Is this Pro-Corporate Tax Cut Argument Valid?

[team_PLEASE]

Is the following argument about how corporate tax cuts will lead to greater wages for workers logical?

Corporate tax cuts --> more companies willing to provide goods at lower prices in order to gain competitive edge --> shift supply curve (of goods) to the right --> equilibrium price of goods 'moves' to the right --> more demand of goods --> companies need to hire more workers to keep up with demand --> demand curve (of labor) shifts to right --> equilibrium price (of labor) shifts upward and to the right, resulting in an increase in wages.
​

Does simply moving the equilibrium price of goods (without actually shifting the demand curve) indicate a change in demand that would result in companies hiring more workers?

Is there anything (else) wrong with the argument presented?

​

 

[Boss]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

In short, there is really not a downside to lower corporate taxation. At some level, it will benefit the economy, there is no way it can't do that. If it is enough of a benefit, the growth will result in generating more actual tax revenue over time. So not only will you be producing more jobs, upgrading technology, strengthening 401k holdings, you'll also be ultimately producing more corporate tax revenue.

Another aspect is how this will effect the attraction of foreign corporate interests. There are many corporations outside the US who would love to come here and open up shop. We have an abundant skilled workforce and vibrant consumer market, the largest on the planet. What has given many of them pause is our high corporate tax rate. When they come here, they are going to hire American workers and begin contributing to the US tax base.

Many of these things are not being factored or calculated because we don't know how to predict them... but they are going to happen.

 

[william the wie]

You have to disintermediate/deconstruct the incentives. The main incentive in the tax bill is to take advantage of the suddenly steeper gradient in cost of living by location.
So there is going to be increased in geographic rent seeking until equilibrium of wages and labor forces equalize out.

 

[william the wie]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

In short, there is really not a downside to lower corporate taxation. At some level, it will benefit the economy, there is no way it can't do that. If it is enough of a benefit, the growth will result in generating more actual tax revenue over time. So not only will you be producing more jobs, upgrading technology, strengthening 401k holdings, you'll also be ultimately producing more corporate tax revenue.

Another aspect is how this will effect the attraction of foreign corporate interests. There are many corporations outside the US who would love to come here and open up shop. We have an abundant skilled workforce and vibrant consumer market, the largest on the planet. What has given many of them pause is our high corporate tax rate. When they come here, they are going to hire American workers and begin contributing to the US tax base.

Many of these things are not being factored or calculated because we don't know how to predict them... but they are going to happen.

Just based on construction and internal migration incentives I got to $10T as a limit for 2018 and the treasury break even point for GDP growth is 2.4%. That's just an educated guess but still with international investment growth added in the results go surreal.

 

[team_PLEASE]

Thanks for the replies.

If consumer demand is there, it could result in more jobs created and expansion of production.

I guess my problem with the argument is the line:

equilibrium price of goods 'moves' to the right --> more demand of goods --> companies need to hire more workers to keep up with demand

Is the demand of goods really increasing simply because the equilibrium price is being 'moved' to the right due to a shift of the supply curve towards the right? It's not as if the demand curve is changing. More people would be having their demands met due to the supply curve being shifted to the right, but I'm unsure if this translates to 'more demand'. The reason I think this is relevant is because if demand isn't being increased, then I don't see why companies would feel the need to hire more workers. After all, in order to make use of the corporate tax cuts by way of decreasing the price of goods, it isn't necessary for companies to hire more workers - they can simply lower the prices of the goods they are currently making.

Does a shift in supply (like this: http://www.economicsonline.co.uk/How markets work graphs/Supply-to-R.png) imply an increase in demand that would warrant companies hiring more workers? Or is this question not important?

 

[william the wie]

I would tend towards unimportant because the demand in question is global demand. The supplier wants minimum regulation, minimum bookkeeping costs and a workforce that can handle the pace of automation. That is what the US is becoming under this bill and Trump's war on regulation the place to find that. Most of sub-Saharan Africa is growing at rates upto and in a few cases above 10% or about 10-20 years behind China. Latin America is slower because of regulations gone wild but they too are straightening out most of their messes and they are growing..

 

[danielpalos]

Is the following argument about how corporate tax cuts will lead to greater wages for workers logical?

Corporate tax cuts --> more companies willing to provide goods at lower prices in order to gain competitive edge --> shift supply curve (of goods) to the right --> equilibrium price of goods 'moves' to the right --> more demand of goods --> companies need to hire more workers to keep up with demand --> demand curve (of labor) shifts to right --> equilibrium price (of labor) shifts upward and to the right, resulting in an increase in wages.
​

Does simply moving the equilibrium price of goods (without actually shifting the demand curve) indicate a change in demand that would result in companies hiring more workers?

Is there anything (else) wrong with the argument presented?

​

Just right wing propaganda. It is simple income redistribution if it adds to the debt.

The right wing, never gets it.

 

[team_PLEASE]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

 

[yiostheoy]

Is the following argument about how corporate tax cuts will lead to greater wages for workers logical?

Corporate tax cuts --> more companies willing to provide goods at lower prices in order to gain competitive edge --> shift supply curve (of goods) to the right --> equilibrium price of goods 'moves' to the right --> more demand of goods --> companies need to hire more workers to keep up with demand --> demand curve (of labor) shifts to right --> equilibrium price (of labor) shifts upward and to the right, resulting in an increase in wages.
​

Does simply moving the equilibrium price of goods (without actually shifting the demand curve) indicate a change in demand that would result in companies hiring more workers?

Is there anything (else) wrong with the argument presented?

​

Your statements don't make any sense.

You beg the question (affirmation/assumption of the consequent).

You don't seem to understand that the bottom line has nothing to do with prices or costs.

You could be Trump himself. He does not understand it either.

He never learned any micro- or macro- economics.

 

[yiostheoy]

You need to pick an avatar to go with your moniker.

 

[william the wie]

The first thing to keep in mind is that jobs and workers are being motivated by the SALT provision of the tax bill to migrate south Southwest. Given that this migration away from the Blue Wall started in the 1920s adding an afterburner to an already established trend means that the transfer of tax base will make it impossible for most blue states to participate in the infrastructure bill. If the blue states start collapsing before the mid-terms Trump will have one of the best mid-terms in history and R special counsels looking for fraud and corruption will have a field day. That is the downside you are trying to find.

 

[danielpalos]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

 

[william the wie]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

At this point a $10 federal minimum can be passed and signed. $15 would cost the Ds giving away the store, which ain't going to happen. Healthcare reform would involve an audit of misconduct by the states in dispensing funds to non-citizens. That would send most of the D establishment to jail. So that sound likes a pipedream to me.

 

[william the wie]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

With reverse mortgages, severance pay and retirement accounts the percentage of people who need to work is shrinking rapidly. For example if Gail and I relocated we would end up having an extra $60,000 a year that we really have no use for. And we are not especially rich just debt free. our main problem is finding missions we want to fund and second priority is scouting out new restaurants that we both want to go to.

That kind of problem is increasingly common my step daughter's brother-in-law is unlikely to take another job because $100k/yr is not enough to get him back in the labor force.

 

[danielpalos]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

At this point a $10 federal minimum can be passed and signed. $15 would cost the Ds giving away the store, which ain't going to happen. Healthcare reform would involve an audit of misconduct by the states in dispensing funds to non-citizens. That would send most of the D establishment to jail. So that sound likes a pipedream to me.

Not sure why that is a problem for the US.

Our alleged wars on crime, drugs, and terror--that the right wing also refuses to pay for--is more of a problem for our economy regarding taxes.

 

[william the wie]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

At this point a $10 federal minimum can be passed and signed. $15 would cost the Ds giving away the store, which ain't going to happen. Healthcare reform would involve an audit of misconduct by the states in dispensing funds to non-citizens. That would send most of the D establishment to jail. So that sound likes a pipedream to me.

Not sure why that is a problem for the US.

Our alleged wars on crime, drugs, and terror--that the right wing also refuses to pay for--is more of a problem for our economy regarding taxes.

Mostly just pro forma BS. some billionth of a percent of the federal budget is marked off and police are made tax collectors by seizure. unless the cops pull something stupid it is a great stealth tax.

 

[danielpalos]

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

The argument presented poses one specific set of predefined variables and draws assumptions on those alone. That's the main problem I see with it.

Cutting corporate taxes does one certain thing. It encourages greater corporate earnings. The less you tax something, the more of it you'll get.... every time. Now, greater corporate earnings can result in several things. If consumer demand is there, it could result in more jobs created and expansion of production. It could also result in upgrades of technology and equipment. This would generate it's own economic growth through jobs to produce equipment, install equipment, training, maintenance, etc. Then there is the possibility of corporate stock buybacks, which strengthen the value of the corporate stocks for shareholders.

Also, the US is essentially at full employment. Will more jobs really be beneficial?

And even they would be, how do we know that there will be consumer demand to warrant an increase in production/upgrades in technology (which would result in the creation of jobs)?

Higher paying jobs result in more tax revenue.

Healthcare reform and a fifteen dollar an hour minimum wage!

At this point a $10 federal minimum can be passed and signed. $15 would cost the Ds giving away the store, which ain't going to happen. Healthcare reform would involve an audit of misconduct by the states in dispensing funds to non-citizens. That would send most of the D establishment to jail. So that sound likes a pipedream to me.

Not sure why that is a problem for the US.

Our alleged wars on crime, drugs, and terror--that the right wing also refuses to pay for--is more of a problem for our economy regarding taxes.

Mostly just pro forma BS. some billionth of a percent of the federal budget is marked off and police are made tax collectors by seizure. unless the cops pull something stupid it is a great stealth tax.

We need to audit those programs. They also need to be listed under defense spending not welfare spending.

 

[team_PLEASE]

​

Your statements don't make any sense.

You beg the question (affirmation/assumption of the consequent).

You don't seem to understand that the bottom line has nothing to do with prices or costs.

You could be Trump himself. He does not understand it either.

He never learned any micro- or macro- economics.

I was presented this argument by someone else, so these aren't my ideas. I was curious to see if it could stand up to scrutiny.

 

[C_Clayton_Jones]

Is the following argument about how corporate tax cuts will lead to greater wages for workers logical?

Corporate tax cuts --> more companies willing to provide goods at lower prices in order to gain competitive edge --> shift supply curve (of goods) to the right --> equilibrium price of goods 'moves' to the right --> more demand of goods --> companies need to hire more workers to keep up with demand --> demand curve (of labor) shifts to right --> equilibrium price (of labor) shifts upward and to the right, resulting in an increase in wages.
​

Does simply moving the equilibrium price of goods (without actually shifting the demand curve) indicate a change in demand that would result in companies hiring more workers?

Is there anything (else) wrong with the argument presented?

​

Yes.

Corporations use their tax windfall to enrich investors and shareholders, they don’t seek to create new jobs.

Indeed, corporations plan on continuing to cut jobs to increase profits.

 

[team_PLEASE]

Is the following argument about how corporate tax cuts will lead to greater wages for workers logical?

Corporate tax cuts --> more companies willing to provide goods at lower prices in order to gain competitive edge --> shift supply curve (of goods) to the right --> equilibrium price of goods 'moves' to the right --> more demand of goods --> companies need to hire more workers to keep up with demand --> demand curve (of labor) shifts to right --> equilibrium price (of labor) shifts upward and to the right, resulting in an increase in wages.
​

Does simply moving the equilibrium price of goods (without actually shifting the demand curve) indicate a change in demand that would result in companies hiring more workers?

Is there anything (else) wrong with the argument presented?

​

Yes.

Corporations use their tax windfall to enrich investors and shareholders, they don’t seek to create new jobs.

Indeed, corporations plan on continuing to cut jobs to increase profits.

When you say "Yes", what is that in response to? The thing you are seemingly saying "yes" to is arguing that the corporate tax cut will beneficial to the country because it will increase wages. Is that your view?