JBvM
VIP Member
Suckers of The World United - Please Please It's Too Much Winning
Mumbo Jumbo Economics
The Trump Tax Cuts! I'm so tired of winning . Please stop Mr. President. We can't afford anymore of this winning.
"Big promises about soaring investment and wages, and also assured everyone that it would pay for itself!"
But none of that has happened."The tax cut has caused corporations to bring some money home, but they’ve used it for stock buybacks rather than to raise wages..."
- Lie because: "No money has, in fact, been brought home."Let me explain each point in turn.
First, when people say that U.S. corporations have “brought money home” they’re referring to dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of those subsidiaries to the home companies; these transactions also showed up as a reduction in the measured stake of the parents in the subsidiaries, i.e., as negative direct investment
First, when people say that U.S. corporations have “brought money home” they’re referring to dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of those subsidiaries to the home companies; these transactions also showed up as a reduction in the measured stake of the parents in the subsidiaries, i.e., as negative direct investment
(Figure 1 ) - Bureau of Economic Analysis
But these transactions are simply rearrangements of companies’ books for tax purposes; they don’t necessarily correspond to anything real. Suppose that Multinational Megacorp USA decides to have its subsidiary, Multinational Mega Ireland, transfer some assets to the home company. This will produce the kind of simultaneous and opposite movement in dividends and direct investment you see in Figure 1. But the company’s overall balance sheet – which always included the assets of MM Ireland – hasn’t changed at all. No real resources have been transferred; MM USA has neither gained nor lost the ability to invest here.
Bu what caught my attention was this:
So the tax cut induced some accounting maneuvers, but did nothing to promote capital flows to America.
The tax cut did, however, have one important international effect: We’re now paying more money to foreigners.
The tax cut did, however, have one important international effect: We’re now paying more money to foreigners.
I started asking myself: In the wider world outside of political and ideological bubbles in the USA, are we being laughed at as much as Trump himself is being laughed at? I mean he's used to being a joke.
And will we become a second rate economic and financial power because of Trump? Will we follow Britian's BREXIT insanity, as we know Trump thought the BREXIT was a great thing
* https://www.nytimes.com/2019/01/01/opinion/the-trump-tax-cut-even-worse-than-youve-heard.html