Posted on 11/27/2017 11:49:33 AM PST by SeekAndFind
The House and Senate are considering tax legislation that will add $1.5 trillion to annual deficits over the next 10 years, according to their own numbers.
This is okay, we're told, because the tax cuts will stoke economic growth, delivering added tax revenue that offsets the rate reductions.
Note the bigger point here.
Republicans still say they don’t like deficits — but apparently, this particular plan lets them cut taxes without adding more debt. It’s a miracle.
Is their claim really true? Will the GOP tax plans boost economic growth?
That’s the 1.5-trillion-dollar question.
Theory vs. Reality
The Republican plan’s centerpiece is a reduction in corporate tax rates from a 35% top bracket to only 20%. That would put the U.S. more in line with other countries.
What you seldom hear is that most other developed countries also have value-added tax (VAT), a kind of consumption tax. The U.S. doesn’t. Our tax system will remain different, and not necessarily better, under the new proposal.
Anyway, the theory is that lower tax rates will entice businesses to bring back operations they currently conduct overseas. They will build new factories and hire more U.S. workers. Those workers will spend their higher incomes on consumer goods, and we’ll all be better off.
Unfortunately, that thinking has several flaws.
For one, as we saw in the NFIB Small Business Economic Trends report, business owners say that finding qualified workers is their top challenge right now. Reducing corporate tax rates won’t make new workers magically appear, nor will it improve the skills of those already here.
What increasing labor demand might do is spark that inflation the Federal Reserve has wanted for years. There’s also a good chance it could spiral out of control, forcing the Fed to hike interest rates even faster than planned
(Excerpt) Read more at forbes.com ...
One of the hardest qualifications to fill is to find the right worker willing to work for what the company wants to pay. So long as the workers overseas are a lot cheaper then that isn't going to change.
Malcolm is turning over in his grave.
And that is the key.
My current place of employment is losing out to another company that pays more. The response? Call the other company and suggest it lower its starting wages. Hints of using political pressure against them (though I doubt that will work), and calls to the local and state government for tax breaks.
If you suggest as a manager that you increase the pay of anyone below E Class managers, you will be laughed out the door. The only price that is able to be changes is wages, and with massive pressure to cut costs that is where all the pressure goes. The drop in employment is not just because of automation.
By the time you finish with the cuts and the loophole endings, this bill isn’t a giant tax cut.
The secret as always, is to adjust to take advantage of what is given and ameliorate what is taken. Been doing that for almost 40 years, it works fine.
I have yet to hear anyone explain what exactly is supposed to be accomplished with this tax reform bill. If the purpose is to get companies to move here and hire more Americans, then it will be completely ineffective because it doesn’t address actual costs associated with hiring employees here in the U.S. Cutting corporate taxes without cutting payroll taxes and eliminating ObamaCare mandates will do absolutely nothing to incentivize hiring.
Your post illustrates why I refer to my local business rag as the Pittsburgh Communist Business Times. Page after page, issue after issue, filled with supposed CEO’s and entrepreneurs, each one of them whining that “The government isn’t doing enough for ME!!!”
What a globalist ass
I need low skilled employees at my company. The job is literally counting, folding and packing t-shirts.
It pays minimum wage to start with raises available by learning and expanding your usefulness to the company. We will train, if you are willing.
It is a job best filled by students. The hours are very flexible. No weekends or holidays.
We can’t find a soul. Not even a nibble. Those expressing any interest want to start at $10 an hour.
Very discouraging.
What a wonderful opportunity for an exposure to work life, learning the discipline of work, and of meeting the minimum standards of productivity in a competitive business.
Post-WWII youth would have jumped at such an opportunity to begin work, recognizing that more opportunities could come to them if they worked hard.
“By the time you finish with the cuts and the loophole endings, this bill isn’t a giant tax cut.”
Tax rate cuts for all income groups...
Doubling the standard deduction...these will end up amounting to the largest tax cut in history...
It’s not perfect but it is much better than the alternative Democrat plan which would seem more stagnant growth and likely higher rates.
From the article:
“The House and Senate are considering tax legislation that will add $1.5 trillion to annual deficits over the next 10 years, according to their own numbers.”
So, giving people their own hard earned money back will only cost 150 billion per year.
Obama added 1.1 Trillion to 1.4 Trillion in deficit annually and it came with meager and stagnant GDP Growth.
The economy will take off after 8-10 years of horrible GDP growth. Trump is hitting 3% GDP growth on merely rolling back Regulations and Consumer and Business Sentiment.
Just wait to these tax cuts hit !!
RE: We can’t find a soul. Not even a nibble.
Not even “immigrants” from South of this country? :)
Why of course not! Hey why don’t we go full keysian and RAISE corporate taxes to tax our way to a strong economy? Hey it worked so well in the 30s right? Suck a lemon jerk
RE: Cutting corporate taxes without cutting payroll taxes and eliminating ObamaCare mandates will do absolutely nothing to incentivize hiring.
Senate is considering doing away with the Obamacare mandate as part of their tax plan.
2. The more onerous mandate is the one that lays out minimum coverage standards. Is the Senate looking to do anything about that?
Kill the bill ping.
We are told that because it's true you dimwit.
RE: The individual mandate or the employer mandate?
I think it is the individual mandate...
SOURCE:
(EXCERPT)
Senate Republicans have decided to include the repeal of the Affordable Care Act’s requirement that most people have health insurance into the sprawling tax rewrite, merging the fight over health care with the high-stakes effort to cut taxes.
They also have made a calculated gamble to help speed their bill to passage on a party-line vote: Republicans revealed late Tuesday they would set all of their tax cuts for individuals to expire at the end of 2025, to comply with a procedural requirement. Their deep cut in the corporate tax rate would remain permanent.
Both the expiration decision and the move to tuck the repeal of the so-called individual mandate into the tax overhaul are attempts by Republicans to solve two problems: math and politics. Repealing the mandate, a longstanding Republican goal, would save hundreds of billions of dollars over the next decade. That would free up money that is earmarked to expand middle-class tax cuts.
If this is the crap Forbes puts out it’s no wonder I no longer read their crap. Thanks for reminding me.
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