Tax cuts vs Insurance subsidies

Discussion in 'Politics' started by Slade3200, Oct 17, 2017.

  1. sartre play
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    sartre play Gold Member

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    Well if there required to not carry over profits why cant they give there CEOs & investors more money, spent it redecorating there offices, buying jets for travel, "business meetings in Belize, all right offs before paying taxes. its what they do now???
     
  2. Mr.Blonde
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    Mr.Blonde VIP Member

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    Why will tax cuts work over insurance and really any subsidies for that matter.

    Tax cuts allow the business to take THEIR OWN MONEY and use it how they see fit. The money will be put back in the economy some how in a potentially profitable way.

    Subsidies can't work because of a very simple fact. Someone who is doing something profitable doesn't need to be subsidized. Subsidies promote failure thus wasting resources.

    Now the insurance subsidies were horrible failures quickly because only the sick want the health insurance being offered.

    I remember being in my early 20 some. If you asked me to buy health insurance over booze and cigarettes I wouldn't especially if it was expensive. If Obamacare had allowed insurance companies to offer different cheap products it would have still failed because it was allowing sick people to get "insurance", but it would have lasted longer.
     
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  3. bendog
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    bendog Gold Member

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    Tax cuts to the 1% are dogma to the gop (and Kosh accuses you of dogma, LOL). No one is making a rational argument that a supply side tax cut will create jobs. Essentially the arguments for a cut come down to "the gummit's takin munny." Well yes, all taxes are unfair, and who likes playing for Trump to play golf. But if we got rid of all taxes, the deficits would be even worse because the gop is additcted to spending as much as the dems. But there is no economic rational that cutting taxes on the 1% would benefit the economy as a whole.

    The gop does argue that middle class tax cut will create demand and grow the economy so as to negate any deficit effect. I don't think anyone really believes it would actually pay for itself, but they make the argument. However, even if the deficits went up, the economy might grow faster if both deficits and gnp were measured as a % of gnp. And the gop is admitting they cannot cut spending, so ... it's grow or die.

    Trump's argument on subsides is basically the subsidy paid to an insurance company for reduced premiums does not correlate to an equal value in treatment provided to people. Imo that's a fair criticism, but there's no way the Americans who have employer sponsored plans will give them up for single payer or to give some uninsured person healthcare. So, getting rid of all gummit aid to biz to provide HC insurance is a non-starter. And Trump so far has not acknowledged the reality.
     
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  4. Winston
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    Winston VIP Member

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    I will help you out.

    First, the insurance company subsidies. They were directed at low income beneficiaries. Their purpose was to cover a portion of the co-pays and deductible within the Silver plans. Yes, the insurance companies turned a profit and they make more profit on a Silver plan than a Bronze plan just like a car dealer makes more profit on a Cadillac rather than a Chevrolet. An example, a Silver plan with a three thousand dollar deductible and a thirty dollar co-pay for doctor visits, with the subsidy the plan's deductible drops to a thousand dollars and the co-pay goes to ten.

    With that example it is pretty easy to see who benefits from the subsidy. The low income beneficiary has an additional two thousand dollars in disposable income in the event of a health care expenditure. He also saves twenty dollars with every office visit. It is rather ironic that the very Republicans who have complained about people not being able to use their insurance due to high deductibles and expensive co-pays are now supporting the elimination of subsidies that reduce both for low income beneficiaries. Cognitive dissonance comes to mind.

    Now, to corporate tax cuts. In the 1950's corporate taxes accounted for one out of every four dollars of federal revenue. Today, it does not even amount to one out of every ten. The shortfall has been made up by increasing Social Security taxes and the results could not be more apparent nor more easily predictable. The rich get richer and the poor get poorer. Corporate income taxes are progressive, Social Security taxes are regressive. But the benefits of a corporate tax cut overwhelmingly go to the wealthiest Americans, mostly because increased corporate earnings translates into higher stock prices and the wealthy own the majority of equities. More importantly, decreasing corporate taxes have never, ever resulted in a boost to the economy. They result in increased income inequality and are a drag on the economy.

    The reason is quite simple. Back to the insurance subsidies. The two thousand dollars saved in our example is SPENT by the beneficiaries. The multiplier effect of that spending is greater than one. But the savings derived by corporate tax cuts are funneled into higher equity prices which equates to additional SAVINGS and therefore the multiplier effect is less than one. It is called the Paradox of Thrift and it is fundamental and a widely accepted Economic concept. So a dollar spent on insurance subsidies results in more than a dollar added to GDP while a dollar spent on corporate tax cuts results in less than a dollar added to GDP. It is simple math.
     
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  5. Slade3200
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    Slade3200 Gold Member

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    My OP expressed no concern about a tax cut nor concern about wealthy insurance companies losing welfare. what made you think that? Do you not understand my question?
     
  6. Dragonlady
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    Dragonlady Designing Woman

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    Bullshit. The offshore money will not result in pay raises to employees. That money will be paid out to shareholders as dividends.

    Corporations are already awash in cash leading to all of the mergers and acquisitions which are ongoing. More cash will lead to more corporate consolidation and job cuts, not growth or pay raises.
     
  7. Markle
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    Markle Gold Member Gold Supporting Member Supporting Member

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    As you know, the two are totally separate issues.

    You also neglected to mention that the subsidies to insurance companies are unconstitutional. Why is that?
     
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  8. Markle
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    Markle Gold Member Gold Supporting Member Supporting Member

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    How is it any of your business what a business does with THEIR money if they chose to move the money they EARNED overseas to our country?

    If you're awash in cash, what business is it of mine and what right do I have to tell you how to spend that money?

    Employees merit pay raises when they increase their value to the employer, not because the company has more money. If that's the way it works, then I'm sure you'll agree that when the market is slower, on in a recession, the employer can simply cut the employees wages and hours in order to make ends meet and the worker is happy to help out! Right?

    Do you understand that there are two entirely different personalities between a business owner and an employee?
     
  9. Winston
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    Winston VIP Member

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    Oh, you mean unconstitutional like disaster relief.
     
  10. Winston
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    Winston VIP Member

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    Employees merit pay raises when they increase their value to the employer, not because the company has more money.

    Question. If an employee generates $100,000 in profit for a corporation paying a corporate tax rate of 39.1% resulting in $60,900 in after tax profit does his value not go up when the tax rate is cut to 20.0% resulting in $80,000 in after tax profit from his labor?
     

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