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Old 02-01-2019, 12:28 PM
 
25 posts, read 2,097 times
Reputation: 40

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The tax cuts which President Trump signed into law are more than sufficient 'stimulus' for our economy; look no farther than today's jobs report which totally blindsided the 'experts' at CNN and elsewhere.


Eight years of Obamanomics and Obamunism were a disaster and the ensuing administration's introduction of those tax cuts (which the Democrats did NOT vote for) has led to our reinvigorated economy which all of Obama's advisers said was impossible, clearly showing how clueless he and his fellow liberals were and are about business-friendly policies and the effectiveness of tax cuts.
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Old 02-01-2019, 12:58 PM
 
Location: Silicon Valley
3,248 posts, read 1,408,796 times
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The Corporate tax cuts were always going to be unpopular, and to a career politician, politically unthinkable. The cold reality is that our tax rates on corporations were extremely high relative to the rest of the world and it was a headwind to the country. It was a big enough difference for companies to invest in transfer pricing departments, which take trade from one area to another and attempts to minimize the price in high tax areas and maximize it in low tax areas.

For example I sell a widget to China for $10.

I may make the product in California at a cost of $4, so I will sell it to my affiliate in a free trade zone in China for $4.20, the free trade zone may then sell it to my Chinese entity for $9.50....in effect reducing my tax...albeit I can't bring the money back. The new tax law basically says...ok we'll lower the rate to what the rest of the world uses, but no more shenanigans. Whether you bring the money home or not, we're now taxing it.

On these trade wars, this is pretty smart as well. As a corporation, you have no citizenship. If you want to sell to Iran, you simply need to run it through different channels and have some reliable partners. Hence a China tariff by itself would be rather stupid, they'll just stop in a port somewhere and call it from Singapore. However, by ripping up the large pacts and presenting it bilaterally, the US now has the option to force nations to actually comply with our trade actions. The US economy dwarfs the of any other nation in terms of GDP, but China has been steadily rising since their reforms in the early 90's. China doesn't allow herself to become trapped by goodwill pacts...it's time for the US to level the playing field. In the meantime, we've gotten some great concessions in North America and will continue to get them around the globe. China makes the headlines, but what's being shutdown is some of the shadow element. Taking lead from the US leadership, other nations are starting to do the same. While trade disruption is bad in the short term, if it reforms trade to not become ruinous, it's well worth the price.

Hence putting them together, the tax cut and trade wars. We are meeting the growing might of China without firing a shot.

Finally we have the budget. Why overheat the economy? Simply put, whoever's behind this plan hopes to increase labor participation rates. Our labor participation rate needs to be closer to 60% for the economy to work. If we can bring some of that labor that left the market back in via higher wages and/or inflation concerns, more gets done, more product is made and more taxes are paid. While the memo maybe came late, it seems like the Fed maybe is starting to understand that the plan isn't as crazy as the spokesperson. (who 100% didn't put this together)

We'll see though. It's nice to see someone trying though.
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Old 02-01-2019, 05:15 PM
 
25 posts, read 2,097 times
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It still boggles my mind that NO Democrats voted for those tax cuts for their constituents thanks to their abject hatred of the President and big business in general.
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Old 02-02-2019, 03:21 PM
 
Location: Myrtle Creek, Oregon
11,528 posts, read 11,895,267 times
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Originally Posted by Marv201 View Post
It still boggles my mind that NO Democrats voted for those tax cuts for their constituents thanks to their abject hatred of the President and big business in general.
It's more likely they were voting against borrowing a trillion dollars a year to keep the government going.
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Old 02-02-2019, 03:27 PM
 
3,556 posts, read 3,347,601 times
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Originally Posted by Larry Caldwell View Post
It's more likely they were voting against borrowing a trillion dollars a year to keep the government going.
Liberals voting against federal borrowing? Now that's a likely scenario... in your imagination perhaps!

The previous poster was exactly correct. The Dems had no problem voting for all kinds of spending under Obama, but as soon as Trump comes in with some supply side policies, they are suddenly deficit hawks. They're not fooling anyone (at least, anyone who is informed).
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Old 02-02-2019, 05:09 PM
 
25,192 posts, read 27,501,119 times
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Quote:
Originally Posted by Larry Caldwell View Post
The huge deficit stimulus package has resulted in very low unemployment and very high business profits.

As far as I know, this is the first time the feds have ever unleashed a massive stimulus package during a solid economic recovery. Should we have done this before? Do you like it? Do you think it's going to run the economy into total ruin?

What do you think?
It's a horrible idea. Running big deficits when you already have a high debt load and when the economy is ok is just a horrible idea. Just. Horrible.

America is a train wreck waiting to happen. It's pretty much a sure thing at this point. It's just a question of when. There must be a higher power because the train wreck should've happened a long time ago, IMO.
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Old 02-02-2019, 05:17 PM
 
25,192 posts, read 27,501,119 times
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Quote:
Originally Posted by jertheber View Post
Your observations regarding the lack of job candidates who fail a drug test simply calls attention to the fact that many US companies are behind the times, drug testing is most likely going away for the fact that much of the drugs people use today are legal, and therefore not a reflection of anything more than a testimony of the length of time some substances remain in the bloodstream. Someone smokes a joint at night in their home, are they still impaired the next day? This Reagan era notion of drug usage is certainly archaic, but also very economically damaging to business.

https://www.bloomberg.com/news/artic...ment-drug-test
As much as I despise pot, I have to agree.
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Old 02-02-2019, 05:18 PM
 
25,192 posts, read 27,501,119 times
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Quote:
Originally Posted by okcthunder1945 View Post
I think our stimulus package would have been better served with only cutting taxes for corporations and shoring up entitlements with an aging population. Would have to really sell the corporate tax cuts as a means to be globally competitive as that's a hard political sell.
I agree with that, but I don't think the top rate should've been dropped so low. I think maybe 25% to 27% would've been a better level.
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Old 02-02-2019, 05:21 PM
 
25,192 posts, read 27,501,119 times
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Originally Posted by GeoffD View Post
Taxes just went in the wrong direction. The Social Security program just turned cash flow negative. Taxes have to go up to keep that program tax flow neutral forever. You don't run huge deficits and borrow huge piles of money in good times. You run modest surpluses. Juicing the economy at this point in the cycle is going to create a very large thud when the cycle corrects. The whole point of fiscal and monetary policy is to dampen an inherently unstable economic cycle. Today's policy makes things less stable, not more stable. There's no headroom to use conventional fiscal and monetary policy when the correction happens. Interest rates are still very low. We risk doing a Greece if we crank up deficit spending any higher. Even with all the juicing, the economy isn't even growing at 4%.



If we actually have a trade war with China, it gets really ugly very quickly. The US will cave in long before China but that's likely after the trigger point for the correction happens.
Yes, I agree with almost all of that.
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Old Today, 02:29 PM
 
3,950 posts, read 2,238,598 times
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Im not sure i want my package stimulated.

Then again....

This has not stimulated anything for us.
No increase in job security, no increase in wages, nothing.

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