Toddsterpatriot
Diamond Member
- May 3, 2011
- 102,418
- 36,347
And when they have two options, expansion in an area with a 20% tax or expansion in an area with a 35% tax, which do you feel they would favor?
There you go again with that false choice. If a company wants to operate in the United States they have to pay the United States corporate tax rate. Just like if a company wants to operate in the United Arab Emirates they have to pay the HIGHER United Arab Emirates tax rate. US companies invested almost ten billion dollars in the UAE last year. Guess tax rates were not part of the decision making process.
Well, after year one, Company A has $100,000 in the bank and company B has $800,000 in the bank.
Thanks for proving my point. At the end of year one they both have one million dollars to invest. But AFTER year one, well there is a huge difference in "money in the bank". So tell me, does not a lower corporate tax rate either encourage investing TOMORROW instead of today, or encourage the stockpiling of cash. Which of course, the current trillions of dollars in company cash reserves kind of indicates that the corporate tax rate is TOO LOW, not that it is too high.
Use logic and explain why a cut from 40% to 34% would cut GDP growth
I have already done that and you seem not to understand. First, the weighted average cost of capital is inversely related to the marginal tax rate. Second, the internal rate of return required to justify an investment increases as the marginal tax rate declines. Which results in, as tax rates decline, companies take less and less risky investments. It also means that rent seeking increases as tax rates decline, and rent seeking is toxic to a growing economy. And finally, as our example has clearly indicated, the opportunity cost of NOT INVESTING in any given year is higher when the tax rate is lower.
You can say all these facts until you're blue in the face, it's not going to make a difference to a zealot like Toddster. And he is a zealot. It's zealotry to argue that trickle-down tax cuts lead to growth...there exists no evidence, outside the realm of theory and fantasy which Toddster exists solely within, that proves even remotely true.
It's zealotry to argue that trickle-down tax cuts lead to growth
What is a "trickle-down tax cut"?
How does it differ from a regular tax cut?
Why doesn't the "trickle-down tax cut" lead to growth?