Still looking for those examples where higher business taxes caused an immediate spike in investment?
I don't understand why it is not intuitive. Higher taxes subsidize risk. You want companies to take more risk, increase their tax rate. You want them to avoid risk, lower those taxes. Taxes, for business, is the cost of taking money off the table. History bears that out,
- In 2011, capital spending by all U.S. nonfarm businesses totaled $1,243.0 billion. Capital investments increased for the next four years, 14.5 percent in 2012, 4.8 percent in 2013, 7.1 percent in 2014, and 2.8 percent in 2015. In 2016, capital spending decreased 4.1 percent but then increased 6.6 percent in 2017. Companies with no employees were excluded from the 2018 sample, therefore, the change in total capital spending cannot be determined between 2018 and 2019. Capital investment decreased 11.0 percent from 2019 to 2020. At the end of the 10-year period from 2011 to 2020, total capital expenditures totaled $1,706.4 billion, an increase of $463.5 billion, (37.3 percent) from 2011 spending.
Data in this report are from the U.S. Census Bureau's 2011 to 2020 Annual Capital Expenditures Survey (ACES).
www.census.gov
Notice, almost all the growth in capital investment came when corporate tax rates were higher. Only the first year produced any gains and all that can be attributed to the ability to deduct all of some capital investments in the first year that once required amortization over several years. It had nothing to do with the rate.
What the tax cut did do was vastly increase rent-seeking. Your continued inability to understand basic finance, the WACC is inversely related to the marginal tax rates, exhibits a stunningly naive and simplistic understanding of Economics. Let alone human behavior.
Corporations are more concerned about the return of their money than the return on their money. You act as if they evaluate capital investment opportunities without regarding risk.
But enough of the sidebar. Return to the subject at hand. I mean you are the only poster that actually demonstrated a possible counter to the inflationary pressures from tax-cuts, tariffs, and mass deportations. I credited you for that, housing costs could decline. But certainly by very little.
For instance, Dad sold both the family farms to an immigrant owned business, well north of seven figures on both. Not only is Mom set, but me and mine are good to go for a couple generations.
Grandmother lived in a house, built in the early 19th century, alone for decades after Grandfather passed away. The house was part of one of those farms and last I heard, 14 Mexicans are living in it. Deport 14 Mexicans, get one house, and 80 acres coming out of field crop production and going to pasture.
nypost.com
