One more reason why the Tax Proposal is a GOP scam.....

[Winston]

Look, anyone that has any exposure to capital budgeting, business planning, or a simple Monte Carlo stimulation of potential capital investments intuitively understands precisely what I am talking about. When the cost of capital is low, that is when the marginal tax rate is high, businesses can justify investments with higher potential risk and greater anticipated returns. But when the cost of capital is high, when the marginal tax rate is low, they can only justify the most conservative investments with lower potential returns. That is why companies are holding cash, conducting stock buybacks, or passing off their earnings to their stockholders in the form of dividends. There are no acceptable investment opportunities that meet the required IRR necessary to justify a capital investment. By lowering the corporate tax rate the Trump plan will only exacerbate that problem.

When the cost of capital is low, that is when the marginal tax rate is high, businesses can justify investments with higher potential risk and greater anticipated returns.

A lower tax rate gives a greater anticipated return.

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Look, anyone that has any exposure to capital budgeting, business planning, or a simple Monte Carlo stimulation of potential capital investments intuitively understands precisely what I am talking about. When the cost of capital is low, that is when the marginal tax rate is high, businesses can justify investments with higher potential risk and greater anticipated returns. But when the cost of capital is high, when the marginal tax rate is low, they can only justify the most conservative investments with lower potential returns. That is why companies are holding cash, conducting stock buybacks, or passing off their earnings to their stockholders in the form of dividends. There are no acceptable investment opportunities that meet the required IRR necessary to justify a capital investment. By lowering the corporate tax rate the Trump plan will only exacerbate that problem.

When the cost of capital is low, that is when the marginal tax rate is high, businesses can justify investments with higher potential risk and greater anticipated returns.

A lower tax rate gives a greater anticipated return.

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Let's assume the cost of each investment is also one million dollars. In case one, the marginal tax rate is 35%. In the second case the marginal tax rate is 20%. Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent. The obvious choice here is Case one, where the potential return is the same but the money at risk is significantly lower.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent.

If both companies implode, the loss in each case is one million.

Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

Well, if we assume the first year profit is $1 million and the taxes paid the first year are zero, because we're deducting the total investment the first year, the results are equivalent.

Now in the second year, with no more write-offs, one company is going to yield an after tax profit of $800,000 while the other yields an after tax profit of $650,000.

I know which one I'm investing in!!!

What about you?

Your scenario would not even pass an Accounting 101 test. Look at it again and see if you can tell me the problem.

 

[ShaklesOfBigGov]

Except, when a company pays a lower tax rate, that also means that leaves more of their own money to invest in themselves. Not every company simply walks in one day at the start with billions of dollars that they can simply afford to risk and spend on themselves. Risk means finding investors that will share in the idea of your product, but not every small company starting out is able to find that. You have to remember that the main driving force of a vibrant economy is in the creation and risk that begins with small business, with the ability of that business to be able to compete. That means as that business grows and takes on more “risk”, with more of their own money at their disposal, they can be able to afford to turn around and invest in themselves.

1) expansion to build another facility. Maybe now they can OWN another distribution center by having one built off that extra money they have at their disposal. Perhaps instead of paying a rental fee to store their product, they are now able to have one built that they now own.

2) As a company retains more of their own revenue, they can now afford to look into ways they can be more competitive. Now we are talking about advancements in technology, like robotics, that can help grow and increase their business’s efficiency in ways they could not previously afford to meet up with that higher demand while producing at a level that helps them to become more competitive. Robotics and higher technology means restructuring that shell of a facility to accommodate with the changes. Plans and newer construction, comes with the ability to afford the cost associated with attaining these higher more advanced pieces of equipment. Now obviously higher technology means you need to pay a higher wage, because your basic electrician is not going to have the necessary skill level in robotics that’s associated with troubleshooting and maintaining that particular piece of equipment, should the system go down. Higher skill levels and higher wages can also mean higher incentives, in drawing those kinds of employees to work in your plant as opposed to working at another facility.

3) Education. Maybe with more of your own money to spend you can invest in internships and reinbursement programs on help retain that higher skill level. Aircraft engineers is just one example comes to mind here, the testing of newer technology that comes out of the “research and development”.

4) That brings “research and development”, which is another cost that can benefit a business into becoming more competitive and efficient as it grows. This can be applied in several different ways depending on the scale and the kind of market you happen to be competing in.


This is just a very brief overview of how a smaller company can grow and build with more of their own money to be able to invest in themselves. You see there are several factors that come with allowing a small business to first be able to initially establish themselves in a market, then take on greater risk to invest in themselves to meet up with the demand as their business grows, while lower federal taxes will afford them the added ability to keep more of their own money to be able to expand and afford ways to be more cost efficient.

All that effort and yet a total waste of time. Every single "investment" you mentioned is done with BEFORE TAX DOLLARS. The key phrase, "as a company retains more of their revenue". You are speaking of retained earnings.

Pure unmitigated nonsense completely devoid of reality and business acumen.

Amazing.

Did you even read my post?

In case you never realized, that formula you just spouted out specifically deals with how a business is expected to compensate for its many investments and investors who have choaen to invest in the business. This investment can be achieved through corporate stocks or bonds.

This has nothing to do with my previous post of small business making a business decision, that comes with having more of their OWN money though lower taxes, to make their own investment through (1) improvements in efficiency (2) giving business to those who sell them the more advanced equipment that aids in making the business more efficient (3) choosing to buy a storage facility instead of renting (4) gaining opportunities to require more skilled workers as a result of maintaining and repairing a more automated efficient system ... etc.

AGAIN, as I’ve said before, the vast majority of the private sector is made up of small business and those who wish to establish their own business with (a best) a small business Bank loan - not corporate stocks and bonds. It’s that simple, it’s not complicated.

You have NOT come close to proving how a raise in corporate taxes helps to create more jobs, I’d suggest you give up now while you can.

Yes, I read your post. It was a bunch of hot air. Every single example of spending you gave would come from PRETAX income. I mean let's take one example. Robotics. You claim a company could invest in robotics if they had more after tax income due to a tax cut. But an investment in robotics would come from PRETAX profits. The tax rate would not have any bearing on the amount of PRETAX profit available to invest in the company. Yet that corporate tax rate would be a factor in the COST of those robotics. Let's say a company wants to invest one million dollars of their profits in robotics. If the tax rate is twenty percent the cost of those robotics would be $800,000 in foregone profits. But if the tax rate was forty percent the cost would only be $600,000 in foregone profits.

The fact is that every single year millions of small business owners face a decision. Do they take profits and pay taxes or do they make a CAPITAL investment in their company. The higher the tax the more likely that small business owner will make that capital investment. Cutting taxes on small business owners does not encourage them to invest in their business, it encourages them to take cash out of their business. A low tax rate does not encourage them to invest in employee raises or the creation of new jobs, it encourages them to take a trip to Europe or buy a new sports car.

It’s obvious that you don’t know a thing about small business to believe that an intelligent small business owner doesn’t know enough to separate business equity from personal pleasure income, if that individual knows anything about sound business practices.

Your “equation” was a breakdown of a corporations’ obligations to business’ investors. You would know that if you bothered to use some common sense research before using that equation in regards to small business reinvestment of their own capital.

Seriously take the time to educate yourself in the realm of small business before you make another claim, that business owners will just tap into their own business account for a vacation or a new car. Seriously you’re an idiot if you believe that.

If tap into their business account, you mean take out profit, well I got to ask. Would they be more likely to take out profit to buy that sports car if they had to pay twenty cents on the dollar in taxes instead of thirty five cents on the dollar? Lower taxes does not encourage small business owners or corporations to invest in their operations, it does the exact opposite, it encourages them to TAKE MONEY OUT of their operation.

There is a time to cut corporate taxes. When companies are investing over aggressively, stingily paying little dividends, and hold little to no cash, well it might be appropriate to lower their tax burden. But when companies are flush with cash, spending large amounts of their earnings on stock buybacks, paying fat dividends, and investing little or anything back in to their businesses and instead seeking economic rents, it is not time to cut corporate taxes.

If you really have to ask the difference between a business account and a personal one, with the understanding as to WHY the need for a small business owner to separate the two, then you don’t know a thing about small business.

 

[Vandalshandle]

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Winston has explained this too you much better than i can. I see no need into trying to improve on his post. Perhaps you can explain to me why the GOP promised a tax cut that would not increase the deficit, or affect Medicare, yet this tax cut would increase the deficit by $1 1/2 trillion, force massive decreases in Medicare, and will expire (only for individuals, not corporations) in a few years, and how this is a GOOD thing. Not to mention that by repealing deductions for property taxes, which would be a major blow to the middle class, would put you into a position where you are paying tax on money that you already paid out as tax, and couldn't even keep?

Winston has explained this too you much better than i can.

Yes, his explanation was amusing. Basically, more businesses will be formed if you can never take any profits out of the business. Businesses prefer higher taxes, lower after tax profit, because they have higher write-offs.
Hilarious!

You think that is hilarious? Then this will leave you laughing your ass off, and begging the GOP for more lubricant:

Opinion | Everybody Hates the Trump Tax Plan

Yes, I think the idea that a higher tax rate increases business formation or growth is fucking hilarious!!!

It’s such a good idea, the left can’t understand or explain why other nations aren’t likewise looking to instead increase their corporate tax rate just like the United States. If such an increase in the corporate tax rate is obviously such a HUGE benefactor in aiding business growth within their own country in a global economy.

Interesting how all these little facts get in the way of the progressives’ knowledge of how a nation is able to create such a strong robust business environment for their country.

Wiat! I thought that all socialist countries are going broke! When did that change?

 

[Vandalshandle]

When the cost of capital is low, that is when the marginal tax rate is high, businesses can justify investments with higher potential risk and greater anticipated returns.

A lower tax rate gives a greater anticipated return.

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

When the cost of capital is low, that is when the marginal tax rate is high, businesses can justify investments with higher potential risk and greater anticipated returns.

A lower tax rate gives a greater anticipated return.

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Let's assume the cost of each investment is also one million dollars. In case one, the marginal tax rate is 35%. In the second case the marginal tax rate is 20%. Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent. The obvious choice here is Case one, where the potential return is the same but the money at risk is significantly lower.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent.

If both companies implode, the loss in each case is one million.

Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

Well, if we assume the first year profit is $1 million and the taxes paid the first year are zero, because we're deducting the total investment the first year, the results are equivalent.

Now in the second year, with no more write-offs, one company is going to yield an after tax profit of $800,000 while the other yields an after tax profit of $650,000.

I know which one I'm investing in!!!

What about you?

Your scenario would not even pass an Accounting 101 test. Look at it again and see if you can tell me the problem.

I guess that Conoco, which paid 1% of their pretax earnings in taxes last year, must be really hampered by their burdensome 35% tax rate, and desperately need relief.

 

[ShaklesOfBigGov]

Winston has explained this too you much better than i can. I see no need into trying to improve on his post. Perhaps you can explain to me why the GOP promised a tax cut that would not increase the deficit, or affect Medicare, yet this tax cut would increase the deficit by $1 1/2 trillion, force massive decreases in Medicare, and will expire (only for individuals, not corporations) in a few years, and how this is a GOOD thing. Not to mention that by repealing deductions for property taxes, which would be a major blow to the middle class, would put you into a position where you are paying tax on money that you already paid out as tax, and couldn't even keep?

Winston has explained this too you much better than i can.

Yes, his explanation was amusing. Basically, more businesses will be formed if you can never take any profits out of the business. Businesses prefer higher taxes, lower after tax profit, because they have higher write-offs.
Hilarious!

You think that is hilarious? Then this will leave you laughing your ass off, and begging the GOP for more lubricant:

Opinion | Everybody Hates the Trump Tax Plan

Yes, I think the idea that a higher tax rate increases business formation or growth is fucking hilarious!!!

It’s such a good idea, the left can’t understand or explain why other nations aren’t likewise looking to instead increase their corporate tax rate just like the United States. If such an increase in the corporate tax rate is obviously such a HUGE benefactor in aiding business growth within their own country in a global economy.

Interesting how all these little facts get in the way of the progressives’ knowledge of how a nation is able to create such a strong robust business environment for their country.

Wiat! I thought that all socialist countries are going broke! When did that change?

Do you need to now know the difference between a capitalist system vs a nation engaging in socialism? Let me give you a small clue. There are tickets to an event that discusses the need and benefits surrounding socialism and it sells out. Now that’s tickets... to a socialism event ... and it sells out, that the organizers must move it to a bigger venue to sell MORE tickets. You are benefitting from and engaging in capitalism. When Michal Moore sells a movie for more than it costs to produce it, unless he recently drastically reduced the asking price, he is engaging in and benefiting from capitalism.

Do you need a clearer illustration?

 

[Winston]

All that effort and yet a total waste of time. Every single "investment" you mentioned is done with BEFORE TAX DOLLARS. The key phrase, "as a company retains more of their revenue". You are speaking of retained earnings.

Did you even read my post?

In case you never realized, that formula you just spouted out specifically deals with how a business is expected to compensate for its many investments and investors who have choaen to invest in the business. This investment can be achieved through corporate stocks or bonds.

This has nothing to do with my previous post of small business making a business decision, that comes with having more of their OWN money though lower taxes, to make their own investment through (1) improvements in efficiency (2) giving business to those who sell them the more advanced equipment that aids in making the business more efficient (3) choosing to buy a storage facility instead of renting (4) gaining opportunities to require more skilled workers as a result of maintaining and repairing a more automated efficient system ... etc.

AGAIN, as I’ve said before, the vast majority of the private sector is made up of small business and those who wish to establish their own business with (a best) a small business Bank loan - not corporate stocks and bonds. It’s that simple, it’s not complicated.

You have NOT come close to proving how a raise in corporate taxes helps to create more jobs, I’d suggest you give up now while you can.

Yes, I read your post. It was a bunch of hot air. Every single example of spending you gave would come from PRETAX income. I mean let's take one example. Robotics. You claim a company could invest in robotics if they had more after tax income due to a tax cut. But an investment in robotics would come from PRETAX profits. The tax rate would not have any bearing on the amount of PRETAX profit available to invest in the company. Yet that corporate tax rate would be a factor in the COST of those robotics. Let's say a company wants to invest one million dollars of their profits in robotics. If the tax rate is twenty percent the cost of those robotics would be $800,000 in foregone profits. But if the tax rate was forty percent the cost would only be $600,000 in foregone profits.

The fact is that every single year millions of small business owners face a decision. Do they take profits and pay taxes or do they make a CAPITAL investment in their company. The higher the tax the more likely that small business owner will make that capital investment. Cutting taxes on small business owners does not encourage them to invest in their business, it encourages them to take cash out of their business. A low tax rate does not encourage them to invest in employee raises or the creation of new jobs, it encourages them to take a trip to Europe or buy a new sports car.

It’s obvious that you don’t know a thing about small business to believe that an intelligent small business owner doesn’t know enough to separate business equity from personal pleasure income, if that individual knows anything about sound business practices.

Your “equation” was a breakdown of a corporations’ obligations to business’ investors. You would know that if you bothered to use some common sense research before using that equation in regards to small business reinvestment of their own capital.

Seriously take the time to educate yourself in the realm of small business before you make another claim, that business owners will just tap into their own business account for a vacation or a new car. Seriously you’re an idiot if you believe that.

If tap into their business account, you mean take out profit, well I got to ask. Would they be more likely to take out profit to buy that sports car if they had to pay twenty cents on the dollar in taxes instead of thirty five cents on the dollar? Lower taxes does not encourage small business owners or corporations to invest in their operations, it does the exact opposite, it encourages them to TAKE MONEY OUT of their operation.

There is a time to cut corporate taxes. When companies are investing over aggressively, stingily paying little dividends, and hold little to no cash, well it might be appropriate to lower their tax burden. But when companies are flush with cash, spending large amounts of their earnings on stock buybacks, paying fat dividends, and investing little or anything back in to their businesses and instead seeking economic rents, it is not time to cut corporate taxes.

If you really have to ask the difference between a business account and a personal one, with the understanding as to WHY the need for a small business owner to separate the two, then you don’t know a thing about small business.

When the hell have I ever asked about the difference between a business account and a personal account? As a successful business owner for more than twenty five years I believe I know the damn difference. And in my business mixing the two gets you a quick trip to jail. My question is rather simple, would a company, or an individual business owner, be more likely to take money out of their business if they had to pay twenty cents on the dollar in taxes as opposed to thirty-five cents a dollar in taxes?

 

[Toddsterpatriot]

Except, when a company pays a lower tax rate, that also means that leaves more of their own money to invest in themselves. Not every company simply walks in one day at the start with billions of dollars that they can simply afford to risk and spend on themselves. Risk means finding investors that will share in the idea of your product, but not every small company starting out is able to find that. You have to remember that the main driving force of a vibrant economy is in the creation and risk that begins with small business, with the ability of that business to be able to compete. That means as that business grows and takes on more “risk”, with more of their own money at their disposal, they can be able to afford to turn around and invest in themselves.

1) expansion to build another facility. Maybe now they can OWN another distribution center by having one built off that extra money they have at their disposal. Perhaps instead of paying a rental fee to store their product, they are now able to have one built that they now own.

2) As a company retains more of their own revenue, they can now afford to look into ways they can be more competitive. Now we are talking about advancements in technology, like robotics, that can help grow and increase their business’s efficiency in ways they could not previously afford to meet up with that higher demand while producing at a level that helps them to become more competitive. Robotics and higher technology means restructuring that shell of a facility to accommodate with the changes. Plans and newer construction, comes with the ability to afford the cost associated with attaining these higher more advanced pieces of equipment. Now obviously higher technology means you need to pay a higher wage, because your basic electrician is not going to have the necessary skill level in robotics that’s associated with troubleshooting and maintaining that particular piece of equipment, should the system go down. Higher skill levels and higher wages can also mean higher incentives, in drawing those kinds of employees to work in your plant as opposed to working at another facility.

3) Education. Maybe with more of your own money to spend you can invest in internships and reinbursement programs on help retain that higher skill level. Aircraft engineers is just one example comes to mind here, the testing of newer technology that comes out of the “research and development”.

4) That brings “research and development”, which is another cost that can benefit a business into becoming more competitive and efficient as it grows. This can be applied in several different ways depending on the scale and the kind of market you happen to be competing in.


This is just a very brief overview of how a smaller company can grow and build with more of their own money to be able to invest in themselves. You see there are several factors that come with allowing a small business to first be able to initially establish themselves in a market, then take on greater risk to invest in themselves to meet up with the demand as their business grows, while lower federal taxes will afford them the added ability to keep more of their own money to be able to expand and afford ways to be more cost efficient.

All that effort and yet a total waste of time. Every single "investment" you mentioned is done with BEFORE TAX DOLLARS. The key phrase, "as a company retains more of their revenue". You are speaking of retained earnings.

Pure unmitigated nonsense completely devoid of reality and business acumen.

Amazing.

Did you even read my post?

In case you never realized, that formula you just spouted out specifically deals with how a business is expected to compensate for its many investments and investors who have choaen to invest in the business. This investment can be achieved through corporate stocks or bonds.

This has nothing to do with my previous post of small business making a business decision, that comes with having more of their OWN money though lower taxes, to make their own investment through (1) improvements in efficiency (2) giving business to those who sell them the more advanced equipment that aids in making the business more efficient (3) choosing to buy a storage facility instead of renting (4) gaining opportunities to require more skilled workers as a result of maintaining and repairing a more automated efficient system ... etc.

AGAIN, as I’ve said before, the vast majority of the private sector is made up of small business and those who wish to establish their own business with (a best) a small business Bank loan - not corporate stocks and bonds. It’s that simple, it’s not complicated.

You have NOT come close to proving how a raise in corporate taxes helps to create more jobs, I’d suggest you give up now while you can.

Yes, I read your post. It was a bunch of hot air. Every single example of spending you gave would come from PRETAX income. I mean let's take one example. Robotics. You claim a company could invest in robotics if they had more after tax income due to a tax cut. But an investment in robotics would come from PRETAX profits. The tax rate would not have any bearing on the amount of PRETAX profit available to invest in the company. Yet that corporate tax rate would be a factor in the COST of those robotics. Let's say a company wants to invest one million dollars of their profits in robotics. If the tax rate is twenty percent the cost of those robotics would be $800,000 in foregone profits. But if the tax rate was forty percent the cost would only be $600,000 in foregone profits.

The fact is that every single year millions of small business owners face a decision. Do they take profits and pay taxes or do they make a CAPITAL investment in their company. The higher the tax the more likely that small business owner will make that capital investment. Cutting taxes on small business owners does not encourage them to invest in their business, it encourages them to take cash out of their business. A low tax rate does not encourage them to invest in employee raises or the creation of new jobs, it encourages them to take a trip to Europe or buy a new sports car.

It’s obvious that you don’t know a thing about small business to believe that an intelligent small business owner doesn’t know enough to separate business equity from personal pleasure income, if that individual knows anything about sound business practices.

Your “equation” was a breakdown of a corporations’ obligations to business’ investors. You would know that if you bothered to use some common sense research before using that equation in regards to small business reinvestment of their own capital.

Seriously take the time to educate yourself in the realm of small business before you make another claim, that business owners will just tap into their own business account for a vacation or a new car. Seriously you’re an idiot if you believe that.

If tap into their business account, you mean take out profit, well I got to ask. Would they be more likely to take out profit to buy that sports car if they had to pay twenty cents on the dollar in taxes instead of thirty five cents on the dollar? Lower taxes does not encourage small business owners or corporations to invest in their operations, it does the exact opposite, it encourages them to TAKE MONEY OUT of their operation.

There is a time to cut corporate taxes. When companies are investing over aggressively, stingily paying little dividends, and hold little to no cash, well it might be appropriate to lower their tax burden. But when companies are flush with cash, spending large amounts of their earnings on stock buybacks, paying fat dividends, and investing little or anything back in to their businesses and instead seeking economic rents, it is not time to cut corporate taxes.

Lower taxes does not encourage small business owners or corporations to invest in their operations, it does the exact opposite, it encourages them to TAKE MONEY OUT of their operation.

I'd start a small business for the purpose of making a profit and taking money out.
A business you never take money out of is a stupid business.

I want to take money out like a mother fucker!!!

If taxes are too high, I'll either invest my money in something else, or invest in a location where the
tax rate isn't moronically the highest in the 1st world.

 

[Toddsterpatriot]

When the cost of capital is low, that is when the marginal tax rate is high, businesses can justify investments with higher potential risk and greater anticipated returns.

A lower tax rate gives a greater anticipated return.

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

When the cost of capital is low, that is when the marginal tax rate is high, businesses can justify investments with higher potential risk and greater anticipated returns.

A lower tax rate gives a greater anticipated return.

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Let's assume the cost of each investment is also one million dollars. In case one, the marginal tax rate is 35%. In the second case the marginal tax rate is 20%. Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent. The obvious choice here is Case one, where the potential return is the same but the money at risk is significantly lower.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent.

If both companies implode, the loss in each case is one million.

Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

Well, if we assume the first year profit is $1 million and the taxes paid the first year are zero, because we're deducting the total investment the first year, the results are equivalent.

Now in the second year, with no more write-offs, one company is going to yield an after tax profit of $800,000 while the other yields an after tax profit of $650,000.

I know which one I'm investing in!!!

What about you?

Your scenario would not even pass an Accounting 101 test. Look at it again and see if you can tell me the problem.

The problem is your feeling that a $650,000 annual profit is better than an $800,000 annual profit.

By all means, feel free to tell me the problem.

 

[ShaklesOfBigGov]

Did you even read my post?

In case you never realized, that formula you just spouted out specifically deals with how a business is expected to compensate for its many investments and investors who have choaen to invest in the business. This investment can be achieved through corporate stocks or bonds.

This has nothing to do with my previous post of small business making a business decision, that comes with having more of their OWN money though lower taxes, to make their own investment through (1) improvements in efficiency (2) giving business to those who sell them the more advanced equipment that aids in making the business more efficient (3) choosing to buy a storage facility instead of renting (4) gaining opportunities to require more skilled workers as a result of maintaining and repairing a more automated efficient system ... etc.

AGAIN, as I’ve said before, the vast majority of the private sector is made up of small business and those who wish to establish their own business with (a best) a small business Bank loan - not corporate stocks and bonds. It’s that simple, it’s not complicated.

You have NOT come close to proving how a raise in corporate taxes helps to create more jobs, I’d suggest you give up now while you can.

Yes, I read your post. It was a bunch of hot air. Every single example of spending you gave would come from PRETAX income. I mean let's take one example. Robotics. You claim a company could invest in robotics if they had more after tax income due to a tax cut. But an investment in robotics would come from PRETAX profits. The tax rate would not have any bearing on the amount of PRETAX profit available to invest in the company. Yet that corporate tax rate would be a factor in the COST of those robotics. Let's say a company wants to invest one million dollars of their profits in robotics. If the tax rate is twenty percent the cost of those robotics would be $800,000 in foregone profits. But if the tax rate was forty percent the cost would only be $600,000 in foregone profits.

The fact is that every single year millions of small business owners face a decision. Do they take profits and pay taxes or do they make a CAPITAL investment in their company. The higher the tax the more likely that small business owner will make that capital investment. Cutting taxes on small business owners does not encourage them to invest in their business, it encourages them to take cash out of their business. A low tax rate does not encourage them to invest in employee raises or the creation of new jobs, it encourages them to take a trip to Europe or buy a new sports car.

It’s obvious that you don’t know a thing about small business to believe that an intelligent small business owner doesn’t know enough to separate business equity from personal pleasure income, if that individual knows anything about sound business practices.

Your “equation” was a breakdown of a corporations’ obligations to business’ investors. You would know that if you bothered to use some common sense research before using that equation in regards to small business reinvestment of their own capital.

Seriously take the time to educate yourself in the realm of small business before you make another claim, that business owners will just tap into their own business account for a vacation or a new car. Seriously you’re an idiot if you believe that.

If tap into their business account, you mean take out profit, well I got to ask. Would they be more likely to take out profit to buy that sports car if they had to pay twenty cents on the dollar in taxes instead of thirty five cents on the dollar? Lower taxes does not encourage small business owners or corporations to invest in their operations, it does the exact opposite, it encourages them to TAKE MONEY OUT of their operation.

There is a time to cut corporate taxes. When companies are investing over aggressively, stingily paying little dividends, and hold little to no cash, well it might be appropriate to lower their tax burden. But when companies are flush with cash, spending large amounts of their earnings on stock buybacks, paying fat dividends, and investing little or anything back in to their businesses and instead seeking economic rents, it is not time to cut corporate taxes.

If you really have to ask the difference between a business account and a personal one, with the understanding as to WHY the need for a small business owner to separate the two, then you don’t know a thing about small business.

When the hell have I ever asked about the difference between a business account and a personal account? As a successful business owner for more than twenty five years I believe I know the damn difference. And in my business mixing the two gets you a quick trip to jail. My question is rather simple, would a company, or an individual business owner, be more likely to take money out of their business if they had to pay twenty cents on the dollar in taxes as opposed to thirty-five cents a dollar in taxes?

Yeah right. I’m sure that explains why you made your initial statement by saying a small business owner will just take all that extra money and blow it on a new sports car. It’s so obvious.

If you must respond with making such a ridiculous statement regarding small business owners, having more of their own money to simply blow on themselves. Then you need to backtrack for me so I can explain to you the idiocy behind even thinking to make such a remark, with how and why an intelligent business owner does not mix personal and business accounts, it explains all I need to know about your knowledge of small business.

Progressives can’t even comprehend why, if it’s such a great benefit to businesses owners to have the government establish such a high (increasing) corporate tax rate (35 ... maybe even 40%), that other nations are not likewise seeing such a valuable asset and likewise increasing THEIR Corporate Tax rate to match ours ... or higher than ours. Obviously the choice of many nations to instead lower their nations’ corporate tax rate, is a mistake for those companies who wish to grow and benefit from creating more jobs. Right?

Move on there buddy.

 

[Toddsterpatriot]

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Let's assume the cost of each investment is also one million dollars. In case one, the marginal tax rate is 35%. In the second case the marginal tax rate is 20%. Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent. The obvious choice here is Case one, where the potential return is the same but the money at risk is significantly lower.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent.

If both companies implode, the loss in each case is one million.

Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

Well, if we assume the first year profit is $1 million and the taxes paid the first year are zero, because we're deducting the total investment the first year, the results are equivalent.

Now in the second year, with no more write-offs, one company is going to yield an after tax profit of $800,000 while the other yields an after tax profit of $650,000.

I know which one I'm investing in!!!

What about you?

Your scenario would not even pass an Accounting 101 test. Look at it again and see if you can tell me the problem.

I guess that Conoco, which paid 1% of their pretax earnings in taxes last year, must be really hampered by their burdensome 35% tax rate, and desperately need relief.

If Conoco paid $7.1 billion in taxes to foreign governments but only $1.9 billion to the US government, and $413 million to state and local governments on pretax earnings of $23 billion in 2011, what was their tax rate?

 

[sartre play]

Bottom line, it just not a good deal for the average American, they need to go back and work on it, take the time to do a bill that does less damage, & adds less to the deficit.

 

[NightFox]

Bottom line, it just not a good deal for the average American, they need to go back and work on it, take the time to do a bill that does less damage, & adds less to the deficit.

You realize that in Washington D.C. "go back and work on it" actually means "take some really bad ideas and make them worse"? The longer Congress Critters "work on it" the more the common citizenry will get looted to satisfy the wants of the special interest masters that control our boys and girls in Washington.

 

[Spare_change]

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Only if you don't understand tax planning, and the impact it has on corporate expenditures.

Only if you don't understand tax planning,

Enlighten me.
2 potential investments, each with an anticipated annual return of $1,000,000 pretax.
One has an anticipated after tax return of $800,000, the other anticipated after tax return of $650,000.
Which investment do you prefer? Why?

Let's assume the cost of each investment is also one million dollars. In case one, the marginal tax rate is 35%. In the second case the marginal tax rate is 20%. Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent. The obvious choice here is Case one, where the potential return is the same but the money at risk is significantly lower.

So, would you rather risk $650,000 for a return of one hundred percent or risk $800,000 for a return of one hundred percent? In both cases the potential return is one hundred percent.

If both companies implode, the loss in each case is one million.

Case one--the million dollar investment costs $650,000 after calculating the $350,000 in tax savings. The POTENTIAL yield is $650,000 in aftertax revenue for a return of one hundred percent. Case two--the million dollar investment costs $800,000 after calculating the $200,000 in tax savings The potential yield is $800,000 in aftertax revenue for a return of one hundred percent.

Well, if we assume the first year profit is $1 million and the taxes paid the first year are zero, because we're deducting the total investment the first year, the results are equivalent.

Now in the second year, with no more write-offs, one company is going to yield an after tax profit of $800,000 while the other yields an after tax profit of $650,000.

I know which one I'm investing in!!!

What about you?

Your scenario would not even pass an Accounting 101 test. Look at it again and see if you can tell me the problem.

I guess that Conoco, which paid 1% of their pretax earnings in taxes last year, must be really hampered by their burdensome 35% tax rate, and desperately need relief.

Kinda convenient on how progressives choose verbal sleight of hand to bolster a VERY weak argument.

You will notice that Conoco paid 1% of their PRETAX earnings --- but their tax rate was 30% of profit (corporate taxes are based on profit claimed - not pretax earnings). By shifting the denominator, the left are able to make the figures say what they WANT it to say, rather than what it actually DOES say.

 

[Reasonable]

So you are bitching about something that doesnt even matter, then?

Answer the fucking question posed on the O/P, moron......or go back to bed.

So, you agree you are bitching about absolutely nothing, according to YOUR OP?

I have a lot to bitch about. I live in a blue state and I won’t be able to deduct my state and local taxes. The idiot in Chief is “ punishing” states that didn’t vote for him. Just another example of why this thin skinned whiny little bitch is unfit to be president.

 

[TNHarley]

So you are bitching about something that doesnt even matter, then?

Answer the fucking question posed on the O/P, moron......or go back to bed.

So, you agree you are bitching about absolutely nothing, according to YOUR OP?

I have a lot to bitch about. I live in a blue state and I won’t be able to deduct my state and local taxes. The idiot in Chief is “ punishing” states that didn’t vote for him. Just another example of why this thin skinned whiny little bitch is unfit to be president.

Why should you get deductions because your state taxes the shit out of you?

 

[Reasonable]

The top one % gets 25 % of of the tax cuts and the other top 3 % get 25% of the tax cuts.
So the top 4% get 50% of the tax cuts and the Liar in Chief has the audacity to call it a “ middle class tax cut” and that he won’t benefit personally from it.

 

[Reasonable]

So you are bitching about something that doesnt even matter, then?

Answer the fucking question posed on the O/P, moron......or go back to bed.

So, you agree you are bitching about absolutely nothing, according to YOUR OP?

I have a lot to bitch about. I live in a blue state and I won’t be able to deduct my state and local taxes. The idiot in Chief is “ punishing” states that didn’t vote for him. Just another example of why this thin skinned whiny little bitch is unfit to be president.

Why should you get deductions because your state taxes the shit out of you?

We always did moron. Only blues States now can’t do that. It’s the little tax relief we can get and now wiped away by trump and the GOP.
You’re also getting screwed but I know how you love to bend over and take it up the ass for Trump.

 

[Reasonable]

If this tax plan (the senate version) goes through, THIRTEEN MILLION people will lose health care coverage....Any guesses by you right wingers on how these folks will vote in 2018 and 2020?...................LOL

The fact that 13 million will lose health care just gave the Trumpies giant erections. They love it when people suffer and even more when they cut their noses to spite their faces.

 

[TNHarley]

So you are bitching about something that doesnt even matter, then?

Answer the fucking question posed on the O/P, moron......or go back to bed.

So, you agree you are bitching about absolutely nothing, according to YOUR OP?

I have a lot to bitch about. I live in a blue state and I won’t be able to deduct my state and local taxes. The idiot in Chief is “ punishing” states that didn’t vote for him. Just another example of why this thin skinned whiny little bitch is unfit to be president.

Why should you get deductions because your state taxes the shit out of you?

We always did moron. Only blues States now can’t do that. It’s the little tax relief we can get and now wiped away by trump and the GOP.
You’re also getting screwed but I know how you love to bend over and take it up the ass for Trump.

But why should you? Seems ridiculous.
How am i getting screwed? Can you be specific?

 

[TNHarley]

If this tax plan (the senate version) goes through, THIRTEEN MILLION people will lose health care coverage....Any guesses by you right wingers on how these folks will vote in 2018 and 2020?...................LOL

The fact that 13 million will lose health care just gave the Trumpies giant erections. They love it when people suffer and even more when they cut their noses to spite their faces.

People will opt out. Nice dishonest play on words