Huge Companies Are Already Bleeding The Middle Class Dry, Why Do We Want To Give Them Tax Cuts?

[Winston]

LMAO. I have an MBA and have ran my own business for more than two decades. Honestly, I have forgotten more about business than you will ever know. It is a fact, money invested back in the business is not taxed. It comes right off on my schedule C. As to the profit scenario, if I can make a buck ten off a buck investment I go for it. Nobody has ever thrown away a winning lottery ticket because of the high taxes. And, as Warren Buffet has said, he knows of no businessman that runs away from a profitable investment because of the tax rate. It's stupid to believe otherwise.

Now, I know you have to understanding of the WACC or an IRR. But look it up. The WACC is inversely related to the tax rate. You also know nothing about the Laffer curve and probably nothing about geometry. The Laffer curve is a FREAKIN CURVE. Yes, at very high rates taxes are prohibitive to business. But with an effective marginal tax rate of somewhere south of twenty percent we are nowhere near the turn in that curve.

And here is the thing. Business worry more about the money they might LOSE more than the money they might make. Since loses are deducted from taxable income the higher the marginal tax rate the less effect loses have on income. Look around hoss. Business are so damn scared of losing money they are running away from potentially profitable investments and instead are doing things like buying back stock and looking for ways to vertically integrate, consolidate, or cut production costs. Like I said, not making more pie, but taking more of the pie that is already there. If nothing else, hell, they just pile up the cash. I will let you in on a little secret, when companies are piling up the cash the damn last thing you need to do is cut their tax rate.

The Ugly Truth Behind Stock Buybacks

There, stock buybacks were illegal. Making them legal was just one of Reagan's many screwups in which we are still paying the consequences today.

Yes, political donations are one of the most visible means of rent seeking. And you know what encourages rent seeking--LOW EFFECTIVE TAX RATES. Oh, and a particularly ignorant SCOTUS decision. But rent seeking encompasses other behavior as well, like the consolidation mentioned in the OP. There is no better way to investigate this effect than a simple visit to the grocery store where competition has declined, margins have increased, wages have remained stagnant, and the workers and the customers are paying the price.

The Rent-Seeking Is Too Damn High

Honestly, I have forgotten more about business than you will ever know.

That would explain the idiocy you posted so far. Too bad you weren't posting before you forgot.

It is a fact, money invested back in the business is not taxed.

Absolutely. So fucking what?

As to the profit scenario, if I can make a buck ten off a buck investment I go for it.

Do you go for the buck ten more eagerly or less eagerly than you'd go after 80 cents? Why?

Since loses are deducted from taxable income the higher the marginal tax rate the less effect loses have on income.

The higher the rate, the less valuable the profit.

Business are so damn scared of losing money they are running away from potentially profitable investments

Lower after tax profits make investment less likely, not more likely.

I will let you in on a little secret, when companies are piling up the cash the damn last thing you need to do is cut their tax rate.

When corporations would rather hold their cash, than invest it, you need to do something.

And you know what encourages rent seeking--LOW EFFECTIVE TAX RATES.

A low, flat rate makes rent-seeking less useful.

Let's say you find a magic box. When you stick in a dollar, at first, it spits out two dollars. After several dollars go in, it spits out a dollar seventy five. Then after several more dollars, it spits out a dollar sixty-five. As you continue to feed it dollars it spits out "diminishing returns" on that dollar. Tell me, when do you decide not to stick in any more dollars?

Let's say you find 2 magic boxes.
When you stick in a dollar in the first one, it spits out two dollars.
When you stick in a dollar in the second one, it spits out a dollar fifty.

Which one would you rather put your dollars into?

I stick a dollar in the first one, take the extra dollar I get and put it in the second one, and feed the original dollar right back in the first, and I do it over and over again. Now, answer my question. When do you stop sticking dollars in the magic box.

Sorry, the boxes are in different states. Now, answer my question.

Which one would you rather put your dollars into?

The one in the state that I would most desire to live in.

 

[LeftofLeft]

Forty years ago, 109 firms earned half of the profits of U.S. public companies. Today it's just 30.

It could be argued that the greatest American pillaging is the transfer of taxpayer funds into the bloated military, or a greed-driven private health care system that deprives human beings of essential medical care. But the conversion of American technologies into low-taxed plutocratic profit may be the most flagrant attack on the middle class.

It can also be argued that the products of the technological companies have enriched and energized our lives in numerous ways, and that the high-tech job market has never been better. But the rest of us pay dearly for all the technological benefits, much more than just the hundreds of dollars for phones and phone service. We have lost middle-class jobs and middle-class wealth. We have lost our share of the national productivity that is the direct result of 70 years of taxpayer input into the technologies that have enriched fewer and fewer people.

Corporate Tax Cuts: Are They Kidding?

Donald Trump and the Republicans want a lower corporate tax rate. But many of the largest U.S. companies have paid ZERO federal income taxes in recent years, and overall the corporate world pays anywhere from 13 to 19 percent, about half the 35 percent statutory rate that they so often complain about.

In 2016, fifteen of the largest corporations in America, with combined revenue well over a trillion dollars, paid less than 6 percent in U.S. federal income taxes.

Meanwhile, profits have been growing at the fastest rate in six years, with a double-digit increase in the most recent quarter.


Huge Companies Are Already Bleeding the Middle Class Dry—So Why Do We Want to Give Them Tax Cuts?

Corporations hire the Middle Class. What do you suggest, fewer corporations, less jobs? Where will the Middle Class work? Take your failed class warfare tactics off to another country.