Tax Bill Vote About to Happen any Moment

[rogue06]

The key to getting businesses to hire and invest is to swamp them with demand for their products by raising the incomes of the poor and the middle class and not those at the very top of the income distribution. So you need very large numbers at the bottom of the income scale with more spending power not cuts in corporation tax which is just going to lead to future debt and increased wealth for very few - and a booming stock market because that's where the money goes because the rich already have everything they need.

Those at the bottom of the income tax scale already tend to get all of their income tax returned and then some ("earned income tax credits"). Those in the tiers above will also be getting more of their money back.

Every competent economist I've heard (and many not so competent ones as well) agree that lowering the tax rate on corporations will not only stop them from leaving the U.S. (which has the highest corporate tax rate in the world), but will bring back many that left and attract many others which will pump a lot more cash into the economy than will be lost.

Very few rich people tend to simply sit on their wealth but tend to want to use it to become even richer. Allowing them to keep more of their money also allows them to invest more into the businesses that they own so they can expand and this creates more jobs. When you have more jobs you start seeing employers compete for workers by raising salaries and increasing benefits as enticements.

[Starlight]

The key to getting businesses to hire and invest is to swamp them with demand for their products by raising the incomes of the poor and the middle class and not those at the very top of the income distribution. So you need very large numbers at the bottom of the income scale with more spending power not cuts in corporation tax which is just going to lead to future debt and increased wealth for very few - and a booming stock market because that's where the money goes because the rich already have everything they need.

Yup, it's pretty straight-forward:

A poor person who is living 'paycheck to paycheck' is spending 100% of their income each week, so give them $1 more and they will spend it within the week on goods and services in the local economy. If you give a wealthier person an extra dollar it will just go into their bank account / stock portfolio and it won't change their spending behavior, they won't purchase more goods from local businesses. So if you want to stimulate the economy you put money in the hands of poor people, who go out and spend it, and then the businesses who are suddenly getting a lot more business will find they need to employ more people to handle the demand, and order in more goods etc, and the whole economy goes in an upward spiral.

This effect, incidentally, seems to be the main reason why minimum wage increases are pretty consistently found to have no impact on overall employment numbers - because the increased money being put into the hands of the poor causes immediate economic growth that precisely matches the layoffs that some businesses who can't afford the minimum wage increase are forced to make. Obviously once the minimum wage gets so high that minimum wage earners are no longer living paycheck to paycheck and begin saving the money like a rich person would, then you'll start seeing layoffs outweighing economic growth as you push the minimum wage higher.

Allowing them to keep more of their money also allows them to invest more into the businesses that they own so they can expand and this creates more jobs.

You've got that backward. Businesses are not a charity in which rich investors generously give away their money by giving jobs to needy people. Instead they are enterprises in which the investors judge market demand for the product and see that enough demand exists to produce a higher rate of return on their investment money than they could get elsewhere.

Your hypothetical situation would only exist if the CEO/Board could see a compelling business case for massive returns on investment were they able to expand the company, but somehow someway they are totally cash-strapped and have not been able to convince a single bank, investment firm, venture capitalist, or millionaire/billionaire in the entire world to lend them money to expand their business to meet the obvious demand and reap the high returns. In such a ridiculous hypothetical scenario, where capital investment is limiting but demand for their business' services is strongly present, the government suddenly handing them more money in the form of a tax rebate, could indeed allow them to expand their business if that was how they choose to use the money.

In practice they're not likely to make that choice even in the absurd hypothetical situation. This is because the corporate infrastructure incentivizes them to chose to do something called a "stock buyback" where the company spends the extra money it gets to buy as many of its own shares as it can off shareholders. The direct effect of that is to increase the price of the remaining shares (its essentially paying out the money as a dividend to shareholders by inflating share values). This makes shareholders happy, because their shares have gone up. It makes the board and CEO happy because making the share price go up is usually pretty high on their list of Key Performance Indicators and is tied to their bonuses so they will usually get more money because of it. And it makes the CEOs doubly happy because they are almost always paid in shares as the largest part of their salaries (in order to avoid income tax on it) and so it directly enriches them by putting the share price up.


So in short, most companies benefiting from the corporate tax cuts will do share buybacks, because that is what's incentivized in standard corporate structures. Virtually none of them will expand their businesses because if they already had a business case for doing that they would already be doing that.



Final note, I see one of the many kicks in the teeth for average people from the Republican Tax Scam, is that all tax benefits for individuals are temporary and disappear completely within 10 years, but all tax benefits for corporations are permanent. Guess who the GOP loves more...?

[Mountain Man]

The one thing that liberals never seem to understand is that the reason tax cuts always seem to benefit the "rich" is because they're the ones paying the vast majority of the taxes.

Anyway the bill passed in the Senate, so it's back to the House today, and then on to the President's desk for signing.

[Roy]

... the U.S. (which has the highest corporate tax rate in the world),

I checked - to my surprise this is (currently) true. I'll add it to my list of things for which the US actually is No.1.

[JimL]

• The House began debate on the final $1.5 trillion tax bill on Tuesday morning.

• The Senate is expected to follow with its own debate and a vote, possibly on Tuesday evening.

• Republicans scored two additional yes votes with Senators Mike Lee of Utah and Susan Collins of Maine publicly supporting the bill.

Yep, interesting how all of a sudden, now that they are in power, republicans no longer care about the deficit. Giving huge tax cuts to themselves, to Trump, and to their multi-millionaire donors is more important to them than adding 1.5 trillion dollars to the deficit. Nothing new though, they'll destroy the overall economy as usual and then the Dems will take over with the task of straightening out the republican swamp creatures mess, and just as they did with Obama the republicans will blame the mess they created on them. But so long as they know that they have their ignorant constituency in their gerrymandered districts to depend upon they will continue to serve themselves and their rich donors regardless of the overall economic consequences for the american people.

[lilpixieofterror]

Yep, interesting how all of a sudden, now that they are in power, republicans no longer care about the deficit. Giving huge tax cuts to themselves, to Trump, and to their multi-millionaire donors is more important to them than adding 1.5 trillion dollars to the deficit. Nothing new though, they'll destroy the overall economy as usual and then the Dems will take over with the task of straightening out the republican swamp creatures mess, and just as they did with Obama the republicans will blame the mess they created on them. But so long as they know that they have their ignorant constituency in their gerrymandered districts to depend upon they will continue to serve themselves and their rich donors regardless of the overall economic consequences.

That’s because they’re not going to follow up with budget cuts as they should. While it’s cute you think democrats ‘fix the economy’, why was growth so slow under Obama’s watch and only really picked up after he left office?

[JimL]

I checked - to my surprise this is (currently) true. I'll add it to my list of things for which the US actually is No.1.

Accept for the fact that when you account for the loopholes that they take advantage of, none of the corporations actually pay that high tax rate.

[seer]

Accept for the fact that when you account for the loopholes that they take advantage of, none of the corporations actually pay that high tax rate.

And now they should pay even less. The whole idea Jim is to make the US more business friendly and hopefully our economy will grow - and that will be good for everyone...

[lilpixieofterror]

Lower income people will not pay taxes and those a little higher up that do will see a 19-22% reduction. A booming stock market helps out most Americans since almost anyone that has a retirement plan owns stocks.

Hey liberal friends. I haven’t seen any of you guys actually deal with the above. I’m waiting with baited breath for how a 19-22% tax reduction is just a ‘pay off to the rich’ or how only rich people benefit from the stock market with a little over 50% of American families having a 401k or something like it.

[JimL]

That’s because they’re not going to follow up with budget cuts as they should.

Well, we will see about that. One of the reasons they were willing to give themselves and their wealthy donors huge tax cuts costing 1.5 trillion is because they say that they now are now going to make that up by cutting medicare, medicaid, social security, and anything else that will make life more miserable for the middle class and the poor in this country.

While it’s cute you think democrats ‘fix the economy’, why was growth so slow under Obama’s watch and only really picked up after he left office?

It wasn't thats why. Obama's numbers were much better than Trumps in his first year, and on top of that Trump is merely riding the Obama wave right now. Trump likes to tell everyone that he inherited a real mess, and of course the likes of you believe everything he says, but you all seem to conveniently forget what Obama and the democrats inherited compared to what Trump inherited from Obama. Don't worry though, no doubt Trump and the republicans, while making themselves rich, will make a mess of things again.

[JimL]

And now they should pay even less. The whole idea Jim is to make the US more business friendly and hopefully our economy will grow - and that will be good for everyone...

Seer, the corporations are doing astoundingly well right now, their profits are humongous and have been for quite some time now, and they are not reinvesting it. Giving them big tax cuts isn't going to motivate them to invest anymore than they are investing now. Besides that, it's not only corporate taxes, it's hundreds of billions of dollars of tax cuts to the filthy rich, to hedgefund managers, realestate investers etc etc. On the other hand the average middleclass working man might get about 20 or 30 bucks a month which is about the same that we got from the Obama tax cut and nobody even noticed it. Trump on the other hand is said to be going to save hundreds of millions on the deal, of course he still refuses to show his taxes so that's only an estimate. Wake up seer, don't be a sucker.

[Sparko]

The key to getting businesses to hire and invest is to swamp them with demand for their products by raising the incomes of the poor and the middle class and not those at the very top of the income distribution. So you need very large numbers at the bottom of the income scale with more spending power not cuts in corporation tax which is just going to lead to future debt and increased wealth for very few - and a booming stock market because that's where the money goes because the rich already have everything they need.

And you give the poor more income by giving them JOBS, which come from the very companies that make those products. It's a cycle. Decrease taxes, lower the costs of goods, means more money to hire more people, giving them more money to buy goods which increases profits and around it goes.

and the stock market depends on how well the companies are doing, and nearly every pension, savings, and retirement account of every person is tied to that stock market. The better it does, the better everyone does.

[lilpixieofterror]

Well, we will see about that. One of the reasons they were willing to give themselves and their wealthy donors huge tax cuts costing 1.5 trillion is because they say that they now are now going to make that up by cutting medicare, medicaid, social security, and anything else that will make life more miserable for the middle class and the poor in this country.

I see you flat ignored the 19-22% tax write off that lower and middle class are getting. Do you think ignoring that little detail will make it go away? As for cutting benefits, you are aware these programs are costing more than they bring in and it was Your democrat buddies that added them into the general fund.

It wasn't thats why. Obama's numbers were much better than Trumps in his first year, and on top of that Trump is merely riding the Obama wave right now. Trump likes to tell everyone that he inherited a real mess, and of course the likes of you believe everything he says, but you all seem to conveniently forget what Obama and the democrats inherited compared to what Trump inherited from Obama. Don't worry though, no doubt Trump and the republicans, while making themselves rich, will make a mess of things again.

So following your logic, those numbers actually belonged to Bush, right?

[Cow Poke]

Accept for the fact that when you account for the loopholes that they take advantage of, none of the corporations actually pay that high tax rate.

You mean "except". "Accept" means you consent to receive, or agree to believe something. I have to watch that one cause Siri always tries to turn my "except" into "accept".

[JimL]

Lower income people will not pay taxes and those a little higher up that do will see a 19-22% reduction. A booming stock market helps out most Americans since almost anyone that has a retirement plan owns stocks.

Your wrong as usual Lilpix. Poor people do pay taxes.
http://www.pbs.org/newshour/economy/...probably-think

And those a little higher up that pay income taxes are going to receive no more than they got from the Obama tax cut which no one even noticed. The only ones that are going to notice this tax cut are the corporations and the ultra wealthy. And btw, the economy and the stock market was doing just fine prior to Trump, the stock market got a boost under Trump, but there are a whole lot of people that aren't participants in the stock market.