Death and Taxes

[88man]

There is, I think we can all agree, a growth rate that is sustainable for the economy. Too much or too little and you have issues, agree?

There are various mechanism via which a country can make adjustments to keep an economy in a healthy position.

Make hay while the sun shines, and then store it for the lean times?

Perhaps @SAJ-99 agrees with this perhaps not... but my opinion.

Conservation = Wise Use

I think of myself as having a conservative economic outlook. Therefore my outlook is that the tax code should be used as a tool. We have seen ridiculous inflation rates recently, yes?

Therefore I think we/the fed should have done things like raise the corporate rate, individual rate as well as the interest rate in order to rein in the hot economy and to consolidate gains, ie pay of your debts when you're making money, don't increase your spending.

In household economics we might call this lifestyle creep.

Neither party balances the budget or is fiscally responsible, but IMHO republicans saying they are fiscally conservative and then never raising taxes is ridiculous... as is raising taxes just to immediately spend 2x that amount, which is the Democrats MO.

I agree and well said WLLM. IMO The lower corp rate boosted inflation pressure as businesses grew and spent pretax cash/income on capital expenses land improvements etc. Increasing demand on just about everything by putting that cash into our economy>> AND OUT OF THE GOVERNMENTS hands directly.

See the folks who want higher income and business taxes believe in BIG GOVERMENT. They think the government should spend the money and not the business owner or the W2 worker. They typically work for the government or make a living as a politician or have businesses that are government contractors or government dependent. It's just that simple.

Those on the left love just love the word corporation. Thats why we heard it here today in every other sentence from them. Its a bad dirty word right. Seriously what percentage of c corps have revenues over 10million bucks?? Or should I say what percentage of corporations including s corps have revenues over 10 million?? I am guessing 95% do not.

The said 95% are the mom and pop businesses or the local companies that drive small town america. When they sit down and do their forecasting they think of the cash available at the year end and what they are gonna spend on capital expenses> trucks/improvements/Bonuses/raises/donations to the community etc/eqpt/tooling/remodeling/. When they know their tax rate/bill will be lower there is more cash available to invest in their business and the local economy. Then other local businesses have good business growth and also do the same cycle.

Oh the dirty word dividend > the c's> Yes they might even have enough cash to pay those who invested in them a few bucks in a dividend which is DOUBLE TAXED at 15% on the shareholders personal taxes and then taxed by the state.

Small and rural america is benefitting from lower corp tax rates.

 

[88man]

Higher Tax rate = more government control > Doesn't matter if its on your personal Rate or on a Business rate.

December 16th 1773 Boston Tea Party> Either you want to spend your money or you want the government to do it!

Those that are always pushing for higher taxes make a living off of tax revenue!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Directly or indirectly

 

[Deleted member 28227]

See the folks who want higher income and business taxes believe in BIG GOVERMENT. They think the government should spend the money and not the business owner or the W2 worker. They typically work for the government or make a living as a politician or have businesses that are government contractors or government dependent. It's just that simple.

I don't think it's that simple. Personally I work for a private company with an EBITDA in the hundreds of millions.

Everyone in my company has a college degree, everyone drives on public roads to work, we are based in CO so most folks are drinking/bathing etc in water that is provided by government projects that store and pull it from the western slope, police protect our assets and employees and make it possible for us to run our business, fire personal likewise. Agencies like the NSA protect our digital assets. Quite literally, we were contacted by alphabet agencies during the beginning of the war in Ukraine because the NSA saw spikes in digital attacks on OG companies. Further we use public assets and infrastructure directly in our business... roads to get to pad sites for instance.

Corporations are able to exist because of public assets, both directly and indirectly, and absolutely benefit from them.

If we had all toll roads that would cut into company profits.

If companies had to set up colleges to train employees that would also effect profits... private security/fire protection/military. Some OG companies actually do have these expenditures in other counties and it does effect the probability of some projects.

It's also probably an argument for why some countries out compete us... government "subsidy". The irony of anti-big government and China out competing us in the same thread.

Can't speak for the populace at large but I think there are some things that the public sector, i.e. government does better. The government certainly over pays on things, but sometimes you need something to be built right (literally and metaphorically) rather than as cheaply as possible. Generally speaking defense/infrastructure I think should be public... and any sector where people are the commodity or could be ... healthcare/education/prisons.

So my argument is that business and government have a symbiotic rather than parasitic/antagonistic relationship.

That being said, doing things that benefit all business probably aren't going to be in the interests of the 1% of the 1% so here we are...

The said 95% are the mom and pop businesses or the local companies that drive small town america. When they sit down and do their forecasting they think of the cash available at the year end and what they are gonna spend on capital expenses> trucks/improvements/Bonuses/raises/donations to the community etc/eqpt/tooling/remodeling/. When they know their tax rate/bill will be lower there is more cash available to invest in their business and the local economy. Then other local businesses have good business growth and also do the same cycle.

Oh the dirty word dividend > the c's> Yes they might even have enough cash to pay those who invested in them a few bucks in a dividend which is DOUBLE TAXED at 15% on the shareholders personal taxes and then taxed by the state.

Small and rural america is benefitting from lower corp tax rates.

I agree.

Though small business account for like 44% of GDP, and I don't think this applies to Amazon/Facebook/Google/ etc.

 

[Sytes]

I always found the "Flat Tax" interesting, since we're discussing taxes.

Clear out all the b.s. IRS clutter, loop holes, and omissions, and draw a 20% line across the board. Some heavy hitting lobbyists opposition, etc.

States operating on a Flat Tax:

Current flat tax	Future flat tax	Pending flat tax
Colorado	Arizona	Oklahoma
Illinois	Georgia
Indiana	Iowa
Kentucky	Mississippi
Massachusetts
Michigan
North Carolina
Pennsylvania
Utah

 

[Deleted member 28227]

I always found the "Flat Tax" interesting, since we're discussing taxes.

Clear out all the b.s. IRS clutter, loop holes, and omissions, and draw a 20% line across the board. Some heavy hitting lobbyists opposition, etc.

I think you end up with the same problem, the tax burden would be entirely on those who are wage earners and would entirely skip those whose wealth is derived from equities.

 

[Deleted member 28227]

I always found the "Flat Tax" interesting, since we're discussing taxes.

Clear out all the b.s. IRS clutter, loop holes, and omissions, and draw a 20% line across the board. Some heavy hitting lobbyists opposition, etc.

States operating on a Flat Tax:

Current flat tax	Future flat tax	Pending flat tax
Colorado	Arizona	Oklahoma
Illinois	Georgia
Indiana	Iowa
Kentucky	Mississippi
Massachusetts
Michigan
North Carolina
Pennsylvania
Utah

Colorado and Mass have waaaaaay more deductions than the fed though so I'm not sure if "flat tax" has the same effect as what the term would suggest.

For instance you can write off rent in MA above the line... commuting expenses, 100% of student loan interest, college tuition, etc.

 

[Sytes]

I think you end up with the same problem, the tax burden would be entirely on those who are wage earners and would entirely skip those whose wealth is derived from equities.

Would you expand your opinion how "those whose wealth is derived from equities" would not pay % tax charged to middle class individual? - I'm not following.

 

[Deleted member 28227]

Would you expand your opinion how "those whose wealth is derived from equities" would not pay % tax charged to middle class individual? - I'm not following.

The whole bezos using loans on stock to pay for boats, therefore not selling stock and having to pay tax.

Same thing we have been beating to death on a couple of threads.

 

[Sytes]

The loan against stock to pay for a boat (example): the 20% (example) is still collected, whether from a loan against stock or a person who buys the boat outright.
It enters the Govt coffers so our congressman can steal it to pay Paul.

Seems more of a social disparagement (aka socialized interest) vs a Govt collection of tax on an equal level of product purchased.

 

[LWC55]

I think you end up with the same problem, the tax burden would be entirely on those who are wage earners and would entirely skip those whose wealth is derived from equities.

I’d be in favor of a flat sales tax

 

[Deleted member 28227]

I’d be in favor of a flat sales tax

Not sure how much we agree or disagree how “big” the government should be, but there is probably some middle ground measured in trillions.

I think that to achieve that without income, corporate, etc you’d have to have a pretty high flat sales tax rate… total WAG but like 20-50% above existing tax, so like a dinner in Vermont might be 80% tax, it’s currently like 20+%.

In a lot of ways I think I could mostly get behind that in lieu of income/capital gains etc, with the caveat of keeping and/ or expanding estate taxes. Up the rate and reduce the exception to 1MM and tie it to CPI.

Smuggling would get to be kinda ridiculous though.

 

[SAJ-99]

Not sure how much we agree or disagree how “big” the government should be, but there is probably some middle ground measured in trillions.

I think that to achieve that without income, corporate, etc you’d have to have a pretty high flat sales tax rate… total WAG but like 20-50% above existing tax, so like a dinner in Vermont might be 80% tax, it’s currently like 20+%.

In a lot of ways I think I could mostly get behind that in lieu of income/capital gains etc, with the caveat of keeping and/ or expanding estate taxes. Up the rate and reduce the exception to 1MM and tie it to CPI.

Smuggling would get to be kinda ridiculous though.

Whatever system that we use, everyone will try to game it. And complain about it.

 

[SAJ-99]

The National Bureau of Economic Research studies the persistent effects of temporary changes in U.S. federal corporate and personal income tax rates. According to their recent 2022 working paper, a corporate income tax cut leads to a sustained increase in GDP and productivity. In contrast, personal income tax cuts trigger a short-lived boost to GDP, productivity, and hours worked but have no long-term effects."

My conclusion is that they basically assumed a can opener. If you don’t know the reference, a simple Google will do. If you do get the reference, you need to get a life.

The basic problem, beside the assumptions, is that as @wllm pointed out, tax rates have declined for decades while GDP has increased, because that is generally what the goal is. So they are measuring long term trends (an implicit bias) and trying to let the regression tell them strength. Numbers les to the conclusion (I didn’t check the math) but Empirical evidence is iffy at best. Given that they are measuring 40 quarters in the model, the assumptions get to be important because a lot of stuff happens over any decade.

I certainly wouldn’t put much faith in the conclusion. I don’t fault the authors. Economics models are messy ar best. There is a lot of behaviors that need to be assumed to hold and people are complicated and weird in real life.

 

[SAJ-99]

How does raising expenses for Walmart, Lowes, Ford, GM, etc... benefit the working class?

There are bills that need to be paid. It sounds like you are ok with the working class having to pay them.

The original point of this was based on the post about “how are my grandchildren going to be paying for this Ukraine war”. My point was, if our grandchildren are practical they will asking why all these grandparents don’t just die already, because the healthcare costs are killing the “middle class”.

 

[Sytes]

My conclusion is that they basically assumed a can opener. If you don’t know the reference, a simple Google will do. If you do get the reference, you need to get a life.

I'm not familiar with the can opener reference.

It fall within the following? The time saved to describe the reference may have saved us both time though teach or feed your play here?

 

[SAJ-99]

I'm not familiar with the can opener reference.

It fall within the following? The time saved to describe the reference may have saved us both time though teach or feed your play here?

No, it would have taken longer to explain all the things they assumed away. The phrase is generic for almost any economic model. There are a lot of pieces and isolating one requires holding others static. The longer the time period measured, the more the model conclusion become BS.

 

[LWC55]

There are bills that need to be paid. It sounds like you are ok with the working class having to pay them.

The original point of this was based on the post about “how are my grandchildren going to be paying for this Ukraine war”. My point was, if our grandchildren are practical they will asking why all these grandparents don’t just die already, because the healthcare costs are killing the “middle class”.

My point is that the working class pays the bills either way. When corp taxes are raised 10% do you think corporations cut their profits, executive bonuses, etc... 10%? They do not. They pass along the additional cost to the consumer as much as the market will allow, they layoff workers to make up the difference, they lower product quality and longevity to make up the difference. Businesses are designed to make a profit or they cease to exist....actually maximize profit. The working class has always and still does pay the bills. I'm just saying that raising corp taxes does not change this.

A lot like raising min wage does not help the ones that it "supposedly" helps. It just raises the cost of labor and goods to a higher level. The people that can't "live" on $7 an hour min wage won't be able to "live" on $15 min wage either.

 

[Sytes]

No, it would have taken longer to explain all the things they assumed away. The phrase is generic for almost any economic model. There are a lot of pieces and isolating one requires holding others static. The longer the time period measured, the more the model conclusion become BS.

My comment related to your can opener reference.

Regarding your opinion on corporate tax cuts and GDP, there are various referenced articles, both in support and opposition.

The spoon bends per an individual's preference. Hopefully you understand my spoon reference. Not sure if Google has it or not though regardless you either get it or you do not.

 

[Deleted member 28227]

My point is that the working class pays the bills either way. When corp taxes are raised 10% do you think corporations cut their profits, executive bonuses, etc... 10%? They do not. They pass along the additional cost to the consumer as much as the market will allow, they layoff workers to make up the difference, they lower product quality and longevity to make up the difference. Businesses are designed to make a profit or they cease to exist....actually maximize profit. The working class has always and still does pay the bills. I'm just saying that raising corp taxes does not change this.

A lot like raising min wage does not help the ones that it "supposedly" helps. It just raises the cost of labor and goods to a higher level. The people that can't "live" on $7 an hour min wage won't be able to "live" on $15 min wage either.

Honestly I don’t love the minimum wage as I don’t think it is a solution to the stated problem.

King for a day I’d create a mandatory minimum equity grant system, kleptocracy would hate it but I think it would address a lot of issues. You’d have to iron out vesting/selling/etc but private companies have worked out solutions to all that already.

 

[SAJ-99]

My point is that the working class pays the bills either way. When corp taxes are raised 10% do you think corporations cut their profits, executive bonuses, etc... 10%? They do not. They pass along the additional cost to the consumer as much as the market will allow, they layoff workers to make up the difference, they lower product quality and longevity to make up the difference. Businesses are designed to make a profit or they cease to exist....actually maximize profit. The working class has always and still does pay the bills. I'm just saying that raising corp taxes does not change this.

A lot like raising min wage does not help the ones that it "supposedly" helps. It just raises the cost of labor and goods to a higher level. The people that can't "live" on $7 an hour min wage won't be able to "live" on $15 min wage either.

It has been replied to you by others that taxes don't work that way. I don't expect anything I reply this time to change your mind. You will keep thinking what you want, even if the data doesn't;t support it.

Right is a chart of the earnings per share of the S&P 500, Left is government tax receipts (col 1 income/payroll, col 2 corp receipts). Tell me where the tax hike was? Point being, it's complicated. Simplifying it to some generic belief isn't helpful for solving problems.

Regarding min wage, you are probably correct, but I think Americans can pay 20cents more for their happy meal for someone to make $15 rather than $7. Businesses complain that they will have to lay off people because they can't increase prices. The latest year of inflation shows that is complete BS. If all employers have to operate under the same competitive market dynamic, any change affects them all equally.