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Post by Bob Olhsson on Nov 17, 2017 9:56:36 GMT -6
Actually, we already have a baseline for catastrophic illness. It's called Medicare Disability and Medicaid. That's what the trust fund brats Orange Julius is the spokes-model for want to get rid of.
The reason the banks weren't allowed to fail was that it would have taken down most of the world's pension funds.
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Post by svart on Nov 17, 2017 10:01:58 GMT -6
I'll say this, if a corporation has managed not to pay taxes through loopholes, and you lower the tax rate, they're not going to start paying taxes anyway. Take the loophole away, they'll find another one. Cutting corporate taxes will increase the deficit. It's true that health care is a monstrous issue to tackle, but it needs to be handled, and what's being done now isn't working. The only answer I can think of is corporations should have a minimum tax they must pay, no deductions, no loopholes, no government tax breaks, nothing. It would cause painful consequences, considering fair trade hasn't really been addressed. But only then might things be possible to sort out. Economist buffs, am I wrong? I don't know enough to speak with any certainty about this. Unfortunately the answer boils down to "it depends". Nothing is clear-cut in economics, especially considering timescales. It takes decades to boil down economic cause-effect, and what might have worked 30 years ago might not work today. One thing is clear though, that the mumbo-jumbo of "offshore" accounts is not nearly as big a problem as it has been made out to be by politicians looking to make political hay. Revenue generated in the US, must pay US income taxes. Period. That's even IF the company is incorporated as an foreign holding. Lets say that you decided to incorporate in Cayman Islands, and created RGO LTD to sell recording gear and dumped all your money into the new holding company. Since RGO LTD. is engaging in US trade and, you (the owner) reside here in the USA, RGO LTD is now liable for US tax. You and RGO LTD are now also liable for "branch profits" which is a tax of 30% ON WHAT'S LEFT of your revenue after paying the US income tax.. So now, you pay 35% for US income tax, and then pay 30% of the remainder for an effective tax rate of 54-ish% Now, since you(the owner) is located in the US, any foreign income is also taxed at US rates too! Moving offshore actually costs more for most companies, than it saves, if the majority of revenue is from the US. So how does it work for large companies? They become foreign companies that only operate "branches" here in the USA, and only pay taxes on revenue it makes here. However, due to the US's penchant for seeing itself as master and commander of the world, we focus on believing that these companies make the most money here, and therefor should pay all their taxes here. The truth is that the rest of the world also matters, and for a company to derive 50% of it's revenue from the rest of the world, paying 15% in the Caymans on that foreign 50% and paying 35% on the US 50% is still better than paying 35% on 100% of their world-wide revenue. The reality is that business income tax in general only makes up for around 2% of the US GDP(8.5% of total tax revenue), which would be maybe 3-4% if they paid US income tax on 100% of their revenue. The majority of the rest is the US citizen shouldering the US income tax burden in some form or another. Barely a drop in the tax bucket, but it makes for great political talking points to portray the "other" side as evil and uncaring.
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Post by Martin John Butler on Nov 17, 2017 10:17:18 GMT -6
Interesting, thanks svart.
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Post by 79sg on Nov 17, 2017 10:27:12 GMT -6
The reason the banks weren't allowed to fail was that it would have taken down most of the world's pension funds. All that has transpired is a postponement of the inevitable failure of pensions. No structural changes were made during the initial financial crisis of 2008 -2009 which was just the opening act. Individuals, Corporations and Governments are more levered today than ever. Fact. It's like this, the patient (economy, pensions, etc.) is still on the table and the anesthesiologist looks at the surgeon and asks when he is going to tell the family the patient didn't make it. The surgeon says to the anesthesiologist just keep giving the patient anesthesia as I don't want to tell the family yet.
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Post by jimwilliams on Nov 17, 2017 11:23:10 GMT -6
Can kicking 101. What ever is cut must be made up on the back side. Without severe cuts to spending, this is only a continuation of the world's largest Ponzy scheme. The US government behaves worse than a 12 year old girl set loose at the mall with Daddy's credit cards.
The USA has over 16 trillion dollars of personal debt combined with over 20 trillion dollars of government debt. Additional borrowing is needed to make up for the lack of tax revenues. That will increase if taxes are cut. If anything, taxes should be doubled to start paying down that debt. Low tax states should not subsidize high income tax states by allowing for a local income tax deduction. That has encouraged California, NY and NJ to raise local taxes far beyond what the people would allow if they couldn't pass that debt on to other states.
The irresponsible US congress created this debt. If they were responsible they would apologize to the people they screwed and resign in mass (Rand Paul excepted). Instead they will ask for your vote in 2018 and you will give it to them.
In the end it is the voter's fault for not paying attention. If you have kids they will struggle to pay this down as we screwed the next generation with our greed.
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Post by ragan on Nov 17, 2017 12:09:54 GMT -6
It's a lot more complicated than just simply analyzing debt as if you were a household. It's about GDP ratios and a bunch of other factors. I'm NOT saying we don't have a debt problem. We do. But applying the concepts of a household or small business and the way those entities carry debt leads to wrong conclusions.
I'm not an economist or an expert but I'm a good listener and I listen to a lot of smart people on every side of this. It's massively complex and you can make compelling cases, with numbers to support them, in about a hundred different directions.
People develop their loyalties and pet dogma and tend to stick with that. Which is fine. "Marketplace of ideas" and all that. But anyone who claims to have it figured out on simplistic terms is, in my opinion, misled.
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Post by swurveman on Nov 17, 2017 12:22:27 GMT -6
Now I see why some of you are recordists and not economists.. I'm not an economist, but I own - with 8 other shareholders - an S Corporation that sells $40 million shower doors annually in 17 states. If this tax cut goes through my tax rate will go from 28% to 20%, but the largest shareholder's will go from 39% to 20%. Will we expand our business, because more money will go into our individual pockets? Not a chance in hell, unless there's more demand for high dollar shower doors. I don't see this demand coming from the upper class, who can already afford our doors. If the government gave the middle class a 19% tax cut we would probably see some more business, though I suspect if the middle class got that kind of cut- which will never happen- a part of the money would go to paying down personal debt which is pretty high in middle class families, or saving for education. My broad view is that there will be some trickle down do to this enormous tax cut for the already rich, but not nearly as much as the lost revenues to the federal government. Those lost revenues will result in cuts in services to those who really need it, the poor and middle class.
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Post by Martin John Butler on Nov 17, 2017 12:47:17 GMT -6
People with serious illnesses might suffer and lose health care from all this. It's not only "the poor", which is often a euphemism for people of color. In fact, I think the majority of those people receiving public assistance of some kind are white. People who work jobs that pay $25,000-$50,000 can't afford health care as it is, no less handle even more cost cutting. This comes down to the Jimmy Kimmel test, and I bet some little kid will go without a doctor.
Jim Williams makes a good point, if you cut somewhere, you must make it up elsewhere. You can theorize all day, poor people will end up suffering more, and infrastructure will be backburnered.
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Post by ragan on Nov 17, 2017 12:58:14 GMT -6
There's the subsidizing thing too, which is always weaponized by the left and the right. The right claim they're subsidizing the high-tax liberal states with deductions. The left claims they're subsidizing the rural, conservative states where way more people suckle at the gov teat (Medicaid, disability, food stamps etc). They're both right. We all subsidize one another in various ways. Used to be called the "commonwealth". Now it's just more fodder for endless political tribalism.
People like Gingrich and Rove were politically brilliant to weaponize divisiveness. And the left played right into it. But boy did it make our society way fucking worse.
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Post by svart on Nov 17, 2017 13:05:17 GMT -6
There's the subsidizing thing too, which is always weaponized by the left and the right. The right claim they're subsidizing the high-tax liberal states with deductions. The left claims they're subsidizing the rural, conservative states where way more people suckle at the gov teat (Medicaid, disability, food stamps etc). They're both right. We all subsidize one another in various ways. Used to be called the "commonwealth". Now it's just more fodder for endless political tribalism. People like Gingrich and Rove were politically brilliant to weaponize divisiveness. And the left played right into it. But boy did it make our society way fucking worse. I definitely agree with this. The truth is that while we can talk about pure economic theory, the reality is that everything has become so intertwined, that un-coupling it is impossible without severe pain for one group or another.
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Post by EmRR on Nov 17, 2017 13:18:17 GMT -6
Which is why it actually requires broad agreement to take many small steps towards a fix over a very long time. But that won't happen.
I've been reading Scotland's political news for awhile, it appears much the opposite of what we have here. Some sense of agreement about social problems and government services, even with differing opinions. Try following it awhile, it looks like some distant planet.
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Post by svart on Nov 17, 2017 13:20:24 GMT -6
People with serious illnesses might suffer and lose health care from all this. It's not only "the poor", which is often a euphemism for people of color. In fact, I think the majority of those people receiving public assistance of some kind are white. People who work jobs that pay $25,000-$50,000 can't afford health care as it is, no less handle even more cost cutting. This comes down to the Jimmy Kimmel test, and I bet some little kid will go without a doctor. Jim Williams makes a good point, if you cut somewhere, you must make it up elsewhere. You can theorize all day, poor people will end up suffering more, and infrastructure will be backburnered. You only "make it up somewhere else" IF you believe the problem is lack of funds to begin with and don't take into account auditing and streamlining services to be more efficient to cut costs while maintaining current services, which the government never does. There is no compelling reason for them to do so, as their sole revenue source is a closed system with no alternatives but to continue providing revenue or face jail/garnishment. That's the issue, that government is not accountable to the citizen anymore, and they continue to spend more than they bring in, with no possibility of ever regaining control over the debt. The debt is currently equal to GDP, which is going to quickly sink this country in the next few decades. Our system has long since transitioned from "for the people" to "from the people" in that regard, and the politicians use divisiveness as a tool to motivate constituents into voting for self-serving bills. As I've always said, the left and the right are two sides of the same coin at this point. Liberals are "tax and spend", and Republicans are "cut and spend".
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Post by ragan on Nov 17, 2017 13:27:03 GMT -6
People with serious illnesses might suffer and lose health care from all this. It's not only "the poor", which is often a euphemism for people of color. In fact, I think the majority of those people receiving public assistance of some kind are white. People who work jobs that pay $25,000-$50,000 can't afford health care as it is, no less handle even more cost cutting. This comes down to the Jimmy Kimmel test, and I bet some little kid will go without a doctor. Jim Williams makes a good point, if you cut somewhere, you must make it up elsewhere. You can theorize all day, poor people will end up suffering more, and infrastructure will be backburnered. You only "make it up somewhere else" IF you don't take into account auditing and streamlining services to be more efficient to cut costs while maintaining current services, which the government never does. There is no compelling reason for them to do so, as their sole revenue source is a closed system with no alternatives but to continue providing revenue or face jail/garnishment. Our system has long since transitioned from "for the people" to "from the people" in that regard, and the politicians use divisiveness as a tool to motivate constituents into voting for self-serving bills. As I've always said, the left and the right are two sides of the same coin at this point. Liberals are "tax and spend", and Republicans are "cut and spend". This is very true. I worked as a wildland firefighter for some years (WA State Dept of Natural Resources and the US Forest Service). The spending/accountability thing was shocking sometimes, especially at the USFS. We'd get to the end of the season and the boss would say "We have to spend $15k today or we don't get it next year". So a couple of us would go down to Lowe's or wherever and buy a shitload of tools and equipment that wasn't really needed. The worst culprit is the military. I have some military buddies and the stories they tell are astounding. One of them, in the Navy, got the order that they needed to burn up some spending and so somewhere outside a port city in Indonesia or something they dumped like $200,000 worth of supplies right off the side of the boat. Had to seem like they needed more to justify the budget. A friend of mine's dad talks about sending planes up to just fly around for hours and hours so they could burn up a couple million bucks of fuel. An in-law of mine talks about buildings in Iraq where every room had 10 huge flatscreen TVs even though the building wasn't powered and was never going to be. Just burning money up into thin air to justify the budget. But yeah, those damn poor kids and their subsidized school lunches! That's the REAL budgetary problem. They shoulda pulled themselves up by their bootstraps in utero so they weren't born into poverty. Lazy little bastards.
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Post by svart on Nov 17, 2017 14:08:57 GMT -6
You only "make it up somewhere else" IF you don't take into account auditing and streamlining services to be more efficient to cut costs while maintaining current services, which the government never does. There is no compelling reason for them to do so, as their sole revenue source is a closed system with no alternatives but to continue providing revenue or face jail/garnishment. Our system has long since transitioned from "for the people" to "from the people" in that regard, and the politicians use divisiveness as a tool to motivate constituents into voting for self-serving bills. As I've always said, the left and the right are two sides of the same coin at this point. Liberals are "tax and spend", and Republicans are "cut and spend". This is very true. I worked as a wildland firefighter for some years (WA State Dept of Natural Resources and the US Forest Service). The spending/accountability thing was shocking sometimes, especially at the USFS. We'd get to the end of the season and the boss would say "We have to spend $15k today or we don't get it next year". So a couple of us would go down to Lowe's or wherever and buy a shitload of tools and equipment that wasn't really needed. The worst culprit is the military. I have some military buddies and the stories they tell are astounding. One of them, in the Navy, got the order that they needed to burn up some spending and so somewhere outside a port city in Indonesia or something they dumped like $200,000 worth of supplies right off the side of the boat. Had to seem like they needed more to justify the budget. A friend of mine's dad talks about sending planes up to just fly around for hours and hours so they could burn up a couple million bucks of fuel. An in-law of mine talks about buildings in Iraq where every room had 10 huge flatscreen TVs even though the building wasn't powered and was never going to be. Just burning money up into thin air to justify the budget. But yeah, those damn poor kids and their subsidized school lunches! That's the REAL budgetary problem. They shoulda pulled themselves up by their bootstraps in utero so they weren't born into poverty. Lazy little bastards. So the pentagon has "lost" about 24 trillion over the course of a couple decades.. Can't account for what happened to it.. Yet somehow nobody ever gets held accountable. Some brass might lose their jobs, but beyond that, nothing. Discretionary spending on military budgets seems to always get downplayed in comparison to non-discretionary spending on entitlement programs (which dwarf everything else in comparison) but we could easily find ways to appropriate funding on an as-needed basis rather than the status-quo method of spending-then-figuring-the-budget as it is now. I've worked several jobs that served the municipal/public sector and they all work like that. End of year budgets must be spent or they lose that amount for the next year, with no real accountability for cost-cutting measures. Nobody seems interested in anything but figuring out how to balloon the next year's budget. It boggles the mind that they have no incentive to save money for the people, nor even consider it, even though they are part of the people that pay for it!
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Post by Bob Olhsson on Nov 17, 2017 14:09:25 GMT -6
People really need to talk to their grandparents about this stuff. How things worked for people who weren't rich prior to Roosevelt's New Deal was that both men and women had to work in order to support both their children and their parents. In many cases such as my mother, work began at around age 16.
The New Deal worked out because lifting a lot of the burden of parental support after WW2 created today's consumer economy which generated a massive number of good-paying jobs. Our problem today is that the majority of those jobs have been converted to automation or offshore cheap labor.
Our challenge is should we go back to the pre-1930s extended family economy or can we educate and harness the incredible talent of our entire diverse population to create massive innovation. Today's trust fund babies are threatened by the disruptive nature of innovation so naturally, they would rather go back to the roaring '20s when most wealth was inherited and not earned.
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Post by ragan on Nov 17, 2017 14:19:33 GMT -6
This is very true. I worked as a wildland firefighter for some years (WA State Dept of Natural Resources and the US Forest Service). The spending/accountability thing was shocking sometimes, especially at the USFS. We'd get to the end of the season and the boss would say "We have to spend $15k today or we don't get it next year". So a couple of us would go down to Lowe's or wherever and buy a shitload of tools and equipment that wasn't really needed. The worst culprit is the military. I have some military buddies and the stories they tell are astounding. One of them, in the Navy, got the order that they needed to burn up some spending and so somewhere outside a port city in Indonesia or something they dumped like $200,000 worth of supplies right off the side of the boat. Had to seem like they needed more to justify the budget. A friend of mine's dad talks about sending planes up to just fly around for hours and hours so they could burn up a couple million bucks of fuel. An in-law of mine talks about buildings in Iraq where every room had 10 huge flatscreen TVs even though the building wasn't powered and was never going to be. Just burning money up into thin air to justify the budget. But yeah, those damn poor kids and their subsidized school lunches! That's the REAL budgetary problem. They shoulda pulled themselves up by their bootstraps in utero so they weren't born into poverty. Lazy little bastards. So the pentagon has "lost" about 24 trillion over the course of a couple decades.. Can't account for what happened to it.. Yet somehow nobody ever gets held accountable. Some brass might lose their jobs, but beyond that, nothing. Discretionary spending on military budgets seems to always get downplayed in comparison to non-discretionary spending on entitlement programs (which dwarf everything else in comparison) but we could easily find ways to appropriate funding on an as-needed basis rather than the status-quo method of spending-then-figuring-the-budget as it is now. I've worked several jobs that served the municipal/public sector and they all work like that. End of year budgets must be spent or they lose that amount for the next year, with no real accountability for cost-cutting measures. Nobody seems interested in anything but figuring out how to balloon the next year's budget. It boggles the mind that they have no incentive to save money for the people, nor even consider it, even though they are part of the people that pay for it! Totally. And yeah, the military is known for the sort of ‘blockbuster’ waste, but entitlements are usually hovering around 3-4 times military spending. It’s just that it’s the slow trickle instead of the obvious graft and corrupt waste so it’s harder to pin down. The left loves to make military spending the boogieman, and it is bad, but entitlements are a way bigger share of the budget. Even if they only have a fraction of the waste the pentagon does, it’s a big deal.
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Post by jakeharris on Nov 17, 2017 14:32:10 GMT -6
For those actually interested in a history lesson.. Tax cuts have always been followed by increased tax revenue. Tax cuts have never been followed by increased tax revenue... ever. You're being intellectually dishonest (again ) leaving out how Reagan continuously raised taxes after his 1981 cut to make up for the lost revenue. It's a zero sum game: You lose revenue, you need to make it back somewhere else. Another thing that's really well documented, the 80's and tricklenomics created the super-rich category. The messed up inequality we have today, all of it's proof the whole thing's a sham. If you're not convinced, have a look at what the bailouts in 2008 achieved. They were given to rich business owners instead of the middle class and the poor. In 2017, the rich are now even richer, but the poor and middle class have either stagnated or ended up even poorer. In ten years time they'll show it again, how the rich became even richer following these Trump cuts, and the middle class sank even further...
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Post by svart on Nov 17, 2017 14:50:11 GMT -6
For those actually interested in a history lesson.. Tax cuts have always been followed by increased tax revenue. Tax cuts have never been followed by increased tax revenue... ever. You're being intellectually dishonest (again ) leaving out how Reagan continuously raised taxes after his 1981 cut to make up for the lost revenue. It's a zero sum game: You lose revenue, you need to make it back somewhere else. Another thing that's really well documented, the 80's and tricklenomics created the super-rich category. The messed up inequality we have today, all of it's proof the whole thing was a sham. If you're not convinced, have a look at what the bailouts in 2008 achieved. They were given to rich business owners instead of the middle class and the poor. In 2017, the rich are now even richer, but the poor and middle class have either stagnated or ended up poorer. In ten years time they'll show it again, how the rich became even richer following these Trump Cuts, and the middle class sank even further... I guess the graph I included was a lie, but whatever. Reagan didn't raise tax rates themselves overall, he closed loopholes, which raised tax revenue. He also ended deductions on some things, which also increased revenue, but did not touch the tax rates that he had cut. He later did increase taxes on gasoline and cigarettes, as well as capital gains, but these were small fish compared to the larger sweeping tax cuts that most of the middle class enjoyed. While it's true he hiked the rates a few times, the net effect was a reduction in tax rates for his time as president, and revenue increased proportionately. One specific example that left-leaning economists love to pull up is the 1982 TEFRA bill that raised tax rates in exchange for 3x strategic spending cuts (as Reagan was attempting to lower the debt of the time) which after being enacted, the democrat-majority congress quickly reversed their promises to cut spending and left the tax increases as they stood. Normal politics ensued. The problem is that the bailouts didn't achieve anything because they were absorbed almost directly into paying down personal and business debts. It made the books look better, which made everyone believe the economy was becoming better, but overall it just pushed the brink of catastrophy down the road until market forces could regroup to truly alleviate imminent disaster.
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Post by cowboycoalminer on Nov 17, 2017 14:55:01 GMT -6
For those actually interested in a history lesson.. Tax cuts have always been followed by increased tax revenue. Tax cuts have never been followed by increased tax revenue... ever. You're being intellectually dishonest (again ) leaving out how Reagan continuously raised taxes after his 1981 cut to make up for the lost revenue. It's a zero sum game: You lose revenue, you need to make it back somewhere else. Another thing that's really well documented, the 80's and tricklenomics created the super-rich category. The messed up inequality we have today, all of it's proof the whole thing's a sham. If you're not convinced, have a look at what the bailouts in 2008 achieved. They were given to rich business owners instead of the middle class and the poor. In 2017, the rich are now even richer, but the poor and middle class have either stagnated or ended up even poorer. In ten years time they'll show it again, how the rich became even richer following these Trump cuts, and the middle class sank even further... You're right. The house tax plan is spread over 10 years. Lower taxes now, higher taxes later. It's geared toward "priming the pump."
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Post by 79sg on Nov 17, 2017 16:07:20 GMT -6
For those actually interested in a history lesson.. Tax cuts have always been followed by increased tax revenue. Tax cuts have never been followed by increased tax revenue... ever. This is an accurate statement. The "bailouts" otherwise known as TARP was for one reason and one reason only. AIG was one of the largest Credit Default Swap (CDS) players at the time and Goldman Sachs was on the other side of the trade with them. If AIG was allowed to fail which it should have along with many others then Goldman Sachs was going down too. Do you find it a coincidence that they put Hank Paulson in at the Treasury right at this time? For those that don't know, Paulson was the previous CEO at Goldman Sachs. Anyone that believes that the bailouts were meant to save the economy is gravely mistaken. Anyone that believes that the purpose of the Federal Reserve Bank is to help guide the economy and watch over the banking system is gravely mistaken and I'd recommend you read G. Edward Griffin's book the Creature from Jekyll Island. The Fed is owned by approximately 300 shareholders all banks. It is a private institution. Most credit the actions of the Federal Reserve with "saving" the stock market, this is untrue. What has saved the stock market for now was FASB Rule 157 (March 9, 2009) which allowed the banks to mark their holdings to their proprietary models NOT to the market as was the case into the last crisis. Yep, they can just make it up. This was the bottom of the market (for now). Welcome to 1929. Enjoy the day. The funny thing (sarcasm) about this miraculous recovery is mere accounting trickery and massive money printing. It should be quite troubling to anyone that believes healthcare spending aka Oshitacare (it is called this because when you get your annual renewal you immediately say Oh Shit among other things) has been the largest contributor to supposed economic growth over the past 8 years which shockingly has been the weakest period of expansion after a "recession" EVER. Talk about waste. I could walk through all of the new math that is used in the GDP (Gross Domestic Product) calculation but it is a waste of time. The reality is, they can make it whatever they want it to be. Just for clarification, I cannot be political as I am a political atheist. Herbie, to answer your original question, no I do not think the proposed tax plan will help or hurt a studio. Neutral at best.
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Post by swurveman on Nov 17, 2017 16:37:03 GMT -6
For those actually interested in a history lesson.. Tax cuts have always been followed by increased tax revenue. If you're not convinced, have a look at what the bailouts in 2008 achieved. They were given to rich business owners instead of the middle class and the poor. In 2017, the rich are now even richer, but the poor and middle class have either stagnated or ended up even poorer. In ten years time they'll show it again, how the rich became even richer following these Trump cuts, and the middle class sank even further... 2008 laid bare how different terms like "market forces" and "free market" are for the average person/business vs Wall Street. If we had a free market and market forces worked the way Adam Smith envisioned them, every one of the banks and the entire financial system would have collapsed. Instead, the taxpayers bailed out the banks, while the Central Reserve Bank took the bad assets off their books while loaning them money at near 0% interest to prevent the collapse. All kinds of corruption can occur, like the mortgage loan/mortgage derivatives scam, and the traders and bankers can make fortunes and get away with it unscathed, and then get another stake to fill up the punch bowl again. This tax cut is going to create an avalanche of money going to Wall Street. For the rich, their money has never been as safe as it is today in Wall Street banks, which are too big to fail and are a protected industry. This is another factor in why these tax cuts aren't going to stimulate vast sectors of the economy imo. Instead of investing in their own businesses with real market forces, already rich business owners will put their money in Wall Street banks, knowing it is ultimately safer in government protected Wall Street banks.
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Post by ragan on Nov 17, 2017 16:48:34 GMT -6
If you're not convinced, have a look at what the bailouts in 2008 achieved. They were given to rich business owners instead of the middle class and the poor. In 2017, the rich are now even richer, but the poor and middle class have either stagnated or ended up even poorer. In ten years time they'll show it again, how the rich became even richer following these Trump cuts, and the middle class sank even further... 2008 laid bare how different terms like "market forces" and "free market" are for the average person/business vs Wall Street. If we had a free market and market forces worked the way Adam Smith envisioned them, every one of the banks and the entire financial system would have collapsed. Instead, the taxpayers bailed out the banks, while the Central Reserve Bank took the bad assets off their books while loaning them money at near 0% interest to prevent the collapse. All kinds of corruption can occur, like the mortgage loan/mortgage derivatives scam, and the traders and bankers can make fortunes and get away with it unscathed, and then get another stake to fill up the punch bowl again. This tax cut is going to create an avalanche of money going to Wall Street. For the rich, their money has never been as safe as it is today in Wall Street banks, which are too big to fail and are a protected industry. This is another factor in why these tax cuts aren't going to stimulate vast sectors of the economy imo. Instead of investing in their own businesses with real market forces, already rich business owners will put their money in Wall Street banks, knowing it is ultimately safer in government protected Wall Street banks. I’m sympathetic to the view that Wall St enjoys the Ultimate Entitlement.
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Post by johneppstein on Nov 17, 2017 17:05:34 GMT -6
That's how they got rich in the first place - by holding on to every penny they can and spending as little of it as possible. That's just flat out untrue. You gotta be kidding me. Or you haven't known many rich people and you don't know anything about how major corprations work.
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Post by johneppstein on Nov 17, 2017 17:11:00 GMT -6
Well, as to cowboycoalminer's topic, I too hope the studio owners see a little of the daylight a tax break might offer. Great studios are becoming harder to find or afford, so I hope the smaller outfits catch a break and it helps them stay in business. They won't. They don't make enough money to see a benefits from the bill. Small business owners will actually see their taxes INCREASE, as will indivuals and families. The devil, as usual, is in the details - look at all the deductions that are being eliminated.
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Post by johneppstein on Nov 17, 2017 17:16:45 GMT -6
I'll say this, if a corporation has managed not to pay taxes through loopholes, and you lower the tax rate, they're not going to start paying taxes anyway. Take the loophole away, they'll find another one. Cutting corporate taxes will increase the deficit. It's true that health care is a monstrous issue to tackle, but it needs to be handled, and what's being done now isn't working. The only answer I can think of is corporations should have a minimum tax they must pay, no deductions, no loopholes, no government tax breaks, nothing. It would cause painful consequences, considering fair trade hasn't really been addressed. But only then might things be possible to sort out. Economist buffs, am I wrong? I don't know enough to speak with any certainty about this. Revenue generated in the US, must pay US income taxes. Period. That's even IF the company is incorporated as an foreign holding. So how does it work for large companies? They become foreign companies that only operate "branches" here in the USA, and only pay taxes on revenue it makes here. However, due to the US's penchant for seeing itself as master and commander of the world, we focus on believing that these companies make the most money here, and therefor should pay all their taxes here. The truth is that the rest of the world also matters, and for a company to derive 50% of it's revenue from the rest of the world, paying 15% in the Caymans on that foreign 50% and paying 35% on the US 50% is still better than paying 35% on 100% of their world-wide revenue. The reality is that business income tax in general only makes up for around 2% of the US GDP(8.5% of total tax revenue), which would be maybe 3-4% if they paid US income tax on 100% of their revenue. The majority of the rest is the US citizen shouldering the US income tax burden in some form or another. Barely a drop in the tax bucket, but it makes for great political talking points to portray the "other" side as evil and uncaring. That is simply untrue.
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