Why do we need tax cuts?

[BrometheusBob.]

Corporate tax reform is necessary because the statutory rate of 35% is very high compared to other developed and industrial nations. The majority of companies that are publicly traded and many private companies are organized as "C-corps." C-corporations are taxed at the corporate level (based on tiered rates, the highest 35%) and when earnings are distributed to the shareholders as dividends they are taxed on the individual's tax return. Thus, you have double taxation.

I'm fine with tax reform for businesses.

I don't particularly believe it's in the best interest of the country to relieve richer individuals of tax liability doe.

[New England]

I'm fine with tax reform for businesses.

I don't particularly believe it's in the best interest of the country to relieve richer individuals of tax liability doe.

you should do yourself a favor and stop making the distinction, because a lot of wealthy people file taxes individually and it's not all that much unlike taking money out of your pocket twice, or out of each pocket.

you stimulate spending and investment when you drop tax rates. that's just a reality. not one you need to look up in a book when you're a hard hustling street entrepreneur like me and you live this life. i am an LLC. i've had a DBA and two LLCs in my name in my lifetime. next year i may be an S corp or a corp, depending on if i take on a partner or if i get beyond a certain threshold of income. i ain't no special mfer, i'm just another swinging dick with who incorporated. when you cut my tax rate you stimulate spending. i spend, therefor i don't shell out profits in tax. pretty simple, no? when you cut taxes for bigger fish you stimulate a hell of a lot more spending.

it's not all money used to gas up the yacht, young padowan. we buy equipment. we hire new people. we make short and long term investments. we buy insurance. we put our money in banks. we buy homes. we build homes. we even hand out raises. the spending of wealthy people, and normal people like me, literally runs this country.

[New England]

and to answer the question the TS is asking


because people who know what the f#ck we're talking about tell you we do.

[Zaroku]

I'm fine with tax reform for businesses.

I don't particularly believe it's in the best interest of the country to relieve richer individuals of tax liability doe.

Do you think it's fair that I pay US tax, while living & working in Japan?

[BrometheusBob.]

Do you think it's fair that I pay US tax, while living & working in Japan?

lol nah I think that blows

Being a US Citizen means you get ****ed worldwide

How long have you been in Japan? Are you planning to move to the US in the future?

[Scipio2009]

What are you babbling about?

I cited TWO instances where tax rate cuts resulted in increased tax revenue.

I'd like your take. What's the problem here?

The first instance that you cited did no such thing; the tax cuts were passed, and the actual windfall was so far below what it was said to be that a second piece of legislation was almost immediately drafted to undo the bulk of what your first example was crafted to do.

The second instance that you cited was a rate cut for loopholes swap that was deliberately crafted to bring in the same amount of revenue (whether that actually ended up being the case I have no idea, but the lack of an immediately re-write would lead me to believe that it did well enough).

Tax revenue going up, if that was actually the case, had far less to do with the rate cuts (opposite on the first instance, and unclear on the second) than you seem to think.

If anything, you can basically attribute such a move to the monetary policy pushed by Paul Volcker at the fed, which "broke the back" of inflation in the early 80's.

[Scipio2009]

Even for a Gruber you are slow.

When you get a refund it doesn't mean you don't pay taxes. It means you overpaid over the year and you get SOME of it back. You still paid some taxes.

Your own source explained it!! You fool, you're not even reading your own sources!

No wonder Gruber mocked you guys for being "stupid".

The average federal tax refund is over $3000, with that figure being drastically higher for a lot of people. The Earned income tax credit has a maximum refund of over $6000, regardless of what you earned. And that's before you even get to the Child credit or anything else. So, what the **** are you talking about?

The tax code is arguably the biggest anti-poverty program in the country; I don't have the numbers in hand, but between the folks who get the payout well beyond anything they paid in, and the folks who literally get their full federal tax withholding returned to them, you're talking about a whole lot of people.

FICA taxes, everyone pays, but you can't be this dense.

[Scipio2009]

Corporate tax reform is necessary because the statutory rate of 35% is very high compared to other developed and industrial nations. The majority of companies that are publicly traded and many private companies are organized as "C-corps." C-corporations are taxed at the corporate level (based on tiered rates, the highest 35%) and when earnings are distributed to the shareholders as dividends they are taxed on the individual's tax return. Thus, you have double taxation.

The result is that corporations cannot afford to reinvest earnings into growing the business. This affects the number of people they hire, the amount spend on capital assets and research and development spending.

That's a pretty loose way to look at things, tbh.

The statutory rate may be 35%, but companies as big as even General Electric, once all of the offsets, deductions, and write-offs were considered, ended up formally paying 0% in corporate taxes.

The actual rate paid by corporations and businesses, once you consider all of the carveouts, is basically around 20% anyway.

My only issue with the current tax reform talk is that folks want to lower the top-line number, while fighting like heck against any move to shave or eliminate the offsets, with some politicians going as far as to propose even more offsets. Likely all in the hope of being like Ireland or Delaware gone national, where corporations pay less and less into public services, folks hope for the physical move of people yet likely end up with the new company owning a PO box, and not really adding anything extra to the new headquarters.

It's a mistake to think that lowering the rate will magically lead to more business, and research (especially in a world where the cost to borrow for well-rated companies is still basically zero); near all of the proceeds from any cut will likely be kept in cash/cash equivalents, used to pay down outstanding debt (which companies have already been using to finance R&D), or used in share buybacks to limit the amount of the actual company is available to the public.

[Scipio2009]

you should do yourself a favor and stop making the distinction, because a lot of wealthy people file taxes individually and it's not all that much unlike taking money out of your pocket twice, or out of each pocket.

you stimulate spending and investment when you drop tax rates. that's just a reality. not one you need to look up in a book when you're a hard hustling street entrepreneur like me and you live this life. i am an LLC. i've had a DBA and two LLCs in my name in my lifetime. next year i may be an S corp or a corp, depending on if i take on a partner or if i get beyond a certain threshold of income. i ain't no special mfer, i'm just another swinging dick with who incorporated. when you cut my tax rate you stimulate spending. i spend, therefor i don't shell out profits in tax. pretty simple, no? when you cut taxes for bigger fish you stimulate a hell of a lot more spending.

it's not all money used to gas up the yacht, young padowan. we buy equipment. we hire new people. we make short and long term investments. we buy insurance. we put our money in banks. we buy homes. we build homes. we even hand out raises. the spending of wealthy people, and normal people like me, literally runs this country.

An LLC, if the rate is cut (most LLCs aren't gigantic) will likely spend the freed up money to further build their business.

GE or Apple or Clorox or Coca-Cola or AT&T, or a host of other businesses, are deeply unlikely to change their business plans on the numerical movement of the statutory tax rate (a move to a territorial system, where taxes are paid at whatever rate is charged in the market being served, has far more to do with a business decision than whether the US stated rate is 35% or 25%).

Any gain off of the tax cut for most corporations will likely be moved into financial instruments, rather than capital expenditures (made doubly clear by the reality that any change now, by deliberate political design, will only be the law for a 10-year window).

[Eff Pandas]

The tax cuts aren't for "us". They aren't even for the fictional character Butler plays on NSB. It's for the guys who people with a mill or two in the bank consider rich or more to the point the wealthy.