[jjbrr]

If you replace "Middle East" with "Baltimore," that whole article is just the plot of The Wire.

edit: re: hezbollah

[rmnka447]

RedSpawn, on 2017-December-15, 16:51, said:

????

Multinational corporations are doing just fine in this global economy. They are not disadvantaged and have manipulated several governments to systematically reduce their corporate tax liability across the globe. Further, as we give the multinational corporations these unnecessary tax breaks, the likelihood that the tax savings will trickle down to the unemployed and underemployed masses is remote.

We are marching toward a lowly-paid service economy and our politicans are doing very little to help Main Street.

The recipients of this glorified form of corporate socialism will continue to invest their tax savings in stock buyback programs and in mergers and acquisitions which will further imperil the job security of the gainfully employed masses.

Multinational companies have no incentive to increase their payrolls or headcount when they can generate respectable earnings per share (EPS) metrics though company stock buyback programs which reduce the total number of shares outstanding and artificially inflate EPS figures. These multinationals will also continue to generate "value" for shareholders by vertically integrating with other industries and reducing redundancies in business processes through layoffs and reengineering.

None of this bodes well for Main Street.

Multinational corporations will invest rationally their profits where they can make the most money. With the US corporate tax rate higher than other developed countries, it makes sense that these corporations will invest elsewhere and essentially be a money and wealth drain on the US economy.

Let's take a hypothetical that would illustrate what I'm getting at. A multinational can produce its product overseas in a country with a 20% corporate tax rate with other costs being about equal to these in the US. If transportation costs to the US are say 5% of revenue. There's still a 10% advantage to making the product overseas and shipping it to the US because of the higher tax rate. And, in fact, if the corporation is producing some of the product in the US, there's an incentive to move that production overseas and reduce US employment also. Such a move increases the multinational profit and you can be sure those corporations will take advantage of it especially if they are primarily foreign-owned.

Now let's reduce the US corporate tax rate to 21%. Now, the cost of producing the product overseas and transporting it to the US is still 25%, but the cost of producing the product in the is 21%. That gives a 4% incentive to producing the product in their US facilities versus producing it overseas. At the very least, it makes it difficult to move production and jobs overseas. There's even an incentive to invest more in Us facilities if demand for the product increases.

Now let's consider if the US facilities producing the product are a competitor of the multinational corporation. The multinational still has a 10% advantage versus the US competitor at the 35% US corporate tax rate. The result is that the multinational can undercut the price the US corporation charges for the product and drain revenue from the US company. You can argue that that's a good deal for the US consumer because they have to pay less for the product. But that good deal is ultimately draining capital and profits from the US company which pushes the company toward bankruptcy and loss of US jobs. It's ultimately hurting the US economy.

Again, if the US corporate tax rate is reduced to 21%, the result is that the multinational corporation can't continue to undercut the US Corporation because of the tax code. So the US company should, hopefully, still be able to compete on a fairly even playing field with the multinational.

So, if you believe in a global economy, then you have to accept that in order not to penalize American business, you can only charge about the average tax rate for developed countries. Otherwise, you're sticking to American businesses and workers.

[Winstonm]

rmnka447, on 2017-December-19, 14:46, said:

Multinational corporations will invest rationally their profits where they can make the most money. With the US corporate tax rate higher than other developed countries, it makes sense that these corporations will invest elsewhere and essentially be a money and wealth drain on the US economy.

Let's take a hypothetical that would illustrate what I'm getting at. A multinational can produce its product overseas in a country with a 20% corporate tax rate with other costs being about equal to these in the US. If transportation costs to the US are say 5% of revenue. There's still a 10% advantage to making the product overseas and shipping it to the US because of the higher tax rate. And, in fact, if the corporation is producing some of the product in the US, there's an incentive to move that production overseas and reduce US employment also. Such a move increases the multinational profit and you can be sure those corporations will take advantage of it especially if they are primarily foreign-owned.

Now let's reduce the US corporate tax rate to 21%. Now, the cost of producing the product overseas and transporting it to the US is still 25%, but the cost of producing the product in the is 21%. That gives a 4% incentive to producing the product in their US facilities versus producing it overseas. At the very least, it makes it difficult to move production and jobs overseas. There's even an incentive to invest more in Us facilities if demand for the product increases.

Now let's consider if the US facilities producing the product are a competitor of the multinational corporation. The multinational still has a 10% advantage versus the US competitor at the 35% US corporate tax rate. The result is that the multinational can undercut the price the US corporation charges for the product and drain revenue from the US company. You can argue that that's a good deal for the US consumer because they have to pay less for the product. But that good deal is ultimately draining capital and profits from the US company which pushes the company toward bankruptcy and loss of US jobs. It's ultimately hurting the US economy.

Again, if the US corporate tax rate is reduced to 21%, the result is that the multinational corporation can't continue to undercut the US Corporation because of the tax code. So the US company should, hopefully, still be able to compete on a fairly even playing field with the multinational.

So, if you believe in a global economy, then you have to accept that in order not to penalize American business, you can only charge about the average tax rate for developed countries. Otherwise, you're sticking to American businesses and workers.

Let's stay in the real world. Corporations right now without tax breaks are sitting on massive amounts of cash and have no reason to expand operations without increased demand. Giving them more cash will not change anything.

[barmar]

What you're missing is that even though the nominal tax rate in the US is high, the effective rate is far lower because of all the incentives and loopholes in the US tax code.

Yes, there have been some newsworthy cases of companies going offshore because of tax benefits (e.g. Apple), but it's not nearly as common as you suggest. It's obviously far easier for a multinational company that has significant offshore sales. But you don't see car companies moving their factories to Ireland to get the tax breaks (they do have some factories in Mexico because the labor costs are lower).

[barmar]

Put simply, practically all the benefits the GOP is claiming will come from this tax reform are based on fallacies. And they rushed this so much that signigicant unintended consequences are almost certain. Most of the legislators don't even know most of the details, they're just voting along party lines.

Like that benefit for owners of real estate LLCs that was snuck in at the last minute -- the Senators who will benefit from it claim they didn't even know about the provision, they learned about it from news reports like we did.

[jjbrr]

Am I back in middle school macro econ?

[barmar]

jjbrr, on 2017-December-19, 15:12, said:

Am I back in middle school macro econ?

I only wish Trump had such advanced understanding of economics.

[y66]

Did somebody suggest there will be unintended consequences of the tax bill?

From The G.O.P. Tax Bill Is Unworkable by John Cassidy:

Quote

What isn’t yet fully appreciated is how porous and potentially unstable the rest of the tax code will be after the bill is passed. With a corporate rate of just twenty per cent, and a big new break for proprietors of unincorporated businesses and certain types of partnerships, the new code will contain enormous incentives for tax-driven restructurings, creative accounting, and outright fraud. Every tax adviser and scammer in the country will be looking for ways to reclassify regular salary income as favored types of business income.

For tax accountants, the first step will be to see how many of their well-to-do clients could feasibly convert themselves into corporations. “Taxpayers will be able to shield their labor income from tax by simply setting up a corporation and having their income accrue in the form of corporate profits. . . . Income that would have been taxed at the high individual rates is instead taxed at the low corporate rate,” an updated report from a group of tax experts at New York University, the University of Chicago, and other places noted on Monday. Investment income is also taxed at the lower rate. “There is really no downside to this game,” the report said.

For some high earners, another alternative will be to go freelance and set up their own businesses, reporting their profits as “pass through” income on their personal tax returns. If they do this, many of them will be able write off twenty per cent of their taxable income, thus reducing the new top rate from thirty-seven per cent to 29.6 per cent, and the new second-top rate from thirty-five per cent to twenty-eight per cent.

This “game is clear,” the report said. “Don’t be John Doe, employee. Be John Doe, independent contractor (or partner in an LLC, receiving a profit share rather than wages).”

But not all unincorporated businesses will be treated equally under the new code. Law partners will be excluded from the twenty-per-cent write-off, as will doctors who co-own medical practices. The owners of other firms that provide a “specified service” whose principal asset is their “reputation or skill” won’t be eligible, either. At least, they won’t be until they start engaging in some restructuring shenanigans.

Take a mid-sized medical practice that owns its premises. Victor Fleischer, a tax professor at the University of San Diego, has suggested that it would make sense for such a practice to set up real-estate-investment trust, which would then charge the doctors and nurses a very high rent. The medical practice’s profits would suffer, but the real-estate company would make out well, and, because of Hatch’s last-minute changes, it would also be able to claim the twenty-per-cent pass-through deduction. In a similar vein, it might well make sense for law firms to set up different companies to handle their accounting, computer systems, and other routine services. Here again, the trick would be to overcharge the main business and generate profits in entities that are eligible for the pass-through deduction.

In many instances, this sort of reorganization would be perfectly legal. In other cases, in which the rules are ambiguous, the I.R.S. would doubtless try to crack down. But the I.R.S. is reeling after years of budget restrictions—it has lost about a fifth of its workforce since 2010—and the scale of the problems introduced by this new tax bill could very quickly overwhelm the tax agency. The shortfall in tax revenues could be enormous.

Perhaps that is what Republicans want to happen. Undoubtedly, there are some in the Party who would like to see the tax base decimated, the I.R.S. crippled, and the federal government forced to slash spending on domestic programs, particularly entitlement programs. But, for anybody who believes in a properly functioning government, a rational, clearly defined tax system is essential. The Republican reform doesn’t meet that standard. In the words of the report, the “haphazard lines” that the legislation creates are “fundamentally unfair and inefficient,” and, taken as a whole, it represents “a substantial blow to the basic integrity of the income tax.” It won’t survive in its current form.

[Zelandakh]

rmnka447, on 2017-December-19, 14:46, said:

Multinational corporations will invest rationally their profits where they can make the most money. With the US corporate tax rate higher than other developed countries, it makes sense that these corporations will invest elsewhere and essentially be a money and wealth drain on the US economy.

Some basic information for you on nominal and effective corporate tax rates. The short version - the effective US corporate tax rate is 18.6% and lies between that of Germany and the UK. The developed country with the lowest effective corporate tax rate is Italy; I am not sure that is the model the US Government wants to be following though...

[y66]

From Single Vote Decides Race That Creates Even Split in Virginia House by Trip Gabriel at NYT:

Quote

The Democratic wave that rose on Election Day in Virginia last month delivered a final crash on the sand Tuesday when a Democratic challenger defeated a Republican incumbent by a single vote, leaving the Virginia House of Delegates evenly split between the two parties.

The victory by Shelly Simonds, a school board member in Newport News, was a civics lesson in every-vote-counts as she won 11,608 to 11,607 in a recount conducted by local election officials.

Ms. Simonds’s win means a 50-50 split in the State House, where Republicans had clung to a one-seat majority after losing 15 seats last month in a night of Democratic victories up and down the ballot, which were widely seen as a rebuke to President Trump. Republicans have controlled the House for 17 years.

“I want to thank the voters who came out on Nov. 7,” Ms. Simonds said in a statement released by the Democratic caucus in the House. “What a difference this is from 2015 when I ran before. Everyone came out and we rocked this town.”

[Winstonm]

Quote

“The ideal subject of totalitarian rule is not the convinced Nazi or the convinced Communist, but people for whom the distinction between fact and fiction and the distinction between true and false no longer exist.” — Hannah Arendt, “The Origins of Totalitarianism”

Quote

The Justice Department is reviving an inquiry into former Secretary of State Hillary Clinton and the government’s controversial approval of the Uranium One deal, NBC News reported on Thursday.

A now-dormant FBI investigation into whether Clinton had ties to the deal has not found evidence of wrongdoing. But NBC, citing “multiple law enforcement officials,” reported that Attorney General Jeff Sessions has in recent weeks directed Justice Department prosecutors to ask FBI agents to explain evidence uncovered in the probe

Quote

Donald Trump Jr. on Tuesday said the federal criminal investigation into his father’s presidential campaign is an example of a “rigged system” with top government officials conspiring to take down the president.

“There is, and there are, people at the highest levels of government that don’t want to let America be America,” Trump Jr. said at the Turning Point USA Student Action Summit, a meeting of young conservatives, in West Palm Beach, Florida

[RedSpawn]

https://www.cnbc.com...-employees.html

Quote

AT&T, Comcast giving $1,000 bonuses to hundreds of thousands of workers after tax bill

• AT&T is paying bonuses of $1,000 to more than 200,000 U.S. employees.
  
• AT&T's CEO said it was in response to tax reform.
  
• The House of Representatives on Wednesday sent tax reform legislation to President Donald Trump, who is expected to sign it soon.

So let me get the logic correct, because we, the citizens of the United States provided corporate socialism in the form of unnecessary tax breaks to corporations who already have a cash-flush balance sheet, they are now going to compensate their employees appropriately?

U.S. Taxpayers are essentially paying merit increases and bonuses for employees of certain companies because these companies didn't want to use their own money to compensate their employees for a job well done. That's what John Q. Taxpayer is for.

We are well beyond the "moral hazard" zone. We are allowing corporations to play hardball politics to control Congress' purse strings.

And this is what we call winning?

Just wow!

[ldrews]

RedSpawn, on 2017-December-21, 10:36, said:

U.S. Taxpayers are essentially paying merit increases and bonuses for employees of certain companies because these companies didn't want to use their own money to compensate their employees for a job well done. That's what John Q. Taxpayer is for.

Let me understand. You think that because corporations get to keep more of their profits instead of paying it in taxes, that the US Taxpayers are paying for the bonuses? What makes you think that the corporations' tax savings belong to the US Taxpayers?

Then you must also think that any reduction in taxes for families comes at the expense of the US Taxpayers. Families don't own their earnings, US Taxpayers do and families receive money only through the largesse of the US Taxpayer. Is that right?

[jjbrr]

RedSpawn, on 2017-December-21, 10:36, said:

https://www.cnbc.com...-employees.html


So let me get the logic correct, because we, the citizens of the United States provided corporate socialism in the form of unnecessary tax breaks to corporations who already have a cash-flush balance sheet, they are now going to compensate their employees appropriately?

U.S. Taxpayers are essentially paying merit increases and bonuses for employees of certain companies because these companies didn't want to use their own money to compensate their employees for a job well done. That's what John Q. Taxpayer is for.

We are well beyond the "moral hazard" zone. We are allowing corporations to play hardball politics to control Congress' purse strings.

And this is what we call winning?

Just wow!

Quote

KANSAS CITY, Mo. -- AT&T has announced layoff’s affecting people in five states, including Missouri.

Just days before Christmas, hundreds of people in the metro found out they will be out of jobs come Jan. 4.

On Dec. 16, the company announced a surplus affecting an estimated 600 employees in Illinois, Wisconsin, Missouri, Michigan, Indiana and Ohio. The workers affected are both indoor and outdoor technicians.

here

[jjbrr]

ldrews, on 2017-December-21, 12:37, said:

Let me understand. You think that because corporations get to keep more of their profits instead of paying it in taxes, that the US Taxpayers are paying for the bonuses? What makes you think that the corporations' tax savings belong to the US Taxpayers?

Then you must also think that any reduction in taxes for families comes at the expense of the US Taxpayers. Families don't own their earnings, US Taxpayers do and families receive money only through the largesse of the US Taxpayer. Is that right?

What are you blithering about?

[hrothgar]

ldrews, on 2017-December-21, 12:37, said:

Let me understand. You think that because corporations get to keep more of their profits instead of paying it in taxes, that the US Taxpayers are paying for the bonuses? What makes you think that the corporations' tax savings belong to the US Taxpayers?

Then you must also think that any reduction in taxes for families comes at the expense of the US Taxpayers. Families don't own their earnings, US Taxpayers do and families receive money only through the largesse of the US Taxpayer. Is that right?

You're both idiots

That $1,000 bonus that Comcast paid?
The one that Trump and co are crowing about?

It's part of the union contract.
it has absolutely nothing to with the tax changes.

You're both too busy stroking yourselves over your own specific idiotic conspiracy theories that you didn't bother looking the actual facts.

Sadly, its par for the course for both of you...

[RedSpawn]

ldrews, on 2017-December-21, 12:37, said:

Let me understand. You think that because corporations get to keep more of their profits instead of paying it in taxes, that the US Taxpayers are paying for the bonuses? What makes you think that the corporations' tax savings belong to the US Taxpayers?

Then you must also think that any reduction in taxes for families comes at the expense of the US Taxpayers. Families don't own their earnings, US Taxpayers do and families receive money only through the largesse of the US Taxpayer. Is that right?

https://www.usatoday...rens/973351001/

Quote

House votes to avert shutdown, provide money for children's health insurance
MICHAEL COLLINS | USA TODAY

The collateral damage from Congress’ struggle to repeal the Affordable Care Act could include a program that covers over 8 million low-income children. States are running out of money to fund the Children’s Health Insurance Program. (Dec. 1)

AP WASHINGTON – Congress is yet again putting off a government shutdown — with a short-term funding measure through mid-January — and temporarily extending funding for health insurance for children of low-income families.

The House voted 231-188 Thursday to approve a short-term spending bill that would fund most government programs at current levels through Jan. 19.

Congress is close to passing a short-term funding bill to keep the government open through mid-January.

What I am saying is that based on our current public debt of $20 trillion which was just $5.5 trillion in 2000 (LESS THAN A GENERATION AGO), we did not need to give $1.5 trillion dollars to rich, cash-flush corporations. . . .

ESPECIALLY WHEN THERE IS A LOOMING GOVERNMENT SHUTDOWN because we:
(1) Have no financial discipline;
(2) Refuse to EVER balance our federal budget on an annual basis;
(3) Refuse to make any REAL budget cuts in any federal agencies because we have to protect all of the federal fiefdoms and federal headcounts; and
(4) Want to wallpaper the world with our Treasury Notes and Treasury Securities so we can continue to justify this seemingly endless carousel of irrationally exuberant deficit spending.

IT'S INSANE AND UNCONSCIONABLE!

How do we give away $1.5 trillion to well-to-do, faceless corporations when we can't even balance the DAMN FEDERAL BUDGET EVER and have almost quadrupled our federal debt in less than a generation? What the hell?

Walk me through this logic because my arithmetic says we are selling out our children's future to keep some whiny, politically connected legal fictions happy.

[Winstonm]

NYT:

Quote

....The Republican Party is no longer just obfuscating the truth or defending the president when he is accused of wrongdoing. Rather, Mr. Trump, Fox News and Republicans in Congress seem to be actively using falsehoods to prepare an assault on the institutions that allow American democracy to function.

In all democracies, politicians occasionally lie to cover up scandals or exaggerate their legislative accomplishments. In the United States, the rise of the right-wing news media in recent decades has tempted politicians to play to their own supporters without worrying whether their rhetoric is inflammatory or fair. But the construction of an alternate reality that obviates the very possibility of conducting politics on the basis of truth is a novelty in this country. And it is increasingly becoming obvious that it will serve a clear purpose: to prepare the ground for egregious violations of basic democratic norms.

[Zelandakh]

Trump finally says something true...about his $15m tax cut bill.

[RedSpawn]

hrothgar, on 2017-December-21, 13:17, said:

You're both idiots

That $1,000 bonus that Comcast paid?
The one that Trump and co are crowing about?

It's part of the union contract.
it has absolutely nothing to with the tax changes.

You're both too busy stroking yourselves over your own specific idiotic conspiracy theories that you didn't bother looking the actual facts.

Sadly, its par for the course for both of you...

Nice for you to call me idiot. You would need to run to an ad hominem attack when your ammunition is running low.

Please explain AT&T's position on the bonuses to their employees and its issuance relative to Trump's tax cut. You attack Comcast but leave AT&T out of the discussion. Is there a reason that you left AT&T's public messaging about the EXTRA bonus to their employees relative to the Trump tax cut?

Ummm, I want you to review how our public debt has gone from $5.5 trillion in 2000 to $11 trillion in 2008 to $20 trillion in 2017.

We have almost quadrupled our federal debt in less than a generation and can't even balance a federal budget annually and have potential government shutdowns because we refuse to balance the budget.

We give away $1.5 trillion in tax cuts to cash flush corporations and act like it is some kind of necessity that has to be passed before Christmas but we can't get other REAL pressing issues passed with the same sense of urgency.

There is no conspiracy theory, sir. You are sipping the government propaganda and Kool-Aid.

No reasonable government would quadruple its debt in less than a generation, fail to balance its federal budget annually during that same time, have looming government shutdowns about the budget almost annually, and give away sweetheart trillion dollar tax cut deals to corporations and then then marvel at its greatness.

BOTTOM LINE: This country has no financial discipline and thinks it can deficit spend it way to wealth and prosperity with no dire repercussions. All we do is create asset bubbles approximately every 7-8 years with the false disguise of wealth creation. The way this $1.5 trillion tax cut was ramrodded through Congress (especially before Christmas) is laughable.

Corporate America can get politicians to work on their behalf this close to Christmas but not John Q. Taxpayer. If this bill was about the American people, Congress would have delayed the bill to after January and they would have taken flights to their respective home states for the holidays.

The graffiti is all on the wall on this one. And notice I didn't name call you in my discussion because I respect the fact that we can agree to disagree without devaluing our humanity.

Happy Holidays!