Skewering of Leftist Economic "Conventional Wisdom"
 

"Conventional Wisdom" - tax cuts for business are bad, since the business will not pass along the benefit of those cuts to workers, and there will be no economic benefit for anyone except business owners or share holders.

Reality:

https://www.bloomberg.com/news/artic...f-tax-overhaul

Wal-Mart Stores Inc. is boosting its starting hourly wage to $11 and delivering bonuses to employees, capitalizing on the U.S. tax overhaul to stay competitive in a tightening labor market.

“Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.,” Chief Executive Officer Doug McMillon said in the statement.

Wal-Mart’s decision makes it the latest corporate titan to plow expected tax savings into employee payouts. Boeing Co., AT&T Inc. and Wells Fargo & Co. have all made similar announcements in recent weeks. Wal-Mart said it’s “early in the process of assessing potential additional investments” it could make.

So you found the exception that proves the rule.

Looks like at least four exceptions.

I believe we have to look at the total picture. The negatives and positives and see where we end up to determine "bad".

The basic argument of the left is that the less well off will end up paying ( reduction in safety net) for the hole which it feels the cut will create.

Anyway it is early in the season.

Again, Whell uses a single anecdote to try to prove a larger point, just as he did with the Carrier deal in Indiana (where Trump "saved" hundreds of jobs, only to have Carrier move all the jobs to Mexico anyway). The only thing this anecdote proves is the existence of an anecdote.

Here's the truth of the matter. The consensus of non-partisan economists and researchers is that ~20% of such tax increases actually help employees. The rest goes to shareholders.
https://www.cbpp.org/research/federa...administration

Target raised their minimum wage last year to $11 far before the GOP's tax plan was finalized. It could be argued that labor market forces compelled Walmart to act and they chose to throw (the ever-needy) Trump a bone by attributing it to the tax bill.

It trickles down.

Or so the discredited theory goes.

Give me an F-ing break. The CBPP is a bunch of non-partisan leftists. The only reason they're non-partisan is that their membership is likely equally distributed between those who vote Democrat, Green Party, Communist Party USA or Social Democrats. Linking to that bunch and calling them "non-partisan" is laughable. I'll see your CBPP blather and raise you something similar from the Tax Foundation.

According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would increase the long-run size of the U.S. economy by 1.7 percent (Table 3). The larger economy would result in 1.5 percent higher wages and a 4.8 percent larger capital stock. The plan would also result in 339,000 additional full-time equivalent jobs.

The larger economy and higher wages are due chiefly to the significantly lower cost of capital under the proposal, which reduces the corporate income tax rate and accelerates expensing of capital investment for short-lived assets.

Of course the bulk of the benefits of a reduction in corporate tax rates will be retained by the business and its shareholders. Hell, shareholders of a nice chunk of US corporations have benefited mightily just from the anticipation of this tax cut.

The question is where that money goes. It doesn't just sit inside the business and do nothing. Businesses reinvest and grow the business which creates jobs, increases demand for labor (thus increasing the upward pressure on wages) broadens the tax base.

What really floors my about the CBPP article you cited, and demonstrates the intellectual deficit behind it, is this:

Further, corporate rate cuts could ultimately hurt the majority of Americans, depending on how they are paid for. If, as in the Administration’s tax proposals, corporate rate cuts are not offset by spending cuts or increases in other taxes, any assumed increase in domestic investment — and therefore benefit for workers in the form of higher productivity and wages — won’t be sustained. The higher deficits would reduce national saving, meaning less capital would be available for investment in the economy and interest rates could rise. Higher interest rates, in turn, would reduce and ultimately reverse the increase in investment necessary for workers to gain (in the form of higher productivity and wages) from a corporate rate cut.

So we have the usual "the economy is static" argument. Tax cuts equal less revenue for government, and that's bad. Increased economic growth and broadening that tax base are not taken into account when determining the impact of a corp tax rate cut. No, the money is just going to sit in corporate coffers and not be returned to the economy. Somehow, this is all going to result in no one saving any money so interest rates will rise and we'll all get screwed.

What a load of crap this is. For example, the pressure to increase interest rates are stimulated by a variety of factors. One of those factors is economic growth. Interest rates are already nosing upward a bit because of this. So, I guess we shouldn't have economic growth because that's bad for interest rates?

Spare me.

Meanwhile, as an adjunct to your anecdote about Walmart's wonderfulness and generosity courtesy of your Dear Leader, Walmart also just announced that they are "closing 63 Sam's Club stores across the US, the company told Business Insider. Several stores were abruptly closed Thursday. In some cases, employees were not informed of the closures prior to showing up to work on Thursday. Instead, they learned that their store would be closing when they found the store's doors locked and a notice announcing the closure, according to reports."

http://www.businessinsider.com/walma...-stores-2018-1

Should your Dear Leader also claim responsibility for these thousands of lay-offs?

By the way, the Tax Foundation is no more non-partisan than the CBPP (they're conservative) and the analysis you point do has been criticized as incomplete and thereby fraudulent.
https://krugman.blogs.nytimes.com/20...laining-to-do/

The bottom line - Using only anecdotal evidence to prove a point proves only the existence of an anecdote (and nothing else). You should have learned that after your embarrassing Carrier Corp. post.

Meanwhile, on the subject of the tax bill:

Millions of Americans will need to use a new Internal Revenue Service tool to ensure their new paychecks are accurate, Trump administration officials said Thursday as they issued guidelines for implementing the recently passed tax law...

In rushing the process, the Treasury Department is asking companies to rely on outdated forms to help determine how much to withhold...

(M)any Americans, including those who tend to itemize their tax returns, would need to use the online tool to ensure they aren’t dramatically overpaying or underpaying their taxes.

If they find their paychecks are inaccurate, it will be incumbent on the employees to tell their employers to make corrections.

https://www.washingtonpost.com/busin...4ef_story.html

Bottom line - you point to a disingenuous, leftist economist to "debunk" the analysis by the Tax Foundation. I'm laughing right out loud.

By the way, just to help you out a bit more, and anecdote is generally used to describe a singular event. There have been multiple companies that have announced bonuses, wage increases, expansions, etc. that they attribute to a more favorable tax climate in 2018. The run up in the stock market in part is attributable to a more favorable tax and regulatory climate in 2018. I think we're a bit beyond classifying this evidence as "anecdotal". You might need to find a different pejorative term to make your failing narrative sound better. :p

Oh, and the Sam's Club closing are unfortunate. However, some locations will be converted to online distribution centers and others will be converted to Walmart stores. As I understand it, the stores were placed in areas where population growth was expected, but such growth didn't materialize.

Your invocation of Trump is curious, since the closing of these operations won't involve outsourcing of jobs to another country. But details like that typically don't stop you from mixing apples and oranges, I guess.

Now for some Right Wing economic wisdom.

IRS Sets Withholding Tables as GOP Pledges Paycheck Increase
Isn't this what Bush Sr. called Voodoo Economics? Goes to show that some of the people like Texas can be fooled all of the time.

Now we know why some Sam's Club locations (aka Walmart) are closing, Texans cannot make their layaway payments? :rolleyes:

Two congressional Democrats have expressed concern that the new tables would “systematically underwithhold income taxes during the 2018 tax year.” That sort of move would boost workers’ pay before the November 2018 congressional elections but could leave them “owing federal income tax when they file in 2019,” according to a Jan. 8 letter to the Treasury Department from Senator Ron Wyden of Oregon and Representative Richard Neal of Massachusetts.

Um, what does this have to do with a reduction in corporate tax rates?

Oh, and leave it to the left to find something wrong with letting folks keep more of their own money from their paycheck. :rolleyes:

Really, define folks. I am not one since my property tax deduction is now limited to $10K which is less than half and own two homes with monthly mortgage payments.

Where are the corporate tax cuts going to?
And why isn't this related, better than the fake drivel you are peddling. This is an actual news item, not a twisted opinion from a minion of our deranged leader.

For deranged please read https://prodimage.images-bn.com/pima...3_s550x406.jpg

And you wonder why no one wants to discuss the issues with you. :rolleyes:

He's a real peach, ain't he?

But your hero Clinton retroactively taxed folks, including dead ones. So, what are you complaining about?

Have fun going off topic all by yourself.

I'm thinking that its simply because you're not able to, because I've not seen much evidence to the contrary.

Only when you choose to deflect.

Poor Whell, he's such a stable genius. :rolleyes:

Thank you for providing additional evidence to the contrary.

Calm down, Skippy. :rolleyes:

This opinion piece is a must read IMO.

Steve Bannon has a point

Now this.
https://www.washingtonpost.com/opini...=.75693efbdeeb

Meanwhile, and back on topic:

https://www.cnbc.com/2018/01/10/bill...or-stocks.html

Even Warren Buffett thinks the Corp tax rate reduction is positive.

Hey Finn - here's a double whammy for you. Not only is Chrysler moving truck production back from Mexico bringing back 2500 jobs, they're also giving out bonuses. Why? A more favorable tax climate.

http://www.detroitnews.com/story/bus...ico/109373632/

Fiat Chrysler Automobiles NV will invest $1 billion at its Warren Truck Assembly plant to bring production of its Ram Heavy Duty truck to the U.S. from Mexico. The company said Thursday the move will add 2,500 jobs in Metro Detroit by 2020, when the plant retooling is completed.

The automaker also plans to give its 60,000 hourly and salaried U.S. employees $2,000 bonuses.

“These announcements reflect our ongoing commitment to our U.S. manufacturing footprint and the dedicated employees who have contributed to FCA’s success,” CEO Sergio Marchionne said in a statement. “It is only proper that our employees share in the savings generated by tax reform and that we openly acknowledge the resulting improvement in the U.S. business environment by investing in our industrial footprint accordingly.”

The company said the move solidifies the U.S. as a manufacturing hub for Ram vehicles. Marchionne and the company said both the new investment and the bonuses were “made possible in part by the passage of U.S. tax reform legislation late last year.”

I don't doubt that $1.5 trillion in tax cuts for corporations and the wealthy will have some positive impacts for corporations or the wealthy and will trickle down somewhat on the less privileged. The issue is whether this tax package was the right thing to do at the time in terms of equity, the deficit and inflation. A couple of anecdotes don't make it so.

It didn't simplify the tax code or close loopholes, nor will it pay for itself (as promised). What it will do is increase interest rates as well as concern from our creditors about the credit-worthiness of US treasuries (just yesterday China expressed grave concern about US treasuries) and bonds are reportedly entering a bear market. Increased interest rates will ultimately have a negative impact upon the economy. Meanwhile, enjoy your sugar high.

We're clearly beyond anecdotes at this stage, my stubborn friend. The China bond story has also been debunked a bit, now classified as a leak aimed at influencing trade policy rather than any serious concerns over China's US bond holdings. And if bonds are entering a "bear market", it's because there are more attractive investments out there...like stocks.

https://www.ft.com/content/924e4c88-...7-5465a6ce1a00

You claim it won't pay for itself, with your fixed pie economy point of view. Others, including the former CBO Director Douglas Holtz-Eakin, thinks it will. I'll take Mr. Holtz-Eakin's Ph.D in Economics from Harvard - informed opinion on this.

Holtz-Eakin is a dedicated supply-sider and the president of a right-wing think tank, the American Action Network. He's about as credible as your Dear Leader's other Alt-Economist, Stephen Moore. There's not a single, credible non-partisan economist or economic think tank who believes that this tax cut will pay for itself.

If you believe this tax cut will pay for itself, you likely also gullible enough to believe that your Dear Leader isn't a liar and a racist.

So, Whell, you trust the experts when they agree with you, but when they don’t, they’re ignorant “lefties”. You’re hilarious.

I think this is hilarious. First, I need to catch myself before fall into the absurd talk track that a corp tax reduction - or tax reduction of any sort - must "pay for itself". If for no other reason that the totality of our tax code is made up of so many moving parts that a singular event like a relatively modest reduction in corporate income tax - which accounts for only about 10% of total tax revenue - is going to somehow send the US government into fiscal distress.

Second, to "pay for itself", we'd need to sustain on average an increase in economic growth of 1% over the current CBO projection of 1.9% for 10 years. Since economic growth rates over the past 10 - 15 years are at historic lows, and most economics suggest the economy is poised for a period of sustained growth, are we really saying that economic growth of 2.9% per year is an unreasonable estimate? (And I don't necessarily but the idea that since we're nearing "theoretical full employment" the prospects for economic growth are compromised).

Even if its 2.5%, we can certainly take steps to "pay for" the a tax rate reduction in other ways. The federal budget is a cesspool of overspending and opportunities to reduce the scope of "paying for" a tax reduction are everywhere.

You'd know, Chickie.

Well put!

You just defined yourself as not being one. :cool:

So, one of America's richest investors, pretty sure it's in corporate wealth, thinks corporate tax rate reductions are good. :rolleyes:

They are indeed and they were either untouched by this package or Trump promised to leave them untouched.

Yup. Right after saying they weren't needed.

https://www.washingtonpost.com/graph...=.a857e071f86e

Untrue. Remember this from earlier in 2017. The House keeps kicking a budget deal down the road, so we've not gotten to the spending part yet.

https://www.nytimes.com/interactive/...t-details.html

So, more to come on the spending side of the equation.

Are you saying it is untrue that Trump promised not to touch Social Security, Medicaid and Medicare? Here are some facts, though facts might make your head explode.
http://www.politifact.com/truth-o-me...cuts-medicare/