Tax Cuts for Rich Unlikely to Spur Growth

[boedicca]

The OP is inane.

What happens with money that is saved by Rich People? They don't stick it in a mattress or bury it in a coffee can in the backyard like some ACORN staffer. They money gets invested, hopefully in endeavors that create jobs

That almost never happens in the US anymore.

"Investments" means non productive second hand stocks, US bonds, inflating commodity bubbles.....

No jobs get created except within the trading floors of the financial icons.

You don't understand investments. The fact that their is a secondary market for stocks enables companies to invest in their own businesses. A high market cap enables a company to raise additional equity or secure favorable debt terms for expansion.

If you don't want them investing in U.S. bonds, cut government spending and the voracious appetite of the Feds to hoover up all available capital (you wont' get any argument from the fiscally responsible people on this one).

Commodity markets also fuel development of commodities. The fact that a farmer can sell corn futures provides the capital to raise the corn in the first place. Yes, there is speculation, but that is the fringe of the market. The main aspect of commodities markets is to lock in prices for customers and provide capital for suppliers to develop the commodity.

 

[boedicca]

The OP is inane.

What happens with money that is saved by Rich People? They don't stick it in a mattress or bury it in a coffee can in the backyard like some ACORN staffer. They money gets invested, hopefully in endeavors that create jobs (as what would have happened if we didn't have such regulatory and tax uncertainty and increases).

On a side note, it's interesting how Obama has recently upleveled the definition of Rich to be those who make over $1M per year and who will be "on average" $100,000 if their tax cuts are extended. So, how does this relate to The Rich who are making only $200K?

What is Rich anyway?

Over $200k in this case. That's from Moody's.

Tax cuts along with spending cuts can bring increased investment over the long-term, but it does little to help us now. If the goal is to spur the economy now, it doesn't necessarily do much good. But as Moody's discovered, tax cuts to that cohort doesn't do much now.

Please provide the link to Moody's which shows this definition in context.

NOTHING is going to have a magic bullet effect. We have long term structural problems that have built up over decades. Arguing against tax cuts because they can't flip GDP growth from 1.6% to over 6% overnight is specious. The real purpose is to stabilize a climate favorable to investment, GDP growth, and job creation. After the past 19 months of increasing regulation, expanding the government's share of GDP by 25%, and increasing taxes, we've seen enough to know that Obamanomics is an EPIC Fail. The only HOPE we have is to CHANGE course to prudent and responsible spending and tax policies that limit government and free the private sector.

 

[loosecannon]

The OP is inane.

What happens with money that is saved by Rich People? They don't stick it in a mattress or bury it in a coffee can in the backyard like some ACORN staffer. They money gets invested, hopefully in endeavors that create jobs

That almost never happens in the US anymore.

"Investments" means non productive second hand stocks, US bonds, inflating commodity bubbles.....

No jobs get created except within the trading floors of the financial icons.

You don't understand investments. The fact that their is a secondary market for stocks enables companies to invest in their own businesses. A high market cap enables a company to raise additional equity or secure favorable debt terms for expansion.

If you don't want them investing in U.S. bonds, cut government spending and the voracious appetite of the Feds to hoover up all available capital (you wont' get any argument from the fiscally responsible people on this one).

Commodity markets also fuel development of commodities. The fact that a farmer can sell corn futures provides the capital to raise the corn in the first place. Yes, there is speculation, but that is the fringe of the market. The main aspect of commodities markets is to lock in prices for customers and provide capital for suppliers to develop the commodity.

and you don't understand what second hand stock is.

Once an initial offering is initiated, in say 1911 in the case of Ford, those stocks no longer do anything to stimulate new investment in anything.

 

[loosecannon]

Commodity markets also fuel development of commodities. The fact that a farmer can sell corn futures provides the capital to raise the corn in the first place. Yes, there is speculation, but that is the fringe of the market. The main aspect of commodities markets is to lock in prices for customers and provide capital for suppliers to develop the commodity.

that is debatable. Commodities originated a a mechanism that allowed farmers to bypass monopolistic food distributors and processors so farmers could get fair prices for their crops.

But it evolved into something very other, as in an even deeper restriction on a farmers options and bargaining power.

Nowadays the (food and oil) commodities markets are often far more about destructive speculation than any useful purpose.

 

[loosecannon]

NOTHING is going to have a magic bullet effect. We have long term structural problems that have built up over decades. Arguing against tax cuts because they can't flip GDP growth from 1.6% to over 6% overnight is specious. The real purpose is to stabilize a climate favorable to investment, GDP growth, and job creation. After the past 19 months of increasing regulation, expanding the government's share of GDP by 25%, and increasing taxes, we've seen enough to know that Obamanomics is an EPIC Fail. The only HOPE we have is to CHANGE course to prudent and responsible spending and tax policies that limit government and free the private sector.

who is gonna invest in growth industries in the USA?

Very few people given current circumstances.

Tax cuts will do next to nothing to help.

Our best hope is to stimulate small business growth, but never in my life have the prospects for new small businesses been more bleak.

 

[Toro]

Please provide the link to Moody's which shows this definition in context.

The definition is in the article. It is anyone who makes over $200,000.

 

[Wry Catcher]

I love how dip shiits just totally ignore the FACT that the top 10% of earners in this country pay 90% of the taxes. How about taxing the lower half of earners until things are at least equitable? As I've said a million times, no one should be making a profit off of their tax returns, but many do. End that little entitlement.

So what if the top 10% pay 90% of the taxes (I've never seen proof of this btw); a little arithmetic reveals an investment banker whose job requires moving around the assets of others may earn $10,000,000 a year. He pays the same % tax on the first $100,000 as does as Joe the Plumber who earns a total of $100,000 a year. On the second $100,000 he pays a somewhat larger %, as he does on the the third, fourth, etc, etc up to $10,000,000. His/her total tax liability is 36% of $10,000,000 less deductions.

Do you want to live in a nation where 90% of the people are poor, or simply getting by, and 10% control 99% of the wealth? Some on this message seem to think that's okay, the same ones who cry about liberty and freedom. Seems to me being free to toil ten hours a day, six days a week (as many Americans, children too, did before unions) is not freedom.

The progressive income tax is good, a 'fair' tax isn't; 'fair' is simply a way to use a word to convince the masses to support something which sounds good but is in reality in their worst interests.

How someone not stupid can support this type of crap amazes me, yet many do. Ideology and dogma are powerful influences and have a not pretty affect on common sense.

 

[johnrocks]

It's THEIR money so they should have the right to it but it can be used to spur growth, it is savings for wealth accumulation, it is used to buy more exotic cars,furs, homes,yachts that requires carpenters,plumbers,electricians,clerks and so much more to create these things. The economy isn't just top-down or bottom up ; supply or demand....it's both and until demand comes back, a stagnant economy will remain.

 

[boedicca]

That almost never happens in the US anymore.

"Investments" means non productive second hand stocks, US bonds, inflating commodity bubbles.....

No jobs get created except within the trading floors of the financial icons.

You don't understand investments. The fact that their is a secondary market for stocks enables companies to invest in their own businesses. A high market cap enables a company to raise additional equity or secure favorable debt terms for expansion.

If you don't want them investing in U.S. bonds, cut government spending and the voracious appetite of the Feds to hoover up all available capital (you wont' get any argument from the fiscally responsible people on this one).

Commodity markets also fuel development of commodities. The fact that a farmer can sell corn futures provides the capital to raise the corn in the first place. Yes, there is speculation, but that is the fringe of the market. The main aspect of commodities markets is to lock in prices for customers and provide capital for suppliers to develop the commodity.

and you don't understand what second hand stock is.

Once an initial offering is initiated, in say 1911 in the case of Ford, those stocks no longer do anything to stimulate new investment in anything.

You clearly don't understand. Secondary stock sales affect the overall market cap of Ford. The higher that market cap, the stronger their ability to raise additional equity for lower dilution, or negotiate better terms for debt financing.

 

[rdean]

It's THEIR money so they should have the right to it but it can be used to spur growth, it is savings for wealth accumulation, it is used to buy more exotic cars,furs, homes,yachts that requires carpenters,plumbers,electricians,clerks and so much more to create these things. The economy isn't just top-down or bottom up ; supply or demand....it's both and until demand comes back, a stagnant economy will remain.

Classic trickle down.

They already got a 2.4 trillion dollar tax cut. How'd that work out?

 

[Wicked Jester]

The bottom line in all of this is that the economy will not improve, businesses will not expand until confidence is restored. Face it, there is no confidence in the business community, large and small, that this president is capable. That this president has a clue. He's fully proven that he is not capable, and doesn't have a clue.

 

[Toro]

You clearly don't understand. Secondary stock sales affect the overall market cap of Ford. The higher that market cap, the stronger their ability to raise additional equity for lower dilution, or negotiate better terms for debt financing.

Boed

A secondary offering shouldn't affect the market capitalization of a company, unless it affects how easily the stock trades. If the government owns 80% of Ford and wants to sell another 20% to the public, the only thing it changes is who owns what. Market capitalization is determined by total shares outstanding regardless of ownership. There can be a small affect if the secondary affects tradeability, but Ford trades 60 million shares a day, so I don't think that's an issue.

 

[loosecannon]

You don't understand investments. The fact that their is a secondary market for stocks enables companies to invest in their own businesses. A high market cap enables a company to raise additional equity or secure favorable debt terms for expansion.

If you don't want them investing in U.S. bonds, cut government spending and the voracious appetite of the Feds to hoover up all available capital (you wont' get any argument from the fiscally responsible people on this one).

Commodity markets also fuel development of commodities. The fact that a farmer can sell corn futures provides the capital to raise the corn in the first place. Yes, there is speculation, but that is the fringe of the market. The main aspect of commodities markets is to lock in prices for customers and provide capital for suppliers to develop the commodity.

and you don't understand what second hand stock is.

Once an initial offering is initiated, in say 1911 in the case of Ford, those stocks no longer do anything to stimulate new investment in anything.

You clearly don't understand. Secondary stock sales affect the overall market cap of Ford. The higher that market cap, the stronger their ability to raise additional equity for lower dilution, or negotiate better terms for debt financing.

But at what cost? I mean if Ford posted an initial offering of 12,000,000 shares, split the stock 6 times and never created new stocks, and today's share price was 400 times the initial cost of that stock that is a hellava huge investment of otherwise completely unproductive investment dollars just to strengthen their position in case they need to recapitalize in the future.

If you wanna argue this topic then do the math, post your whole calculation and then explain your pov.

Because the majority of the money "invested" in the stock market is doing almost nothing to spur new investment in startups or new industry here in the USA.

That should be self evident just by looking at our recession......

it isn't working! Despite $15 trillion in stock shares dormantly sucking up capital.