Trumped up trickle down or Clintonized?

[JCricket]

okay folks,
I was hoping to start a discussion on the difference between the GOP and the Dems on tax systems, and what constitutes a healthy economy. After the first presidential debate I was left with a few ideas I had not had before.

If I were Trump, how would I measure an economy as strong. I think it would be when my companies are doing well. When my investments are putting money into my pocket. Please not I said TRUMP, not GOP.

The Dem's, when there are plenty of jobs, low unemployment. When people have money in there pockets and are willing to spend it.

I can see Trumps point of view. If I were in his shoes, I would likely measure it the same way. Same with the Dem's. In a nutshell, it is almost the same perspective - do I have money in my pocket? The question is where you are standing and how that affects your perspectives. Either way a national budget cannot be balanced without a strong economy.

Trickle down economics to me is absurd. What drives jobs in a company is the return on investment, how much better the bottom line gets by having these jobs(employees). If they do not add to the bottom line they are cut. Just because a company gets more money(less taxes) does not mean they will create jobs with them, not hardly.

If the American people are working and at a reasonable rate(pay and unemployment) then they have money in their pocket. If they have money in their pocket they will spend it, consuming goods and services thus putting money into the hands of the companies and creating a demand for the product, and possibly jobs if the demand is high enough.

Either way, I think saying that the economy is directly tied to the amount of taxes people pay, is fundamentally flawed.

thoughts.

[Dondilion]

Rich people and companies have options more so than before. There are myriad loop holes supported by both parties and there is fierce competition for investment using the tax incentive.
It is not the amount of taxes collected which matters. It is how we use it.

[JCricket]

Originally Posted by Dondilion

Rich people and companies have options more so than before. There are myriad loop holes supported by both parties and there is fierce competition for investment using the tax incentive.
It is not the amount of taxes collected which matters. It is how we use it.

I am not quite sure what this means? "fierce competition for investment", I get this. "Using the tax incentive"? I am clearly out of my league here. Can you educate me on this?

[Dondilion]

Originally Posted by JCricket

I am not quite sure what this means? "fierce competition for investment", I get this. "Using the tax incentive"? I am clearly out of my league here. Can you educate me on this?

Relocation/location to states and countries with sweeter deals.

[BlueStreak]

Trickle down is ridiculous because it assumes that if the wealthy have more money, they WILL use it to hire more Americans.............

Unless, of course, they made that fortune operating overseas.

[nailer]

Originally Posted by BlueStreak

Trickle down is ridiculous because it assumes that if the wealthy have more money, they WILL use it to hire more Americans.............

Unless, of course, they made that fortune operating overseas.

Trickle down is an apt description of supply side economics. Voodoo also works.

[whell]

Originally Posted by BlueStreak

Trickle down is ridiculous because it assumes that if the wealthy have more money, they WILL use it to hire more Americans.............

Unless, of course, they made that fortune operating overseas.

Yes, that's what "trickle down" has come to mean. But Trump isn't proposing "trickle down". Trump is proposing a derivative of supply side economics.

[donquixote99]

Originally Posted by whell

Yes, that's what "trickle down" has come to mean. But Trump isn't proposing "trickle down". Trump is proposing a derivative of supply side economics.

Ah, such subtle economic genius!

[Rajoo]

Originally Posted by donquixote99

Ah, such subtle economic genius!

Wiki:
Supply-side economics is a macroeconomic theory that argues economic growth can be most effectively created by investing in capital and by lowering barriers on the production of goods and services.

Where does capital come from?
Tax breaks of course with no preconditions, so in effect a gift.

Lower trade barriers? Mexico, China here we come.

So net effect is that this is a tax payer funded permanent exportation of jobs.
Delphi Electronics comes to mind or see Mitt Romney.

[whell]

Originally Posted by Rajoo

Where does capital come from?
Tax breaks of course with no preconditions, so in effect a gift.

What are you talking about?

Example: let's say I live on a piece of property that has lots of trees. I cut down a tree and make 10 baseball bats out of it. In this example, the tree is capital - specifically the wood from the tree.

If I invest in someone else's business - via direct investment or stock purchase - I am adding capital to that business.

A capital gains tax is the increase in value of the capital that may be realized when capital is sold. If my investment in the business increases in value when I sell my stock - or when my direct investment is paid back - I am subject to tax on that gain.

Capital is not sourced from a tax break. However, if the tax rate on gains are too high, there is a risk that the tax becomes a disincentive to invest. Money - capital - is then more likely to sit on the sidelines in low risk, low return instruments. Lots of cash on a corporate balance sheet can make a company appear healthy. But it's also can be a sign of a company not making R&D investments or capital improvements. On a macro scale, it can negatively impact economic growth.

Sound familiar?