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#304721 - 12/30/17 08:32 PM Re: Big Lies and Tax Cuts [Re: NW Ponderer]
NW Ponderer Offline
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Registered: 09/09/11
Posts: 15969
From the Worst Case thread:
Originally Posted By: Ujest Shurly
No, it can get worse, much worse. Starting with the Republicans get their act together and pass regressive laws.
The Tax Cut frenzy of 2017 is exactly that.

This corporate/billionaire tax cut is going to be devastating in about 18 months. Initially, it will look like great guns as corporations repatriate trillions in overseas profits. How Tax Bills Would Reward Companies That Moved Money Offshore. These companies stashed money overseas to keep it from being taxed - a tax dodge. "Over the past few decades, some of the largest companies in the United States made a big bet: By stashing hundreds of billions of dollars of profits offshore, they could slash their taxes and bolster their profits."

Now the GOP has made that tax dodge pay off big time. Like the 2004 giveaway by President Bush, this giveaway is a godsend to capital-rich financiers:

Quote:
The tax breaks for bringing home such offshore profits “confirm the central tenet of tax planning that a tax deferred is a tax avoided,” said David Miller, a tax lawyer at Proskauer Rose. “For decades, U.S. multinationals have shifted profits abroad and deferred their taxes on them. If either of the tax bills pass, they will be rewarded for doing so.”
The biggest bankers, like Goldman Sachs, moreover, are "writing down" their losses in taxes and maneuvering to avoid even more taxes. In Goldman Sachs' case, they're paying $5 billion now, and have avoided $15 billion with the tax dodge. That's a 300% return!

The $3 trillion in stashed cash will allow companies that have engineered the dodge to avoid similar amounts - squeezing nearly a $1 trillion out of treasury. Where will all that money go? Well.... it's estimated that 50% will go directly to buy-backs of stock (corporations reducing outstanding stocks) and artificially inflate the books - great for investors, especially hedge funds, and it will also artificially inflate stock prices - for the next year. Wall Street says a major fear about Trump's tax plan is overblown (Don't believe Wall Street.) After that, well.... there will be a "market correction."

The rest of that windfall will go to - debt payments. Companies have been borrowing like crazy while interest rates are near 0%. But it's still debt. Getting debt off the books will make the bottom line look great. Unfortunately, when they have to borrow again (like, for taking over smaller competitors), it will be at higher rates.

After the first quarter of 2018, tax revenues to the United States Treasury will plummet - by about 40%. Yes, 40%. How Much Will Trump's Tax Plan Cost? That "$1.4 trillion" deficit expectation? Fantasy. Realistically, it will be twice that. The bite will begin to be felt in 2019 (conveniently after elections), and will be raging by 2022 - forget 2025 when the individual cuts expire. Expect a massive slow-down in the economy much sooner.
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A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

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#304728 - 12/31/17 01:00 AM Re: Big Lies and Tax Cuts [Re: NW Ponderer]
pondering_it_all Offline
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Registered: 02/27/06
Posts: 7626
Loc: North San Diego County
You left out massive special dividend payments to shareholders. Last time we did this a large portion of the repatriated money went to such dividends. The interesting thing is that almost NONE of it went to new investments in capacity and new hires. In fact, companies are sitting on piles of cash inside the US tax system right now. if they thought investments in growth and new jobs would benefit them, they would already be doing it. They are not.

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#304732 - 12/31/17 03:33 AM Re: Big Lies and Tax Cuts [Re: NW Ponderer]
NW Ponderer Offline
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Registered: 09/09/11
Posts: 15969
Well said, p-i-a. Indeed, the evidence from the 2004 cut is that they cut jobs. From a macroeconomic standpoint this is the worst time to cut taxes.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

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#304733 - 12/31/17 04:02 AM Re: Big Lies and Tax Cuts [Re: NW Ponderer]
rporter314 Online   content
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Registered: 03/18/03
Posts: 6419
Loc: Highlands, Tx
for conservatives anytime is a good time to cut taxes .... they do not like government
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#304740 - 12/31/17 05:32 AM Re: Big Lies and Tax Cuts [Re: rporter314]
Greger Offline

Pooh-Bah

Registered: 11/24/06
Posts: 13952
Loc: Florida
Originally Posted By: rporter314
for conservatives anytime is a good time to cut taxes .... they do not like government

But y'know...in the long run government has to deliver on certain promises people have come to expect. They start mucking around with Social Security checks and Medicare and there's a whole lot of old Republicans that are gonna have issues with it and vote accordingly.

There will be a reckoning at some point with the actual results of this tax cut. Our government already spends more than it collects in taxes and other revenue. Republicans are not penny pincers when it comes to spending public funds either, so deficits will soar, services and infrastructure will suffer. Like Obamacare, this one is gonna need some adjustments down the road.
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#304742 - 12/31/17 12:37 PM Re: Big Lies and Tax Cuts [Re: NW Ponderer]
pondering_it_all Offline
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Registered: 02/27/06
Posts: 7626
Loc: North San Diego County
Yeah, even Ronald Reagan said: "Oops, we cut taxes too much." at one point and raised them.

It is kind of silly to have medical insurance for everybody subsidized for anybody who can't afford it, and then say we should have lower taxes too. It just doesn't make any sense.

Borrowing it from the future is like getting a credit card advance to pay off your other credit balance.

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#304749 - 12/31/17 08:09 PM Re: Big Lies and Tax Cuts [Re: pondering_it_all]
NW Ponderer Offline
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Registered: 09/09/11
Posts: 15969
Originally Posted By: pondering_it_all
Yeah, even Ronald Reagan said: "Oops, we cut taxes too much." at one point and raised them.
This is another of those "truths" that tax-cut happy politicians happily ignore. Taxes: What people forget about Reagan
Quote:
[D]espite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue.

"Reagan was certainly a tax cutter legislatively, emotionally and ideologically. But for a variety of political reasons, it was hard for him to ignore the cost of his tax cuts," said tax historian Joseph Thorndike.

Two bills passed in 1982 and 1984 together "constituted the biggest tax increase ever enacted during peacetime," Thorndike said.

The bills didn't raise more revenue by hiking individual income tax rates though. Instead they did it largely through making it tougher to evade taxes, and through "base broadening" -- that is, reducing various federal tax breaks and closing tax loopholes.
- CNN Money (Emphasis added). During Reagan's presidency, the national debt almost tripled and the U.S. went from being the world's largest creditor nation to the world's largest debtor in under eight years.
Quote:
According to a 2003 Treasury study, the tax cuts in the Economic Recovery Tax Act of 1981 resulted in a significant decline in revenue relative to a baseline without the cuts, approximately $111 billion (in 1992 dollars) on average during the first four years after implementation or nearly 3% GDP annually.
- Wikipedia, Reaganomics. Spending did not fall relative to GDP, but actually increased.

They also like to ignore the dire effects on the deficit and real impact on the economy. From the CNN Article:
Quote:
Reagan's behavior might not pass muster with those voters today who insist their Congressmen treat every proposed tax increase as poisonous to the republic.

"By today's standards, the Gipper would easily qualify for status as a back-stabbing, treacherous RINO [Republican in Name Only]," wrote Tax Analysts contributing editor Martin Sullivan, in an article for Tax Notes in May.
_________________________
A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich

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#304761 - 01/01/18 05:34 AM Re: Big Lies and Tax Cuts [Re: NW Ponderer]
pdx rick Offline
Member
Carpal Tunnel

Registered: 05/09/05
Posts: 40893
Loc: Puget Sound, WA


Welp, here it is...

Quote:
“Is it our goal to increase return to our shareholders and do we have an excess amount of capital? The answer to both is, yes,” Sloan told CNN Money. “So our expectation should be that we will continue to increase our dividend and our share buybacks next year and the year after that and the year after that.”

--Wells Fargo CEO Tim Sloa


Think Progress


Trump supporters got conned again by Don. LOL
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#304762 - 01/01/18 06:12 AM Re: Big Lies and Tax Cuts [Re: NW Ponderer]
pdx rick Offline
Member
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Registered: 05/09/05
Posts: 40893
Loc: Puget Sound, WA
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#304781 - 01/02/18 05:12 AM Re: Big Lies and Tax Cuts [Re: NW Ponderer]
pondering_it_all Offline
veteran

Registered: 02/27/06
Posts: 7626
Loc: North San Diego County
Exactly, and that's why I'm going to incorporate and create a pass-thru business this year. I hate this tax bill, but I've got to live with it.

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