I completely agree that we should simply subsidize what we want, rather than reduce taxes on what we want, but that defies the political reality in the US that tax cuts are far more palatable than subsidies. While in principle they are very similar, and the later perhaps more efficient at targeted research without distorting business activity, I think it would take a major propaganda campaign to sway the public view enough to dent the more important opinions in Congress.
But… but… that means someone told Malathor a falsehood! Next, someone is going to tell me there’s no Tooth Fairy.
Yeah, but… had Clinton been elected would that job still be there? I doubt it would have been.
I’m sure @Malathor will come back with a sincere mea culpa for his mistake. I’m gonna hold my breath while we wait.
That is what eating too much raw squid will do to you.
Please don’t summon him. We all know this routine by now: he drops a link which is inaccurate or ridiculous after a moment or two of critical thinking, rolls his eyes at the libtards, then disappears when people actually try discussing the link he provided or the corporation that gave out $200 bonuses lays off thousands of workers. Rinse and repeat.
From your own article:
Cook did say in an ABC News interview Wednesday that the company was going to bring back “the vast majority” of its cash but didn’t specify an amount nor a time frame.
Actually they did specify what they plan to do. It’s 350 billion invested in the US over 5 years, including 55 billion this year alone.
Also Tim Cook himself said that "the move wouldn’t have happened without Washington’s new tax law and the subsequent “repatriation tax holiday.”
What falsehood was that exactly? Please specify.
Jesus wept.
I don’t know why you guys are arguing over this. Apple is ramping up their capital investment, in and out of the us. The same is true for their competitors. This trend has been going for years now.
It has virtually nothing to do with the tax bill. This stuff has been in the planning stages since well before the tax bill.
It’s like saying the stock market is up because of the tax bill.
Durrrrr…
And all of this effectively ignores the fact that corporate tax rates were only one part of this immense, hastily written, garbage bill. And only a simpleminded imbecile looks at something like capital investment by a company, or isolated tales of individual bonuses, as some kind of meaningful justification for the bill in full.
Like seriously, you would have to be a fucking retard to be that dumb.
Pretty sure that $350 billion number is supposed to be an estimate of the total effect on the US economy of Apple’s investment plans, not the actual total amount they plan to spend. I heard as much on All Things Considered last night.
The stock market has been anticipating Trump’s tax cuts for years.
I just attended an investment review dinner, and the UBS economist who spoke for a long time, made a point of giving credit to the tax credit for the phenomenal rise in the market since this summer. Hell, you can see in the chart you posted. There is a bonus back from the over reaction to the Great recession in 2009. You can draw almost a straight line from the beginning of 2010 to the middle of 2017. That’s why Trump deserves no more credit than Obama for the stock rise. But after July there is a sharp uptick which is precisely when it started to look like a corporate tax cut was likely.
He also made that point in past corporate cuts we have seen roughly 1/3 of the money go to workers and 2/3 go to investments. I asked what about buy back and said that’s going to happen depending on the corporation, somebody like GE, probably YES a high flyer like Tesla or Facebook NO. He also stressed the same thing that I’ve been saying. It is going to be years before we will be able to fully assess the impact.
I will say that UBS economist is no Trump fan, and we know Tim Cook is no Trump fan, I’m 99% sure Tim is a Democrat, so neither them or most of the other CEO have an incentive to help Trump.
The US economy and the stock market are complex and no single thing can explain everything, but I think you have to be equally retarded or at least having your head buried in the sand to ignore the positive economy news we are seeing from the corporate tax cut. Yes, it was hastily drafted (although the corporate portion has been around for a decade), the process sucked, and it is truly awful that was jammed through on a straight-party line vote. But it may end up working as designed.
The fact remains that a company looking at $100 million investment that was expected to make between $10-$20 million a year pre tax profit had ROI of ~6-12% and now that same investment has an ROI of ~8-16%. For many corporations, that’s an enough difference to greenlight previously marginally project
Of course, cutting corporate rates made corporations happy. They made the market happy. But the up tick in the market you saw recently was purely psychological. There is really no fundamental reason that it will actually CAUSE growth, because corporations weren’t short on cash. Even if you only count domestic cash holdings of corporations, is corporations were sitting on mountains of cash. Resources were not limiting their investment or expenditures. This is simply a fact. Honestly, I suspect focusing more of the tax cuts on the middle class would have resulted in more real long term growth, rather than giving so much to the ultra wealthy… And such cuts would have also likely benefitted businesses more too, since those are the folks who buy stuff.
Now, don’t get me wrong, lots of market movements are driven purely by psychology. But that kind of movement tends to be vulnerable to spooking.
When I look at the markets movement this year? We’ve seen this kind of pattern before. It’s not going to last, I fear. And given the utter vacuum of competent leadership in the government, I’m not eager to see what happens once the herd gets spooked.
This is certainly fair, and why I don’t oppose the corporate rate cuts. But the absolutely mindless touting of stuff like, “the tax cut is making them spend all this money!” is so inane.
As you say, some portion of that spending might become more promising… But most of it was planned well ahead of time.
I don’t think anybody claimed that purpose of the corporate tax cut was to really eliminate deduction, it was a straight corporate tax cut. On the individual side depending who you listen to it was either a cut Trump, or a reform and cut Ryan.
I won’t go point by point on the list of corporate loopholes. But pretty much any of the loopholes that include the word “foreign” are now pretty much irrelevant. At 21% the US corporate rate is slightly below average with a lot of countries cluster in the 20-25% and most of the rest in the 15-20% and a few like Japan and France just over 30%. It requires a lot of political capital to lower corporate rates in a democracy (e.g USA 2017). I have a friend who has intimate knowledge of the Japanese attempts to lower their corporate rate, this is hard to do. So I don’t expect in the next couple of years to see the large countries making a giant cut in their rate.
As @AK_Icebear say subsidies are politically harder than tax deductions. The reality is the 21st century. If we spend a trillion dollars to give health care insurance to the poor, buy new weapons systems, or cut corporate rates, in all case corporations end up with more money, and we add another trillion dollars to our growing debt. The rest of discussion is which has the better stimulative effect on the economy and we have many threads for those discussions.
The big challenge with any corporate tax law is defining profits, unlike in the case of an individual where I think individuals should tax almost entirely on their gross income and family size, it is very important that we tax business solely on their profits. We also have to recognize that there is startup cost, business cycles, and individual companies will fall on hard times. So that means if companies are unprofitable some year, those losses can be carried forward to reduce the taxes in the profitable years. Otherwise, nobody would invest in start-ups.
But most of all it is important to recognize that businesses have different cost structure a retailer like Costco only marks up the product they by 15%. A normal retailer doubles the prices, and jewelry or furniture store often triple the price. On the other hand the cost to distribute a digital game is barely a penny and even if you add in support cost probably less than $1/customer, but development costs are in the tens of millions.
The majority of corporate loopholes are simply a recognition that are costs associated with running a business. Delivery trucks don’t last forever, nor do oil fields. An accurate accounting of profits recognizes that both of the assets depreciate and will need to be replaced. If you want to call them loopholes fine, but I think they are a legitimate business expense which helps make the tax code fairer for a wide variety of business.
That said there are lots of industry and even company-specific loopholes in the tax code which should be looked at. But I suspect that while the intention is good, they very may well be like ending earmarks and not work out as well we hope. The cynic in me says if some Senator got Exxon a loophole 50 years ago, we should at least make the bastards payoff a new group of Senators :-).
From that left wing rag… (Checks notes)… Reason.
Jesus ball-slapping Christ, make it stop.
Well, looks like this is going to be a delight. http://m.startribune.com/minnesotans-could-face-significant-state-tax-hike-next-year-in-wake-of-federal-changes/468536813/
There may be bonuses (boni?) and whatever, this year. But next year, or every year after?
No!
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