President Trump- The Implications

[TeeDub]

Gonna break out a bottle of champagne tonight and celebrate another $1.5 trillion in national debt !!   And most importantly, huge tax cuts for the richest!!

It looks like my taxes will probably go down too!    I am in the top 50% of wage earners for sure.   

$1.5T is just chump change...   He needs to really get to work to catch up to his predecessors.
https://www.thebalance.com/us-debt-by-president-by-dollar-and-percent-3306296
 
Also, I don't have money for champagne, but I will drink some fireball!

[BKDotCom]

The FCC's Next Stunt: Reclassifying Cell Phone Data Service as 'Broadband Internet'
The agency is expected to make this change in February, which will make America's broadband situation look better than it actually is.

https://motherboard.vice.com/en_us/article/mbpezp/fcc-smartphone-data-reclassification

This would not only camouflage many of the communities in the US with no access to the internet, but could prevent them from getting necessary funding to build that access. Cell service is often slower, more expensive, and comes with data caps, and even tethering a computer to a phone for internet isn't a long-term solution

[hello]

Debt and deficit are not the same thing. This bill adds $1.5 trillion to the DEFICIT.

I don't know why people have to keep relearning the lesson that tax cuts to the rich don't stimulate the economy.

A never ending cycle-Republicans destroy the economy, people get mad, elect Democrats to clean it up and even though the economy starts to look up people get mad that Democrats can't fix everything at once, especially when they have an obstructionist Congress, so they elect Republicans to screw everything up again, etc, etc.

[cannon_fodder]

Wouldn't it be great if we didn't have to waffle back and forth?  I don't know, maybe some kind of moderation or a system that isn't binary?  Like, if there were other choices maybe the entire composition of government wouldn't flip flop every 10 years or so.  If only some would have warned us about the two party state...'

There is nothing which I dread so much as a division of the republic into two great parties, each arranged under its leader, and concerting measures in opposition to each other. This, in my humble apprehension, is to be dreaded as the greatest political evil under our Constitution.

he alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries, which result, gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of Public Liberty

Without looking forward to an extremity of this kind, (which nevertheless ought not to be entirely out of sight,) the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it.

It serves always to distract the Public Councils, and enfeeble the Public Administration. It agitates the Community with ill-founded jealousies and false alarms; kindles the animosity of one part against another, foments occasionally riot and insurrection. It opens the door to foreign influence and corruption, which find a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the policy and will of another.

There is an opinion, that parties in free countries are useful checks upon the administration of the Government, and serve to keep alive the spirit of Liberty. This within certain limits is probably true; and in Governments of a Monarchical cast, Patriotism may look with indulgence, if not with favor, upon the spirit of party. But in those of the popular character, in Governments purely elective, it is a spirit not to be encouraged. From their natural tendency, it is certain there will always be enough of that spirit for every salutary purpose. And, there being constant danger of excess, the effort ought to be, by force of public opinion, to mitigate and assuage it. A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume.

[hello]

Wouldn't it be great if we didn't have to waffle back and forth?  I don't know, maybe some kind of moderation or a system that isn't binary?  Like, if there were other choices maybe the entire composition of government wouldn't flip flop every 10 years or so.  If only some would have warned us about the two party state...'

A two party system could work if both of the parties acted in good faith. One side has sadly gone off the rails. The Koch ideas that the majority of US citizens thought were insane in the 1970s have been normalized and adopted by the GOP and we are all paying for it.

[erfalf]

A two party system could work if both of the parties acted in good faith. One side has sadly gone off the rails. The Koch ideas that the majority of US citizens thought were insane in the 1970s have been normalized and adopted by the GOP and we are all paying for it.

[Red Arrow]

A two party system could work if both of the parties acted in good faith. One side has sadly gone off the rails. The Koch ideas that the majority of US citizens thought were insane in the 1970s have been normalized and adopted by the GOP and we are all paying for it.

Yellow Dog Democrats are no help either.

[Conan71]

Debt and deficit are not the same thing. This bill adds $1.5 trillion to the DEFICIT.

I don't know why people have to keep relearning the lesson that tax cuts to the rich don't stimulate the economy.

A never ending cycle-Republicans destroy the economy, people get mad, elect Democrats to clean it up and even though the economy starts to look up people get mad that Democrats can't fix everything at once, especially when they have an obstructionist Congress, so they elect Republicans to screw everything up again, etc, etc.

Every tax cut is not a panacea, and you can cut your way to destitution as the Oklahoma state legislature has proven.  Is there any denial though that a lower corporate tax rate may stimulate capital spending or hiring if it frees up cash, or that it may stimulate spending on operations in the U.S. instead of foreign countries?  There's a difference in chasing cheap labor, but companies locating tech centers in places like Ireland which have lower tax rates is one example of how higher corporate taxes can force money to remain off-shore and jobs to be outsourced.

I'm with CF, moderating policies would be a great start instead of wild idealogical swings every four to eight years.

If my tax rate goes down next year, those freed up funds might get plowed back into new inventory for our business, might help start another business, or I might just spend it on craft beer or expensive wine.  

[patric]

Trump: "We essentially repealed Obamacare"

https://www.washingtonpost.com/news/the-fix/wp/2017/12/21/no-trump-didnt-repeal-obamacare-but-he-may-regret-claiming-as-much

[guido911]

Emoluments Clause case dismissed, CR passed, drilling in Anwr, Obamacare mandate gone, big tax cuts...pretty terrific week. Hopefully start turning off the tap to the UN next week.

[Red Arrow]

If my tax rate goes down next year, those freed up funds might get plowed back into new inventory for our business, might help start another business, or I might just spend it on craft beer or expensive wine.

No, no, no.  You are supposed to stuff it in a mattress (but not in a guest room) so no one benefits from it.

[hello]

Is there any denial though that a lower corporate tax rate may stimulate capital spending or hiring if it frees up cash, or that it may stimulate spending on operations in the U.S. instead of foreign countries?

https://www.washingtonpost.com/graphics/2017/business/corporations-tax-cut-gop-tax-bill/?utm_term=.9098eb549404

"The Washington Post looked at what America's 20 largest companies in the Fortune 500 say about taxes. Nearly all have vocally supported the GOP bill. Many say at least some of the extra money would probably go to shareholders via higher dividends. Other popular plans for additional cash include: looking for other companies to buy and paying down debt. Only two — AT&T and CVS — have made explicit promises to hire workers. Apple and Kroger executives have made vague statements that they would probably hire more people. Not a single company has said it will raise wages, although AT&T announced a one-time special bonus for workers after Trump signs the bill."

Of course At&T is also laying off 700 workers this week.

[Conan71]

https://www.washingtonpost.com/graphics/2017/business/corporations-tax-cut-gop-tax-bill/?utm_term=.9098eb549404

"The Washington Post looked at what America's 20 largest companies in the Fortune 500 say about taxes. Nearly all have vocally supported the GOP bill. Many say at least some of the extra money would probably go to shareholders via higher dividends. Other popular plans for additional cash include: looking for other companies to buy and paying down debt. Only two — AT&T and CVS — have made explicit promises to hire workers. Apple and Kroger executives have made vague statements that they would probably hire more people. Not a single company has said it will raise wages, although AT&T announced a one-time special bonus for workers after Trump signs the bill."

Of course At&T is also laying off 700 workers this week.

The article examines the 20 largest.  What about all the other companies which pay corporate taxes?  Heather Long, the article's author, doesn't seem to equate investment in the economy with creation of jobs and one could draw the conclusion she appears to have a preconceived notion that tax cuts are bad.  

"Lots of promises to help shareholders. Two promises to hire more workers. No promises to raise wages."- her or her editor's summary at the top of the article.

Let's take a look at some of the quotes in the article:

FORD  
32 percent tax rate. Plans to invest more. Ford Group Vice President of Government and Community Relations Ziad Ojakli wrote this in a letter to U.S. senators:

"[The bill] enables our critical investments in next-generation technologies like autonomy and electrification — and coupled with our provisions, like the EV [electric vehicle] tax credit, it helps support market adoption of these innovations."

Investing in new technology creates jobs both inside and outside the Ford corporate structure.

CVS HEALTH  
39 percent tax rate. Pledge to hire 3,000 more workers. CVS Health CFO David Denton said in November:

"To the degree that we have [tax] relief, there's a lot of investments that we think we can make within our business model that can more rapidly expand our business model across the country and deliver better care and higher quality and lower cost. So we would look to take the benefit of that and invest it clearly."

See, CVS can build more craptastic stores on every corner.

Here's Apple's stance which pretty well mirrored what I said yesterday.  I don't think it will bring their manufacturing to the states because cheap Chinese labor allows them gigantic profit margins on their products but it might help create higher paying jobs in the design and corporate structure.

APPLE    
25.5 percent tax rate. Vague pledge to hire more in the United States. Apple CEO Tim Cook said in November:

"I believe that tax reform is sorely needed in this country. . . . The biggest issue with corporations is that if you earn money outside the United States, which most companies increasingly will . . . the only way you can bring it into the U.S. and invest is if you pay 40 percent [tax]. This is kind of a crazy thing to do, so what do people do? They don't bring it to the United States. . . . In my view, it should have been fixed years ago, but let's get it done now."
When asked by NBC's Lester Holt whether he expected Apple to use residuals to add more jobs, Cook said:

"Yeah, I do."

AT&T's quote about what investing $1 billion in the American economy does, it creates 7000 jobs.

AT&T  
Current effective tax rate: 32.7 percent. Plans to invest $1 billion more. AT&T announced Wednesday it will give its 200,000 U.S. workers a $1,000 "special bonus" because of the tax bill, but the company stopped short of raising wages.

"AT&T is committed to invest an additional $1 billion in the United States in 2018 if a tax bill with a permanent corporate tax rate of 21 percent is signed into law. Every $1 billion in capital invested in the telecom industry domestically creates about 7,000 U.S. jobs, research shows."

For employee shareholders in companies, there is a net benefit to them with increased dividends.

Of course there is no assurance that shareholders will treat their dividends as expendable income.  Savvy investors will take increased dividends and either re-invest in more shares of the company which paid them dividends and it gives them more ability to spread that around to other companies.  Wealth can either be saved or spent.  Additional wealth at least gives the recipient the ability to spend that money which improves the overall economy....at least in theory.

As I said, not every tax cut is a panacea, but there are solid examples stated in the WaPo article which illustrate how a corporate tax cut can create good economic returns.  It remains to be seen how the theory plays out.

[guido911]

Trump signed the tax reform bill today. Merry Christmas taxpayers...And then there is this:

https://www.cbsnews.com/news/how-the-tax-bill-will-affect-three-american-families/

[heironymouspasparagus]

Exactly what I have been saying for years... great projection attempt!!  That's an 8!