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Thread: Republican Tax Reform - The Answer to ... What?

  1. #61
    Master political analyst Dittohead not!'s Avatar
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    Quote Originally Posted by Libertine View Post
    The recession ended on its own a few months after Obama took office in June 2009. Instead of standing out of the way so the economy could recover Obama pushed policies that tamped down recovery non-stop. His carbon credit scheme, threats of higher taxes, Obamacare's increase of health care costs for employers and individuals, policies to increase energy costs, all resulted in the worst economic record of any modern POTUS.
    The recession did not end "on its own." It took a stimulus from the Bush Administration, and another from the Obama administration. It took bringing the prime rate to near zero. It took tax reduction, which was (often forgotten to be) a part of the stimulus package.

    Now, the argument is that the economy is just humming along, no doubt due to having the proper letter after the president's name, but we need tax cuts to stimulate the economy. Well, tax cuts are popular, and the current administration is not. If people see some reduction in their taxes, or think they do, then the administration will also be more popular.

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    Quote Originally Posted by Djinn View Post
    By far, the most massive loss of revenue in the Republican tax plan is the cut to the corporate tax rate. The last time it was cut was under Ronald Reagan, and at the time, capital was scarce, inflation was high, and unemployment had recently spiked at over 10% - and was still at around 8%. For better or for worse, the corporate tax cut was designed to address these problems.

    So... what problem is Trump addressing with these tax cuts?

    Inflation? The historical average U.S. inflation rate is 3.22%. Over the past decade, it's been 2.07%. So inflation is not a major issue.

    The stock market? Clearly not... the stock market has been climbing fairly steadily since 2010, and is currently at record highs.

    Unemployment? Peaked at about 10% around 2010 and has been dropping ever since. The current unemployment rate is about 4%, and is approaching lows not seen since the late 1960s.

    Raise average salaries? Create jobs? Doubtful. In 2004, Bush offered a tax holiday on overseas profits. The top 15 repatriating companies brought home $150 billion. Nearly all of it was passed on to stakeholders - and then these same 15 companies collectively laid off 21,000 workers over the next three years. When companies have extra capital, they tend NOT to pass it on to their employees.

    Improve the buying power of the U.S. dollar? The value of the dollar isn't stratospheric, but it's not low either; it's been climbing since 2011. And if the value of the dollar is TOO high, it hurts the U.S. tourism industry, not to mention raises the price of U.S. exports.

    Overall, the U.S. economy is doing well. So if the Republican Tax Reform is the answer, what is the question?
    We haven't seen a 3% annual GDP growth rate in over a decade. Growth was in decline in the Obamaconomy and was only 1.6% last year. We were trending toward recession.

    Just the talk of tax cuts to spur economic growth has raised business and consumer confidence levels much higher than at any point of Obama's tenure, or that of GWB as well.

    Simplification of the tax code, along with making it more equitable and attractive to do business in US will certainly spur the economy and reduce compliance costs.

    It doesn't go nearly far enough. Good to see SALT leaving, would like to see carried interest killed as well. It's a baby step in the right direction and is better than nothing.
    Last edited by Libertine; 16th November 2017 at 07:22 AM.

  3. #63
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    Quote Originally Posted by Dittohead not! View Post
    The recession did not end "on its own." It took a stimulus from the Bush Administration, and another from the Obama administration. It took bringing the prime rate to near zero. It took tax reduction, which was (often forgotten to be) a part of the stimulus package.

    Now, the argument is that the economy is just humming along, no doubt due to having the proper letter after the president's name, but we need tax cuts to stimulate the economy. Well, tax cuts are popular, and the current administration is not. If people see some reduction in their taxes, or think they do, then the administration will also be more popular.
    So cutting taxes stimulates the economy?

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    Quote Originally Posted by Djinn View Post
    But what is the tax reform proposal intended to "fix?" Like I said, economic indicators say things are going well - so what's the reasoning for rocking the boat?
    Economic growth had fell to 1.6% last year, that is not going well. Just the promise of tax reform has helped stimulate growth. Real median household incomes and net worth are still suffering and job growth hasn't kept up with working age population growth.

  5. #65
    Spock of Vulcan Ian Jeffrey's Avatar
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    Quote Originally Posted by Ian Jeffrey View Post
    I eagerly await the conservatives' answers to that question.

    Still waiting for that answer. More accurately, still waiting for the question the proposals answer.

  6. #66
    Council Member Djinn's Avatar
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    Quote Originally Posted by Libertine View Post
    We have seen a 3% annual GDP growth rate in over a decade. Growth was in decline in the Obamaconomy and was only 1.6% last year. We were trending toward recession.

    Just the talk of tax cuts to spur economic growth has raised business and consumer confidence levels much higher than at any point of Obama's tenure, or that of GWB as well.

    Simplification of the tax code, along with making it more equitable and attractive to do business in US will certainly spur the economy and reduce compliance costs.

    It doesn't go nearly far enough. Good to see SALT leaving, would like to see carried interest killed as well. It's a baby step in the right direction and is better than nothing.
    But the GDP is 3.1% now - which is where where it should be. So why do we want to change things up?

  7. #67
    Master political analyst Dittohead not!'s Avatar
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    Quote Originally Posted by Libertine View Post
    So cutting taxes stimulates the economy?
    If properly done, it can.

  8. #68
    Master political analyst Dittohead not!'s Avatar
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    Quote Originally Posted by Libertine View Post
    We haven't seen a 3% annual GDP growth rate in over a decade. Growth was in decline in the Obamaconomy and was only 1.6% last year. We were trending toward recession.

    Just the talk of tax cuts to spur economic growth has raised business and consumer confidence levels much higher than at any point of Obama's tenure, or that of GWB as well.

    Simplification of the tax code, along with making it more equitable and attractive to do business in US will certainly spur the economy and reduce compliance costs.

    It doesn't go nearly far enough. Good to see SALT leaving, would like to see carried interest killed as well. It's a baby step in the right direction and is better than nothing.
    We don't need to cut taxes. Just talking about it stimulates business. Talking about building a wall keeps illegals out. Talking about nuking North Korea stops them from building ICBMs. Magical talk.

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    Quote Originally Posted by Djinn View Post
    But the GDP is 3.1% now - which is where where it should be. So why do we want to change things up?
    The last quarter was 3.1%, but we will finish the year below 3%. Growth is up mostly because Trump and the GOP promised to change things up.

    Lowering the corporate tax rate will help eliminate all the silly tax avoidance games being played and free up part of the billions spent on compliance.

  10. #70
    Council Member Djinn's Avatar
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    Quote Originally Posted by Libertine View Post
    The last quarter was 3.1%, but we will finish the year below 3%. Growth is up mostly because Trump and the GOP promised to change things up.

    Lowering the corporate tax rate will help eliminate all the silly tax avoidance games being played and free up part of the billions spent on compliance.
    The goal is to sustain a rate of approximately 3% each quarter. Averaging quarters doesn't mean much; the calendar year is arbitrary from an economic perspective. If 2017 Q4 is shaping up to fall between 2.8% and 3.2%, there's no need to make major changes.

    Trump wants to bring the growth rate to 5% or 6%, making him sound like he wants to gun the engines on the Titanic.

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