Tax Reform Isn't A Panacea But It Will Help!

Corporate Tax reform is a must for Congress and the President to do if they are to do their duty to make the American economy competitive with other economies throughout the world. But advocates of such reform exaggerate when they say it will increase wages the reasoning being that yes when Washington lowers the corporate tax rate there will be a big jump in corporate net income and theoretically management could spend it on increasing wages but one must factor in how the U.S. economy really works meaning that corporate stock owners especially hedge funds and index fund managers and other large stock holders from a big picture standpoint hold the job fate of top corporate executives and put the focus on evaluating corporations on their quarterly revenue compared to the last quarter's and last year's and the only way that corporate executives can meet the number requirements is if they keep a tight rein on expenses a major one being the wages of their employees so corporate management cannot afford to significantly raise worker wages it puts quarterly earnings too much at risk to do so. Nevertheless, lowering taxes by Washington should be pursued with all possible zeal for it will provide corporate management with additional revenue they will use to strengthen their business which will create jobs not a major amount but a significant amount; those advocates that say such tax reform will create a major amount of new businesses are overplaying the issue there is plenty of capital out there today for corporations to get their hands on if they see a good investment opportunity more revenue in their coiffeurs is not going to create these opportunities.



The tax reform debate in this country has brought to the fore many good ideas but one area that has not received the focus it should is allowing corporations to deduct the interest they pay on their debt from their income to lower their tax bill. In part, this is fair and great tax policy and should be continued for many types of corporate borrowing such as corporate borrowing that builds a factory or a business site or is used to acquire capital equipment or hire employees. But borrowing that is used to for corporate management bonuses, payments to private equity and hedge funds as management fees rising out of the fact these entities own a significant part of the business, leveraged buyouts and "stock dividend payouts" is bad and should be discouraged by disallowing such interest deductions. This type of borrowing is a really major evil in American society. For how many corporations went into bankruptcy because of such debt, how many good Americans families were really hurt when a member of the family lost his or her job because their employer was cutting expenses or being sold to pay off the principle and/or interest on such debt.



In this debate on taxes their seems to be a breakdown into at least two groups in America. Those that are adamant that envision no other alternative than lowering the corporate rate to fifteen percent and those that recognize this is a Herculean challenge that probably is not practically achievable and are perfectly fine with settling with a higher tax rate. These fifteen percent Americans need to be open to settling for a reduction in the corporate tax rate that is higher than fifteen percent. It is definitely better for America that the corporate tax rate be taken down from thirty-five percent even if it doesn't approach fifteen percent than the American people to see no reduction in the corporate tax rate at all. The old adage that is really appropriate here is: Don't let the perfect be the enemy of the good!

 

of course that makes no sense whatsoever. Management has to raises wages, lower prices, and raise quality in a competitive market place. If they lower wages, raise prices, and lower quality more than competition that will put quarterly earnings and the entire business at risk.

 

makes no sense whatsoever. The more shots on goal venture capitalists take the more goals they score. When libcommie govt taxes away venture capital it taxes away new ventures like Apple Amazon Intel etc etc.

 

one group, conservatives and libertarians wants to eliminate the tax altogether because it distracts business from doing business for no reason, and because the tax cost like any cost is passed on to customers anyway. We have the tax only to pander to the pure ignorance of liberals!!

 

Only the hard right tea party wants to eliminate the tax altogether, most reasonable conservatives agree if we eliminate the tax altogether, it would add trillions to the deficit. I thought the tea party was fiscally responsible? LOL.

 

Let's try to help you again. Conservative/libertarian intellectuals want to eliminate the corporate tax so business is free to conduct business, and not worry about taxes and arrange their business around taxes. GE for example has 1000 full time tax professionals who prepare a 132 LBS tax return and moves billions in assets and jobs all over the world with tax consequences in mind. Freed of this burden they would be much more efficient and successful and competitive and in need of employees in the USA. Since the tax cost like any cost is passed on in the form of higher prices the customer pays it anyway. Do you grasp this. We could eliminate the corporate tax, raise the personal tax to compensate if needed, and see no price increases or deficit increases.

 

ok lol.

 

translation: as a typical liberal I lost yet another debate

 

Here's the logic that is missing whenever politicians and presidents talk about tax reform; 100% of taxation is created by the demand to fund the government. Instead of playing games with tax policy all that is needed is a significant reduction in the cost of government. As long as spending remains the same, and/or increases each year, the collective society and business must continue to fund the bloated government spending. In this case all that tax policy does is redistribute the tax burden from one American to another. Since perhaps 100 million Americans already are paying little to no income taxes, who can possibly benefit from new tax policy? Regarding business having more cash if they pay less taxes and the idea of this going to higher wages...ain't going to happen!

 

if new means higher taxes then the people who get the welfare benefit and those who pay the tax don't. 1+1=2

"There are two distinct classes of men - those who pay taxes and those who receive and live upon taxes."
Thomas Paine

 

obviously competition would force them to lower prices and raise wages. Econ 101 class one day one. If you don't understand feel free to ask questions.

 

While I tend to agree with that, I'm curious to know where might you suggest government reduce its cost?

 

What's the purpose of new tax policy? Higher taxes on the wealthy? Lower taxes on others? Lower taxes on corporate income? Higher capital gains taxes? Increased tax revenue? Decreased tax revenue? How can anyone know possible benefits of new tax policy when we have no idea what new tax policy might be?

 

Never mind your stupid personal attack, a company having extra cash does not imply that cash will go to higher wages. Plenty of companies today have billion$ in cash laying around and they are not giving it to employees beyond what is needed to hire and sustain great employees...

 

It's not my job to decide where government can reduce spending? But we can generally guess almost any institution in the USA can at any time reduce their spending by 10%. I can therefore assume our disgustingly inefficient government is capable of reducing spending by 20%. Currently the cost ONLY of federal government is about $12,500 for every man, woman and child in the USA! A family of four is responsible for $50K/year in federal taxation! Go ahead and guess how many households in the USA today can pay their way? The idea that a majority of people and families can't even pay a portion of what they theoretically owe tells me the cost of government is out of control. BUT...this will never change because the collective we are too stupid...

 

You don't understand capitalism. If an industry gets tax cuts it has more money. If one company uses the money to attract better workers it produces better products and bankrupts the company that gives the money to shareholders. This Republican capitalist competition to always drive up wages is why American workers are so rich and can buy so much.

 

it will never change because liberals are anti-science. Rich people pay for poor people to live but poor people reproduce more. This effectively reverses evolution and degrades the species.

 

We know Trump Republican policy is lower taxes and thus freedom from govt as our Founders wanted

 

Government spending would be more easily controlled if everyone felt a loss as a result of more spending. No one should live off government spending.

 

Whatever you say...

 

Are you referring to one of my posts or that of another?

 

In Post #21 I quoted James M...

 

He's on my block list, and I only unblock him periodically out of curiosity.

 

Here's an article that debunks taxation.

https://www.theguardian.com/busines...axed-more-a-new-paper-shows-unequivocally-yes

 

Ever see a conservative or libertarian afraid to debate?