Tax Cuts Steal Democracy

[The Derp]

OMG! That's awful! What do the stock sellers do with the money?

Stash it in accounts in overseas socialist countries like Switzerland. BTW - I thought socialism was so terrible? If it is, how come people like Romney stash their money in banks in socialist nations? It would appear that socialism and capitalism can coexist. If it's good enough for Romney...

Deferred compensation happens in the future. We're talking about cash now!!!

No we're not. You're trying to shift the goalposts to that, but it was never what I said. This is just your attempt to hijack the thread.

Where does their higher profit end up?

In banks in socialist countries. Not in the pockets of the workers. Wages haven't increased, yet the 1%'s wealth has. So these corporations cut workforce more and more in order to increase profit margins to satisfy the top shareholders who are also the Board of Directors. Revenues don't grow, but profits do. That doesn't mean there's economic growth, what it means is that more wealth is transferred to the top at the expense of workers and the overall economy.

Leaving the money overseas doesn't even work in the movies.

It works if you're a rich person, who also likely sits on the Board of the very corporation we are talking about. Plus, Bush did a tax repatriation in 2004 that was a resounding failure, according to the Wall Street Journal.

 

[The Derp]

There is no point in arguing economic science and how it should translate into policy with a leftist. They are not capable of capitalism, that's why they're subhuman leftist filth.

Conservatives need welfare to pay for tax cuts. Making Conservatives the true welfare queens. Your entire economic belief system is dependent on welfare. And you dare say *I* don't like capitalism? LOL!

 

[Toddsterpatriot]

The ones that vote.......durr.

And of those, what typically happens? Those with the most shares band together to control the company, install who they want to install on the executive team, and direct the company to act in a certain way. That's the whole point.

It wouldn't be surprising that Board Members vote their tiny holdings for each other.

This is exactly what I've been saying that you've been disagreeing with me over. Now you are trying to assume my position as your own while foisting your position on me. Pathetic.

Thanks. You don't think the Fed was involved with TARP, do you?
And you said TARP bought toxic assets from banks. You don't think AIG is a bank, do you?

TARP did relieve toxic assets from the banks. From the House Oversight Committee:

“This diagnosis of the financial crisis is driving the Administration’s aggressive interagency effort to revive credit markets and strengthen the balance sheets of financial institutions through capital injections and the removal of toxic assets,”

Those with the most shares band together to control the company

Give me an example and I'll try to highlight your error.

This is exactly what I've been saying that you've been disagreeing with me over.

No, you've been saying the Board has massive amounts of stock. For the most part, their holdings are tiny.

strengthen the balance sheets of financial institutions through capital injections and the removal of toxic assets,”

This was a newer idea, in 2009, long after TARP had bought preferred shares.
It was basically a failure. Too complicated. Too many hoops to jump thru.
From your earlier source.........

The Treasury Department's Public-Private Investment Program, or PPIP, for example, promised to buy as many as $1 trillion worth of troubled securities when it was first unveiled in March of 2009.

As of late June however, the program has purchased just a fraction of that amount, roughly $12 billion in assets. It hasn't helped either that the Federal Deposit Insurance Corporation was forced to shelve the legacy loans portion of the program last June.

Over a year later.....$12 billion in purchases.
TARP was originally gonna buy $700 billion in assets.

Unless you think $12 billion was the toxic total?

 

[The Derp]

Give me an example and I'll try to highlight your error.

You want me to give you an example on how a Board of Directors is chosen?!?!?! Who do you think chooses the board? My God...it's like you're getting more dense on purpose.

No, you've been saying the Board has massive amounts of stock. For the most part, their holdings are tiny.

The Board of Directors are chosen by majority shareholders for a reason.

This was a newer idea, in 2009, long after TARP had bought preferred shares.It was basically a failure. Too complicated. Too many hoops to jump thru.

Wait, wait, wait...you said earlier that it was the initial idea, but they shifted to preferred stock afterwards. Now you are saying, "no, no, they did the relieving of the toxic assets idea after." So you're confused on the timeline.

The Treasury Department's Public-Private Investment Program, or PPIP, for example, promised to buy as many as $1 trillion worth of troubled securities when it was first unveiled in March of 2009. As of late June however, the program has purchased just a fraction of that amount, roughly $12 billion in assets. It hasn't helped either that the Federal Deposit Insurance Corporation was forced to shelve the legacy loans portion of the program last June.

SO THEY DID BUY ASSETS, THEN! Just like I said. Fucking moron.

TARP was originally gonna buy $700 billion in assets.nless you think $12 billion was the toxic total?

The U.S. Treasury pledged Monday to commit $75 billion to $100 billion of its financial bailout fund to soak up distressed assets now choking bank balance sheets. Treasury Secretary Timothy Geithner's banking plan will use low-interest loans and between $75 billion to $100 billion of what's left of the government's $700 billion bailout fund to entice private sector investors to initially buy about buy $500 billion in toxic assets — taking them off the books of the nation's banks.

 

[Toddsterpatriot]

OMG! That's awful! What do the stock sellers do with the money?

Stash it in accounts in overseas socialist countries like Switzerland. BTW - I thought socialism was so terrible? If it is, how come people like Romney stash their money in banks in socialist nations? It would appear that socialism and capitalism can coexist. If it's good enough for Romney...

Deferred compensation happens in the future. We're talking about cash now!!!

No we're not. You're trying to shift the goalposts to that, but it was never what I said. This is just your attempt to hijack the thread.

Where does their higher profit end up?

In banks in socialist countries. Not in the pockets of the workers. Wages haven't increased, yet the 1%'s wealth has. So these corporations cut workforce more and more in order to increase profit margins to satisfy the top shareholders who are also the Board of Directors. Revenues don't grow, but profits do. That doesn't mean there's economic growth, what it means is that more wealth is transferred to the top at the expense of workers and the overall economy.

Leaving the money overseas doesn't even work in the movies.

It works if you're a rich person, who also likely sits on the Board of the very corporation we are talking about. Plus, Bush did a tax repatriation in 2004 that was a resounding failure, according to the Wall Street Journal.

Stash it in accounts in overseas socialist countries like Switzerland

If Pfizer brings back cash and buys my shares, I'm going to stash it in Switzerland?
You realize they've really cracked down on that behavior. How should I get it there?
Why would I want to?

Also, I'm curious as to the basis you're using to call Switzerland socialist. Elaborate please.

No we're not

We are.
If a company brings back cash today, why would they use it to give their CEO stock awards in 2020?
It sounds like another example of your ignorance.

In banks in socialist countries. Not in the pockets of the workers.

Ummm.....IBM gets a tax cut here and sends the money to a socialist country?
You're making less and less sense.

It works if you're a rich person

A rich person can't spend money their IBM shares hold overseas.

Plus, Bush did a tax repatriation in 2004 that was a resounding failure

Companies brought money back, the government got their cut, the companies and shareholders got the rest.
That's not a failure.

 

[The Derp]

If Pfizer brings back cash and buys my shares, I'm going to stash it in Switzerland?

The majority of workers in this country have no investments. So you are trying to inject your unverifiable anecdote into the debate in order to represent the entire picture. You do that because you know the facts are not on your side.

IAlso, I'm curious as to the basis you're using to call Switzerland socialist. Elaborate please.

Are you fucking serious?

e are.If a company brings back cash today, why would they use it to give their CEO stock awards in 2020?It sounds like another example of your ignorance.

Because they need the operating capital thanks to the fact that revenues have stagnated or declined, because there's no demand.

Ummm.....IBM gets a tax cut here and sends the money to a socialist country? You're making less and less sense..

That is precisely what they do. Same practice applies to businesses that headquarter themselves in Delaware. They're not doing so because it's good for demand, just good for their bottom line where the Board and majority shareholders benefit.

A rich person can't spend money their IBM shares hold overseas.

Try writing that sentence again without the assistance of a Russian-to-English translator, please.

Companies brought money back, the government got their cut, the companies and shareholders got the rest.That's not a failure.

The repatriation cost the Treasury $3B, cost 20,000 jobs, and did nothing to increase consumer demand. Failure.

 

[Toddsterpatriot]

Give me an example and I'll try to highlight your error.

You want me to give you an example on how a Board of Directors is chosen?!?!?! Who do you think chooses the board? My God...it's like you're getting more dense on purpose.

No, you've been saying the Board has massive amounts of stock. For the most part, their holdings are tiny.

The Board of Directors are chosen by majority shareholders for a reason.

This was a newer idea, in 2009, long after TARP had bought preferred shares.It was basically a failure. Too complicated. Too many hoops to jump thru.

Wait, wait, wait...you said earlier that it was the initial idea, but they shifted to preferred stock afterwards. Now you are saying, "no, no, they did the relieving of the toxic assets idea after." So you're confused on the timeline.

The Treasury Department's Public-Private Investment Program, or PPIP, for example, promised to buy as many as $1 trillion worth of troubled securities when it was first unveiled in March of 2009. As of late June however, the program has purchased just a fraction of that amount, roughly $12 billion in assets. It hasn't helped either that the Federal Deposit Insurance Corporation was forced to shelve the legacy loans portion of the program last June.

SO THEY DID BUY ASSETS, THEN! Just like I said. Fucking moron.

TARP was originally gonna buy $700 billion in assets.nless you think $12 billion was the toxic total?

The U.S. Treasury pledged Monday to commit $75 billion to $100 billion of its financial bailout fund to soak up distressed assets now choking bank balance sheets. Treasury Secretary Timothy Geithner's banking plan will use low-interest loans and between $75 billion to $100 billion of what's left of the government's $700 billion bailout fund to entice private sector investors to initially buy about buy $500 billion in toxic assets — taking them off the books of the nation's banks.

You want me to give you an example on how a Board of Directors is chosen?!?!?!

No, silly, give me an example of a big bank and I'll try to show you how few shares are really controlled by the board.

The Board of Directors are chosen by majority shareholders for a reason.

Yup. And it's not because they themselves hold the majority.

Wait, wait, wait...you said earlier that it was the initial idea, but they shifted to preferred stock afterwards.

Yup. Before they bought a single "toxic asset", they shifted to buying preferred shares.
It was in all the papers. You need yet another link?

Now you are saying, "no, no, they did the relieving of the toxic assets idea after."

No, I'm saying the tiny amount they ended up buying couldn't possibly have been all the toxic assets.
Unless you think it was?

The U.S. Treasury pledged Monday to commit $75 billion to $100 billion of its financial bailout fund

And how much was actually spent?

to entice private sector investors to initially buy about buy $500 billion in toxic assets

That's not the Treasury or Fed buying toxic assets. And this was another failed Obama administration idea that ended up going nowhere.

 

[Toddsterpatriot]

If Pfizer brings back cash and buys my shares, I'm going to stash it in Switzerland?

The majority of workers in this country have no investments. So you are trying to inject your unverifiable anecdote into the debate in order to represent the entire picture. You do that because you know the facts are not on your side.

IAlso, I'm curious as to the basis you're using to call Switzerland socialist. Elaborate please.

Are you fucking serious?

e are.If a company brings back cash today, why would they use it to give their CEO stock awards in 2020?It sounds like another example of your ignorance.

Because they need the operating capital thanks to the fact that revenues have stagnated or declined, because there's no demand.

Ummm.....IBM gets a tax cut here and sends the money to a socialist country? You're making less and less sense..

That is precisely what they do. Same practice applies to businesses that headquarter themselves in Delaware. They're not doing so because it's good for demand, just good for their bottom line where the Board and majority shareholders benefit.

A rich person can't spend money their IBM shares hold overseas.

Try writing that sentence again without the assistance of a Russian-to-English translator, please.

Companies brought money back, the government got their cut, the companies and shareholders got the rest.That's not a failure.

The repatriation cost the Treasury $3B, cost 20,000 jobs, and did nothing to increase consumer demand. Failure.

The majority of workers in this country have no investments.

I don't work for Pfizer, I own Pfizer shares.

So you are trying to inject your unverifiable anecdote into the debate

Like your story about American stock holders taking their proceeds and moving them offshore? Cool!

Because they need the operating capital

Your confusion about time frames and the difference between cash and stock options is interesting.

Are you fucking serious?

Are you more confused about Switzerland or socialism?

That is precisely what they do.

They already have a ton of money overseas that they can't spend here. Can't give to shareholders here.

Try writing that sentence again without the assistance of a Russian-to-English translator, please.

You said a rich person benefits from cash held by IBM overseas.
Explain how I benefit from the cash IBM holds in any other country.
Use your moron-to-English translator, because your posts are getting dumber. Hard to believe, I know.

The repatriation cost the Treasury $3B

No it didn't. The Treasury got money they would not have otherwise received.

cost 20,000 jobs,

No it didn't. Companies with more cash cut fewer jobs, not more.

and did nothing to increase consumer demand

Baloney. Anything the companies do with repatriated cash eventually hits consumer demand.

 

[The Derp]

Companies brought money back, the government got their cut, the companies and shareholders got the rest.That's not a failure.

Firms largely used the profits that they repatriated during the 2004 holiday not to invest or create U.S. jobs but for the very purposes that Congress sought to prohibit, such as repurchasing their own stock and paying bigger dividends to shareholders. Moreover, many firms laid off large numbers of U.S. workers even as they reaped multi-billion-dollar benefits from the tax holiday and passed them on to shareholders. The top 15 repatriating corporations repatriated more than $150 billion during the holiday while cuttingtheir U.S. workforces by 21,000 between 2004 and 2007, a Senate Permanent Subcommittee on Investigations report found.

 

[EdwardBaiamonte]

Simply giving a business money doesn't mean that business will automatically use that money to expand.

They used a lot of money to create a $17 trillion economy and will need a lot more to grow it to a $20 or $30 trillion economy.

 

[The Derp]

Baloney. Anything the companies do with repatriated cash eventually hits consumer demand.

There is no evidence that the holiday had the promised beneficial effects, as researchers at academic institutions, the Congressional Research Service, the Treasury Department, and outside analysts all have found. To the contrary, there is strong evidence that firms used the repatriated earnings mainly to benefit corporate owners and shareholders and that the congressional restrictions on the use of repatriated earnings to ensure they were invested in the United States were ineffective.

The repatriation holiday “did not increase domestic investment, employment, or [research and development],” according to a study by economists at the University of Illinois, Harvard University, and MIT (Dhammika Dharmapala, Kristin J. Foley, and C. Fritz Forbes, “Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act,” NBER Working Paper, June 2009.)

Proponents of a new tax holiday argue that large multinationals are cash-constrained and would make significant, job-creating investments in the United States if they had access to their overseas earnings. The large stock repurchases that some multinationals made in recent years, however, (1) show that they already have easy access to large amounts of domestic cash and (2) suggest that multinationals would likely use additional cash from repatriation for more stock buy-backs, rather than new investments. Indeed, the ten companies with the largest stockpiles of foreign profits paid out more than $107 billion in cash to shareholders through share repurchases in 2013, suggesting that they are not cash-constrained. Moreover, seven of the ten companies with the largest stockpiles of foreign earnings in 2013 also ranked among the top ten U.S. companies by share repurchases.

So what that all means is that there isn't a need to do corporate tax repatriation at low rates if you are looking to grow the economy. If you're looking to grow the bank accounts of the 1%, then they do achieve that goal. But they do not achieve the goal of growth, and end up costing the Treasury revenue in the long-term.

 

[hadit]

If the median is $51K, that means it's the 50th percentile.

NO IT FUCKING DOESN'T. All it means is that of all wages together, the median is $51K. But when you enter that median wage into a percentile of wages, you find that $51K is in the 63rd percentile. So that means there are more workers making under $51K than at or above it. The reason it's $51K is because of incomes at the top, skewing the median upward.

Fucking moron...wow. No wonder GDP growth was so terrible last quarter.

Seriously, did you even bother to figure this out for yourself? You can very easily see where $51K/yr falls in income percentiles. The fact that you don't do that means you're either too lazy or too ignorant to know better.

Seriously, look it up.

Median = the point on the list with equal numbers above and below it, and it doesn't matter how high above or below.

Consider the following annual wages:

$5
$10K
$20K
$50K
$60K
$1 mil
$100 mil

The average income is $14,448,572. The median, OTOH, is $50K.

 

[EdwardBaiamonte]

Why would they if their revenues stagnate or decline? You are working from the assumption that business expands just because. .

no dummy working from assumption that the supply of new inventions creates demand that generates revenue and profit.

 

[EdwardBaiamonte]

Business only expands if there is requisite demand for their product. And that is determined by revenue growth, not profit growth.

business expanded from stone age to here thanks to supply of new and affordable inventions which in turn led to revenue and profit growth. THe supply of new inventions requires huge investments. Now do you understand supply side economics?

 

[Toddsterpatriot]

Companies brought money back, the government got their cut, the companies and shareholders got the rest.That's not a failure.

Firms largely used the profits that they repatriated during the 2004 holiday not to invest or create U.S. jobs but for the very purposes that Congress sought to prohibit, such as repurchasing their own stock and paying bigger dividends to shareholders. Moreover, many firms laid off large numbers of U.S. workers even as they reaped multi-billion-dollar benefits from the tax holiday and passed them on to shareholders. The top 15 repatriating corporations repatriated more than $150 billion during the holiday while cuttingtheir U.S. workforces by 21,000 between 2004 and 2007, a Senate Permanent Subcommittee on Investigations report found.

Firms largely used the profits that they repatriated during the 2004 holiday not to invest or create U.S. jobs but for the very purposes that Congress sought to prohibit, such as repurchasing their own stock and paying bigger dividends to shareholders.

Cash is fungible. Buybacks and dividends also create jobs and boost consumer spending.

Moreover, many firms laid off large numbers of U.S. workers even as they reaped multi-billion-dollar benefits from the tax holiday and passed them on to shareholders.

Yup, despite bringing back cash they did those things.
Not because they brought back cash.

 

[Toddsterpatriot]

Baloney. Anything the companies do with repatriated cash eventually hits consumer demand.

There is no evidence that the holiday had the promised beneficial effects, as researchers at academic institutions, the Congressional Research Service, the Treasury Department, and outside analysts all have found. To the contrary, there is strong evidence that firms used the repatriated earnings mainly to benefit corporate owners and shareholders and that the congressional restrictions on the use of repatriated earnings to ensure they were invested in the United States were ineffective.

The repatriation holiday “did not increase domestic investment, employment, or [research and development],” according to a study by economists at the University of Illinois, Harvard University, and MIT (Dhammika Dharmapala, Kristin J. Foley, and C. Fritz Forbes, “Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act,” NBER Working Paper, June 2009.)

Proponents of a new tax holiday argue that large multinationals are cash-constrained and would make significant, job-creating investments in the United States if they had access to their overseas earnings. The large stock repurchases that some multinationals made in recent years, however, (1) show that they already have easy access to large amounts of domestic cash and (2) suggest that multinationals would likely use additional cash from repatriation for more stock buy-backs, rather than new investments. Indeed, the ten companies with the largest stockpiles of foreign profits paid out more than $107 billion in cash to shareholders through share repurchases in 2013, suggesting that they are not cash-constrained. Moreover, seven of the ten companies with the largest stockpiles of foreign earnings in 2013 also ranked among the top ten U.S. companies by share repurchases.

So what that all means is that there isn't a need to do corporate tax repatriation at low rates if you are looking to grow the economy. If you're looking to grow the bank accounts of the 1%, then they do achieve that goal. But they do not achieve the goal of growth, and end up costing the Treasury revenue in the long-term.

There is no evidence that the holiday had the promised beneficial effects

Unless they brought back cash and then burned it, there were beneficial effects.

To the contrary, there is strong evidence that firms used the repatriated earnings mainly to benefit corporate owners and shareholders

Owners and shareholders benefitted and when they spent this cash, the economy benefitted. Thanks.

The repatriation holiday “did not increase domestic investment, employment, or [research and development],”

The repatriation holiday “did not reduce domestic investment, employment, or [research and development],”

But they do not achieve the goal of growth, and end up costing the Treasury revenue in the long-term

LOL! Such a stupid claim.

 

[The Derp]

No it didn't. Companies with more cash cut fewer jobs, not more.

It's not cash, it's profits. They are increasing their profits, but they're not doing so by increasing their revenues. Companies slash workforce in order to achieve higher profit margins all the time. Once again, the equation is:

Profit (P) = Tax Rate (t) x (Revenues (r) - Expenses (e))

P can increase without also increasing r. Usually, it's done by reducing e. And the biggest share of e is always payroll. So if your r is flat or in decline, but you need to increase your P to satisfy the Board, you cut e. It doesn't matter how much "cash" the company has on hand. If r isn't increasing, then the business isn't growing. But to satisfy P, companies reduce e.

Baloney. Anything the companies do with repatriated cash eventually hits consumer demand.

No it doesn't. In fact, repatriation encourages more foreign offshoring of profits, as the Joint Committee determined in 2014.

You said a rich person benefits from cash held by IBM overseas.
Explain how I benefit from the cash IBM holds in any other country.

You're not a rich person, why are you pretending to be one? IBM holding cash in another company benefits a wealthy shareholder because the P is higher because the t is lower. But that does nothing to increase r, which is the goal.

No it didn't. The Treasury got money they would not have otherwise received.

According to the Joint Committee, it did. Check out page 2 of this letter the Joint Committee sent to Hatch in 2014.

 

[The Derp]

They used a lot of money to create a $17 trillion economy and will need a lot more to grow it to a $20 or $30 trillion economy.

Why would you expand your business if your revenues aren't growing?

 

[EdwardBaiamonte]

But they do not achieve the goal of growth, and end up costing the Treasury revenue in the long-term.

so we need laws to encourage our corporations to keep money off shore and to invest it in offshore plant and equipment and jobs ??

 

[Toddsterpatriot]

If the median is $51K, that means it's the 50th percentile.

NO IT FUCKING DOESN'T. All it means is that of all wages together, the median is $51K. But when you enter that median wage into a percentile of wages, you find that $51K is in the 63rd percentile. So that means there are more workers making under $51K than at or above it. The reason it's $51K is because of incomes at the top, skewing the median upward.

Fucking moron...wow. No wonder GDP growth was so terrible last quarter.

Seriously, did you even bother to figure this out for yourself? You can very easily see where $51K/yr falls in income percentiles. The fact that you don't do that means you're either too lazy or too ignorant to know better.

Seriously, look it up.

Median = the point on the list with equal numbers above and below it, and it doesn't matter how high above or below.

Consider the following annual wages:

$5
$10K
$20K
$50K
$60K
$1 mil
$100 mil

The average income is $14,448,572. The median, OTOH, is $50K.

He's pretty ignorant.