[RD] Getting SALTy

[hobbsyoyo]

That's the crux of problem with Republican attacks on civil society. Everything should be critically analyzed and critiqued. The problem is that the Republicans use any pretext they can to take down obstacles to their economic and political agenda. Of course they don't actually need a genuine pretext to attack things they don't like (see global warming).

A great example is how far they have gone to destroy the normal order and workings of our government to meet their ends. They stopped Obama's nominees from advancing in the Senate for literally years then made sure to change all the rules such that they could ram through their appointments without opposition. The Democrats have so far been willing to play by the rules and I'm very afraid that if they begin to act like Republicans in this manner our society will be worse off in the long run.

On the other hand, the Republicans need to be stopped. So I'm conflicted.

 

[BvBPL]

In the wake of the Senate Parliamentarian announcing that a deficit trigger would not be permitted under reconciliation rules, senate GOP leadership is attempting to rewrite the bill to appease deficit hawks like Corker and Flake. That will apparently include retaining the alternative minimum tax and an automatic hike in the corporate rate in a few years. Those measures are likely to be problematic for the House’s Freedom Caucus.

 

[Lexicus]

On the other hand, the Republicans need to be stopped. So I'm conflicted.

I'm not. I don't care about the rules at all for their own sake. And the 2016 election convinced me we need to overhaul the Constitution anyway.

 

[hobbsyoyo]

I'm not. I don't care about the rules at all for their own sake. And the 2016 election convinced me we need to overhaul the Constitution anyway.

There needs to be an ammendment that all financial holdings of politicians need to be publiclly disclosed and they must divest themselves of control over their investments via a blind trust.

That's just a starter. Also we apparently need to codify what counts as treason and regulate the use of social media by politicians.

 

[Elephantium]

I don't agree with their analysis, this tax bill will likely lead to economic contraction in fact.

Could you elaborate on this? I'm curious about *how* this tax bill will lead to economic contraction.

 

[Lexicus]

Could you elaborate on this? I'm curious about *how* this tax bill will lead to economic contraction.

It's going to redistribute income away from people who have a high propensity to consume.

 

[JollyRoger]

We get 1920-1929 or 2001-2008.

https://www.cato.org/publications/c...arked-economic-growth-raised-federal-revenues

http://money.cnn.com/2007/08/08/news/economy/bush/index.htm

 

[hobbsyoyo]

Could you elaborate on this? I'm curious about *how* this tax bill will lead to economic contraction.

It has been conclusively shown that beyond a certain point, ultra rich individuals and corporations stop utilizing capital for any meaningful purpose. They just horde the money, even without trying (though of course they usually try very hard).

There are only so many houses one can buy, etc.

For everyone else, however, the more money they have, the more they spend. You get a huge raise, you buy a bigger house and so on. This is the foundation of the model of trickle down economics. It's subscribers take a principle that applies to a broad swath of the economy/population and apply it to everyone. In reality, spending habits are very different between the classes and if you want everyone to be better off, you help the poor and middle classes with tax breaks and direct government spending. That money goes right back into the economy and helps everyone.

If you help the rich with tax cuts it just adds zeros to balance sheets without doing anything productive.

 

[civvver]

It's going to redistribute income away from people who have a high propensity to consume.

But middle class is getting a break and will consume more. It's only an issue if the deficits lead directly to reductions in things that hurt the middle class. If it's just another minus sign on usa's ledger then who cares? Middle class families are going to get a thousand or two extra to spend and spend it they will.

I'd actually be more concerned about removing incentives the housing market with the changes in standard deduction, owning a house in most markets is no longer a tax break.

I don't disagree with your stance on the bill but I don't see how it causes the economy to contract.

 

[onejayhawk]

This is an article on the economic impact of the bill. There are some tidbits about the effect on individuals, but this is about businesses with an international scope.
http://nationalinterest.org/feature/2018-could-be-the-year-trumponomics-23444

The benefits of the tax plan are unambiguously skewed toward U.S.-centric corporations. U.S.-centric corporations typically pay far higher tax rates than their multinational counterparts. A 20 percent corporate tax break for them would be a significant boost.

For instance, Canaccord Genuity estimates that a 20 percent corporate tax rate would boost S&P 500 energy sector earnings by more than 20 percent and financial sector earnings by more than 18 percent in 2018. The overall earnings impact is estimated to be 10.5 percent for the S&P 500 as a whole in 2018.

The tax plan is far less beneficial to individuals. In the near-term, it is about a 1.5 percent boost to overall after-tax incomes in 2019. This effect fades over time as the current tax breaks are phased out. In 2027, the tax break for an individual is marginally positive.
​

J

 

[Lexicus]

I don't see how it causes the economy to contract.

Well, you're going to find out.

 

[Timsup2nothin]

But middle class is getting a break and will consume more. It's only an issue if the deficits lead directly to reductions in things that hurt the middle class. If it's just another minus sign on usa's ledger then who cares? Middle class families are going to get a thousand or two extra to spend and spend it they will.

Great. "Spend it they will!" But 80% of the benefits go to people who are "spend it they won't." That little 20% will cycle through the economy maybe once or twice before it gets locked up in the won't category. To get expansion you need not only debt financing putting money into the hands of consumers, you need to encourage the wealth holders to spend from their hoards...or at least to not skim the new moving money immediately into their hoards.

 

[Broken_Erika]

It's "Generating Wealth" and that's all that matters.

 

[metalhead]

For instance, Canaccord Genuity estimates that a 20 percent corporate tax rate would boost S&P 500 energy sector earnings by more than 20 percent and financial sector earnings by more than 18 percent in 2018. The overall earnings impact is estimated to be 10.5 percent for the S&P 500 as a whole in 2018.

The issue is that this is of no benefit to anyone other than the shareholders of energy and financial companies. And comes at the cost of higher deficits, which I'm told are really bad.

 

[onejayhawk]

The issue is that this is of no benefit to anyone other than the shareholders of energy and financial companies. And comes at the cost of higher deficits, which I'm told are really bad.

Also employees and business partners. This is one case from a stratum of businesses, justifying the prediction of 20% growth in the sector. Businesses with 20% growth do not have RIF's. In fact they may add personnel. It's not all good, but saying it's nothing is wrong.

Since when do you care about deficits? A few years ago they were no big deal.

J

 

[Broken_Erika]

....
Since when do you care about deficits? A few years ago they were no big deal.

J

That's what money printers are for right?
I don't think any politician should be allowed to touch the budget, it needs to be completely redone by technocrats with no political leanings what-so-ever.

 

[metalhead]

Also employees and business partners. This is one case from a stratum of businesses, justifying the prediction of 20% growth in the sector. Businesses with 20% growth do not have RIF's. In fact they may add personnel. It's not all good, but saying it's nothing is wrong.

No it isn't. It has been conclusively proven that there is no causal link between increased revenue and higher wages/higher employment.

Revenue growth is not the same thing as business growth. Businesses that realize more revenue from tax cuts have no incentive to invest in anything if there is no increase in demand for their goods and services. If there is no additional demand for goods and services, there is no additional demand for employees, so they will see no gains, either. This is really basic stuff, either you are comically ignorant or partisanship has thoroughly rotted your brain.

These "tax cuts" are merely a way to transfer wealth from the poor and middle class to the investor class. That will be the end result. There is nothing here which will stimulate real business growth, and any claim otherwise is a lie.

Since when do you care about deficits? A few years ago they were no big deal.

I don't. The deficit is not why this is a terrible bill. I'm simply wondering why you and millions of other people don't seem to care about it any more. You used to.

 

[hobbsyoyo]

I'm only worried about the deficit to the extent that Republicans will use it as a pretext to further ravage social spending while increasing the military's budget.

 

[Broken_Erika]

I'm only worried about the deficit to the extent that Republicans will use it as a pretext to further ravage social spending while increasing the military's budget.

They're going to do that regardless of deficit, they could have a massive surplus and they'll still do it.

 

[hobbsyoyo]

I know but claiming they have to make cuts because of the deficit has been an effective way of getting their base to support the cuts that hurt them. I'm half way convinced that their base supports the cuts because they don't actually understand what cuts to social programs means to them.