I got a tax cut! What will I do with it?

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alan
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I got a tax cut! What will I do with it?

Post by alan » Thu Dec 21, 2017 2:08 am

Got a tax cut! Now, I will hire more workers! And pay them more!
Right?
No, actually, I will not. I will hire more workers when I see the need for more workers. My tax cuts have nothing to do with that.
And I will pay them more money? No, I will not. My tax cuts have no relation to how much workers are paid.
Right?
Tax cut for the super wealthy do nothing other than make the super wealthy more wealthy, and hurt everyone else.
Right?

Garrib
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Re: I got a tax cut! What will I do with it?

Post by Garrib » Thu Dec 21, 2017 2:32 am

Are you super wealthy? or are you just talking in hypotheticals?

"Free market" right wingers always claim that these give-aways to the wealthy make their way down to everyone else and boost the overall strength of the economy. In reality, that doesn't generally appear to be the case...

alan
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Re: I got a tax cut! What will I do with it?

Post by alan » Thu Dec 21, 2017 2:38 am

I'm not super wealthy. And I'm talking reality,
No one, ever, has given a higher wage to their workers just because they got a tax cut.

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Re: I got a tax cut! What will I do with it?

Post by retrofuturist » Thu Dec 21, 2017 3:29 am

Greetings Alan,
alan wrote:
Thu Dec 21, 2017 2:38 am
No one, ever, has given a higher wage to their workers just because they got a tax cut.
You have it back to front. Tax cuts means that there is more money in the pockets of more people, and demand for goods and services rise as a result.

With the rising demand, there's more incentive for companies to produce and supply more things, and that will often lead to more employment.

Economic growth will no doubt rise... what the U.S. needs to keep an eye on now is inflationary pressures, either due to relative shortages in supply (of materials and finished products) and rising wages (due to relative scarcity of available workers).

Therefore, as they try to keep a lid on inflation, keep an eye on interest rates and expect the next move to be an upward one.

Metta,
Paul. B.Ec. :)
"Do not force others, including children, by any means whatsoever, to adopt your views, whether by authority, threat, money, propaganda, or even education." - Ven. Thich Nhat Hanh

"The uprooting of identity is seen by the noble ones as pleasurable; but this contradicts what the whole world sees." (Snp 3.12)

"One discerns wrong view as wrong view, and right view as right view. This is one's right view." (MN 117)

alan
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Re: I got a tax cut! What will I do with it?

Post by alan » Thu Dec 21, 2017 3:38 am

Bush W cut taxes. What happened? Did we get more growth?
No. We did not. Because cutting taxes does not result in economic growth. This has been proven. It has been proven over and over again, yet, people still believe in this fantasy.
Why are people so God Dam Stupid?

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Re: I got a tax cut! What will I do with it?

Post by alan » Thu Dec 21, 2017 3:45 am

Only thing that happens when you cut taxes is that people pay less taxes, and the government has less money. When the government has less money, it starts to fall apart.
Don't believe me? I invite you to go to a country with less government--like India.
And then tell me who wonderful it is, to have less government.

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Re: I got a tax cut! What will I do with it?

Post by retrofuturist » Thu Dec 21, 2017 3:49 am

Greetings,
alan wrote:
Thu Dec 21, 2017 3:38 am
Because cutting taxes does not result in economic growth. This has been proven. It has been proven over and over again
No it hasn't.

The very existence of taxes is a natural disincentive towards work (labour) and investment.

If you reduce the disincentive for economic activity, then, naturally there is more economic activity.

Metta,
Paul. :)
"Do not force others, including children, by any means whatsoever, to adopt your views, whether by authority, threat, money, propaganda, or even education." - Ven. Thich Nhat Hanh

"The uprooting of identity is seen by the noble ones as pleasurable; but this contradicts what the whole world sees." (Snp 3.12)

"One discerns wrong view as wrong view, and right view as right view. This is one's right view." (MN 117)

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Re: I got a tax cut! What will I do with it?

Post by alan » Thu Dec 21, 2017 3:58 am

Oh, that is so much right-wing Bulls*t.
If cutting taxes made for more economic growth, why did it not happen under Bush?

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Re: I got a tax cut! What will I do with it?

Post by DNS » Thu Dec 21, 2017 3:58 am

I'm getting a tax cut too. For the sake of the country, I hope everything will be alright, but I'm concerned about the corporate tax rate going from 35% to 21%. I hope corporations use the extra net funds for further growth, but I'm afraid they just might use it for bigger salaries and bonuses for the upper management, executives, and board members. Does anyone really need $200 million per year? There are some CEOs who make that much. If they go to the loo and it takes a minute, they just made another $10,000.

And then there's this:
http://www.usdebtclock.org/sources/transparent2.gif

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Re: I got a tax cut! What will I do with it?

Post by alan » Thu Dec 21, 2017 4:00 am

And, if cutting taxes is always good, why not cut them to zero?

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Re: I got a tax cut! What will I do with it?

Post by alan » Thu Dec 21, 2017 4:06 am

Cut taxes all the way to zero. Then see what happens.
I've lived and traveled in many Third World Countries--including the Philippines, where I lived for 3 years. I have a first hand account of how awful it is when there is no government, because there is no tax revenue.
You can't tell me I'm wrong, because you have not lived there.

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Re: I got a tax cut! What will I do with it?

Post by DNS » Thu Dec 21, 2017 4:11 am

alan wrote:
Thu Dec 21, 2017 3:58 am
If cutting taxes made for more economic growth, why did it not happen under Bush?
Bush destroyed the economy, not from the tax cuts, but from massive government spending, mostly on 2 very costly wars, roughly costing around $3 trillion. He could have spent that money on rebuilding infrastructure and numerous other things, but he preferred war, because too many people still like war and rally around the flag, patriotism and then helps to get you reelected. His father didn't go to any major war and lost his bid for a second term.

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Re: I got a tax cut! What will I do with it?

Post by retrofuturist » Thu Dec 21, 2017 4:18 am

Greetings Alan,
alan wrote:
Thu Dec 21, 2017 4:00 am
And, if cutting taxes is always good, why not cut them to zero?
Because you need some money to collectively purchase things that can only be consumed collectively...

E.g. infrastructure, law & order, defence

... plus some things that we publicly invest in because of the positive externalities and benefits delivered...

E.g. primary and secondary education, basic health care

Hard-core libertarians will even start to question these requirements, but I think they're pretty easily justifiable on economic grounds.

Metta,
Paul. :)
"Do not force others, including children, by any means whatsoever, to adopt your views, whether by authority, threat, money, propaganda, or even education." - Ven. Thich Nhat Hanh

"The uprooting of identity is seen by the noble ones as pleasurable; but this contradicts what the whole world sees." (Snp 3.12)

"One discerns wrong view as wrong view, and right view as right view. This is one's right view." (MN 117)

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Re: I got a tax cut! What will I do with it?

Post by chownah » Thu Dec 21, 2017 5:13 am

retrofuturist wrote:
Thu Dec 21, 2017 3:29 am
Greetings Alan,
alan wrote:
Thu Dec 21, 2017 2:38 am
No one, ever, has given a higher wage to their workers just because they got a tax cut.
You have it back to front. Tax cuts means that there is more money in the pockets of more people, and demand for goods and services rise as a result.

With the rising demand, there's more incentive for companies to produce and supply more things, and that will often lead to more employment.

Economic growth will no doubt rise... what the U.S. needs to keep an eye on now is inflationary pressures, either due to relative shortages in supply (of materials and finished products) and rising wages (due to relative scarcity of available workers).

Therefore, as they try to keep a lid on inflation, keep an eye on interest rates and expect the next move to be an upward one.

Metta,
Paul. B.Ec. :)
THis is not a reply to retrofuturist.
Tax cuts will increase consumer demand if the money goes to people who will spend alot of it on consumer products. The people who will increase their spending on consumer products are at the bottom and middle of the income range. Poor people will be those most likely to increase their consumer spending and as you go up in income level you see a shift to income levels where less will be spent on consumer products and more will be invested. When you get to the upper levels you find that rich people are already spending as much as they want on consumer products so they will be pretty much exclusively spending on investments and not consumer products. The new tax law will give most of the tax cuts (as measured in dollars) to the upper levels. If the idea was to increase consumer spending the tax cuts (as measured in dolllars) should have gone to the lower levels.
I include the reminder that I am using tax cuts as measured in dollars because it is the number of dolllars that get spent on consumer goods that matters....in the news that I have seen they always talk in terms of how many people at various income levels will receive tax cuts and from the standpoint of increasing consumer demand the number of people is (mostly) irrelevant....it is the number of dollars.....and this tax law gives the vast majority of the tax cuts to the people who are the least likely to spur consumer demand.
chownah

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Re: I got a tax cut! What will I do with it?

Post by DooDoot » Thu Dec 21, 2017 5:27 am



:thumbsup:

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Re: I got a tax cut! What will I do with it?

Post by DooDoot » Thu Dec 21, 2017 5:38 am

DNS wrote:
Thu Dec 21, 2017 3:58 am
I'm getting a tax cut too. For the sake of the country, I hope everything will be alright, but I'm concerned about the corporate tax rate going from 35% to 21%.
How does it work in the USA? Somewhere in samsara a company must distribute its (taxable) profits to its shareholders.

For example, in Australia, the top personal tax rate is 45% plus 2% for medical & the company tax rate is 30%, however there is a dividend imputation system that prevents double taxation. For example, a shareholder that earns a $1 million dividend from a company will (generally) receive a 30% tax credit (that represents the tax paid in Australia by an Australian company) and thus pay the additional 17% themselves. The total tax at the big end of town is 47%, which together includes both the company & shareholder. The company profit is essentially only taxed once; but ultimately in the hands of the shareholders (who naturally are the owners of the company).

My quick Wiki research finds the US does not have a tax credit (imputation) system. Is this correct? Therefore, if so, a company is taxed 21% and a large shareholder is taxed at least 20% on "qualified" dividends therefore the total tax at the big end of town 41%. Is this correct?

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Re: I got a tax cut! What will I do with it?

Post by robertk » Thu Dec 21, 2017 7:53 am

http://time.com/5074911/tax-reform-bill ... s-bonuses/

Several companies announced new investments, minimum wage hikes and employee bonuses on Wednesday as a result of the passage of Republican tax reform bill, which is set to bring them significant tax cuts by lowering the corporate tax rate.

AT&T
AT&T said it would give $1,000 bonuses to more than 200,000 employees in the U.S. once the tax bill is signed into law and promised to invest an additional $1 billion in the U.S. in 2018. CEO Randall Stephenson praised the tax legislation as “a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world.”

Trump praised AT&T’s announcement in remarks at the White House. “That’s because of what we did,” he said. “So that’s pretty good. That’s pretty good.” AT&T is currently awaiting approval from Trump’s Justice Department of its pending $85 billion acquisition of Time Warner.
Boeing
Boeing announced that it would spend $300 million on “employee-related and charitable investments” because of the tax plan. “The reforms enable us to better compete on the world stage and give us a stronger foundation for the investment in innovation, facilities and skills that will support our long-term growth,” CEO Dennis Muilenburg said in a statement
Comcast
Comcast is giving $1,000 bonuses to 100,000 “frontline and non-executive employees,” the company announced, citing the rollback of the FCC’s Obama-era net neutrality rules and the passage of the tax reform bill. CEO Brian Roberts also said the company expects to spend “well in excess of” $50 billion on infrastructure investment over the next five years.

Fifth Third Bankcorp
Fifth Third Bancorp said it would increase its hourly minimum wage to $15 for U.S. employees.
Wells Fargo
Wells Fargo said it would increase its minimum wage for U.S. employees from $13.50 to $15 and spend $400 million on donations to nonprofits and community organizations in 2018

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DNS
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Re: I got a tax cut! What will I do with it?

Post by DNS » Thu Dec 21, 2017 4:03 pm

DooDoot wrote:
Thu Dec 21, 2017 5:38 am
My quick Wiki research finds the US does not have a tax credit (imputation) system. Is this correct? Therefore, if so, a company is taxed 21% and a large shareholder is taxed at least 20% on "qualified" dividends therefore the total tax at the big end of town 41%. Is this correct?
Correct, that is for public companies. For private companies, like Trump Intl, there are no share holders, so the owner of the company keeps all the net profits.

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Re: I got a tax cut! What will I do with it?

Post by pulga » Thu Dec 21, 2017 4:15 pm

robertk wrote:
Thu Dec 21, 2017 7:53 am

Several companies announced new investments...
That is reassuring news. Originally an import tax was proposed to encourage corporations to invest in the U.S. once they repatriated their money from abroad. But that idea was shelved, at least for now. It seems to me that a lot of the money that is going to be flowing back into the country will go towards stock buybacks and dividend payouts.

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Re: I got a tax cut! What will I do with it?

Post by Circle5 » Thu Dec 21, 2017 7:17 pm

Alan, I don't think you understand how thirld world countries and developed economies work. Developed economies have huge tax rates, USA included. Developing countries such as my Romania and all eastern europe have super low taxes to encourage growth and it is working. Romania used to be "the tiger or europe" before the economic chrisis, being nr 1. at economic growth for 5 years. Today, it is again having the biggest economic growth in europe for 2-3 years already and is predicted to continue like that.

A developing country has a lot of catching up to do and it also has the potential for growth. A developed country does not have a potential for growth, therefore taxing to death what you already have makes more sense. How much you actually should tax is not something normal people like us should decide. That depends on a lot of factors, a lot of statistics. Only expert macro-economist can know what is good for a particular case.

Let's take a loot at this from this thread
corporate tax rate going from 35% to 21%.
In Romania, even during the economic crisis, we managed to maintain a low and flat 16% tax rate. We adopted huge austerity programs but did not touch this flat corporate tax rate. The Bulgarians have it at 10%. That's a lot lower than 35%.

If a developed country has too big of a flat rate, people will just move those businesses somewhere else, same as many Romanians have their business registered in Bulgaria.

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