GOP tax plan could raise GDP by 5% wages 7%

[Econ4Every1]

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

Explain to me, what exactly would they "bring back"? US dollars?

US corporations hold about $2 trillion in earnings outside the US.

Ok, but those earnings aren't in US dollars, correct?

 

[Toddsterpatriot]

Report: GOP Tax Plan Could Raise GDP By 5%, Wages 7%
President Donald Trump’s tax reform framework could raise GDP by as much as 5 percent and wages by as much as 7 percent, according to a new study from Boston University economists.
------------------------------------------------------------------------------

Well we shall see, globalist like to throw road black in the way of Trump gotta make him look bad.

Well, let's see?

If we give tax breaks to the wealthy and corporations wil they:

1. Invest in capital improvements, more jobs and higher pay
2. Just keep the money

Who ever got rich by just keeping the money? You think Warren Buffet became a billionaire by hording his money in a 2% interest savings account at his bank? When I see people make comments like that it's an automatic tell tale sign they have no clue about how an economy works. Furthermore, if they did as you say, how is that any business of yours? It's their money, not yours. If they want to install a 24k gold bathtub and bathe in hundred dollar bills that's really none of your concern.

Over $2 trillion is currently being hoarded
What make you think giving them more would be invested in jobs and increased salaries?

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

How does cutting taxes encourage them to bring it back? They pay ZERO now, they pay ZERO if taxes are cut. If they can pay ZERO why would they choose to pay ANYTHING?

How does cutting taxes encourage them to bring it back?

How does our highest rate in the developed world encourage them to bring it back?

They pay ZERO now, they pay ZERO if taxes are cut.

We should move to a territorial system.

If they can pay ZERO why would they choose to pay ANYTHING?

They might like to use that money in the US.

 

[Toddsterpatriot]

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

Explain to me, what exactly would they "bring back"? US dollars?

US corporations hold about $2 trillion in earnings outside the US.

Ok, but those earnings aren't in US dollars, correct?

Not initially. Usually.

 

[Econ4Every1]

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

Explain to me, what exactly would they "bring back"? US dollars?

US corporations hold about $2 trillion in earnings outside the US.

Ok, but those earnings aren't in US dollars, correct?

Not initially. Usually.

So how can you "bring something back" that was never here to begin with?

 

[Toddsterpatriot]

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

Explain to me, what exactly would they "bring back"? US dollars?

US corporations hold about $2 trillion in earnings outside the US.

Ok, but those earnings aren't in US dollars, correct?

Not initially. Usually.

So how can you "bring something back" that was never here to begin with?

There is a wonderous thing called the FX market.
It allows you to exchange the Euros and British Pounds, among other currencies, that your corporation has earned, for US Dollars.

 

[edthecynic]

Report: GOP Tax Plan Could Raise GDP By 5%, Wages 7%
President Donald Trump’s tax reform framework could raise GDP by as much as 5 percent and wages by as much as 7 percent, according to a new study from Boston University economists.
------------------------------------------------------------------------------

Well we shall see, globalist like to throw road black in the way of Trump gotta make him look bad.

Flake News!

Corporations are showing record profits at the current 35%, and so far they have not raised wages for wage earners 7%.
How many tines do you pinheads have to be lied to before you stop swallowing the BS?????

View attachment 156025Averaging 2.4% a year over the last 5 years.......even with Obama's crappy growth.

So you admit it was even less than half the 7% the Trump shills projected while profits soared.
The corresponding chart you failed to post:

 

[Toddsterpatriot]

Report: GOP Tax Plan Could Raise GDP By 5%, Wages 7%
President Donald Trump’s tax reform framework could raise GDP by as much as 5 percent and wages by as much as 7 percent, according to a new study from Boston University economists.
------------------------------------------------------------------------------

Well we shall see, globalist like to throw road black in the way of Trump gotta make him look bad.

Flake News!

Corporations are showing record profits at the current 35%, and so far they have not raised wages for wage earners 7%.
How many tines do you pinheads have to be lied to before you stop swallowing the BS?????

View attachment 156025Averaging 2.4% a year over the last 5 years.......even with Obama's crappy growth.

So you admit it was even less than half the 7% the Trump shills projected while profits soared.
The corresponding chart you failed to post:

Yes, I admit Obama's weak recovery was weak.

 

[edthecynic]

Report: GOP Tax Plan Could Raise GDP By 5%, Wages 7%
President Donald Trump’s tax reform framework could raise GDP by as much as 5 percent and wages by as much as 7 percent, according to a new study from Boston University economists.
------------------------------------------------------------------------------

Well we shall see, globalist like to throw road black in the way of Trump gotta make him look bad.

Flake News!

Corporations are showing record profits at the current 35%, and so far they have not raised wages for wage earners 7%.
How many tines do you pinheads have to be lied to before you stop swallowing the BS?????

View attachment 156025Averaging 2.4% a year over the last 5 years.......even with Obama's crappy growth.

So you admit it was even less than half the 7% the Trump shills projected while profits soared.
The corresponding chart you failed to post:

Yes, I admit Obama's weak recovery was weak.

and yet strong enough that DoTard Trump is trying to take credit for it!!!!!!

 

[JakeStarkey]

The twats of the Far Right want credit where it is not due.

And they know that the proposed tax reform will help the 1% and hurt the middle and working classes.

 

[Winston]

Well, let's see?

If we give tax breaks to the wealthy and corporations wil they:

1. Invest in capital improvements, more jobs and higher pay
2. Just keep the money

Who ever got rich by just keeping the money? You think Warren Buffet became a billionaire by hording his money in a 2% interest savings account at his bank? When I see people make comments like that it's an automatic tell tale sign they have no clue about how an economy works. Furthermore, if they did as you say, how is that any business of yours? It's their money, not yours. If they want to install a 24k gold bathtub and bathe in hundred dollar bills that's really none of your concern.

Over $2 trillion is currently being hoarded
What make you think giving them more would be invested in jobs and increased salaries?

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

How does cutting taxes encourage them to bring it back? They pay ZERO now, they pay ZERO if taxes are cut. If they can pay ZERO why would they choose to pay ANYTHING?

How does cutting taxes encourage them to bring it back?

How does our highest rate in the developed world encourage them to bring it back?

They pay ZERO now, they pay ZERO if taxes are cut.

We should move to a territorial system.

If they can pay ZERO why would they choose to pay ANYTHING?

They might like to use that money in the US.

Big surprise. Your answer was not even close to adequate. They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from? And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

Now I wondered how the hell those economists from Boston University could come up with such a figure considering what I know about the history of previous corporate tax cuts. So, unlike probably anyone else here, I found the study.

https://kotlikoff.net/sites/default/files/Simulating the Unified Framework Tax Reform Plan_0.pdf

Now, they got that growth in GDP by plugging the numbers into the Global Gaidar Model. I laughed out loud. The irony of touting a study based on a model designed by RUSSIAN economists can't be overlooked. But, there are some things we can take from the study. For instance,

Indeed, cuts in personal income tax rates in the GGM produce deficits, crowd out capital and lower long-run economic welfare.

Guess that tax cut for the wealthy should be pulled off the table. And then this,

This said, we share the TPC’s concern that the UF plan could disproportionately benefit the top 1 percent. This concern about fairness as well as the country’s massive long-term fiscal gap suggests modifying the UF plan to include, for example, the elimination of Social Security’s FICA tax ceiling, a tax on lifetime inheritances and gifts received above $5 million, or a progressive cash flow tax on consumption above $100,000

And there goes the elimination of the estate tax. Plus, I got to tell you, I love the idea of eliminating the ceiling on FICA taxes and implementing a cash flow tax on consumption above a hundred grand.

But the biggest problem with the study is the numbers plugged in. You know the saying, garbage in, garbage out. They plugged in a marginal EFFECTIVE tax rate of 34.6% and a new rate of 18.6%. The problem, the marginal EFFECTIVE corporate tax rate is no where close to 34.6%. Here is a study that pegs the EFFECTIVE corporate tax rate on new investments at 24%.

Actual U.S. Corporate Tax Rates Are in Line with Comparable Countries

So, in summary, the study in the OP assumes an extraordinary high effective marginal corporate tax rate that is not based on reality and ignores the additional components of Trump's tax plan like the personal income tax cut and the elimination of the estate tax. In fact, the study advocates maintaining the estate tax and a significant increase on taxes of the wealthy by eliminating the cap on FICA taxes.

 

[Winston]

The twats of the Far Right want credit where it is not due.

And they know that the proposed tax reform will help the 1% and hurt the middle and working classes.

The study touted in the OP confirms that the majority of the benefit goes to the top one percent.

 

[Toddsterpatriot]

Who ever got rich by just keeping the money? You think Warren Buffet became a billionaire by hording his money in a 2% interest savings account at his bank? When I see people make comments like that it's an automatic tell tale sign they have no clue about how an economy works. Furthermore, if they did as you say, how is that any business of yours? It's their money, not yours. If they want to install a 24k gold bathtub and bathe in hundred dollar bills that's really none of your concern.

Over $2 trillion is currently being hoarded
What make you think giving them more would be invested in jobs and increased salaries?

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

How does cutting taxes encourage them to bring it back? They pay ZERO now, they pay ZERO if taxes are cut. If they can pay ZERO why would they choose to pay ANYTHING?

How does cutting taxes encourage them to bring it back?

How does our highest rate in the developed world encourage them to bring it back?

They pay ZERO now, they pay ZERO if taxes are cut.

We should move to a territorial system.

If they can pay ZERO why would they choose to pay ANYTHING?

They might like to use that money in the US.

Big surprise. Your answer was not even close to adequate. They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from? And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

Now I wondered how the hell those economists from Boston University could come up with such a figure considering what I know about the history of previous corporate tax cuts. So, unlike probably anyone else here, I found the study.

https://kotlikoff.net/sites/default/files/Simulating the Unified Framework Tax Reform Plan_0.pdf

Now, they got that growth in GDP by plugging the numbers into the Global Gaidar Model. I laughed out loud. The irony of touting a study based on a model designed by RUSSIAN economists can't be overlooked. But, there are some things we can take from the study. For instance,

Indeed, cuts in personal income tax rates in the GGM produce deficits, crowd out capital and lower long-run economic welfare.

Guess that tax cut for the wealthy should be pulled off the table. And then this,

This said, we share the TPC’s concern that the UF plan could disproportionately benefit the top 1 percent. This concern about fairness as well as the country’s massive long-term fiscal gap suggests modifying the UF plan to include, for example, the elimination of Social Security’s FICA tax ceiling, a tax on lifetime inheritances and gifts received above $5 million, or a progressive cash flow tax on consumption above $100,000

And there goes the elimination of the estate tax. Plus, I got to tell you, I love the idea of eliminating the ceiling on FICA taxes and implementing a cash flow tax on consumption above a hundred grand.

But the biggest problem with the study is the numbers plugged in. You know the saying, garbage in, garbage out. They plugged in a marginal EFFECTIVE tax rate of 34.6% and a new rate of 18.6%. The problem, the marginal EFFECTIVE corporate tax rate is no where close to 34.6%. Here is a study that pegs the EFFECTIVE corporate tax rate on new investments at 24%.

Actual U.S. Corporate Tax Rates Are in Line with Comparable Countries

So, in summary, the study in the OP assumes an extraordinary high effective marginal corporate tax rate that is not based on reality and ignores the additional components of Trump's tax plan like the personal income tax cut and the elimination of the estate tax. In fact, the study advocates maintaining the estate tax and a significant increase on taxes of the wealthy by eliminating the cap on FICA taxes.

They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from?

From companies that want to buy more equipment here, or pay more dividends here, or buyback more stock here, or hire more employees here. Why do you want them to keep their earnings offshore?

And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

So what?

 

[Winston]

Over $2 trillion is currently being hoarded
What make you think giving them more would be invested in jobs and increased salaries?

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

How does cutting taxes encourage them to bring it back? They pay ZERO now, they pay ZERO if taxes are cut. If they can pay ZERO why would they choose to pay ANYTHING?

How does cutting taxes encourage them to bring it back?

How does our highest rate in the developed world encourage them to bring it back?

They pay ZERO now, they pay ZERO if taxes are cut.

We should move to a territorial system.

If they can pay ZERO why would they choose to pay ANYTHING?

They might like to use that money in the US.

Big surprise. Your answer was not even close to adequate. They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from? And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

Now I wondered how the hell those economists from Boston University could come up with such a figure considering what I know about the history of previous corporate tax cuts. So, unlike probably anyone else here, I found the study.

https://kotlikoff.net/sites/default/files/Simulating the Unified Framework Tax Reform Plan_0.pdf

Now, they got that growth in GDP by plugging the numbers into the Global Gaidar Model. I laughed out loud. The irony of touting a study based on a model designed by RUSSIAN economists can't be overlooked. But, there are some things we can take from the study. For instance,

Indeed, cuts in personal income tax rates in the GGM produce deficits, crowd out capital and lower long-run economic welfare.

Guess that tax cut for the wealthy should be pulled off the table. And then this,

This said, we share the TPC’s concern that the UF plan could disproportionately benefit the top 1 percent. This concern about fairness as well as the country’s massive long-term fiscal gap suggests modifying the UF plan to include, for example, the elimination of Social Security’s FICA tax ceiling, a tax on lifetime inheritances and gifts received above $5 million, or a progressive cash flow tax on consumption above $100,000

And there goes the elimination of the estate tax. Plus, I got to tell you, I love the idea of eliminating the ceiling on FICA taxes and implementing a cash flow tax on consumption above a hundred grand.

But the biggest problem with the study is the numbers plugged in. You know the saying, garbage in, garbage out. They plugged in a marginal EFFECTIVE tax rate of 34.6% and a new rate of 18.6%. The problem, the marginal EFFECTIVE corporate tax rate is no where close to 34.6%. Here is a study that pegs the EFFECTIVE corporate tax rate on new investments at 24%.

Actual U.S. Corporate Tax Rates Are in Line with Comparable Countries

So, in summary, the study in the OP assumes an extraordinary high effective marginal corporate tax rate that is not based on reality and ignores the additional components of Trump's tax plan like the personal income tax cut and the elimination of the estate tax. In fact, the study advocates maintaining the estate tax and a significant increase on taxes of the wealthy by eliminating the cap on FICA taxes.

They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from?

From companies that want to buy more equipment here, or pay more dividends here, or buyback more stock here, or hire more employees here. Why do you want them to keep their earnings offshore?

And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

So what?

So what? Seriously? Well if companies are more than willingly to invest in the country with the highest corporate tax rate it would appear that tax rates don't have jack shit to do with rather a company chooses to invest. And it don't. A company chooses to invest where there is sufficient demand for the product or service they provide, tax rates be damned. No company is going to buy more equipment simply because the tax rate is cut. A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders. And stock buybacks are not conducive to a growing economy. Hell, prior to Ronald Reagan stock buybacks were ILLEGAL as they were considered manipulating of stock prices. Truth is, stock buybacks are just another form of rent seeking that is currently a huge drag on the economy.

 

[Toddsterpatriot]

Over $2 trillion is currently being hoarded

Hike taxes more, that'll encourage companies to bring back money.

How does cutting taxes encourage them to bring it back? They pay ZERO now, they pay ZERO if taxes are cut. If they can pay ZERO why would they choose to pay ANYTHING?

How does cutting taxes encourage them to bring it back?

How does our highest rate in the developed world encourage them to bring it back?

They pay ZERO now, they pay ZERO if taxes are cut.

We should move to a territorial system.

If they can pay ZERO why would they choose to pay ANYTHING?

They might like to use that money in the US.

Big surprise. Your answer was not even close to adequate. They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from? And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

Now I wondered how the hell those economists from Boston University could come up with such a figure considering what I know about the history of previous corporate tax cuts. So, unlike probably anyone else here, I found the study.

https://kotlikoff.net/sites/default/files/Simulating the Unified Framework Tax Reform Plan_0.pdf

Now, they got that growth in GDP by plugging the numbers into the Global Gaidar Model. I laughed out loud. The irony of touting a study based on a model designed by RUSSIAN economists can't be overlooked. But, there are some things we can take from the study. For instance,

Indeed, cuts in personal income tax rates in the GGM produce deficits, crowd out capital and lower long-run economic welfare.

Guess that tax cut for the wealthy should be pulled off the table. And then this,

This said, we share the TPC’s concern that the UF plan could disproportionately benefit the top 1 percent. This concern about fairness as well as the country’s massive long-term fiscal gap suggests modifying the UF plan to include, for example, the elimination of Social Security’s FICA tax ceiling, a tax on lifetime inheritances and gifts received above $5 million, or a progressive cash flow tax on consumption above $100,000

And there goes the elimination of the estate tax. Plus, I got to tell you, I love the idea of eliminating the ceiling on FICA taxes and implementing a cash flow tax on consumption above a hundred grand.

But the biggest problem with the study is the numbers plugged in. You know the saying, garbage in, garbage out. They plugged in a marginal EFFECTIVE tax rate of 34.6% and a new rate of 18.6%. The problem, the marginal EFFECTIVE corporate tax rate is no where close to 34.6%. Here is a study that pegs the EFFECTIVE corporate tax rate on new investments at 24%.

Actual U.S. Corporate Tax Rates Are in Line with Comparable Countries

So, in summary, the study in the OP assumes an extraordinary high effective marginal corporate tax rate that is not based on reality and ignores the additional components of Trump's tax plan like the personal income tax cut and the elimination of the estate tax. In fact, the study advocates maintaining the estate tax and a significant increase on taxes of the wealthy by eliminating the cap on FICA taxes.

They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from?

From companies that want to buy more equipment here, or pay more dividends here, or buyback more stock here, or hire more employees here. Why do you want them to keep their earnings offshore?

And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

So what?

So what? Seriously? Well if companies are more than willingly to invest in the country with the highest corporate tax rate it would appear that tax rates don't have jack shit to do with rather a company chooses to invest. And it don't. A company chooses to invest where there is sufficient demand for the product or service they provide, tax rates be damned. No company is going to buy more equipment simply because the tax rate is cut. A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders. And stock buybacks are not conducive to a growing economy. Hell, prior to Ronald Reagan stock buybacks were ILLEGAL as they were considered manipulating of stock prices. Truth is, stock buybacks are just another form of rent seeking that is currently a huge drag on the economy.

So what? Seriously?

Yes, so what? What does a tiny, oil rich area have to do with our idiotically high corporate tax rate?

Well if companies are more than willingly to invest in the country with the highest corporate tax rate

Plenty of companies invest in the US. What they don't do is repatriate all their foreign earnings.

No company is going to buy more equipment simply because the tax rate is cut.

Really? If a new piece of equipment is projected to add $1 million in after tax profit under the old rate but $1.23 million after the new rate, the incentive to buy isn't higher?

A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders.

With all the extra money they'll have, I think they'll do both.

And stock buybacks are not conducive to a growing economy.

Why not?

Truth is, stock buybacks are just another form of rent seeking

Please post your definition of rent seeking.

that is currently a huge drag on the economy.

How does giving money back to share holders cause a drag on the economy?

 

[Winston]

How does cutting taxes encourage them to bring it back? They pay ZERO now, they pay ZERO if taxes are cut. If they can pay ZERO why would they choose to pay ANYTHING?

How does cutting taxes encourage them to bring it back?

How does our highest rate in the developed world encourage them to bring it back?

They pay ZERO now, they pay ZERO if taxes are cut.

We should move to a territorial system.

If they can pay ZERO why would they choose to pay ANYTHING?

They might like to use that money in the US.

Big surprise. Your answer was not even close to adequate. They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from? And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

Now I wondered how the hell those economists from Boston University could come up with such a figure considering what I know about the history of previous corporate tax cuts. So, unlike probably anyone else here, I found the study.

https://kotlikoff.net/sites/default/files/Simulating the Unified Framework Tax Reform Plan_0.pdf

Now, they got that growth in GDP by plugging the numbers into the Global Gaidar Model. I laughed out loud. The irony of touting a study based on a model designed by RUSSIAN economists can't be overlooked. But, there are some things we can take from the study. For instance,

Indeed, cuts in personal income tax rates in the GGM produce deficits, crowd out capital and lower long-run economic welfare.

Guess that tax cut for the wealthy should be pulled off the table. And then this,

This said, we share the TPC’s concern that the UF plan could disproportionately benefit the top 1 percent. This concern about fairness as well as the country’s massive long-term fiscal gap suggests modifying the UF plan to include, for example, the elimination of Social Security’s FICA tax ceiling, a tax on lifetime inheritances and gifts received above $5 million, or a progressive cash flow tax on consumption above $100,000

And there goes the elimination of the estate tax. Plus, I got to tell you, I love the idea of eliminating the ceiling on FICA taxes and implementing a cash flow tax on consumption above a hundred grand.

But the biggest problem with the study is the numbers plugged in. You know the saying, garbage in, garbage out. They plugged in a marginal EFFECTIVE tax rate of 34.6% and a new rate of 18.6%. The problem, the marginal EFFECTIVE corporate tax rate is no where close to 34.6%. Here is a study that pegs the EFFECTIVE corporate tax rate on new investments at 24%.

Actual U.S. Corporate Tax Rates Are in Line with Comparable Countries

So, in summary, the study in the OP assumes an extraordinary high effective marginal corporate tax rate that is not based on reality and ignores the additional components of Trump's tax plan like the personal income tax cut and the elimination of the estate tax. In fact, the study advocates maintaining the estate tax and a significant increase on taxes of the wealthy by eliminating the cap on FICA taxes.

They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from?

From companies that want to buy more equipment here, or pay more dividends here, or buyback more stock here, or hire more employees here. Why do you want them to keep their earnings offshore?

And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

So what?

So what? Seriously? Well if companies are more than willingly to invest in the country with the highest corporate tax rate it would appear that tax rates don't have jack shit to do with rather a company chooses to invest. And it don't. A company chooses to invest where there is sufficient demand for the product or service they provide, tax rates be damned. No company is going to buy more equipment simply because the tax rate is cut. A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders. And stock buybacks are not conducive to a growing economy. Hell, prior to Ronald Reagan stock buybacks were ILLEGAL as they were considered manipulating of stock prices. Truth is, stock buybacks are just another form of rent seeking that is currently a huge drag on the economy.

So what? Seriously?

Yes, so what? What does a tiny, oil rich area have to do with our idiotically high corporate tax rate?

Well if companies are more than willingly to invest in the country with the highest corporate tax rate

Plenty of companies invest in the US. What they don't do is repatriate all their foreign earnings.

No company is going to buy more equipment simply because the tax rate is cut.

Really? If a new piece of equipment is projected to add $1 million in after tax profit under the old rate but $1.23 million after the new rate, the incentive to buy isn't higher?

A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders.

With all the extra money they'll have, I think they'll do both.

And stock buybacks are not conducive to a growing economy.

Why not?

Truth is, stock buybacks are just another form of rent seeking

Please post your definition of rent seeking.

that is currently a huge drag on the economy.

How does giving money back to share holders cause a drag on the economy?

First, a definition of rent seeking. Taking more of the pie that is already there instead of making more pie. Tell me, when a company uses it's profits to buy back stock what "pie" is created? And there is the problem. The money companies use to buyback stock could have been used to invest in research and development, purchase more modern equipment, or even raise employee salaries leading to increased demand. Instead, the money is used to buy back stock and artificially inflate the stock price, temporarily I might add, mostly to inflate executive compensation. It doesn't create more pie. In fact, the increase in price resulting takes pie away from other endeavors. Of course, I suppose you are one of the amateurs that believe buying stock is "investing".

Now I doubt you are reading any of the links I provide, like the one explaining the whole OP is based on a model created by Russian economists. LMAO. But here is one from the world's leading expert on stock buybacks and in the Harvard Business Review at that.

Profits Without Prosperity

 

[JakeStarkey]

Winston drives Todd weeping before him.

 

[Toddsterpatriot]

How does cutting taxes encourage them to bring it back?

How does our highest rate in the developed world encourage them to bring it back?

They pay ZERO now, they pay ZERO if taxes are cut.

We should move to a territorial system.

If they can pay ZERO why would they choose to pay ANYTHING?

They might like to use that money in the US.

Big surprise. Your answer was not even close to adequate. They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from? And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

Now I wondered how the hell those economists from Boston University could come up with such a figure considering what I know about the history of previous corporate tax cuts. So, unlike probably anyone else here, I found the study.

https://kotlikoff.net/sites/default/files/Simulating the Unified Framework Tax Reform Plan_0.pdf

Now, they got that growth in GDP by plugging the numbers into the Global Gaidar Model. I laughed out loud. The irony of touting a study based on a model designed by RUSSIAN economists can't be overlooked. But, there are some things we can take from the study. For instance,

Indeed, cuts in personal income tax rates in the GGM produce deficits, crowd out capital and lower long-run economic welfare.

Guess that tax cut for the wealthy should be pulled off the table. And then this,

This said, we share the TPC’s concern that the UF plan could disproportionately benefit the top 1 percent. This concern about fairness as well as the country’s massive long-term fiscal gap suggests modifying the UF plan to include, for example, the elimination of Social Security’s FICA tax ceiling, a tax on lifetime inheritances and gifts received above $5 million, or a progressive cash flow tax on consumption above $100,000

And there goes the elimination of the estate tax. Plus, I got to tell you, I love the idea of eliminating the ceiling on FICA taxes and implementing a cash flow tax on consumption above a hundred grand.

But the biggest problem with the study is the numbers plugged in. You know the saying, garbage in, garbage out. They plugged in a marginal EFFECTIVE tax rate of 34.6% and a new rate of 18.6%. The problem, the marginal EFFECTIVE corporate tax rate is no where close to 34.6%. Here is a study that pegs the EFFECTIVE corporate tax rate on new investments at 24%.

Actual U.S. Corporate Tax Rates Are in Line with Comparable Countries

So, in summary, the study in the OP assumes an extraordinary high effective marginal corporate tax rate that is not based on reality and ignores the additional components of Trump's tax plan like the personal income tax cut and the elimination of the estate tax. In fact, the study advocates maintaining the estate tax and a significant increase on taxes of the wealthy by eliminating the cap on FICA taxes.

They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from?

From companies that want to buy more equipment here, or pay more dividends here, or buyback more stock here, or hire more employees here. Why do you want them to keep their earnings offshore?

And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

So what?

So what? Seriously? Well if companies are more than willingly to invest in the country with the highest corporate tax rate it would appear that tax rates don't have jack shit to do with rather a company chooses to invest. And it don't. A company chooses to invest where there is sufficient demand for the product or service they provide, tax rates be damned. No company is going to buy more equipment simply because the tax rate is cut. A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders. And stock buybacks are not conducive to a growing economy. Hell, prior to Ronald Reagan stock buybacks were ILLEGAL as they were considered manipulating of stock prices. Truth is, stock buybacks are just another form of rent seeking that is currently a huge drag on the economy.

So what? Seriously?

Yes, so what? What does a tiny, oil rich area have to do with our idiotically high corporate tax rate?

Well if companies are more than willingly to invest in the country with the highest corporate tax rate

Plenty of companies invest in the US. What they don't do is repatriate all their foreign earnings.

No company is going to buy more equipment simply because the tax rate is cut.

Really? If a new piece of equipment is projected to add $1 million in after tax profit under the old rate but $1.23 million after the new rate, the incentive to buy isn't higher?

A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders.

With all the extra money they'll have, I think they'll do both.

And stock buybacks are not conducive to a growing economy.

Why not?

Truth is, stock buybacks are just another form of rent seeking

Please post your definition of rent seeking.

that is currently a huge drag on the economy.

How does giving money back to share holders cause a drag on the economy?

First, a definition of rent seeking. Taking more of the pie that is already there instead of making more pie. Tell me, when a company uses it's profits to buy back stock what "pie" is created? And there is the problem. The money companies use to buyback stock could have been used to invest in research and development, purchase more modern equipment, or even raise employee salaries leading to increased demand. Instead, the money is used to buy back stock and artificially inflate the stock price, temporarily I might add, mostly to inflate executive compensation. It doesn't create more pie. In fact, the increase in price resulting takes pie away from other endeavors. Of course, I suppose you are one of the amateurs that believe buying stock is "investing".

Now I doubt you are reading any of the links I provide, like the one explaining the whole OP is based on a model created by Russian economists. LMAO. But here is one from the world's leading expert on stock buybacks and in the Harvard Business Review at that.

Profits Without Prosperity

First, a definition of rent seeking. Taking more of the pie that is already there instead of making more pie.

How is giving shareholders more of their pie.......rent seeking?

Tell me, when a company uses it's profits to buy back stock what "pie" is created?

What do the shareholders do with their slice of the pie?

The money companies use to buyback stock could have been used to invest in research and development, purchase more modern equipment,

You bet. Different companies will do different things with their own money. Freedom!

or even raise employee salaries leading to increased demand.

Or even raise shareholder capital gains, leading to increased demand

It doesn't create more pie.

High taxes don't create more pie.

Of course, I suppose you are one of the amateurs that believe buying stock is "investing"

Of course, I suppose you are one of the amateurs that believe taxing is "investing"

 

[Toddsterpatriot]

Winston drives Todd weeping before him.

Laughing.

 

[JakeStarkey]

Yes, laughing and weep tears of frustration by todd.

Oh, I can say something positive about Trump.

He said the GOP in Congress were not going to touch the pre-tax of IRAs: period.

Good on that!

 

[Toddsterpatriot]

How does cutting taxes encourage them to bring it back?

How does our highest rate in the developed world encourage them to bring it back?

They pay ZERO now, they pay ZERO if taxes are cut.

We should move to a territorial system.

If they can pay ZERO why would they choose to pay ANYTHING?

They might like to use that money in the US.

Big surprise. Your answer was not even close to adequate. They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from? And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

Now I wondered how the hell those economists from Boston University could come up with such a figure considering what I know about the history of previous corporate tax cuts. So, unlike probably anyone else here, I found the study.

https://kotlikoff.net/sites/default/files/Simulating the Unified Framework Tax Reform Plan_0.pdf

Now, they got that growth in GDP by plugging the numbers into the Global Gaidar Model. I laughed out loud. The irony of touting a study based on a model designed by RUSSIAN economists can't be overlooked. But, there are some things we can take from the study. For instance,

Indeed, cuts in personal income tax rates in the GGM produce deficits, crowd out capital and lower long-run economic welfare.

Guess that tax cut for the wealthy should be pulled off the table. And then this,

This said, we share the TPC’s concern that the UF plan could disproportionately benefit the top 1 percent. This concern about fairness as well as the country’s massive long-term fiscal gap suggests modifying the UF plan to include, for example, the elimination of Social Security’s FICA tax ceiling, a tax on lifetime inheritances and gifts received above $5 million, or a progressive cash flow tax on consumption above $100,000

And there goes the elimination of the estate tax. Plus, I got to tell you, I love the idea of eliminating the ceiling on FICA taxes and implementing a cash flow tax on consumption above a hundred grand.

But the biggest problem with the study is the numbers plugged in. You know the saying, garbage in, garbage out. They plugged in a marginal EFFECTIVE tax rate of 34.6% and a new rate of 18.6%. The problem, the marginal EFFECTIVE corporate tax rate is no where close to 34.6%. Here is a study that pegs the EFFECTIVE corporate tax rate on new investments at 24%.

Actual U.S. Corporate Tax Rates Are in Line with Comparable Countries

So, in summary, the study in the OP assumes an extraordinary high effective marginal corporate tax rate that is not based on reality and ignores the additional components of Trump's tax plan like the personal income tax cut and the elimination of the estate tax. In fact, the study advocates maintaining the estate tax and a significant increase on taxes of the wealthy by eliminating the cap on FICA taxes.

They pay zero now, they pay zero under the new plan. There is no incentive to return that money to the US unless, as you did point out, they want to use the money here. But where is the demand going to come from?

From companies that want to buy more equipment here, or pay more dividends here, or buyback more stock here, or hire more employees here. Why do you want them to keep their earnings offshore?

And I believe I previously pointed out to you that the highest corporate tax rate in the developed world is in the United Arab Emirates. It appears there is no shortage of businesses more than willing to invest in Dubai, and the police force there drives Lamborghinis.

So what?

So what? Seriously? Well if companies are more than willingly to invest in the country with the highest corporate tax rate it would appear that tax rates don't have jack shit to do with rather a company chooses to invest. And it don't. A company chooses to invest where there is sufficient demand for the product or service they provide, tax rates be damned. No company is going to buy more equipment simply because the tax rate is cut. A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders. And stock buybacks are not conducive to a growing economy. Hell, prior to Ronald Reagan stock buybacks were ILLEGAL as they were considered manipulating of stock prices. Truth is, stock buybacks are just another form of rent seeking that is currently a huge drag on the economy.

So what? Seriously?

Yes, so what? What does a tiny, oil rich area have to do with our idiotically high corporate tax rate?

Well if companies are more than willingly to invest in the country with the highest corporate tax rate

Plenty of companies invest in the US. What they don't do is repatriate all their foreign earnings.

No company is going to buy more equipment simply because the tax rate is cut.

Really? If a new piece of equipment is projected to add $1 million in after tax profit under the old rate but $1.23 million after the new rate, the incentive to buy isn't higher?

A company pays dividends when they don't have sufficient investment opportunities that meet their required IRR so they give it back to the shareholders.

With all the extra money they'll have, I think they'll do both.

And stock buybacks are not conducive to a growing economy.

Why not?

Truth is, stock buybacks are just another form of rent seeking

Please post your definition of rent seeking.

that is currently a huge drag on the economy.

How does giving money back to share holders cause a drag on the economy?

First, a definition of rent seeking. Taking more of the pie that is already there instead of making more pie. Tell me, when a company uses it's profits to buy back stock what "pie" is created? And there is the problem. The money companies use to buyback stock could have been used to invest in research and development, purchase more modern equipment, or even raise employee salaries leading to increased demand. Instead, the money is used to buy back stock and artificially inflate the stock price, temporarily I might add, mostly to inflate executive compensation. It doesn't create more pie. In fact, the increase in price resulting takes pie away from other endeavors. Of course, I suppose you are one of the amateurs that believe buying stock is "investing".

Now I doubt you are reading any of the links I provide, like the one explaining the whole OP is based on a model created by Russian economists. LMAO. But here is one from the world's leading expert on stock buybacks and in the Harvard Business Review at that.

Profits Without Prosperity

But here is one from the world's leading expert on stock buybacks and in the Harvard Business Review at that.

He's free to start his own company and never buy back any shares, or pay any dividends.

Roger Lowenstein

Stock buybacks are suddenly controversial, with critics arguing that they are hurting the American economy, killing jobs, and manipulating stock prices and therefore must be banned. Bernie Sanders, the Vermont senator running for president, has made slamming buybacks a theme of his campaign. And William Lazonick, an economics professor at UMass Lowell, has asserted that banning buybacks is key to reviving the middle class.

Is this ordinary corporate tactic really so bad? Actually, buybacks are both useful and benign — and in no way warrant restriction. Let’s start with the basics: stock buybacks are a converse operation to stock sales. Companies issue stock — that is, they sell slices of equity — to raise capital. They buy back stock to retire capital. These buybacks occur for two reasons.

Sometimes, a firm accumulates more capital than its business can profitably employ. Believe it or not, overcapitalization can be just as harmful as undercapitalization. Companies with an overabundance of capital tend to do stupid things. They become lazy about operating efficiently, or build a vanity headquarters, or make a foolish acquisition. Such pursuits may make the CEO feel important, but (often) they waste the shareholders’ capital. Retiring excess capital is smart business.

The other common reason for repurchasing shares is that executives believe their stock is cheap — and indeed, cheaper than possible alternatives. This is not “manipulating” the stock. As with an investment you make in your 401(k), buybacks will pay off if — and only if — the executives’ calculation about value is correct. Suppose you had a 50-50 partner in a private business worth $1 million; one day your partner, feeling gloomy, offers to sell his half for only $250,000. Buying him out would increase the value of your equity. In just that way, buybacks of inexpensive stock raise the value of the remaining shares.

In defense of stock buybacks - The Boston Globe