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 ...
Point out the flaws in his logic.
Tax bill ping
Not when you eliminate the personal exemptions...it's a virtual wash.
IMO, the tax cuts go to the Chamber of Commerce and K Street, paid for by Main Street.
The corporate tax should be ZERO.
What will that result in?
Economic growth
Would not more economic growth be generated by cutting taxes substantially for the middle class? The ones who actually spend?
It should be the same as all other legal person’s.
BS PROPAGANDA!
https://www.youtube.com/watch?v=QztsrEfenf8
You still need a low-skilled worker to feed the machine. But higher productivity means you can afford to pay him enough to get him to take the job. More shirts folded per man-hour.
Corporate taxes are passed to consumer in the form of higher prices and to employees in the form of lower wages. There would be no bigger boom for the middle class, and all of America, than to eliminate corporate taxes.
Corporations aren't going to lower their prices!
It should be zero. Then tax individuals what you’ll tax them. Corporations are made up of individuals. The main argument for high corporate taxes seems to be based on envy, the building block of the Democrat party.
Corporations are legal persons.
Under law, they have legal personhood. Under Supreme Court rulings, that grants them all the rights of individuals.
They also have a number of special privileges and rights that “real” people don’t. For instance, if you or I committed the crimes that say, ADM did in the 1990’s, our property and holdings would be taken, and our freedom would be also. ADM, while they paid a fine, kept doing business.
Also, they get huge pay outs from Federal, state, and local governments. Elon Musk has never turned a profit in Tesla, and (if you believe the statements) Amazon does not either. Yet they get plumb contracts, massive tax incentives, and laws written to benefit them at the expense of their competitors and ‘customers” (which are not those who buy the services or products).
Corporations also have been given dispensation for numerous laws that you and I have to follow. For instance, a mercenary company has a training facility across the river in Illinois. They have fully automatic weapons, crew served weapons, light helicopter gunships, and armor. All granted to the legal person that is the corporation, while a citizen of Illinois does not have a fraction of those rights.
So what you are saying is that we have two systems of law. One for the nobility (of which those legal persons called corporations are a part) and one for the rest (which are those living persons and those corporations without the money to buy their way into the trough).
IF a corporation is a legal person, which under law they claim to be, THEN actually treat them under the law as a person. Tax, regulate, and enforce the same rules for all persons, not just those who have no influence.
I used to think as you do, till I had the good fortune to see how things are done. We don’t have a free market, we having since the late 1800’s. The large corporations of today pay out huge amounts of money to buy political influence, forced payouts, and to limit competition.
So no, the tax rate shouldn’t be zero. A corporation like Walmart, which structures its pay scale so most of its employees are on welfare, costs me money if I shop their or not. A firm like GM, who bellied up to bench and demanded that Bush give them my money by the point of a gun even though I will never drive another GM care again, has no sympathy from me.
If they want to be treated as legal people, they then can deal with the down side as well as the up. Setting the rate to zero would actually hurt the economy, because my (and I suspect your) taxes would go up dramatically, while the companies would not expand. Corporations don’t hire people because they make money. They don’t increase wages for those below the E class based on profit either. They only expand, or give raises, or hire, if they feel it will benefit them.
Trust me. A company with a sudden increase in profit margin will not just go out and give raises to everyone. They will be “consulted” to do the opposite. Because if you made X profit with Y people, if you cut 10% you could make even MORE profit! And if that doesn’t work, you lobby the government for a handout!
This tax bill will end up costing a lot. It will increase my taxes (because I am of the powerless class that pays taxes). It will end up costing the GOP a lot of seats in Congress (because the only thing they can seem to do is give out tax cuts to large corporations and tax hikes to the middle class, Where is my wall BTW?) And in the end, it will hurt the economy just like the bail outs did in 2008.
Amen. Great post. All of it.
And unfortunately, you are right.
Walmart (FOREIGN CHEAP CRAP) and Ikea ( MORE FORGEIGN CHEAP CRAP ) are different kinds of entities than Microsoft.
The oil, steel, and railroad men were fighting between themselves, which WILL bring down prices...for a while.
Oh stop deluding yourself...SOME corporations ARE "the enemy"; some aren't! And the government is NOT a "corporation"! Words have specific meanings ( though now with the race hustlers, PC and the damned SJWs, words mean whatever THEY say they do; except for people who are sane and intelligent ), not by any standard definition.
You can make a good argument that corporations do not pay tax. What the government imposes as a tax, a corporation must add to the price of the goods or services they sell. It is therefore the consumer who pays the tax on the corporation. If that consumer is the government itself, the tax only adds to the deficit dollar for dollar.
BRAVO !
I’m strongly opposed to government intervention in business, GM and others like them should have been allowed to fail. I don’t see business as the enemy, but government. I think the corporate rate should be zero, let the cards fall where they may.
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