Why you’ll pay for Trump’s tax cut

Fenton · Sep 17, 2017

JANFU said:
I think it is around 20 %

Low enough at least to justify American Corporate tax inversions, right ?

Are you a proponent of tax cuts in Canada and the increased revenue they provide or do tax cuts only work North of the border ?

Its a coincidence I guess that so many non-Americans support policies that adversely affect not only the American economy but the American worker. You folks had a lot in common with our last administration and this isnt limited to tax policy

The Paris accord is another good example. A terrible deal commited to by a terrible President who had every intention of finishing off what was left of a US economy that averaged only 1.8 percent GDP per year

Progressive tax policies drive out capital investment and drive trillions of dollars in American Corporate profits overseas.

Or over to Canada, you guys can take advantage of revenues from American corporate profits while supporting the very same policies and agenda that sent them there in the first place

apdst · Sep 17, 2017

JANFU said:
Read what I posted. Otherwise no need to reply.

Facts really mess you people up, don't they? Then, you act like you all are too smart to respond. That's why y'all can't sell your agenda.

MTAtech · Sep 18, 2017

Fenton said:
Lol ! Corporations have been offshoring their profits for years to avoid the second highest corporate tax rate among developed Nations

Add the effective US Corporate tax rate with State tax and Corporations have good reason to offshore 2.5 Trillion dollars in profits

When Canada lowered its tax rate to 15 percent, American corporations jumped at the chance to relocate and the best the Obama administration could come up with to stop corporate inversions was to call them " unpatriotic "

The US has been losing revenue on trillions of dollars in profits because the Left thinks tax policy should be dictated on intangible class struggle rhetoric.

The thing is people like Sanders and Warren know there ars trillions in profits parked overseas, they know the US isnt seeing any revenues from it but they support the same tax rates and policies that keep that money out of the US

So what gives ?

Ahem...

Source: CBO

[h=1]The 35 Percent Corporate Tax Myth [/h]

Some Key Findings:

As a group, the 258 corporations paid an effective federal income tax rate of 21.2 percent over the eight-year period, slightly over half the statutory 35 percent tax rate.

Eighteen of the corporations, including General Electric, International Paper, Priceline.com and PG&E, paid no federal income tax at all over the eight-year period. A fifth of the corporations (48) paid an effective tax rate of less than 10 percent over that period.

Of those corporations in our sample with significant offshore profits, more than half paid higher corporate tax rates to foreign governments where they operate than they paid in the United States on their U.S. profits.

Southern Dad · Sep 18, 2017

If cutting the corporate tax rates keeps corporations in this country, then it is worth it. Burger King, an American founded corporation is now a Canadian company. They saved a ton of money with that reverse merger. What happens when a company like Walmart does it? Or Apple? How much would we lose in tax dollars?

MTAtech · Sep 18, 2017

Southern Dad said:
If cutting the corporate tax rates keeps corporations in this country, then it is worth it. Burger King, an American founded corporation is now a Canadian company. They saved a ton of money with that reverse merger. What happens when a company like Walmart does it? Or Apple? How much would we lose in tax dollars?

What Burger King did is known as corporate inversion -- buying a foreign corporation and making it a paper transaction and running the company exactly like it did. It isn't done because the tax-rates are lower but because the U.S. requires U.S. corporations to pay U.S. taxes on all global income, not just that earned in the U.S. This is how it works:

[h=1]How does an inversion work?[/h] A corporate inversion occurs when a U.S. company merges with a foreign one, dissolves its U.S. corporate status and reincorporates in the foreign country. The U.S. company becomes a subsidiary of the foreign one, but the foreign firm is controlled by the original U.S. firm.
A U.S. corporation can invert if after a merger the owners of the U.S. corporation retain less than 80% of outstanding stock of the new merged company, or if after the merger the new merged company has “substantial business activities” in the foreign country equaling at least 25% of operations. So, with just a 20% change in ownership, a company can become “foreign” even if it largely operates in and is controlled from America.
[h=1]What is the tax advantage of an inversion?[/h] Corporations undergo inversions to take advantage of much lower tax rates, usually in tax-haven countries. Once inverted, a company no longer pays U.S. taxes on its global income. Instead, it is only responsible for paying taxes on income generated in the U.S. For example, Walgreens, which had $72 billion in U.S. sales last year, would likely avoid $4 billion in U.S income taxes over five years if it inverts with a Swiss firm. Pfizer, which tried to do an inversion with AstraZeneca in the U.K., would dodge $1 billion a year in taxes here.
Also, U.S. companies with billions of untaxed profits offshore can escape paying taxes on those profits in America if a company inverts. Medtronic reportedly could use $20.5 billion in its untaxed profits now offshore to invest back here and avoid paying taxes on those funds.
[h=1]Why inversions are unfair[/h] Companies that invert will continue to take advantage of the things that make the U.S. the best place in the world to do business — our educated workforce, legal and transportation systems, and federally-funded research. And they will continue to be able to get government contracts and to sell products to millions of American consumers.
But they will pay far less than their fair share for these services, passing on the cost to American taxpayers and to other companies.

SOURCE: https://americansfortaxfairness.org...-booklet/fact-sheet-corporate-tax-inversions/

Southern Dad · Sep 18, 2017

MTAtech said:
What Burger King did is known as corporate inversion -- buying a foreign corporation and making it a paper transaction and running the company exactly like it did. It isn't done because the tax-rates are lower but because the U.S. requires U.S. corporations to pay U.S. taxes on all global income, not just that earned in the U.S.

That sure sounds great. And you know, I'm sure that there are many liberals that believe that Burger Kind did not choose Canada for their headquarters after the corporate inversion based upon taxes. That may play well when talking to liberals around the water cooler but the rest of us understand that $1.2 BILLION is a big reason to make that switch, especially if that is ongoing tax savings.

Burger King to save millions in U.S. taxes in 'inversion': study - Reuters

We finally have an idea of how much money Burger King will save by moving to Canada - The Washington Post

Burger King's controversial tax savings - CNN Money

Burger King Could Dodge $1.2 Billion In US Taxes Through 2018 With Tim Horton's Merger: Americans For Tax Fairness - International Business Times

Stinger · Sep 18, 2017

Rogue Valley said:
Why you’ll pay for Trump’s tax cut

When Trump demands tax reform ... it's not for your benefit.

Why don't you try citing some of the relevant parts of the article and discuss them?

And you do know that after the Gingrich/Kasich tax rate cuts and the Bush43 tax rate cuts not only did the highest earners pay HUGELY more tax revenues but also a bigger share of taxes?

Stinger · Sep 18, 2017

ttwtt78640 said:
Yep, but anyone with a brain and a calculator already knew that. You cannot cut taxes in a revenue neutral way (especially when you consider that taxation is revenue) - so, to pretend to can do so, you must add "future GDP growth" as the magical balancing factor.

But, as any congress critter already knows, you can also "grow the GDP" by simply borrowing the money that you add to it with more government spending. Proposing cutting taxation without equal cuts in government spending is simply saying that you will borrow the difference, spend it and say "the GDP went up, just like we said it would".

The goal should not be "revenue neutral" and CBO scoring is woefully historically inaccurate to judge it anyway. The goal should be like the previous Republibcan tax rate cuts, INCREASED revenues, goals that were met.

Stinger · Sep 18, 2017

GhostlyJoe said:
It's a cornerstone of GOP politics to try to shift the tax burden down the income scale. This analysis is hardly surprising.

Really which tax rate cuts did that?

Stinger · Sep 18, 2017

Absentglare said:
We're supposed to believe that "The Heir" contributes so much more to the economy than "The Doctor" simply by parking their inherited wealth somewhere.

Your point being what? Tax policy is not based on how much someone "contributes to the economy" although the heir is contributing $300,000 to the economy by investing it and putting at risk of loss while the doctor is taking $300,000 out as income. But then I bet that doctor has investment income and I bet the heir has some earned income.

What is your goal, higher tax revenues or sticking it to the wealthy and taking more earnings from them?

If we collect double capital gains revenues at 15% over 29% where should we set the rate?

Stinger · Sep 18, 2017

JANFU said:
Same ones that paid for Reagan's. The poor, low income, social assistance programs to name 3.

Really? Prove it.

ttwtt78640 · Sep 18, 2017

Stinger said:
The goal should not be "revenue neutral" and CBO scoring is woefully historically inaccurate to judge it anyway. The goal should be like the previous Republibcan tax rate cuts, INCREASED revenues, goals that were met.

Hmm... did those increased revenues make federal deficit spending go up or down?

JANFU · Sep 18, 2017

Stinger said:
Really? Prove it.

Page 2- does not copy well.
https://www.irp.wisc.edu/publications/focus/pdfs/foc52b.pdf

Stinger · Sep 18, 2017

JANFU said:
Page 2- does not copy well.
https://www.irp.wisc.edu/publications/focus/pdfs/foc52b.pdf

You said pay for it, they didn't pay anything. And this is about proposed budgets, Reagan's budgets were never passed in toto, and of course the goal is to get MORE PEOPLE WORKING and paying taxes NOT to expand welfare and put more people on government subsistence.

And actual spending

Starting in 1980 to 1988 on human resources

313,374 362,022 388,681 426,011 432,076 471,859 481,625 502,220 533,426

Stinger · Sep 18, 2017

ttwtt78640 said:
Hmm... did those increased revenues make federal deficit spending go up or down?

You mean deficits. Down.....dramatically. Producing surpluses in the late 1990's and reducing the one year 2004 deficit from the 2001 recession to a paltry $161B by 2007 the last Republican budget until 2015. In just two years after the Democrats took budget control the deficit was $1,400B and stayed over $1,000B for the next four years.

ttwtt78640 · Sep 18, 2017

Stinger said:
You mean deficits. Down.....dramatically. Producing surpluses in the late 1990's and reducing the one year 2004 deficit from the 2001 recession to a paltry $161B by 2007 the last Republican budget until 2015. In just two years after the Democrats took budget control the deficit was $1,400B and stayed over $1,000B for the next four years.

Yet revenues (generally - except during recessions) went up every year no matter who was in power. What you seem to call a revenue problem is, in fact, a spending problem which cannot be fixed by cutting taxes. If you look at the Trump budget it does not balance even using super rosy GDP growth projections until 2027 (3 to 7 years after Trump leaves office). Don't even try to make it sound like republicant budgets cut spending, since that is a pure myth, at best republicant budgets slow the spending growth rate.

Stinger · Sep 18, 2017

ttwtt78640 said:
Yet revenues (generally - except during recessions) went up every year no matter who was in power. What you seem to call a revenue problem is, in fact, a spending problem which cannot be fixed by cutting taxes. If you look at the Trump budget it does not balance even using super rosy GDP growth projections until 2027 (3 to 7 years after Trump leaves office). Don't even try to make it sound like republicant budgets cut spending, since that is a pure myth, at best republicant budgets slow the spending growth rate.

Well if they went up just $1 they went up but not a very good record to point to. And those HUGE revenue increases came in part BECAUSE of tax rate cuts. The fact is Clinton came into office on STRONG tax revenue growth as we were in a strong recovery, passed a tax rate hike and that revenue growth slowed, even with deferred revenues being applied. It took the Gingrich/Kaisch tax rate cuts to kick the economy back into high gear and we hit double digit tax revenue growth and produced surpluses. It it is cutting the rate of spending growth not necessarily a cut in actual spending although that did occur with the Republican sequester with cut the deficit by about 40%. It's HUGE spending increases like the Democrats in 2008 and 2009 with their 9% and then 18% increases that blew open the deficits again.

You don't bring the budget back under control by raising tax rates, you do so with first restrained spending increases, growing the economy, getting people back to work paying taxes instead of being government expense.

ttwtt78640 · Sep 18, 2017

Stinger said:
Well if they went up just $1 they went up but not a very good record to point to. And those HUGE revenue increases came in part BECAUSE of tax rate cuts. The fact is Clinton came into office on STRONG tax revenue growth as we were in a strong recovery, passed a tax rate hike and that revenue growth slowed, even with deferred revenues being applied. It took the Gingrich/Kaisch tax rate cuts to kick the economy back into high gear and we hit double digit tax revenue growth and produced surpluses. It it is cutting the rate of spending growth not necessarily a cut in actual spending although that did occur with the Republican sequester with cut the deficit by about 40%. It's HUGE spending increases like the Democrats in 2008 and 2009 with their 9% and then 18% increases that blew open the deficits again.

You don't bring the budget back under control by raising tax rates, you do so with first restrained spending increases, growing the economy, getting people back to work paying taxes instead of being government expense.

All are aware of theory and concepts but the facts (what actually happened) say differently - see national debt.

MTAtech · Sep 18, 2017

Stinger said:
Your point being what? Tax policy is not based on how much someone "contributes to the economy" although the heir is contributing $300,000 to the economy by investing it and putting at risk of loss while the doctor is taking $300,000 out as income. But then I bet that doctor has investment income and I bet the heir has some earned income.

What is your goal, higher tax revenues or sticking it to the wealthy and taking more earnings from them?

If we collect double capital gains revenues at 15% over 29% where should we set the rate?

It has not been concluded that people who sit around the pool drinking cocktales while their invested money earns them capital gains income, are more productive to the economy and society, than those who wake up early to go to a job. As such, there shouldn't be favorable tax policy for capital gains. The only reason that there is favorable treatment of capital gains is because the group that gets those capital gains have influential lobbyists.

As for whether the wealthy who earn the bulk of their income from capital gains should be taxed more -- yes, and Warren Buffett agrees.

MTAtech · Sep 18, 2017

ttwtt78640 said:
Yet revenues (generally - except during recessions) went up every year no matter who was in power. What you seem to call a revenue problem is, in fact, a spending problem which cannot be fixed by cutting taxes. If you look at the Trump budget it does not balance even using super rosy GDP growth projections until 2027 (3 to 7 years after Trump leaves office). Don't even try to make it sound like republicant budgets cut spending, since that is a pure myth, at best republicant budgets slow the spending growth rate.

The theory that Republicans cut budgets and Democrats increase them can be tested with the numbers. You see how Republicans controlled spending over Democrats? Me neither.

Bush:

Obama

MTAtech · Sep 18, 2017

What caused higher deficits in 2008 and 2009 wasn't anything that Democrats or Republicans did. It was the economy.

Revenues fell dramatically, not expenditures rising.

ttwtt78640 · Sep 18, 2017

MTAtech said:
The theory that Republicans cut budgets and Democrats increase them can be tested with the numbers. You see how Republicans controlled spending over Democrats? Me neither.

Bush:

Obama

There we have it folks - federal spending is going up and yet the proposed fix is for federal taxation to go down.

ttwtt78640 · Sep 18, 2017

MTAtech said:
What caused higher deficits in 2008 and 2009 wasn't anything that Democrats or Republicans did. It was the economy.

Revenues fell dramatically, not expenditures rising.

Actually it was a combination of more spending and less revenue that caused deficits to soar during that time. Why not show both revenue and spending? Could it be that would shoot down your (bolded above) assertion?

MTAtech · Sep 18, 2017

ttwtt78640 said:
Actually it was a combination of more spending and less revenue that caused deficits to soar during that time. Why not show both revenue and spending? Could it be that would shoot down your (bolded above) assertion?

See: https://krugman.blogs.nytimes.com/2011/04/25/john-taylor-and-the-zombies/

Stinger · Sep 18, 2017

MTAtech said:
It has not been concluded that people who sit around the pool drinking cocktales while their invested money earns them capital gains income, are more productive to the economy and society, than those who wake up early to go to a job. As such, there shouldn't be favorable tax policy for capital gains. The only reason that there is favorable treatment of capital gains is because the group that gets those capital gains have influential lobbyists.

Well someone who is contributing $10,000,000, and placing it at risk, to the economy through economic activity is sure contributing a heck of alot, how much more is the person earning $70,000, taking it out of the economy contributing?

And if raising the capital gains tax rates means half the tax revenue and half the economic activity why on earth would you want to do that other than to satisfy your envy and jealousy?

As for whether the wealthy who earn the bulk of their income from capital gains should be taxed more -- yes

Why? Because you are envious, tax revenues and more money to spend on government programs be damned?

Why you’ll pay for Trump’s tax cut

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