Trump Tax Cut Proposal Underway

[Tero]

Fox News in story after story focuses on 2018 with tax cuts, ignoring years past 2020. It will lower pay check tax in 2018 as that is part of the plan. The Trumpians will vote again for Republicans in 2018, possibly buying 2 more years for them.
http://www.foxnews.com/opinion/2017/12/ ... -2018.html

[Tero]

Trump gift going to 165 000 earners
None $0.00+ 10% (no change)
3% cut $19,050+ 12% (cut from 15%)
3% cut $77,400+ 22% (cut from 25%)
4% cut $165,000+ 24% (cut from 28%)
1% cut $315,000+ 32% (cut from 33%)
0% cut $400,000+ 35% (no change)
2.6% cut $600,000+ 37% (cut from 39.6%)

”The biggest cut I can see goes to people making $165k–$315k. Since when is that Middle Class?” ...from another board

[Tyrannical]

Trump gift going to 165 000 earners
None $0.00+ 10% (no change)
3% cut $19,050+ 12% (cut from 15%)
3% cut $77,400+ 22% (cut from 25%)
4% cut $165,000+ 24% (cut from 28%)
1% cut $315,000+ 32% (cut from 33%)
0% cut $400,000+ 35% (no change)
2.6% cut $600,000+ 37% (cut from 39.6%)

”The biggest cut I can see goes to people making $165k–$315k. Since when is that Middle Class?” ...from another board

In part because the state/local tax deduction was capped at $10k, which probably doesn't really effect people earning less that $165k.

[Brian Peacock]

The biggest cut is for the upper middle class. How much is a congressman's salary again?

[Tero]

Economists weigh in. Trickle down does not work, debt goes up.

WSJ WASHINGTON—The recent changes to the U.S. tax law will increase economic growth modestly but not fast enough to pay for themselves, according to a new estimate from a pair of economists from different sides of the political spectrum.

In other words, the additional government tax revenue generated by higher growth won’t be enough to offset the drop in revenue due to tax cuts.

The net cost to the Treasury, after accounting for economic growth, would be $1.2 trillion over a decade, according to the paper by the Harvard University economists, conservative Robert Barro and Jason Furman, who was an adviser to President Barack Obama.

[Forty Two]

Fox News in story after story focuses on 2018 with tax cuts, ignoring years past 2020. It will lower pay check tax in 2018 as that is part of the plan. The Trumpians will vote again for Republicans in 2018, possibly buying 2 more years for them.
http://www.foxnews.com/opinion/2017/12/ ... -2018.html

It's more than the Democrats would do....I don't hear them calling for extending the tax cuts, do you?

[laklak]

Tax info just went in to Magic George this AM. I'll report back when he tells me how much money they're stealing from me this year.

[Forty Two]

Trump gift going to 165 000 earners
None $0.00+ 10% (no change)
3% cut $19,050+ 12% (cut from 15%)
3% cut $77,400+ 22% (cut from 25%)
4% cut $165,000+ 24% (cut from 28%)
1% cut $315,000+ 32% (cut from 33%)
0% cut $400,000+ 35% (no change)
2.6% cut $600,000+ 37% (cut from 39.6%)

”The biggest cut I can see goes to people making $165k–$315k. Since when is that Middle Class?” ...from another board

Most of the people in the two lowest brackets don't pay any federal tax after their credits and deductions.

[Forty Two]

Economists weigh in. Trickle down does not work, debt goes up.

WSJ WASHINGTON—The recent changes to the U.S. tax law will increase economic growth modestly but not fast enough to pay for themselves, according to a new estimate from a pair of economists from different sides of the political spectrum.

In other words, the additional government tax revenue generated by higher growth won’t be enough to offset the drop in revenue due to tax cuts.

The net cost to the Treasury, after accounting for economic growth, would be $1.2 trillion over a decade, according to the paper by the Harvard University economists, conservative Robert Barro and Jason Furman, who was an adviser to President Barack Obama.

Tax cut =/= trickle down

Trickle down is the nickname for supply-side economics, which is an economic theory that holds that, by lowering taxes on corporations, government can stimulate investment in industry and thereby raise production, which will, in turn, bring down prices and control inflation.

That does, in fact, work.

[Tero]

But he lowered taxes on corporations. And they used it all for stock buy back.

[Forty Two]

But he lowered taxes on corporations. And they used it all for stock buy back.

You might think that “massive share buybacks” are an alternative to boosting wages, investment and economic growth. They are not. In reality, it is an open question how buybacks will affect wages, investment and economic growth, but they do not render the more positive scenarios less likely.

A basic principle of economic reasoning is to think in terms of real resources, not just the first-round flows of money. If a major corporation engages in buybacks, that simply transfers money from one set of hands to another -- from the corporate entity to the shareholders. It doesn’t destroy real resources or determine their final disposition. The money could still go to a venture capital fund, or into private equity or a real estate investment trust, in addition to numerous other undertakings, all of which might boost investment and real wages.

The shareholders could also spend that money, say, buying ice cream cones, but as relatively wealthy individuals they are more likely to invest the money somewhere else. (If they needed the money to buy something, they would have already sold the shares.)


Furthermore, a lot of shareholder spending is on durable consumption that can involve significant investment. What if shareholders took that buyback income and had new homes built, or bid up the prices of existing homes and spurred new construction? That would boost investment, add to the supply of physical structures, create new jobs and drive up wages to some degree. Or buying a Picasso from another art collector actually gives that collector a chance to be the one who makes the new investment decisions.

The key question for whether investment will go up somewhere is whether the rate of return on investment has increased. From the nature of the tax cut, we know it has. Investment in the American economy therefore is likely to rise, even if we don’t always know where or by how much.

Share buybacks simply indicate that investors don’t think those particular companies are the most promising outlets for new investment. In some cases, however, a share buyback may be consistent with a company undertaking more investment. In some theories of corporate governance, investors want a business to raise new capital and pay out funds at the same time. Arguably the payout is designed to force the company back into capital markets, creating a new set of delegated monitors for the company and the quality of its investments.

No matter which way you turn your head on this one, you just don’t arrive at the conclusion that share buybacks, massive or not, are going to pull real resources away from new investment. You might even try suggesting that because most large, publicly traded corporations are relatively cash-rich, share buybacks might be a sign of a new dynamism, or a harbinger of additional unicorns on the way. We just don’t know, but those claims are more plausible than the view that buybacks are pulling resources away from investment and job creation.

https://www.bloomberg.com/view/articles ... en-t-scary

[Hermit]

But he lowered taxes on corporations. And they used it all for stock buy back.

The money could still go to a venture capital fund, or into private equity or a real estate investment trust, in addition to numerous other undertakings, all of which might boost investment and real wages.

[...]

What if shareholders took that buyback income and had new homes built, or bid up the prices of existing homes and spurred new construction?

The key question for whether investment will go up somewhere is whether the rate of return on investment has increased. From the nature of the tax cut, we know it has. Investment in the American economy therefore is likely to rise, even if we don’t always know where or by how much.

Share buybacks simply indicate that investors don’t think those particular companies are the most promising outlets for new investment. In some cases, however, a share buyback may be consistent with a company undertaking more investment.

[...]

You might even try suggesting that because most large, publicly traded corporations are relatively cash-rich, share buybacks might be a sign of a new dynamism, or a harbinger of additional unicorns on the way. We just don’t know, but those claims are more plausible than the view that buybacks are pulling resources away from investment and job creation.

https://www.bloomberg.com/view/articles ... en-t-scary

From trickle down to trickle back. The "good news" is riddled with conditionals, conditionals, moreover, that are thoroughly uncertain, and the results of trickle back are no more plausible than the constantly promised but never realised ones concerning trickle down. But never mind; there's one born every second, so it'll work as it always does - for the rich.

[Forty Two]

As the article says, it's working. Can't argue with success.

[Hermit]

As the article says, it's working. Can't argue with success.

The article says nothing of the sort. It is addled with ifs, mays, mights. and so on and finishes with "We just don’t know".

[pErvinalia]

As the article says, it's working. Can't argue with success.

What's working? Trickle-down? Have you checked the level of US and world debt lately??