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Thread: Moody's Assessment of the Tax Overhaul

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    tWebber carpedm9587's Avatar
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    Moody's Assessment of the Tax Overhaul

    Moody is apparently confirming to its customers that the Tax overhaul will have minimal impact on the economy because (as was predicted) the vast majority of businesses are prioritizing stock buy-backs, mergers and acquisitions, and paying down debt. (https://www.marketwatch.com/story/ta...ays-2018-01-25).

    This was predicted. Prior to the tax overhaul for businesses, U.S. businesses were sitting on almost record holdings. That they would take the surplus cash and use it for things they were not doing with their existing holdings seemed unlikely, and Moody has confirmed this is their projection and what they are seeing in the market.

    What we are seeing in the news is the usual case of select instances of businesses that ARE giving part of their gains to employees, but those gains are primarily being given in the form of one-time bonuses. That avoids the need to change payroll, and means that companies can elect NOT to give that bonus in future years and retain the surplus earnings.

    As expected, raising salaries and adding jobs is not something a business seeks to do. Managers will tell you it is always the course of last resorts and is done only when a business has no additional room to squeeze efficiency enhancements, or is expecting increased demand beyond what they can meet with efficiency enhancements. When a business gets more money, they do not immediately think, "let's make more jobs."
    The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.

    -Martin Luther King

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    Troll Magnet Sparko's Avatar
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    Quote Originally Posted by carpedm9587 View Post
    Moody is apparently confirming to its customers that the Tax overhaul will have minimal impact on the economy because (as was predicted) the vast majority of businesses are prioritizing stock buy-backs, mergers and acquisitions, and paying down debt. (https://www.marketwatch.com/story/ta...ays-2018-01-25).

    This was predicted. Prior to the tax overhaul for businesses, U.S. businesses were sitting on almost record holdings. That they would take the surplus cash and use it for things they were not doing with their existing holdings seemed unlikely, and Moody has confirmed this is their projection and what they are seeing in the market.

    What we are seeing in the news is the usual case of select instances of businesses that ARE giving part of their gains to employees, but those gains are primarily being given in the form of one-time bonuses. That avoids the need to change payroll, and means that companies can elect NOT to give that bonus in future years and retain the surplus earnings.

    As expected, raising salaries and adding jobs is not something a business seeks to do. Managers will tell you it is always the course of last resorts and is done only when a business has no additional room to squeeze efficiency enhancements, or is expecting increased demand beyond what they can meet with efficiency enhancements. When a business gets more money, they do not immediately think, "let's make more jobs."
    Are you speaking from experience as a business owner?

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    Troll Magnet Sparko's Avatar
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    PS the article you link to is nothing more than opinion and prediction. It is not a "done deal" - it is conjecture. I will wait and see what happens to the economy.

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    tWebber seer's Avatar
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    Quote Originally Posted by carpedm9587 View Post
    Moody is apparently confirming to its customers that the Tax overhaul will have minimal impact on the economy because (as was predicted) the vast majority of businesses are prioritizing stock buy-backs, mergers and acquisitions, and paying down debt. (https://www.marketwatch.com/story/ta...ays-2018-01-25).

    This was predicted. Prior to the tax overhaul for businesses, U.S. businesses were sitting on almost record holdings. That they would take the surplus cash and use it for things they were not doing with their existing holdings seemed unlikely, and Moody has confirmed this is their projection and what they are seeing in the market.

    What we are seeing in the news is the usual case of select instances of businesses that ARE giving part of their gains to employees, but those gains are primarily being given in the form of one-time bonuses. That avoids the need to change payroll, and means that companies can elect NOT to give that bonus in future years and retain the surplus earnings.

    As expected, raising salaries and adding jobs is not something a business seeks to do. Managers will tell you it is always the course of last resorts and is done only when a business has no additional room to squeeze efficiency enhancements, or is expecting increased demand beyond what they can meet with efficiency enhancements. When a business gets more money, they do not immediately think, "let's make more jobs."
    Well all I know know is that we all got our tax cuts in our checks last week, which translates to about 1,300 a year for me. That is a good thing...
    “The only place outside Heaven where you can be perfectly safe from all the dangers and perturbations of love is Hell.” C.S. Lewis

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    Troll Magnet Sparko's Avatar
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    Quote Originally Posted by seer View Post
    Well all I know know is that we all got our tax cuts in our checks last week, which translates to about 1,300 a year for me. That is a good thing...
    I find out this Friday.

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    tWebber seer's Avatar
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    Quote Originally Posted by Sparko View Post
    I find out this Friday.
    We got ours you should get yours...
    “The only place outside Heaven where you can be perfectly safe from all the dangers and perturbations of love is Hell.” C.S. Lewis

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    tWebber Mountain Man's Avatar
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    Quote Originally Posted by Sparko View Post
    PS the article you link to is nothing more than opinion and prediction. It is not a "done deal" - it is conjecture. I will wait and see what happens to the economy.
    Yep. It's like forecasts made by the Congressional Budget Office. There's a lot of speculation, assumptions, and hedging the data, and their predictions are almost always wrong.

    Moody's can make whatever prediction they want, but they don't have an infallible crystal ball.
    Some may call me foolish, and some may call me odd
    But I'd rather be a fool in the eyes of man
    Than a fool in the eyes of God


    From "Fools Gold" by Petra

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    tWebber carpedm9587's Avatar
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    Quote Originally Posted by Sparko View Post
    Are you speaking from experience as a business owner?
    Yes - as both owner and a member of the executive team of other businesses.
    The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.

    -Martin Luther King

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    Evolution is God's ID rogue06's Avatar
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    Quote Originally Posted by Sparko View Post
    PS the article you link to is nothing more than opinion and prediction. It is not a "done deal" - it is conjecture. I will wait and see what happens to the economy.
    This is like the survey conducted by Reuters where they cannot find many people who have been positively effected by the recent tax cut. Of course this is no surprise since it doesn't go in effect until next month.

    I'm always still in trouble again

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    tWebber carpedm9587's Avatar
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    Quote Originally Posted by seer View Post
    Well all I know know is that we all got our tax cuts in our checks last week, which translates to about 1,300 a year for me. That is a good thing...
    I don't see how that is possible, since most of the tax plan does not take effect until the 2018 tax year. There are a small number of items that DO impact 2017 taxes, but they will likely reduce the return if they affect you, not increase it.

    https://turbotax.intuit.com/tax-tips...axes/L9kree6l2

    Any change you are seeing in your taxes is likely not due to the bill passed in December 2017.

    Edited to add: I think I may have misunderstood you. Your withholding has been adjusted for your paycheck this year, correct? So you saw a $25 change? Mine was substantially larger - possibly because my income is still fairly high. Statistically, I am in the top 1% (depending on who's numbers you believe), and there is no question this tax cut is going to significantly benefit me. It is why I was not in favor of it. I, and others like me, are not the ones that need the extra money.
    Last edited by carpedm9587; 01-30-2018 at 08:02 PM.
    The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.

    -Martin Luther King

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