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Post by johneppstein on Nov 17, 2017 17:56:12 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. There are a couple of things that need to be understood about the present situation. Thye first is that the is no functional left in this country anymore, there is only near right and far right. The so-called "left", the Democratic Party, is somewhat to right of the position of Barry Goldwater in the '60s - and at the time Goldwater was viewed as a firebreathing right-winger, darling of the John Birch Society. The second is economics is not a science, any more than any other form of fortune telling is. Only this kind of fortune telling is deeply entwined with politics and business, and is commonly employed as an excuse for political ideologies concerned with corporate gain. The third is that the goals of big business in the US have shifted since the 1960s from long term corporate growth and expansion of production (and consequently employment), which is inherently healthy and forward-looking, to maximization of short term profits/capital gains for the immediate benefit of stock holders and high ranking executives without regard for long term corporate health, employment, or stability of the economy and economic health of the country. One of the more visible effects of this is the continuing shift of the US from a production economy to a service economy. Another (and related) effect is constant decrease in the real income of the average American citizen and the continuing and accelerating inflation of our currency. Another is the consolidation of formerly independent businesses into only a few megacorporations, with cocomitant shrinkage of the workforce and the takeover of many businesses by hedgefunds that liquidate the assets and bankrupt the residual corporate corpse, again eliminating many jobs and decrteasing real productivity.
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Post by m03 on Nov 17, 2017 18:00:20 GMT -6
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. I've known enough and I've helped friends build successful companies from nothing. The old axiom "it takes money to make money" applies, and any rich who follow your prior statement and don't reinvest in their businesses (investing, hiring employees, expanding into new markets, etc) simply aren't going to stay rich. The idea that people sit on cash (which is ever-decreasing in value) forever and remain rich is ludicrous. Reading is crucial.
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Post by ragan on Nov 17, 2017 18:06:47 GMT -6
You gotta be kidding me. Or you haven't known many rich people and you don't know anything about how major corprations work. I've known enough and I've helped friends build successful companies from nothing. The old axiom "it takes money to make money" applies, and any rich who follow your prior statement and don't reinvest in their businesses (investing, hiring employees, expanding into new markets, etc) simply aren't going to stay rich. The idea that people sit on cash (which is ever-decreasing in value) forever and remain rich is ludicrous. Reading is crucial. Kinda depends on how much cash we’re talking about. Also a million other things like what assets they’re holding and what costs are associated with them.
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Post by johneppstein on Nov 17, 2017 18:09:49 GMT -6
You gotta be kidding me. Or you haven't known many rich people and you don't know anything about how major corprations work. I've known enough and I've helped friends build successful companies from nothing. The old axiom "it takes money to make money" applies, and any rich who follow your prior statement and don't reinvest in their businesses (investing, hiring employees, expanding into new markets, etc) simply aren't going to stay rich. The idea that people sit on cash (which is ever-decreasing in value) forever and remain rich is ludicrous. Reading is crucial. More likely using that money to acquire and loot other companies, eliminating jobs and production. Yes there are still a few old fashioned entrepreneurs left, but they're in the vast minority and many end up as prey for the vultures. And, if you haven't noticed, that's S.O.P. for the cabal currently in power in Washington - they don't produce anything except bankruptcies and money laundering. Oh, and treason, of course. EDIT: And yes, reading is crucial. So is understanding.
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Post by svart on Nov 17, 2017 18:21:47 GMT -6
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. I double checked with my tax attorney just to make sure. It's 100% true. Sorry.
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Post by m03 on Nov 17, 2017 18:23:06 GMT -6
EDIT: Meh. Nevermind.
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Post by svart on Nov 17, 2017 18:27:21 GMT -6
I think I see this thread taking the turn, so I'm going to bail on it to help keep the peace.
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Post by joseph on Nov 17, 2017 19:36:25 GMT -6
I think I see this thread taking the turn, so I'm going to bail on it to help keep the peace. Well, I for one appreciated your smart contributions and our civil discussion. On healthcare, you gave preeminence to ethics over raw theory. Maybe you should run for office! - John is absolutely right that economics is not a science in that the same data can lead to vastly different conclusions which unlike with scientific method are difficult to revise with later data since conditions cannot be controlled.
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Post by joseph on Nov 17, 2017 19:40:13 GMT -6
You gotta be kidding me. Or you haven't known many rich people and you don't know anything about how major corprations work. I've known enough and I've helped friends build successful companies from nothing. The old axiom "it takes money to make money" applies, and any rich who follow your prior statement and don't reinvest in their businesses (investing, hiring employees, expanding into new markets, etc) simply aren't going to stay rich. The idea that people sit on cash (which is ever-decreasing in value) forever and remain rich is ludicrous. Reading is crucial. I guess it depends how you define sitting on cash, but it's a fair point that many rich people make money from capital gains and rentier income with low taxes rather than "working" for a living.
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Post by Bob Olhsson on Nov 17, 2017 19:49:11 GMT -6
Adam Smith is rolling in his grave over the limitations on liability we allow. Corporations block the market from controlling wrongdoing.
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Post by m03 on Nov 17, 2017 20:25:06 GMT -6
I guess it depends how you define sitting on cash, but it's a fair point that many rich people make money from capital gains and rentier income with low taxes rather than "working" for a living. But the income you describe comes from successful investments in businesses, which means the investment money is being put to work in the form of paying employees of companies they own, renting office space to other businesses, etc. So that money is not just being horded, but is actively cycling through various parts of the economy. Beyond that, any capital gains spent on day to day items cycles through the economy just like anyone else's money.
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Post by donr on Nov 17, 2017 21:01:39 GMT -6
The corporate tax rate reduction is designed to encourage multinational American companies to repatriate profits earned abroad. Tons of money and economic activity is kept overseas because the rest of the world has lower taxes than the US. Equalizing that rate would pour a lot of money back into the US economy.
On the other hand, if a tax cut has to be 'paid for,' it's not really a tax cut, is it? The government can never do with less, but taxpayers have to, constantly.
Lowering marginal rates has historically resulted in higher revenue for the government, when JFK did it in the sixties and when Reagan did it in the '80's. The '80's boom lasted 20 years. The lower rates stimulate economic growth. Growth creates higher tax revenue to government. This is a fact.
Class and wealth envy is an emotional, not a rational point of view. The best tax would be a flat rate on everybody and all sources of income. Then we'd all have skin in the game, and share the incentive to demand efficiency and real thrift from government.
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Post by joseph on Nov 17, 2017 21:10:59 GMT -6
I guess it depends how you define sitting on cash, but it's a fair point that many rich people make money from capital gains and rentier income with low taxes rather than "working" for a living. But the income you describe comes from successful investments in businesses, which means the investment money is being put to work in the form of paying employees of companies they own, renting office space to other businesses, etc. So that money is not just being horded, but is actively cycling through various parts of the economy. Beyond that, any capital gains spent on day to day items cycles through the economy just like anyone else's money. I think you are being a bit too generous in that successful investments are judged by returns, not the health of companies and employees. Often the opposite.
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Post by joseph on Nov 17, 2017 21:21:34 GMT -6
The corporate tax rate reduction is designed to encourage multinational American companies to repatriate profits earned abroad. Tons of money and economic activity is kept overseas because the rest of the world has lower taxes than the US. Equalizing that rate would pour a lot of money back into the US economy. On the other hand, if a tax cut has to be 'paid for,' it's not really a tax cut, is it? The government can never do with less, but taxpayers have to, constantly. Lowering marginal rates has historically resulted in higher revenue for the government, when JFK did it in the sixties and when Reagan did it in the '80's. The '80's boom lasted 20 years. The lower rates stimulate economic growth. Growth creates higher tax revenue to government. This is a fact. Class and wealth envy is an emotional, not a rational point of view. The best tax would be a flat rate on everybody and all sources of income. Then we'd all have skin in the game, and share the incentive to demand efficiency and real thrift from government. Or it could set off a trade war. I'll just repeat verbatim what I said before on Reagan. The top marginal tax rate is much lower now than it was initially under Reagan, and we're not currently under recession. Under Reagan federal revenues were particularly high. The question is whether any stimulus in investing from the tax cuts will make up for the revenue lost to the government.
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Post by donr on Nov 17, 2017 21:45:06 GMT -6
I maintain there won't be lost revenue to gov't. And does it matter? Gov't spends more than it takes in regardless, buying votes essentially. Why worry about it if gov't won't address spending and pledged future obligations anyway? If I were young I wouldn't count on Social Security or Medicare in old age.
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Post by christopher on Nov 17, 2017 22:12:48 GMT -6
My father loves to explain the rosy picture to me. He was explaining to me a few weeks ago how Mr Potter on 'it's a wonderful life' was actually the good guy, only helping the hard workers with strong ethics that actually deserved to have homes, while George Bailey is the bad guy helping out the losers. I didn't let him know that I'm a George Bailey when it comes to recording of course, haha. ....The world is too complicated for the simplicity that echoes everywhere.
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Post by joseph on Nov 17, 2017 22:30:32 GMT -6
I maintain there won't be lost revenue to gov't. And does it matter? Gov't spends more than it takes in regardless, buying votes essentially. Why worry about it if gov't won't address spending and pledged future obligations anyway? If I were young I wouldn't count on Social Security or Medicare in old age. One could argue that the tax cuts are designed to starve the government so social security, medicaid and medicare can then be targeted at the behest of oligarchs. Don't want to get into the weeds too much, but the same strategy of sabotage would apply to the affordable care act. Who exactly recommended Alex Azar to be health secretary anyway?
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Post by ragan on Nov 17, 2017 22:57:21 GMT -6
The correlation/causation fallacy, though it makes any logician or statistician worth their salt throw up in their mouth a little, is irresistible to us humans. "Reagan did ______ and then after that ______ happened, therefore, his policy caused that" or "Clinton signed ______ and then we saw ________ increase therefore blah blah blah". It's used to disingenuously take credit and avoid blame by partisan cheerleaders on both sides. We're all guilty of it. Numbers can "support" a million different causes and we turn a favorable eye to the ones that pat our dogma on the back.
Edit: speaking to the topic generally here, not responding to the last few posts specifically or anything.
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ericn
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Post by ericn on Nov 17, 2017 23:01:08 GMT -6
If anyone seriously that these tax cuts will in any way stimulate the economy I'd like to have some of what they're smoking. Tax cuts for the rich and corporations NEVER "trickle down" to help employees, consumers, the economy, anybody/thing that isn't already so rich that they don't need any help. This has been PROVEN mltiple times already. Rich people don't get rich by giving money away. What it WILL do is send medical costs through the roof, putting a heavy burden on families, the working class, the middle class, owners of small businesses, and, especially, the elderly, who will start dying in increased number due to unaffordable medical care. But what do you expect when you elect as president a man who has a documented history of fattening his own coffers by bankrupting one business after another? Why on earth would anyone NOT expect him to do the same thing to the entire country if given a chance? An aside - when I was contemplating relocating to Nashville a little over a year ago, the unavailable of adequate medical programs was a major factor in my decision to stay in California. A lot things about this state may suck but at least we try to take care of our people. I shudder to think what the state of medical care will be in the South if this tax bill passes. Did you see all those CEO's not raise there hands at the event where Cohen was speaking and asked how many of their CO would reinvest their new tax savings ! The thing is people think Corporations will reinvest & the Wealthy will spend it, but history shows us it isn't true just I hope there for it must be true! Multipliers for low to middle income to spend it are much better, except the reaserchers are hearing people have this major worry at this point, the cost of healthcare!
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ericn
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Post by ericn on Nov 17, 2017 23:06:47 GMT -6
Ppl/corporations are holding offshore to avoid paying US taxes. We have one of the highest corporate tax rates in the world. The point of lowering the rate to 20% is to get them to keep their money here and pay US taxes rather than Ireland's or Singapores. We're talking about trillions of dollars that are currently taxed at zero. Tax revenues won't go down they'll go up. The simple math is would you rather have 33% of 50. Or 20% of 100. Corporations don't pay taxes consumers do. Any taxes or penalties they incur are included in the costs of goods. If you increase their costs (raise their taxes) they simply pass those costs on down to you. All taxes are a tax on the consumer. Your rich neighbor. Your poor neighbor. And you. Actually, they've realized that they don't pass on taxes to the consumer in the form of price increases. What has been seen and proven isthat they pass it on to their employees in the way of hiring fewer, and reducing compensation and benefits. Lowering taxes has always had the effect of hiring surges and employee benefits increases regardless of what people heard on MSNBC. Some of the most socialist European countries, like Denmark, are often used as tentpoles in arguments for vast government oversight on corporations, and how super high personal tax rates(50-60%) aren't totally killing the economy, but suspiciously leave out how Denmark has NO minimum wage, and their corporate tax rate is only 24.5%, which are the real reasons they enjoy a good economy even with ridiculous personal tax rates.. True when Buisness reinvest it , but large corporations are saying they won't also high & higher debt levels are unprecedented, and the 200,000,000,000,000 pound Gorrila in the US economy Healthcare costs and the uncertainty. Economics is not a simple equation, way more variables to make a that statement.
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ericn
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Post by ericn on Nov 17, 2017 23:10:39 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. Bob as the one guy hear who is using that, in addition to real insurance, for many it's tricky to get that coverage and many are bankrupt before the net catches them. The thing that most don't realize though is the number one social welfare organization for signing people up for any benefits they are do, your neighborhood hospital! They like getting paid!
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Post by jeromemason on Nov 17, 2017 23:12:44 GMT -6
Whatever the hell they have to do to get the paychecks in line with the cost of living then all of them, both parties, need to get off their ass and get it fixed. The housing prices in Nashville, both rent and purchasing have risen so damn high and paychecks have not budged a penny. Everything is getting more expensive and again, paychecks are idle. In the US if you work you pay taxes, if we're going to give our tax money to corporations in the hopes they pass that down to people like my wife, who works her ass off, has seen her workload increase dramatically over the last 5 years while also depending on commissions as part of her salary, her paycheck has not seen a raise in that same 5 years, and the commissions haven't risen either.
Something has to get done here and instead of a couple of political parties going at this like rooting for a favorite football team, hold those freaking people accountable that are representing us, make damn sure that if this legislation they're swearing will fix all our problems, then it damn well better, because something has got to change for lower to moderate middle class families. We're getting slaughtered right now. I can't stand when elected officials point to the damn stock market to indicate that things are better than ever. Total different streets and that metaphor couldn't be more true. Quit the damn fighting, quit the damn division, everyone unify and help these families out! Enough of the political BS, just fix the damn problem. I wish political parties didn't exist, it'd just be nice if people had some different opinions on things but when it came to getting together and helping people that are hurting, the whole "my team is better than your team" BS wouldn't be in the way, which I think it is now more than it's ever been. I honestly don't believe when the founders drew up the idea for this country this is what they had in mind. I'm not an independent, I'm not a democrat, I'm not a republican, I'm a person that just wants the executive and legislative branches to do what they're supposed to do and look out for the people who hired them to look out for our best interest.
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Post by viciousbliss on Nov 17, 2017 23:19:20 GMT -6
I read "The Real Crash" by Peter Schiff a couple times. Both times I came away thinking that he made very solid cases as to why government should have never massively expanded. One thing I don't think I saw mentioned here is the role of the dollar as world reserve currency. From most things I've read, that role is crucial to the government's ability to print up money to fund all its excesses. I've heard Roger Stone make the argument about lowering certain corporate taxes so that they bring the money back here from abroad. He usually has the best inside info on what goes on in Washington. I'm not sure raising taxes is working out for Illinois. We just stopped going to a lot of places in Cook County after they passed the soda tax. People are leaving because of the ridiculous property taxes. Seems these politicians have always wanted to bribe voters and come up with all kinds of schemes as to how they were going to fund it. Government should have never become an industry unto itself. So many policies are now dictated by the interests of those who work for the government or whose business is dependent on it. The function of government has become to provide jobs and benefits to specific groups instead of governing with any sort of integrity. And it just grows bigger and more oppressive. The Democrats are pretty well finished as a national party. Now they're losing moral high ground on female identity politics at the same time as identity politics rises in groups more likely to vote republican. They need a complete re-branding with someone at the helm who has some real credibility and vision. These corporate Bush/Rove republicans won't last as you've all probably seen many of them retire instead of fight Bannon. We'll get replacements that don't cater to corporate interests anywhere as much, but not sure they're going to be better on other stuff. They're likely to be more Pat Buchanan than Rand Paul. Maybe even more to the right than Buchanan. A lot of the Trump base hates Sessions for wasting time on marijuana instead of doing more useful things. Trump himself supposedly wanted him gone but the GOP establishment told him they'd refuse to confirm someone new. I'm hoping we don't see politicians attempting to return us to hard right authoritarian social conservatism while keeping and increasing draconian laws. The big x factor again is tech. Self-driving ubers that offer cheaper rides than today's uber will enable people to ditch their cars and all the expenses. That would be huge. I hear people complaining about tech replacing jobs on the radio or youtube. Their shows wouldn't be possible without many things that displaced people's jobs. Tech will be what cuts the costs of healthcare. They'll probably never pay off these debts. There should be a lot more talk about nanotech in society. Regenerative medicine. There's a ton of stuff that has to be factored in. I'm guessing social security won't be necessary for me in 30-40 years. It's more likely some advanced tech might have me in better shape than I'm in now. I found this pic on one of the Singularity U guy's twitter: pbs.twimg.com/media/DOO5-hAUMAAVzR1.jpg:largeSeems to support what a lot of people said about social security being unsustainable. When they implemented it, they didn't really think about how tech and other things would change society. Years ago I would talk to customers face to face at a retail desk who were born in the 20s and 30s. None of them had any inkling during their youth that the world of 2010 would be what it was. As for studio people in the current year, I would think any tax cuts would be helpful.
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Post by jakeharris on Nov 18, 2017 0:00:40 GMT -6
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. You're clutching at straws – look at your graph, the revenue crashed till 1983. GDP dropped to -1.9% in 1982... He basically caused a recession with his 1981 cut! Then most of his tax cuts are rolled back, except for the cut on highest earners (which has zero benefit for the middle class or the poor), and the revenue picks back up. 1982 – increases taxes on business 1983 – increases taxes on payrolls 1984 – increases taxes on energy 1986 – increases taxes on capital gains Then another high earner tax cut in 1986, and another recession in 1990! 1991 – tax rate on high earners increased 1993 – tax rate on high earners increased again These increases are followed by a period of the highest job growth of any modern presidency, under Clinton. Then another high earner tax cut in 2003, and another recession in 2008!! Reagan's average tax rate was also above average compared to the last 40-years. But in all, there is simply no connection between tax cuts for the rich, and improved revenues or better economic growth. It doesn't even make any sense (you slash revenue, you lose income). The most important part of all this, the effect is going to be a stripping down of social services that benefit the average person. I don't see how anyone could be in favour of this (incidentally, Trump voters wanted an increase on taxes for the rich).
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Post by johneppstein on Nov 18, 2017 0:18:33 GMT -6
Now I see why some of you are recordists and not economists.. Have you read the bill? Do you understand it? Within 10 years this bill will drastically increase taxes on everybody making less that $75,000/year and it will eliminate derductions for paying state taxes. And that's not even close to all of it. It will also gut social security and medicare. To me, personally, that means that my health care will become unaffordable. This is beyond all doubt the WORST tax bill in the history of the US. In a meeting of US CEOs televised by NBC news, the question was asked how many of the large roomfull of CEOs planned to increase jobs and wages if the bill passed. 6, that's SIX out all in the room, raised their hands.
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