The logic flaw of tax cuts.

[Mexicano]

While I can understand how tax cuts on the middle class and small to medium businesses can help the economy, I am reluctant regarding giving tax cuts to large corporations. The main reason is that history has proven they engage into speculative investment ( derivatives, stock exchange, money markets).
These activities hardly help the economy or consumption.
The only way around this problem is to either tax capital gains or a tax on wealth.

Now just a definition of large corporation : a corporation with sales exceeding one billion dollars.

 

[1srelluc]

Odd, Newt got us to a balanced budget with huge capital gains cuts (1998-2001) with economic prosperity to boot......I did very well for myself back then as did most of my peers.

A whole generation has passed where folks have never seen a balanced budget.

 

[Toddsterpatriot]

While I can understand how tax cuts on the middle class and small to medium businesses can help the economy, I am reluctant regarding giving tax cuts to large corporations. The main reason is that history has proven they engage into speculative investment ( derivatives, stock exchange, money markets).
These activities hardly help the economy or consumption.
The only way around this problem is to either tax capital gains or a tax on wealth.

Now just a definition of large corporation : a corporation with sales exceeding one billion dollars.

The main reason is that history has proven they engage into speculative investment ( derivatives, stock exchange, money markets).

Which corporations are doing that with their tax savings?
Why do you feel "money markets" don't help the economy?

The only way around this problem

What problem?

is to either tax capital gains or a tax on wealth.
We already tax capital gains.

 

[Mexicano]

Odd, Newt got us to a balanced budget with huge capital gains cuts (1998-2001) with economic prosperity to boot......I did very well for myself back then as did most of my peers.

A whole generation has passed where folks have never seen a balanced budget.

The government can't run a balanced budget in the long run, unless the country gets a net inflow of money from the exterior ( exports, remittances, interest on loans).
That is easier said than done.

 

[Oddball]

Odd, Newt got us to a balanced budget with huge capital gains cuts (1998-2001) with economic prosperity to boot......I did very well for myself back then as did most of my peers.

A whole generation has passed where folks have never seen a balanced budget.

God, not you too.

The "balanced budget" was never real...It was projected to come into balance in 2002, just as Ross Perot said it would in 1992....Their public preening and grandstanding notwithstanding, niether the remocrats nor depublicans did anything of substance to bring that about.

It was all the inertia of ongoing incoming taxes and federal outlays that was bound to happen, barring any radically drastic economic moves made by anyone.

 

[Mexicano]

The main reason is that history has proven they engage into speculative investment ( derivatives, stock exchange, money markets).

Which corporations are doing that with their tax savings?
Why do you feel "money markets" don't help the economy?

The only way around this problem

What problem?

is to either tax capital gains or a tax on wealth.
We already tax capital gains.

The specifics of the companies are irrelevant, you can look at an indicator from the FRED : velocity of money. It has been steadily dropping.
There are trillions of dollars, they don't translate into an increase in production.
The problem is the US will fall into a recession.

 

[Toddsterpatriot]

The specifics of the companies are irrelevant, you can look at an indicator from the FRED : velocity of money. It has been steadily dropping.
There are trillions of dollars, they don't translate into an increase in production.
The problem is the US will fall into a recession.

The specifics of the companies are irrelevant,

No evidence to back your lie...err...claim?

you can look at an indicator from the FRED : velocity of money. It has been steadily dropping.

It's a stupid indicator. What is it supposed to predict?

There are trillions of dollars, they don't translate into an increase in production.

It sounds like you don't know what a money market means.

The problem is the US will fall into a recession.

How will a tax on either capital gains or a tax on wealth prevent a recession?

 

[themirrorthief]

While I can understand how tax cuts on the middle class and small to medium businesses can help the economy, I am reluctant regarding giving tax cuts to large corporations. The main reason is that history has proven they engage into speculative investment ( derivatives, stock exchange, money markets).
These activities hardly help the economy or consumption.
The only way around this problem is to either tax capital gains or a tax on wealth.

Now just a definition of large corporation : a corporation with sales exceeding one billion dollars.

letting the working class keep more of their hard earned dollars goes against communism and therefore cant be allowed...besides UKraine needs the money for their war against russia

 

[Mexicano]

The specifics of the companies are irrelevant,

No evidence to back your lie...err...claim?

you can look at an indicator from the FRED : velocity of money. It has been steadily dropping.

It's a stupid indicator. What is it supposed to predict?

There are trillions of dollars, they don't translate into an increase in production.

It sounds like you don't know what a money market means.

The problem is the US will fall into a recession.

How will a tax on either capital gains or a tax on wealth prevent a recession?

No evidence to back your lie...err...claim?

Toddster, if you want specifics : Goldman Sachs, Morgan Stanley... the banks make the purchases on behalf of theirr customers.

Secret Derivatives Trading by Goldman Sachs, Morgan Stanley, and the Latest Hedge Fund Collapse Again Reveal the Dangers of the Unregulated Shadow Banking System | Better Markets

FOR IMMEDIATE RELEASE Monday, March 29, 2021 Contact: Pamela Russell at 202-618-6433 or [email protected] Washington, D.C. – Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement in response to reports that Goldman Sachs, Morgan...

bettermarkets.org

It's a stupid indicator. What is it supposed to predict?

It predicts nothing , it just states how fast or solowly money churns.

How will a tax on either capital gains or a tax on wealth prevent a recession?

By putting it back into the real economy through government spending.

 

[Toddsterpatriot]

Toddster, if you want specifics : Goldman Sachs, Morgan Stanley... the banks make the purchases on behalf of theirr customers.

Secret Derivatives Trading by Goldman Sachs, Morgan Stanley, and the Latest Hedge Fund Collapse Again Reveal the Dangers of the Unregulated Shadow Banking System | Better Markets

FOR IMMEDIATE RELEASE Monday, March 29, 2021 Contact: Pamela Russell at 202-618-6433 or [email protected] Washington, D.C. – Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement in response to reports that Goldman Sachs, Morgan...

bettermarkets.org

It predicts nothing , it just states how fast or solowly money churns.

How will a tax on either capital gains or a tax on wealth prevent a recession?

By putting it back into the real economy through government spending.

Goldman Sachs, Morgan Stanley... the banks make the purchases on behalf of their customers.

You don't know how many, if any, corporations above $1 billion use their earnings to buy derivatives

It predicts nothing ,

If it predicts nothing, it's useless.

it just states how fast or solowly money churns.
It does no such thing. It's GDP divided by money supply.

By putting it back into the real economy through government spending.

By taking it out of the real productive economy first.

It still sounds like you don't know what a money market means.

 

[Stryder50]

Toddster, if you want specifics : Goldman Sachs, Morgan Stanley... the banks make the purchases on behalf of theirr customers.

Secret Derivatives Trading by Goldman Sachs, Morgan Stanley, and the Latest Hedge Fund Collapse Again Reveal the Dangers of the Unregulated Shadow Banking System | Better Markets

FOR IMMEDIATE RELEASE Monday, March 29, 2021 Contact: Pamela Russell at 202-618-6433 or [email protected] Washington, D.C. – Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement in response to reports that Goldman Sachs, Morgan...

bettermarkets.org

It predicts nothing , it just states how fast or solowly money churns.

How will a tax on either capital gains or a tax on wealth prevent a recession?

By putting it back into the real economy through government spending.

US Government spending is the major source of our nation's economic "problems". Consider checking some numbers here, and with the "time machine" function showing trends back to 1980;

https://www.usdebtclock.org/

Remember;
Wealth = Goods/services that have market value (others willing to trade their "goods/services" for same)
Money = device/tool to measure wealth/value and to facilitate barter/trade

Government doesn't create wealth, just redistributes it. Unfortunately, that takes wealth out of the production process so it isn't available to make more wealth. A major reason(one of) for inflation/devaluation.

 

[Stryder50]

With 401Ks, IRAs, and most pension funds invested in corporate stocks and bonds, one wants to see such grow, make profits, in order for these retirement investments to prosper and grow. This is one of the best ways for "wealthy" businesses/corporations to provide return and benefit to the investor~public and the economy.

 

[Stryder50]

The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America--And How to Undo His Legacy​

Book Overview​

New York Times reporter and "Corner Office" columnist David Gelles reveals legendary GE CEO Jack Welch to be the root of all that's wrong with capitalism today and offers advice on how we might right those wrongs.

In 1981, Jack Welch took over General Electric and quickly rose to fame as the first celebrity CEO. He golfed with presidents, mingled with movie stars, and was idolized for growing GE into the most valuable company in the world. But Welch's achievements didn't stem from some greater intelligence or business prowess. Rather, they were the result of a sustained effort to push GE's stock price ever higher, often at the expense of workers, consumers, and innovation.

In this captivating, revelatory book, David Gelles argues that Welch single-handedly ushered in a new, cutthroat era of American capitalism that continues to this day. Gelles chronicles Welch's campaign to vaporize hundreds of thousands of jobs in a bid to boost profits, eviscerating the country's manufacturing base and destabilizing the middle class. Welch's obsession with downsizing--he eliminated 10% of employees every year--fundamentally altered GE and inspired generations of imitators who have employed his strategies at other companies around the globe. In his day, Welch was corporate America's leading proponent of mergers and acquisitions, using deals to gobble up competitors and giving rise to an economy that is more concentrated and less dynamic. And Welch pioneered the dark arts of "financialization," transforming GE from an admired industrial manufacturer into what was effectively an unregulated bank.

The finance business was hugely profitable in the short term and helped Welch keep GE's stock price ticking up. But ultimately, financialization undermined GE and dozens of other Fortune 500 companies. Gelles shows how Welch's celebrated emphasis on increasing shareholder value by any means necessary (layoffs, outsourcing, offshoring, acquisitions, and buybacks, to name but a few tactics) became the norm in American business generally.

He demonstrates how that approach has led to the greatest socioeconomic inequality since the Great Depression and harmed many of the very companies that have embraced it. And he shows how a generation of Welch acolytes radically transformed companies like Boeing, Home Depot, Kraft Heinz, and more. Finally, Gelles chronicles the change that is now afoot in corporate America, highlighting companies and leaders who have abandoned Welchism and are proving that it is still possible to excel in the business world without destroying livelihoods, gutting communities, and spurning regulation.
...

The Man Who Broke Capitalism: How Jack... book by David Gelles

 

[Mexicano]

US Government spending is the major source of our nation's economic "problems". Consider checking some numbers here, and with the "time machine" function showing trends back to 1980;

https://www.usdebtclock.org/

Remember;
Wealth = Goods/services that have market value (others willing to trade their "goods/services" for same)
Money = device/tool to measure wealth/value and to facilitate barter/trade

Government doesn't create wealth, just redistributes it. Unfortunately, that takes wealth out of the production process so it isn't available to make more wealth. A major reason(one of) for inflation/devaluation.

I agree with your definition of money and wealth. However , I have to challenge your notion that "Government" doesn't create wealth.
Have you seen the high-speed rail network of China? well... that is a government enterprise. You can also look at the state-owned enterprises of Kuwait and Saudi Arabia. Two huge state-owned companies that are responsible of the largest chunk of their exports.
If you want to go local you can take a look at the Federal Highway System.
The problem is not government debt by itself , the problem is that all that money is being poured directly into the financial system, which produces absolutely nothing. The main role of the financial system is to expand the monetary base to allow the increase in production.

 

[Toddsterpatriot]

I agree with your definition of money and wealth. However , I have to challenge your notion that "Government" doesn't create wealth.
Have you seen the high-speed rail network of China? well... that is a government enterprise. You can also look at the state-owned enterprises of Kuwait and Saudi Arabia. Two huge state-owned companies that are responsible of the largest chunk of their exports.
If you want to go local you can take a look at the Federal Highway System.
The problem is not government debt by itself , the problem is that all that money is being poured directly into the financial system, which produces absolutely nothing. The main role of the financial system is to expand the monetary base to allow the increase in production.

Have you seen the high-speed rail network of California? well... that is a government enterprise.

 

[Blues Man]

While I can understand how tax cuts on the middle class and small to medium businesses can help the economy, I am reluctant regarding giving tax cuts to large corporations. The main reason is that history has proven they engage into speculative investment ( derivatives, stock exchange, money markets).
These activities hardly help the economy or consumption.
The only way around this problem is to either tax capital gains or a tax on wealth.

Now just a definition of large corporation : a corporation with sales exceeding one billion dollars.

We already do tax capital gains.

 

[Blues Man]

With 401Ks, IRAs, and most pension funds invested in corporate stocks and bonds, one wants to see such grow, make profits, in order for these retirement investments to prosper and grow. This is one of the best ways for "wealthy" businesses/corporations to provide return and benefit to the investor~public and the economy.

Except that traditional 401 k and Ira accounts are designed to squeeze every tax dollar out of people in retirement as possible.

 

[Blues Man]

I agree with your definition of money and wealth. However , I have to challenge your notion that "Government" doesn't create wealth.
Have you seen the high-speed rail network of China? well... that is a government enterprise. You can also look at the state-owned enterprises of Kuwait and Saudi Arabia. Two huge state-owned companies that are responsible of the largest chunk of their exports.
If you want to go local you can take a look at the Federal Highway System.
The problem is not government debt by itself , the problem is that all that money is being poured directly into the financial system, which produces absolutely nothing. The main role of the financial system is to expand the monetary base to allow the increase in production.

Who does that create "wealth" for?

Not the citizens who had to pay the taxes to fund it.

 

[Mexicano]

Who does that create "wealth" for?

Not the citizens who had to pay the taxes to fund it.

Since they are public goods ( e.g the roads or the railroad network) that wealth is created for all the citizens.
In the case of Kuwait those revenues also create wealth for the citizens, because they are entitled to extremely low tax rates
0% personal income tax rate
15% corporate tax rate.

Kuwait Corporate Tax Rate

The Corporate Tax Rate in Kuwait stands at 15 percent. This page provides - Kuwait Corporate Tax Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

Kuwait Personal Income Tax Rate

The Personal Income Tax Rate in Kuwait stands at 0 percent. This page provides - Kuwait Personal Income Tax Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

 

[task0778]

The government can't run a balanced budget in the long run, unless the country gets a net inflow of money from the exterior ( exports, remittances, interest on loans).
That is easier said than done.

Did it ever cross your mind that spending less might also balance the budget? We dont have a revenue problem, we have a spending problem.