possible to do so, but this bill isnt it. Disincentivize going to college by repealing student loan deduction (small but thats the effect on its face). Big corporation tax break isnt promoting anything other than higher profit margins. If they really wanted to increase the economy it would have been directed at peoples take home pay and probably toward poorer americans since 70% of GDP is consumer based and they spend greater than 100% of their paychecks. The place where regulations and taxes are hurting business formation and growth is in the small business arena, which is not getting any breaks whatsoever with this particular bill.

     
    Click to expand...


    It must be hard to go through life being that cynical and pessimistic.  I am not satisfied with 1.8% growth but apparently you are.  The difference between that and even just 3% means a tremendous amount in terms of upward mobility and trillions of wealth over a decade.

    Newsflash:  Poor people don’t hire much of anyone.  It’s overwhelmingly likely than that your employer is a person(s) who are richer than you are.  And the idea that consumer spending is what propels growth is discredited Keynesian nonsense.  Investment drives growth and investment requires profit.

    Leave a comment:


  • Rando
    replied










    A Tax Cut That Lifts the Economy? Opinions Are SplitOn the point of economic growth being the excuse to sell the tax plan, the people are often told only a small piece of the actual plans and motivations of politicians. Our President has explicitly acknowledged that his philosophy is not necessarily to reveal his ultimate intentions. I find it very hard not to think that the goal is to further enrich rich people, when those selling the plan are personally to benefit, and the political system is funded by corporate interests who will benefit. It is not hard to come up with alternate narratives to sell when the people need to be brought along.
    Click to expand…


    It is pointless to try to guess motivations.  If the plan is a net positive for the country, Trump’s “goal” is immaterial.  Conversely, if the plan is bad for the country it should be condemned regardless of good intentions.
    Click to expand…


    Makes sense but can you really determine that?

    See “A Tax Cut That Lifts the Economy? Opinions Are Split”:

    https://www.nytimes.com/2017/11/02/business/economy/corporate-tax-economists.html?em_pos=small&emc=edit_my_20171106&nl=your-money&nl_art=2&nlid=39040775&ref=headline&te=1&_r=0

    More detail within, but for example:

    ”Economists are still parsing the details, but even some ardent supporters of the plan say expectations about heady growth and job gains are exaggerated. Interest rates are already at bargain-basement levels, plenty of potential investment capital is sloshing around, and the official jobless rate is at lows not seen in many years. Moreover, the cost of the tax package will inevitably deepen the deficit and lead to spending cuts that are likely to hit low- and middle-income workers.”

     

     
    Click to expand...


    I think that's a good article and asks the questions we should be asking, not is Trump trying to help his rich cronies, blah, blah, blah.  My suspicion is Trump has very little to do with this plan anyway.

    Leave a comment:


  • MPMD
    replied






     
    Click to expand…


    The goal is increased economic growth over time.  It’s not the minutia of how many dollars a middle-class class family of 4 saves in a year or how much Warren Buffett pays.

    We had a sharp, nasty recession in 2008-9 and normally sharp, nasty recessions are followed by vigorous and robust recoveries. Guess what?  It didn’t happen.  GDP growth was tepid and weak, despite the bull market in stocks, from 2010-2016.  The headline unemployment number fell nicely but much of the decline was due to millions working part-time and leaving the workforce altogether.  The prior administration is the only two-term one in American history to have not produced even a single year of 3% or greater GDP growth.  I’m going to avoid pointing fingers politically here and certainly there’s fault all around but it’s hard to ignore the tax and regulatory burden layered on by the prior administration as purely coincidental.

    Regardless, getting back to 3-4% growth makes facing “clear and present dangers” (entitlements, for example) a lot less daunting.  That’s what this plan, as well as the repeal of unnecessary regulation, is geared for.  I don’t know that it will work, actually no one knows that for sure.  But we know what hasn’t worked.  Obamacare has been an economic drag.  Excessive regulation is definitely an economic drag.  Having the highest corporate tax rate in the developed world seems pretty ************************ likely to be an economic drag.
    Click to expand...


    That is very much not the justification, the justification is always that tax cuts weighted towards the wealthy will immediately produce explosive economic growth. I'm not making some sort of Rachel Maddow rant exaggeration here. This is now and has been the GOP position -- contra all evidence -- for decades.

    Leave a comment:


  • Antares
    replied







    A Tax Cut That Lifts the Economy? Opinions Are SplitOn the point of economic growth being the excuse to sell the tax plan, the people are often told only a small piece of the actual plans and motivations of politicians. Our President has explicitly acknowledged that his philosophy is not necessarily to reveal his ultimate intentions. I find it very hard not to think that the goal is to further enrich rich people, when those selling the plan are personally to benefit, and the political system is funded by corporate interests who will benefit. It is not hard to come up with alternate narratives to sell when the people need to be brought along.
    Click to expand…


    It is pointless to try to guess motivations.  If the plan is a net positive for the country, Trump’s “goal” is immaterial.  Conversely, if the plan is bad for the country it should be condemned regardless of good intentions.
    Click to expand...


    Makes sense but can you really determine that?

    See “A Tax Cut That Lifts the Economy? Opinions Are Split”:

    https://www.nytimes.com/2017/11/02/business/economy/corporate-tax-economists.html?em_pos=small&emc=edit_my_20171106&nl=your-money&nl_art=2&nlid=39040775&ref=headline&te=1&_r=0

    More detail within, but for example:

    ”Economists are still parsing the details, but even some ardent supporters of the plan say expectations about heady growth and job gains are exaggerated. Interest rates are already at bargain-basement levels, plenty of potential investment capital is sloshing around, and the official jobless rate is at lows not seen in many years. Moreover, the cost of the tax package will inevitably deepen the deficit and lead to spending cuts that are likely to hit low- and middle-income workers.”

     

     

    Leave a comment:


  • Rando
    replied




    On the point of economic growth being the excuse to sell the tax plan, the people are often told only a small piece of the actual plans and motivations of politicians. Our President has explicitly acknowledged that his philosophy is not necessarily to reveal his ultimate intentions. I find it very hard not to think that the goal is to further enrich rich people, when those selling the plan are personally to benefit, and the political system is funded by corporate interests who will benefit. It is not hard to come up with alternate narratives to sell when the people need to be brought along.
    Click to expand...


    It is pointless to try to guess motivations.  If the plan is a net positive for the country, Trump's "goal" is immaterial.  Conversely, if the plan is bad for the country it should be condemned regardless of good intentions.

    Leave a comment:


  • Antares
    replied
    On the point of economic growth being the excuse to sell the tax plan, the people are often told only a small piece of the actual plans and motivations of politicians. Our President has explicitly acknowledged that his philosophy is not necessarily to reveal his ultimate intentions. I find it very hard not to think that the goal is to further enrich rich people, when those selling the plan are personally to benefit, and the political system is funded by corporate interests who will benefit. It is not hard to come up with alternate narratives to sell when the people need to be brought along.

    Leave a comment:


  • Zaphod
    replied










    I  will not personally benefit from a reduction in corporate tax directly.  I do not own and am not employed by a corporation.  I do however own a fair amount of stock.  It seems obvious to me that if us corporations pay less in taxes they have money to build more plants, hire more people, pay more benefits etc.  I see increasing productivity and higher stock prices with this which is good for everybody.
    Click to expand…


    Everyone who owns stocks, which is around 50ish% of people. Its an effect, albeit indirect. Just depends on what the effect is supposed to be. I wont say they ever really made any spectacle of hiding that its corporate first, and this is wholly in line with that. However, as a much more direct ‘middle class’ money in your pocket plan that is often hitting the media rounds, it stinks. There are so many much more direct ways to do this. For one decreasing payroll taxes, an immediate, obvious in every check directly in the hands of workers.

    Its all in how its done. I’d argue tax reform in general while nice, isnt actually a pressing concern and isnt holding the economy back in any obvious way. Healthcare, for sure, a clear and present danger.
    Click to expand…


    The goal is increased economic growth over time.  It’s not the minutia of how many dollars a middle-class class family of 4 saves in a year or how much Warren Buffett pays.

    We had a sharp, nasty recession in 2008-9 and normally sharp, nasty recessions are followed by vigorous and robust recoveries. Guess what?  It didn’t happen.  GDP growth was tepid and weak, despite the bull market in stocks, from 2010-2016.  The headline unemployment number fell nicely but much of the decline was due to millions working part-time and leaving the workforce altogether.  The prior administration is the only two-term one in American history to have not produced even a single year of 3% or greater GDP growth.  I’m going to avoid pointing fingers politically here and certainly there’s fault all around but it’s hard to ignore the tax and regulatory burden layered on by the prior administration as purely coincidental.

    Regardless, getting back to 3-4% growth makes facing “clear and present dangers” (entitlements, for example) a lot less daunting.  That’s what this plan, as well as the repeal of unnecessary regulation, is geared for.  I don’t know that it will work, actually no one knows that for sure.  But we know what hasn’t worked.  Obamacare has been an economic drag.  Excessive regulation is definitely an economic drag.  Having the highest corporate tax rate in the developed world seems pretty ************************ likely to be an economic drag.
    Click to expand...


     

    The goal of the tax legislation is? Thats preposterous. I dont believe you believe that. That is the excuse, the narrative of the story to sell tax cuts. The point of the tax cuts is to reward donors, lobbyists, and enrich friends and self. That highest tax rate in the world thing is statuatory/nominal, effective rate is much lower and in line with other countries. Should this dumb game of high rate/deductions be fixed, yes, but you cant argue with the success of american companies that its holding them back somehow. The rate in this bill takes the rate to nearly the bottom of oecd nominal with no word on any change in major deductions. Corporate tax revenues have fallen as gdp has grown and profit margins have soared these last decades.

    I would argue the slow steady recovery is safer and more sustainable than merely blowing another economic bubble up to have it summarily cause another recession. You cant just will 3-4% growth. The tax and regulatory burden had nothing to do with tepid growth, that is pure fiscal policy and other such decisions. Congress repeatedly defeated any fiscal policy that would give Obama a political 'win' in their eyes. Any of the infrastructure bills, an even larger monetary response earlier, larger deficit spending of almost any sort would have increased growth (these are temporary of course). Thats purely political and we are still there today. Now, the deficit apparently doesnt matter (it didnt then either, but a tool). Just like filibustering or blocking appointees is extremely hypocritical on both sides, these are just political games, which we unfortunately are the victims.

    Instead of trying to manufacture growth that no one actually 'knows' how to make happen consistently without inflating some sort of bubble, we should focus on making things work in the long run. That however requires actual legislative work and tough choices and unpopular decisions, but would be better off. We are currently in a demographic slump until mid 2020s or so, we do have a slight tailwind after that thankfully. If anything, the only long term truth in any economic sense has been demographic in nature, and thats a difficult beast to fight.

    For tax reform to promote growth the incentives have to aimed at that direction. I dont see how that is addressed in what we know about this bill. Its possible to do so, but this bill isnt it. Disincentivize going to college by repealing student loan deduction (small but thats the effect on its face). Big corporation tax break isnt promoting anything other than higher profit margins. If they really wanted to increase the economy it would have been directed at peoples take home pay and probably toward poorer americans since 70% of GDP is consumer based and they spend greater than 100% of their paychecks. The place where regulations and taxes are hurting business formation and growth is in the small business arena, which is not getting any breaks whatsoever with this particular bill.

     

    Leave a comment:


  • AZdoc68
    replied







    I  will not personally benefit from a reduction in corporate tax directly.  I do not own and am not employed by a corporation.  I do however own a fair amount of stock.  It seems obvious to me that if us corporations pay less in taxes they have money to build more plants, hire more people, pay more benefits etc.  I see increasing productivity and higher stock prices with this which is good for everybody.
    Click to expand…


    Everyone who owns stocks, which is around 50ish% of people. Its an effect, albeit indirect. Just depends on what the effect is supposed to be. I wont say they ever really made any spectacle of hiding that its corporate first, and this is wholly in line with that. However, as a much more direct ‘middle class’ money in your pocket plan that is often hitting the media rounds, it stinks. There are so many much more direct ways to do this. For one decreasing payroll taxes, an immediate, obvious in every check directly in the hands of workers.

    Its all in how its done. I’d argue tax reform in general while nice, isnt actually a pressing concern and isnt holding the economy back in any obvious way. Healthcare, for sure, a clear and present danger.
    Click to expand...


    The goal is increased economic growth over time.  It’s not the minutia of how many dollars a middle-class class family of 4 saves in a year or how much Warren Buffett pays.

    We had a sharp, nasty recession in 2008-9 and normally sharp, nasty recessions are followed by vigorous and robust recoveries. Guess what?  It didn’t happen.  GDP growth was tepid and weak, despite the bull market in stocks, from 2010-2016.  The headline unemployment number fell nicely but much of the decline was due to millions working part-time and leaving the workforce altogether.  The prior administration is the only two-term one in American history to have not produced even a single year of 3% or greater GDP growth.  I’m going to avoid pointing fingers politically here and certainly there’s fault all around but it’s hard to ignore the tax and regulatory burden layered on by the prior administration as purely coincidental.

    Regardless, getting back to 3-4% growth makes facing “clear and present dangers” (entitlements, for example) a lot less daunting.  That’s what this plan, as well as the repeal of unnecessary regulation, is geared for.  I don’t know that it will work, actually no one knows that for sure.  But we know what hasn’t worked.  Obamacare has been an economic drag.  Excessive regulation is definitely an economic drag.  Having the highest corporate tax rate in the developed world seems pretty ************************ likely to be an economic drag.

    Leave a comment:


  • Zaphod
    replied













    Just venting here: I saw my wealthiest friend yesterday. I don’t know exactly but I think he’s worth somewhere north of half a billion. He was disgusted with the tax cut he would be getting, saying he doesn’t need it and everyone else will pay the price for it. I know I’m stating the obvious, but while it’s great to have a secure and relatively lucrative career. it seems in many ways the deck is stacked against the hard-working high-earning wage earner. The fairness issue relative to others is hard to stomach. The loss of the self-employed health insurance premium deduction galls me because employed people receive this benefit automatically. It goes without saying that it would be even worse to be a hard-working low-earning wage earning. I’ve been very aggravated lately.  ????
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    Tell your friend he’s welcome to write a check for any extra tax he wants to pay.  I’m serious.  I always laugh when I hear someone make complaints like that….because they’re utter nonsense.  I guarantee you the IRS accepts such donations.  And there’s no law that requires a filer to utilize every credit, deduction, and capital loss offset that they’re entitled to.  In sum, anyone who wants to pay extra tax is perfectly able to do so.

    That’s how you know your friend is full of bull.  Talks the talk but doesn’t walk the walk.  If he’s opposed to the proposal, it’s not really because he’s mad he “wouldn’t pay enough”.  That little problem is easily fixed.

    Besides I find it hard to believe that a guy worth over $500m doesn’t get the vast majority of his yearly income from capital gains, not salary, and cap gains rates aren’t expected to change.
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    No, he’s the CEO and founder of a group of public companies, and he stands to benefit from the reduction in the corporate tax rate.

    And it’s not about whether or not to accept the windfall. He just thinks it’s poor public policy. It’s as Warren Buffett is saying: his investors will benefit, but it’s not good for the country. Personally I suspect it’s not good for me either.
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    Benefit as a shareholder/investor in these companies?  Isn’t that we want?  Don’t we want American companies to be successful and have greater after-tax profits to thereby be able to expand further and pay more dividends?  I’m not really seeeing the problem here.

    Echoing what I said earlier, I really don’t think we should judge the merits of public policy based on how it affects a few CEOs.  The US corporate tax rate is among the highest in the developed world.  It is widely cited as a key hindering factor in the relative decline in competiveness of American companies.  Heck even Obama, whom no one would confuse for a low-tax free marketeer, acknowledged it was too high on several occasions.
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    American companies are very successful and generally sitting on hoards of cash, or have so much cash readily available they burn it as if it is their primary job (Tesla, lol).

    Our nominal rates are high, but effective for the S/P is about 24%, not terrible. Just because its widely cited does not make it true. The big discrepancy in top line and effective makes it a very useful propaganda piece though.

    Problem lies in the loopholes and other junk that create incentives for accounting gimmicks and relocations just to play taxes. If the answer is a lower nominal, fine, etc...but a top line reduction isnt whats 'needed'. Whats needed is an update of existing laws, antitrust/privacy, and global competition focus. No matter what you set US rates to, Ireland or where ever can always undercut you. You need to make the cost of leaving the US too great, and that can be done by increasing surcharges or penalties on structures to evade taxes like inversions, etc...Not saying Im for all those things just the toolbox is large. We should be promoting innovation and growth, not tax strategies.

    In reality there is a paucity of investable ideas out there, companies have been complaining about it for a long time.

     

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