‘Trickle-down’ tax cuts make the rich richer but are of no value to overall economy, study finds

[pknopp]

When someone has $200 million in an account they aren't going to go out and say "Hey, I got a tax cut, I can now afford to start my business".

What starts a business is a need. People who have nothing have meet that need.

Yes, everyone is Scrooge McDuck with swimming pools filled with gold coins, I get it.

But the childish fantasy of the left has utterly no connection to reality.

In the real world taxes are very important. Most Communists have never had a finance class in their life, much less a class on basic economics. They can't read a balance sheet or income statement. They couldn't produce a capital investment repayment plan if their life depended on it. But in real life, that's how things work. If I want to expand a business, I have to show that the expansion plan will repay the capital employed, a concept we call ROCE, "return on capital employed". I must demonstrate to the bank or board of directors that the investment will pay back in a certain number of years or the project will not be funded. Another concept that Communists don't grasp is EBIT, which is "earnings before interest and taxes." What follows are two critical elements on an income statement - interest on debts, and taxes. The impact of these two is enormous and heavily impacts any business decision.

Yes, I'm getting into grown up talk, which is not what leftists understand. But in the world of finance and business, this is how things work. If the interest on debt for expansion erodes the payback, if the taxes on EBIT consume the return, then expansion will not happen. The jobs created by that expansion will not happen.

Need creates jobs, not tax cuts. Simply "expanding" your business does not create a need and if there is a need it's going to be met by someone, tax cuts or not.

As I've been saying since the reagan years:

No company is going to hire someone to just stand around all day doing nothing. If they don't have the work, they don't need more employees.

The only reason a business will hire more workers is if there is more work to do than the existing staff of workers can handle in a regular 8 hour work day.

If that is happening, they are having more sales. If that is happening the company is making more money and the last thing they need is a tax cut.

It's simple capitalism supply and demand.

A company can offer all the supply they want. If there is no demand their supply is worthless.

If there is a demand, their supply is worth capital and the last thing a company needs is a tax cut.

It is not the government's job to give anyone a raise or pay anyone working outside the government. That is the responsibility of the employer. The government is responsible for making sure that employer is paying a living wage, proper benefits with safe and proper working conditions for the employee. Employers aren't going to do that out of the goodness of their hearts. They only care about money. The only way to make sure the employer is properly paying employees with proper working conditions is through proper wage laws and working condition regulations.

If people aren't making enough money to live on, no tax cut will ever help them. A raise in pay will. The federal minimum wage has not been increased since the bush boy years. Get the government to do their job of increasing the minimum wage. Cutting taxes for a few years isn't going to do much beyond create more debt and make a small amount of filthy rich people even more filthy rich.

The conservative economic theory is a lie which only results in the destruction of an economy.

How many times does the nation have to go through it before we learn?

I'm not sure we ever will which is why I am OK with it all falling apart.

 

[pknopp]

If we can afford to give billions upon billions to foreigners then we are taxing Americans too much.

Period, full stop.

I don't agree with giving more aid to non-Americans than to Americans.

Are you sure? This foreign aid is to benefit our war machinery. Are you saying you don't support this? You support bringing all of our military home?

Most American foreign aid comes with a requirement that the money is used to buy military equipment from American suppliers. It is in fact, a subsidy to the military industrial complex, and helps create jobs in the "defense industry".

So it's better for them to use our money to buy T-72 cast-offs from the Russians?

Using the money we give them mean they are not actually buying the jets. We are using trick of hand to give them away.

 

[dudmuck]

https://www.washingtonpost.com/business/2020/12/23/tax-cuts-rich-trickle-down/

Creating more debt and giving more to the uber rich

Washington Post? All they publish is leftist propaganda.

Its a study from London School of Economics, it has nothing todo with WaPo.
London School of Economics studied 18 different developed countries. Trickle-down failure is global, not just USA.

 

[Bush92]

https://www.washingtonpost.com/business/2020/12/23/tax-cuts-rich-trickle-down/

Creating more debt and giving more to the uber rich

The trickle down economic theory was the biggest scam ever run against the American people.

Mid to late 1980's economy boomed and the positive affects of this finally came to fruition under Slick Willie Clinton in the 1990's. Where did the start-up $$$ for tech boom of 1990's come from? Reagan years. But oh, I forgot, Democrats think Al Gore invented the Internet.

 

[Coyote]

If we can afford to give billions upon billions to foreigners then we are taxing Americans too much.

Period, full stop.

When did everything become our problem? It's not our fault we kick so much ass. We have no obligation to shoot ourselves in the foot for other nations.

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

 

[Bush92]

https://www.washingtonpost.com/business/2020/12/23/tax-cuts-rich-trickle-down/

Creating more debt and giving more to the uber rich

Washington Post? All they publish is leftist propaganda.

Its a study from London School of Economics, it has nothing todo with WaPo.
London School of Economics studied 18 different developed countries. Trickle-down failure is global, not just USA.

Socialist Great Britain. Got it. The economic policy was directed at USA not the world.

 

[Anomalism]

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

We spend a lot of money on a lot of shit that isn't realistically helping the security of our nation.

 

[Bush92]

If we can afford to give billions upon billions to foreigners then we are taxing Americans too much.

Period, full stop.

When did everything become our problem? It's not our fault we kick so much ass. We have no obligation to shoot ourselves in the foot for other nations.

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

Trickle down had nothing to with our national security. Piss poor trade deals and China being allowed to become largest lobby group in Washington D.C. is.

 

[Coyote]

If we can afford to give billions upon billions to foreigners then we are taxing Americans too much.

Period, full stop.

When did everything become our problem? It's not our fault we kick so much ass. We have no obligation to shoot ourselves in the foot for other nations.

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

Trickle down had nothing to with our national security. Piss poor trade deals and China being allowed to become largest lobby group in Washington D.C. is.

True, but I was answering something specific. Also true - Trickle Down never worked.

 

[Coyote]

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

We spend a lot of money on a lot of shit that isn't realistically helping the security of our nation.

There is always "silly stuff" (gender studies in Pakistan) but there is a lot that just isn't obvious. For example aid and forms of assistance to Central American countries suffering from extreme climate effects or political instability could put a dent in the high migration rates we are seeing and help ease the crisis at the border.

 

[Bush92]

If we can afford to give billions upon billions to foreigners then we are taxing Americans too much.

Period, full stop.

When did everything become our problem? It's not our fault we kick so much ass. We have no obligation to shoot ourselves in the foot for other nations.

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

Clinton adminstration allowing China to steal the science behind our top secret defense programs (F-24 Raptor) did more to hurt our national security.

 

[Rambunctious]

https://www.washingtonpost.com/business/2020/12/23/tax-cuts-rich-trickle-down/

Creating more debt and giving more to the uber rich

If the nation's residents are all poor what is the benefit there?....lets say a contractor wants to pour slabs for homes owned by wealthy folks...but there are no wealthy folks with money enough to invest in a home....what benefit do you see there?....

All you have to do is look at other nations that use that philosophy in your post to know its balderdash....why can't you do that?...what are you missing when watching south America?...or Cuba? or Iran?...what can you be thinking?....

The evidence is all over the world and in every history book that socialism and communism does not work for anyone but the rulers.....so what is your flaw that keeps you from seeing it?....why do you dislike wealthy people?....and what good will their end be for you?...do you think your life would be better without rich people?...can't you see how silly that is?....

You must be very young...

 

[Anomalism]

There is always "silly stuff" (gender studies in Pakistan) but there is a lot that just isn't obvious. For example aid and forms of assistance to Central American countries suffering from extreme climate effects or political instability could put a dent in the high migration rates we are seeing and help ease the crisis at the border.

We don't need to have troops in Europe and probably not even South Korea or Japan. We don't need to send 50+ billion out for charity every year. That money could be making a real difference back home.

 

[Coyote]

If we can afford to give billions upon billions to foreigners then we are taxing Americans too much.

Period, full stop.

When did everything become our problem? It's not our fault we kick so much ass. We have no obligation to shoot ourselves in the foot for other nations.

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

Clinton adminstration allowing China to steal the science behind our top secret defense programs (F-24 Raptor) did more to hurt our national security.

How did they "allow" it?

 

[Coyote]

There is always "silly stuff" (gender studies in Pakistan) but there is a lot that just isn't obvious. For example aid and forms of assistance to Central American countries suffering from extreme climate effects or political instability could put a dent in the high migration rates we are seeing and help ease the crisis at the border.

We don't need to have troops in Europe and probably not even South Korea or Japan. We don't need to send 50+ billion out for charity every year. That money could be making a real difference back home.

We don't and can't exist in a bubble.

 

[Anomalism]

We don't and can't exist in a bubble.

We don't need to entirely. We just need to focus more at home.

 

[Billiejeens]

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

We spend a lot of money on a lot of shit that isn't realistically helping the security of our nation.

Because Democrats hate our nation as founded.

 

[Coyote]

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

We spend a lot of money on a lot of shit that isn't realistically helping the security of our nation.

Because Democrats hate our nation as founded.

We were founded on the idea that only white land owners could vote. I think we've moved past that. Poke your head out of the bubble - it's not 1776 anymore.

 

[Dragonlady]

They use the windfall to increase profits and enrich investors,

Enriched investors make more investments and/or pay more taxes.

No they pay lower rates of taxes on investment income than workers would pay on their wages. Remember Warren Buffet saying his secretary paid a higher rate of tax that he does. So raising the minimum wage also raises government revenues.

Remember Biden's oft-quoted phrase "valuing work over wealth". Less than 40% of wealthy Americans work, while 80% of the people who received government assistance in 2019, had full-time jobs. No one who has a full time job should require government assistance just to keep a roof over their head.

It's easy to use a broad brush. Hopefully we all find in reprehensible that a Wal-Mart worker would qualify for TANF or Medicaid, while the Wal-Mart heirs avoid taxes. But I've yet to hear any objection, that is not based on emotion and no facts, why there's some great economic argument against taxing - Wal-Mart profits (or Amazon or … name the corporate behemoth) or placing a miniscule penny tax on short term, large stock trades or even taxing healthcare providers - to pay for people to get healthcare whose employers don't provide it as a benefit, which the vast maj of employers offered 40-50 years ago.

Or why is it so much more expensive as measured by a % of income to go to college as it was 40-50 years ago.

I have no idea where your statistics about how many people get aid come from, and I'm not complaining, but generally these figures don't exclude "aid" like medical and education assistance. Placing taxes directly on small biz or even franchisees like Subway, can hurt employment. But even Wal-Mart said it was ok with Obamacare so long as it's competitors had to pay the same taxes.

I have a real bone to pick the franchises, primarily because I did franchise law and use to have to parse franchise agreements to find out exactly what our clients were going to be responsible for paying to the Franchisor.

McDonalds being a case in point. Most operators will tell you they can't afford to increase front line employee wages, and they're not making that much themselves. But McDonald's is one of the most profitable companies in America. That's because the franchise agreement for McDonald's is designed to extract the maximum number of dollars from the stores and transfer them to corporate.

Posters here have said the monthly franchise fee is only 4% of sales. That may be true but there are other fees: advertising fee - also 4%. monthly service fee 4%, rent - also a percentage of sales. Given that the net profti, before taxes for any restaurant is usually around 15% of gross sales, 12% is gone to franchise fees. Then there are your supplies - all food, napkins, placemats and other supplies for your store, will be shipped to you by corporate, at their standard prices. You not only don't have to source this stuff locally, you're not allowed to do it. Last but not least, if corporate decides that your store is looking tired or shabby, they will order to you to redecorate your premises. Corporate will sell you your new counters, booths, tables, and approved decor the world recognizes as McDonalds.

And don't get me started on the "gig economy". Skip the Dishes takes 15% of your order. So much for your profit if you're a small family owned restaurant.

 

[Billiejeens]

If we can afford to give billions upon billions to foreigners then we are taxing Americans too much.

Period, full stop.

When did everything become our problem? It's not our fault we kick so much ass. We have no obligation to shoot ourselves in the foot for other nations.

When it has an effect on our security or national interests or to promote stability (which is in our national interests).

Clinton adminstration allowing China to steal the science behind our top secret defense programs (F-24 Raptor) did more to hurt our national security.

Not sure that "steal" is the correct word.