Economic Expert Predicts Doom Over Trump Presidency... Dow Now Passes 23,000
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You have a lot of one liners that do not make sense.
You lower the tax rates on the repatriated money to 10% for short time. $2.6 trillion is overseas and even at 10% that is $260 billion in tax revenue. The remain $2+ billion will be reinvested here instead of out of the country.
Our corporate tax rate is the highest in the world at 35%.
Its a win win but if you can't handle lowering corporate taxes to benefit all Americans then you just let them keep the money elsewhere.
I can go for the "Short Term"... to get the money back !!!! Then what? how will its interest earned then be calculated... and taxed? because they are smart enough not to do a trade off that may cost them more in the long term?
It makes for an interesting conversation, I will come back later...
In the mean time, Please Look at the Historical Tax Rates as to the current rate it has been such for 17 yrs. And corporations have massive loopholes, and many get all measures of Federal Assistance not just monetary but other cost saving and loss mitigating means. The picture is very big, and by the time its factored, the actual Taxes paid, is so much less than the listed rate... To the point, not only do some not pay, they get a carry over tax credit, and like Trump, he spread them over a 2 decade period, and some still have not expired or meted out to 0.
Last edited by Chance and Change; 10-18-2017 at 09:41 AM..
I was one of those who predicted a stock bear-market if Trump were to be elected; but didn’t act on my prediction. At least thus far, my prediction was wrong. I’d rather be proven wrong in my opinions, than diminished in my finances.
Presidents don’t determine the long-term stock market trajectory, unless something goes seriously awry. Neither does the ongoing news, “real” or “fake”. Ultimately, only one thing matters: corporate profit growth. If profit growth is sprightly, stocks will rise. Thus far, corporate profits have been recovering, from their recession of ~2015 (those who don’t invest, may not have had occasion to observe that there was an earnings-recession). Stupid economic policy can of course derail profit growth. I worry that protectionism or other impediments and instabilities might do that. So far, this hasn’t happened. One can only speculate as to why.
Over the proverbial long-term, stock markets rise. Presidents and Congresses can impede that, but again, unless something seriously goes awry (Hoover administration?), the market recovers. My long-range concern is that our productivity-growth is plateauing. This is partially the result of regulatory-policy, tax-policy and so forth… but only partially. Let’s hope that our politicians don’t screw up those portions of the economy that they can actually influence.
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Originally Posted by my54ford
let it blow! The worse the better. Have to burn it down before it can be rebuilt!!!
Pray tell: regardless of your political orientation, how is nihilistic glee going to be helpful?
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Originally Posted by don1945
... there has been no significant legislation that has occurred in the past 9 months that would have contributed to this rise.........NONE.
Indeed. Perhaps the upside-surprise has been, that there's not been any particularly harmful or stupid legislation. There's something to be said for doing nothing.
Now comes the mother of all adverse effects — and what it brings with it is a regime that will be ignorant of economic policy and hostile to any effort to make it work. Effective fiscal support for the Fed? Not a chance. In fact, you can bet that the Fed will lose its independence, and be bullied by cranks.
So we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.
The Dow just passed the 23,000 mark. Up 4,600 in seven months.
I understand that a small minority of people are benefiting... but many of them are the ones hating on Trump, but are profiting very nicely from their investments.
I'm not an economics expert but this makes me wonder when it's going to pop. I never trust these "too good to be true" results when it comes to stocks. Obama was a HORRIBLE president with almost half the country going on some type of welfare yet the stocks kept rising. It didn't match with what was happening. Trump has done good things, but with the left attempting to block him at every turn, I don't trust that this won't fall back down.
And the people hailing Obama over this will quickly shift gears and blame Trump for it all if it does start correcting itself.
You lower the tax rates on the repatriated money to 10% for short time. $2.6 trillion is overseas and even at 10% that is $260 billion in tax revenue. The remain $2+ billion will be reinvested here instead of out of the country.
You know, I really wish what you said above, about a $260 billion tax windfall and a $2 trillion injection into the US economy was true.
But your own cited source indicates that it wouldn't be quite so rosy.
One of the 12 bullet points in the tax reform plan released Wednesday calls for a "one-time tax on trillions of dollars held overseas." It was unclear what that reduced rate would be, but the last tax holiday allowed companies to repatriate overseas earnings at a tax rate of 5.25 percent. That was enacted by President George W. Bush in 2004 in another attempt to stimulate the economy.
According to [U.S. economist for Capital Economics Andrew] Hunter's note, around two-thirds of overseas earnings were repatriated during the previous tax holiday. That was about $362 billion, according to the IRS.
If Congress enacts a similar tax holiday, the prior example suggests that up to $1.7 trillion could be repatriated by U.S. companies. The trouble is, it's unknown how much of the funds are in foreign bank accounts or short-term investments, though estimates suggest that around half of the $2.6 trillion is held in cash. The rest is likely held in other, more illiquid assets like factories and equipment, the note said. Earnings on those resources would be much harder to repatriate.
At a 5.25 percent tax rate, that $1.3 trillion would raise only about $60 billion or $70 billion in tax revenue. Hunter notes that a tax holiday could actually reduce the amount of revenue collected, since companies could take advantage of the lower tax rate on funds they would have repatriated anyway.
Yes, it would be another $70 billion in tax revenue, but only a one-time shot...maybe.
And the last sentence from the cited source indicates that the net effect of a tax holiday on overseas profits might actually be a decrease in government tax revenue...which some on this forum might applaud.
If we strip away every entity you despise all we will have left is a monolithic central government like Cuba or N. Korea. No greed, no profit, no wealth inequality. Just the powerful feds who control everything.
Regarding Google. Are we talking just the Google division or Alphabet which is the parent company of Google? You know that changed more than a year ago.
Although advertising is a big part of the google division, Alphabet is quite diversified as is Amazon. And with Alphabet from self driving cars, space exploration and drones and robotics they will be driving future innovation. There are dozens of companies under Alphabet doing all sorts of things.
You do realize that innovations over the past 100 years or so have resulted in a world that was in 1900 90% in extreme poverty to a world now that is less than 10%. That happened with capitalism and innovations that were created through business and corporations. Take away the profit incentive and you have N. Korea or Cuba.
we can learn how to profit and be equitable in our manner without "greed driving wildly every aspect of things".. Money cycling in the system is what stabilizes wealth of a system. When people are paid well, they can purchase functionally, which means the system then works as the interactive function make it so, but when the purchasing power of the people is diminished, the system is sluggish, slow and prone to a jerky operation and may even have fail points. Eventually it makes the overall system work harder, and heats up becoming over inflated and etc.. increase stress, and the life-cycle of things is shortened, which indicates a down grade, because greed has taken the gains for itself. The system is then starved....
You know, I really wish what you said above, about a $260 billion tax windfall and a $2 trillion injection into the US economy was true.
But your own cited source indicates that it wouldn't be quite so rosy.
One of the 12 bullet points in the tax reform plan released Wednesday calls for a "one-time tax on trillions of dollars held overseas." It was unclear what that reduced rate would be, but the last tax holiday allowed companies to repatriate overseas earnings at a tax rate of 5.25 percent. That was enacted by President George W. Bush in 2004 in another attempt to stimulate the economy.
According to [U.S. economist for Capital Economics Andrew] Hunter's note, around two-thirds of overseas earnings were repatriated during the previous tax holiday. That was about $362 billion, according to the IRS.
If Congress enacts a similar tax holiday, the prior example suggests that up to $1.7 trillion could be repatriated by U.S. companies. The trouble is, it's unknown how much of the funds are in foreign bank accounts or short-term investments, though estimates suggest that around half of the $2.6 trillion is held in cash. The rest is likely held in other, more illiquid assets like factories and equipment, the note said. Earnings on those resources would be much harder to repatriate.
At a 5.25 percent tax rate, that $1.3 trillion would raise only about $60 billion or $70 billion in tax revenue. Hunter notes that a tax holiday could actually reduce the amount of revenue collected, since companies could take advantage of the lower tax rate on funds they would have repatriated anyway.
Yes, it would be another $70 billion in tax revenue, but only a one-time shot...maybe.
And the last sentence from the cited source indicates that the net effect of a tax holiday on overseas profits might actually be a decrease in government tax revenue...which some on this forum might applaud.
The 2004 Tax Holiday for companies cost $3 Billion and the 15 companies that profited the most cut 20,000 jobs. The money mostly went to stock repurchase and executive pay.
Do you also understand that for most of that we're still running on the momentum from Obama, and his legacy?
We're going to start seeing Trumps results here soon. My prediction? No idea. Some things look positive, some look drastically negative. What it balances out too? Your guess as is good as mine.
I agree with this.
We are still on an upswing from Obama's economic policies.
You Trumpsters need to make your guy pass a budget and we'll see what he can do from an economic front. FWIW I hope he does a good job economically.
I'm not an economics expert but this makes me wonder when it's going to pop. I never trust these "too good to be true" results when it comes to stocks. Obama was a HORRIBLE president with almost half the country going on some type of welfare yet the stocks kept rising. It didn't match with what was happening. Trump has done good things, but with the left attempting to block him at every turn, I don't trust that this won't fall back down.
And the people hailing Obama over this will quickly shift gears and blame Trump for it all if it does start correcting itself.
I don't trust this at all.
Stocks did not immediately rise when Obama became president.
They did because he pumped a lot of money into commercial business and he also didn't go after the wall street cronies that caused the financial collaspe. Economics is a social science and is based upon the emotions of a select few members of the economy when it comes to stocks in particular. Those who pay attention to the markets and actually know (and aren't blinded by partisan politics or ideology) recognize when a good thing occurs - like "the Stimulus" and the bailouts of the car companies and banks, etc. That makes those people who run the market and who invest in the market more comfortable and content and a down market in housing encourages investors (like Trump BTW) to buy up real estate at low prices and that makes the economy on the surface look very good.
That is what happened under Obama. People who were unskilled suffered the most from job losses and went on foodstamps (and not half the country lol) like they always do. Due to the downturn that group also were more likely to go back to school and gain some skills and so we have more people who are skilled today working. When companies and investors were comfortable and happier they started hiring more people. They weren't paying them as much, but the wages of particular Americans actually did go up (those in my own class/educational range). So it was not all doom and gloom like many of you conservatives believe under Obama. He was pretty hands off of wall street - that was something that many liberals in particular were upset at him about. He didn't attack Wall Street like they wanted him to. If he had, then it would have made investors uncomfortable and lengthened the recession.
So Obama put us on a good footing to improve. Hopefully Trump realizes he needs to work with his own party members, let alone the Dems and get some thing done on taxes and infrastructure improvement in particular. Him wanting to do the above is the main reason why the market is holding. Obama improved infrastructure too with ARRA ("the stimulus") and if Trump is smart, he'd make a similar investment into the country that Obama did and put some money where his mouth is. On taxes, we'll see how it goes and if he can actually get something done.
On the blue, I find it odd that you think Dems are trying to stop him. They cannot stop him. They are not a majority. It is the GOP that is stopping him and he is being combative with them and not making deals, like he said they would. Honestly he shouldn't have to make deals with his own party. IMO his lack of action on the economy - tax reform and creating a budget (let alone healthcare) can only be blamed on himself and the GOP controlled congress. Not the Dems. They have very limited abilities to stop anything the GOP congress can agree to.
I honestly don't see anything "good" he has done from an economic standpoint. He hasn't passed a budget. He failed to repeal and replace ACA. He hasn't gotten tax reform done. So he hasn't done anything "good" from that perspective.
I wonder if it's now time to focus on this thread.
I think it is time.
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