Death and Taxes

[Sytes]

Ukraine v Russia thread wandered a bit. Tossed this over here to find, fresh tracks.

World of the relations between Death and Taxes.

Has it gone down ever for the working family? Serious question as I'm (somewhat) young...

Corporate tax cuts are an interesting subject. Most people believe if there are corporate tax cuts, the purpose is for the consumer.
That is far down the list.
The primary reason for corporate tax cuts are to increase a more sustained GDP.
GDP, (Gross Domestic Product) is defined as:

"A comprehensive measure of U.S. economic activity. GDP measures the value of the final goods and services produced in the United States (without double counting the intermediate goods and services used up to produce them). Changes in GDP are the most popular indicator of the nation's overall economic health."

Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA)​

www.bea.gov

So, in a sense, it does increase the sales to the consumer as supply becomes more in line with demand. When this occurs, demand value decreases and it becomes a semblance of cost saving to the consumer.

Basically, a country's economic standard is not a simple yes / no response. If you follow the tax cut principles, one of the end results is more domestic products available which reduces the increase value of demand

Not sure that theory holds up. Mostly because you can’t isolate the tax cut (or rise) front the other dozens of variables that affect an economy.

Taxes are applied to income. It’s a division of the final pie. Taxes go to a government entity who spends the money - also a component of GDP. Simply put, the theory politicians like to use is based on how a pie is divided will actually make the pie bigger or smaller. Hogwash. There is an optimal tax rate where it doesn’t affect behavior, but no one knows what that is. Regardless, we are spending more than we collect so something has to change eventually. Either revenue or expenses.

Politics twist spoons, beyond Matrix level. Outside politics, below adds to the topic.

A quick find to support my opinion:

How Tax Cuts Affect the Economy

An increase or decrease in taxes affects the economy and spending decisions of individuals in higher and lower income brackets.

www.investopedia.com

"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."

 

[texwest44]

The primary reason for corporate tax cuts are to increase a more sustained GDP.

I didn't expect this to be a comedy thread!

 

[Deleted member 28227]

Ukraine v Russia thread wandered a bit. Tossed this over here to find, fresh tracks.



Politics twist spoons.

Outside politics:

A quick find to support my opinion:

How Tax Cuts Affect the Economy

An increase or decrease in taxes affects the economy and spending decisions of individuals in higher and lower income brackets.

www.investopedia.com

"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."

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.

 

[Deleted member 28227]

@LWC55 @88man

The corporate rate was cut what ~15% and then 2 years later we had 3x the inflation rate...certainly not causative but definitely a correlation.

You can't be suggesting that suppressing interest rates + cutting taxes didn't contribute to inflation?

WSJ - March 4, 2018
Can we run the economy “hot”?
...
"There is only one large snag: We tried this in the ’60s and ’70s, and it failed abysmally. It led to double- digit inflation, frequent recessions and public demoralization. No matter. Trump is moving toward this sort of inflationary system by raising the economy’s demand and constricting its supply."

https://www.washingtonpost.com/opinions/the-coming-trump-inflation/2018/03/04/f7d51a64-1e3d-11e8-ae5a-16e60e4605f3_story.html

This was widely predicted.

Trump's Economic Scorecard: Higher Inflation, Flat Wages And A Ballooning Federal Deficit

While overall GDP growth has been solid, higher inflation is keeping wages in check. Combine that with a ballooning federal deficit from Trump’s tax cuts and everything isn’t as rosy as it appears. And watch out for tariffs hitting both inflation and economic growth.

www.forbes.com

Donald Trump may Make Inflation Great Again

The yield on the U.S. 10-Year Treasury note is at its highest level in more than 2 years. Experts say Trump stimulus and Fed rate hikes could push this benchmark higher and lead to more inflation. That could be bad news for consumers.

money.cnn.com

The price of everything in America may be about to go up

President-elect Donald Trump has proposed two large-scale economic plans that could lead to some serious inflation.

www.businessinsider.com

GDP, Inflation and Interest Rates Forecast to Rise Under Trump Presidency

The presidency of Donald Trump is poised to usher in a new era for the U.S. economy that forecasters say could boost economic growth, bring higher interest rates and inflation, and a new set of potential risks including international trade wars.

www.wsj.com

 

[BuzzH]

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.

Agree, but to say that Republicans don't spend like Democrats is divorcing yourself from reality.

A much more accurate statement would be that CONGRESS spends money like drunk sailors.

 

[Sytes]

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.

It's an ebb n flow world when economics involve tweaks.

Too much a crank on the torque may cause a chit show, in its own right... GDP also plays a factor as the stage is pitting China vs the U.S., economically. Unfortunately, for us spoiled Americans, I believe China has the current upper hand. I'm not so sure reducing our GDP at this point is a solid move. Though simpe coppers added to a topic we are all masters of opinion.

 

[Deleted member 28227]

Agree, but to say that Republicans don't spend like Democrats is divorcing yourself from reality.

A much more accurate statement would be that CONGRESS spends money like drunk sailors.

Fair, though I was more commenting on their respective preferred rhetoric, "no taxes" is a ridiculous idea as is "tax and spend".

 

[SAJ-99]

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.

You are are true Keynesian.

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."

I will read tonight. I would think that if the NBER solved that tax-rate research conundrum it would get more press.

 

[BuzzH]

Fair, though I was more commenting on their respective preferred rhetoric, "no taxes" is a ridiculous idea as is "tax and spend".

Also fair, but the lines between those 2 preferred pieces of rhetoric are so blurry, that the line is now unrecognizable.

IMO, the 2 party system is corporatist and corporatist light...

 

[LWC55]

@LWC55 @88man

The corporate rate was cut what ~15% and then 2 years later we had 3x the inflation rate...certainly not causative but definitely a correlation.

You can't be suggesting that suppressing interest rates + cutting taxes didn't contribute to inflation?

I'm not suggesting that at all. I'm saying the corp tax rates are a political tool. Much like min wage. Leave them alone and work on other economic tools.

 

[Deleted member 28227]

Leave them alone and work on other economic tools.

What does "leave them alone" mean?

 

[LWC55]

What does "leave them alone" mean?

Don't lower or raise. Corp taxes or min wage.

 

[Deleted member 28227]

Don't lower or raise. Corp taxes or min wage.

From where or do you mean don't have them?

 

[LWC55]

From where or do you mean don't have them?

From now.

 

[Deleted member 28227]

From now.

Why now? Assuming a 3% inflation rate a $7 today will be $70 in 2122

Or in reverse like .70... so why not have it at 0?

My question is what makes current rates ideal?

 

[LWC55]

Why now? Assuming a 3% inflation rate a $7 today will be $70 in 2122

Or in reverse like .70... so why not have it at 0?

My question is what makes current rates ideal?

Today's rates are not ideal. They are artificially fabricated for politics. The market should set the rates. Taking them away would cause more harm at this point, so I say leave them alone and use other tools such as interest rates and regulatory controls. Maybe quit printing money like a crack head.

 

[BuzzH]

Today's rates are not ideal. They are artificially fabricated for politics. The market should set the rates. Taking them away would cause more harm at this point, so I say leave them alone and use other tools such as interest rates and regulatory controls. Maybe quit printing money like a crack head.

Should have left corporate tax rates alone at 35%, if only obviously.

Read the articles wllm posted, then read them again.

Oh, and how is regulating interest rates working out right now?

 

[LWC55]

Should have left corporate tax rates alone at 35%, if only obviously.

Read the articles wllm posted, then read them again.

Oh, and how is regulating interest rates working out right now?

You have some great insight on corp taxes. What are your thoughts on min wage?

 

[Deleted member 28227]

Today's rates are not ideal. They are artificially fabricated for politics. The market should set the rates. Taking them away would cause more harm at this point, so I say leave them alone and use other tools such as interest rates and regulatory controls. Maybe quit printing money like a crack head.

Here is real and inflation adjusted min wage rates.

So current rates are the lowest they have been in the last 80 years.





So I guess my argument is why is the lowest rate it's been in a century best?

IMHO, there is a lot of shifting baseline syndrome that occurs with economic policy, I think it plays a role in GDP decline, and our gini-index.

 

[LWC55]

Here is real and inflation adjusted min wage rates.

So current rates are the lowest they have been in the last 80 years.
View attachment 241720


View attachment 241727

So I guess my argument is why is the lowest rate it's been in a century best?

IMHO, there is a lot of shifting baseline syndrome that occurs with economic policy, I think it plays a role in GDP decline, and our gini-index.

I think what is current is what is best because the market has already adjusted for it. How does raising expenses for Walmart, Lowes, Ford, GM, etc... benefit the working class?