Tax plan

[QMany]

[Danny Bateman]

https://twitter.com/johnjharwood/status/857301555183308803

It dang near doubles the deficit. But it will totally pay for itself with growth.

 

Now on for the hard part for this administation... putting some concrete policy with the rhetoric.

[BigRedBuster]

Hey.....he's the king of debt.

 

He'll renegotiate.

[Moiraine]

We should take a page out of China's book and manipulate our currency.

[zoogs]

Party of fiscal responsibility.

 

See, the interesting thing is this isn't even Trump, right? This is the fiscal conservative dream he's signed onto, and the reason for the loyalty of that Caucus.

[BigRedBuster]

El Diaco....

 

Thanks for the discussion on this. Actually, I was looking at this for our own company just the other day. Our company is 72 years old and I wanted to see how our tax burden has changed over the years. I went back and tried to piece together "income before tax" and "taxes paid" to get a percentage.

 

The last 5 years look like:

 

2016 33%

2015 36%

2014 34%

2013 36%

2012 41%

 

That is just Federal income Tax.

[JJ Husker]

El Diaco....

 

Thanks for the discussion on this. Actually, I was looking at this for our own company just the other day. Our company is 72 years old and I wanted to see how our tax burden has changed over the years. I went back and tried to piece together "income before tax" and "taxes paid" to get a percentage.

 

The last 5 years look like:

 

2016 33%

2015 36%

2014 34%

2013 36%

2012 41%

 

That is just Federal income Tax.

Not to start a sh#t storm, but that's why it sort of pisses me off when people who are paying 15% or less federal and only their half share of fica have no problem with tax increases and are opposed to cutting taxes for businesses. I don't mind paying my fair share but it has not been my experience that it's necessarily fair. The problem lies in the tax code that allows the $250+ club to pay way less. I've got no problem getting rid of the loopholes that allow this.

 

My business is an LLC and the business itself is not taxed. All pay and profits flow directly to my personal return for taxes.

[BigRedBuster]

 

El Diaco....

 

Thanks for the discussion on this. Actually, I was looking at this for our own company just the other day. Our company is 72 years old and I wanted to see how our tax burden has changed over the years. I went back and tried to piece together "income before tax" and "taxes paid" to get a percentage.

 

The last 5 years look like:

 

2016 33%

2015 36%

2014 34%

2013 36%

2012 41%

 

That is just Federal income Tax.

Not to start a sh#t storm, but that's why it sort of pisses me off when people who are paying 15% or less federal and only their half share of fica have no problem with tax increases and are opposed to cutting taxes for businesses. I don't mind paying my fair share but it has not been my experience that it's necessarily fair. The problem lies in the tax code that allows the $250+ club to pay way less. I've got no problem getting rid of the loopholes that allow this.

 

My business is an LLC and the business itself is not taxed. All pay and profits flow directly to my personal return for taxes.

 

I completely agree with you. That's why I have advocated for a very long time to put the corporate tax rate at a very low rate or even make it ZERO. Then, offset that by taking out loopholes and deductions so that the people who benefit from that corporation pay their fair share of taxes.

 

The entity of a company (especially when you talk public companies) is nothing more than a shell that within it, people work and gain financial benefit. So, taxing the shell where the work is done makes no sense. Tax the people who take money out of the company for personal benefit.

 

That's why I have no problem with the 15% corporate tax rate....as long as their are other tax reforms that go along with it.

 

And...personally....just my own opinion is that it should be illegal for the government to take more than 30% of anyone's income. But....that might be for another discussion.

[BigRedBuster]

Since I put in the work on this and found it interesting, I took the 72 year data from our company and averaged it per decade.

 

1945 - 1954 = 89%

1955 - 1964 = 28%

1965 - 1974 = 24%

1975 - 1984 = 6%

1985 - 1994 = 25%

1995 - 2004 = 27%

2005 - 2014 = 26%

2015 - 2016 = 34%

 

Now...disclaimer. There's a lot more than just the tax rate that goes into this. For instance, the 1980s was an extremely tough decade for our company and we didn't make any money so, obviously we wouldn't be paying any taxes. So, that's probably why that is so low. The same could be said about the years from 2007 - 2011.

 

Interestingly, I'm not sure what the hell the deal was in 1948. But, we made 19,000 and paid 32,000 in taxes. Truman must have really sucked.

[RedDenver]

 

 

El Diaco....

 

Thanks for the discussion on this. Actually, I was looking at this for our own company just the other day. Our company is 72 years old and I wanted to see how our tax burden has changed over the years. I went back and tried to piece together "income before tax" and "taxes paid" to get a percentage.

 

The last 5 years look like:

 

2016 33%

2015 36%

2014 34%

2013 36%

2012 41%

 

That is just Federal income Tax.

Not to start a sh#t storm, but that's why it sort of pisses me off when people who are paying 15% or less federal and only their half share of fica have no problem with tax increases and are opposed to cutting taxes for businesses. I don't mind paying my fair share but it has not been my experience that it's necessarily fair. The problem lies in the tax code that allows the $250+ club to pay way less. I've got no problem getting rid of the loopholes that allow this.

 

My business is an LLC and the business itself is not taxed. All pay and profits flow directly to my personal return for taxes.

 

I completely agree with you. That's why I have advocated for a very long time to put the corporate tax rate at a very low rate or even make it ZERO. Then, offset that by taking out loopholes and deductions so that the people who benefit from that corporation pay their fair share of taxes.

 

The entity of a company (especially when you talk public companies) is nothing more than a shell that within it, people work and gain financial benefit. So, taxing the shell where the work is done makes no sense. Tax the people who take money out of the company for personal benefit.

 

That's why I have no problem with the 15% corporate tax rate....as long as their are other tax reforms that go along with it.

 

And...personally....just my own opinion is that it should be illegal for the government to take more than 30% of anyone's income. But....that might be for another discussion.

 

The problem with setting the corporate tax rate (or an income tax rate) low is that it encourages the corporations to hold onto their money as opposed to spending it. And spending is what drives the economy.

 

I'd be all for setting the corporate tax rate low or even to zero if there was a way to minimize their saving and maximize their spending. And I'd be even more in favor of it if the corporation was encouraged to spend on it's middle-class and lower employees (however we want to define that). But I don't know of a good way to do either of those things.

[Moiraine]

 

El Diaco....

 

Thanks for the discussion on this. Actually, I was looking at this for our own company just the other day. Our company is 72 years old and I wanted to see how our tax burden has changed over the years. I went back and tried to piece together "income before tax" and "taxes paid" to get a percentage.

 

The last 5 years look like:

 

2016 33%

2015 36%

2014 34%

2013 36%

2012 41%

 

That is just Federal income Tax.

Not to start a sh#t storm, but that's why it sort of pisses me off when people who are paying 15% or less federal and only their half share of fica have no problem with tax increases and are opposed to cutting taxes for businesses. I don't mind paying my fair share but it has not been my experience that it's necessarily fair. The problem lies in the tax code that allows the $250+ club to pay way less. I've got no problem getting rid of the loopholes that allow this.

 

My business is an LLC and the business itself is not taxed. All pay and profits flow directly to my personal return for taxes.

Why would it start a sh#tstorm unless you're assuming someone in this topic is paying less than 15% in taxes and saying those things?

 

One thing I don't like is people who assume you must be poor if you don't want taxes lowered. Now I'm the ine making an assumption but it's something I see all the time from Republicans. It's similar to thinking anyone protesting or rioting must be on welfare or not have a job.

 

Now that said - I pay a lot more than 15% and don't want taxes decreased, and I don't have any problem with poor people paying less than 15%.

 

15% of a poor person'a income could cause them to starve to death. $3,000 from an income of $20,000 is money that goes to surviving. They shouldn't be paying more and still have every right to their opinion.

[BigRedBuster]

I might as well put this here since it has to do with taxes.

 

[BigRedBuster]

 

 

 

El Diaco....

 

Thanks for the discussion on this. Actually, I was looking at this for our own company just the other day. Our company is 72 years old and I wanted to see how our tax burden has changed over the years. I went back and tried to piece together "income before tax" and "taxes paid" to get a percentage.

 

The last 5 years look like:

 

2016 33%

2015 36%

2014 34%

2013 36%

2012 41%

 

That is just Federal income Tax.

Not to start a sh#t storm, but that's why it sort of pisses me off when people who are paying 15% or less federal and only their half share of fica have no problem with tax increases and are opposed to cutting taxes for businesses. I don't mind paying my fair share but it has not been my experience that it's necessarily fair. The problem lies in the tax code that allows the $250+ club to pay way less. I've got no problem getting rid of the loopholes that allow this.

 

My business is an LLC and the business itself is not taxed. All pay and profits flow directly to my personal return for taxes.

 

I completely agree with you. That's why I have advocated for a very long time to put the corporate tax rate at a very low rate or even make it ZERO. Then, offset that by taking out loopholes and deductions so that the people who benefit from that corporation pay their fair share of taxes.

 

The entity of a company (especially when you talk public companies) is nothing more than a shell that within it, people work and gain financial benefit. So, taxing the shell where the work is done makes no sense. Tax the people who take money out of the company for personal benefit.

 

That's why I have no problem with the 15% corporate tax rate....as long as their are other tax reforms that go along with it.

 

And...personally....just my own opinion is that it should be illegal for the government to take more than 30% of anyone's income. But....that might be for another discussion.

 

The problem with setting the corporate tax rate (or an income tax rate) low is that it encourages the corporations to hold onto their money as opposed to spending it. And spending is what drives the economy.

 

I'd be all for setting the corporate tax rate low or even to zero if there was a way to minimize their saving and maximize their spending. And I'd be even more in favor of it if the corporation was encouraged to spend on it's middle-class and lower employees (however we want to define that). But I don't know of a good way to do either of those things.

 

I don't buy that.

 

Ultimately, the company is going to spend the money. Even if they don't, they aren't going to put it in a bank earning .00001% interest. They are going to invest it in maybe other company stocks which that company is using it to invest and grow.

 

Tell me......why would I allow our company to grow it's savings to millions of dollars and do absolutely nothing with it? A company would love to have a certain level of savings just like a married couple with kids for security. But, that company isn't saving for retirement. Once it has a certain level of savings, there really isn't a need to keep it growing. The stock holders are going to want that money working for them.

[RedDenver]

 

 

 

 

El Diaco....

 

Thanks for the discussion on this. Actually, I was looking at this for our own company just the other day. Our company is 72 years old and I wanted to see how our tax burden has changed over the years. I went back and tried to piece together "income before tax" and "taxes paid" to get a percentage.

 

The last 5 years look like:

 

2016 33%

2015 36%

2014 34%

2013 36%

2012 41%

 

That is just Federal income Tax.

Not to start a sh#t storm, but that's why it sort of pisses me off when people who are paying 15% or less federal and only their half share of fica have no problem with tax increases and are opposed to cutting taxes for businesses. I don't mind paying my fair share but it has not been my experience that it's necessarily fair. The problem lies in the tax code that allows the $250+ club to pay way less. I've got no problem getting rid of the loopholes that allow this.

 

My business is an LLC and the business itself is not taxed. All pay and profits flow directly to my personal return for taxes.

 

I completely agree with you. That's why I have advocated for a very long time to put the corporate tax rate at a very low rate or even make it ZERO. Then, offset that by taking out loopholes and deductions so that the people who benefit from that corporation pay their fair share of taxes.

 

The entity of a company (especially when you talk public companies) is nothing more than a shell that within it, people work and gain financial benefit. So, taxing the shell where the work is done makes no sense. Tax the people who take money out of the company for personal benefit.

 

That's why I have no problem with the 15% corporate tax rate....as long as their are other tax reforms that go along with it.

 

And...personally....just my own opinion is that it should be illegal for the government to take more than 30% of anyone's income. But....that might be for another discussion.

 

The problem with setting the corporate tax rate (or an income tax rate) low is that it encourages the corporations to hold onto their money as opposed to spending it. And spending is what drives the economy.

 

I'd be all for setting the corporate tax rate low or even to zero if there was a way to minimize their saving and maximize their spending. And I'd be even more in favor of it if the corporation was encouraged to spend on it's middle-class and lower employees (however we want to define that). But I don't know of a good way to do either of those things.

 

I don't buy that.

 

Ultimately, the company is going to spend the money. Even if they don't, they aren't going to put it in a bank earning .00001% interest. They are going to invest it in maybe other company stocks which that company is using it to invest and grow.

 

Tell me......why would I allow our company to grow it's savings to millions of dollars and do absolutely nothing with it? A company would love to have a certain level of savings just like a married couple with kids for security. But, that company isn't saving for retirement. Once it has a certain level of savings, there really isn't a need to keep it growing. The stock holders are going to want that money working for them.

 

You're right that over a sufficiently long period of time, the company will spend that money. Here's an article discussing Google's and Apple's cash positions (I think the article is from 2016, but the exact period this covers doesn't matter) that shows that it is possible for corporations to have huge cash reserves. That's tens to hundreds of billions of dollars for each company (depending on your definition of "cash"), so not an insignificant sum, and so far the investors have not made them spend that money (or at least when that article was written).

 

The problem lies in when the corporations save and for how long. Corporations will tend to save when there isn't a better way to spend their money - usually that will coincide with a poorly performing economy. And corporations saving instead of spending hurts the economy, which leads to worsening economic conditions and more corporations saving. There's obviously a lot of factors I'm leaving out here for simplicity, but that's the basic idea.

 

My solution is to limit their saving in all economic conditions, which obviously isn't optimal but should minimize the vicious cycle I described. If you've got an idea to fix that saving vs spending in varying economic conditions, I'm all ears.

 

A second-order problem is that even if the investors make the corporations hand out that cash to investors, the rich tend to have more investments and can save more than they spend (as compared to people who need to spend that money), so we've shifted the problem from corporations saving instead of spending to individuals saving instead of spending. I'm not sure if that's better or worse for the economy.

[BigRedBuster]

 

 

 

 

 

El Diaco....

 

Thanks for the discussion on this. Actually, I was looking at this for our own company just the other day. Our company is 72 years old and I wanted to see how our tax burden has changed over the years. I went back and tried to piece together "income before tax" and "taxes paid" to get a percentage.

 

The last 5 years look like:

 

2016 33%

2015 36%

2014 34%

2013 36%

2012 41%

 

That is just Federal income Tax.

Not to start a sh#t storm, but that's why it sort of pisses me off when people who are paying 15% or less federal and only their half share of fica have no problem with tax increases and are opposed to cutting taxes for businesses. I don't mind paying my fair share but it has not been my experience that it's necessarily fair. The problem lies in the tax code that allows the $250+ club to pay way less. I've got no problem getting rid of the loopholes that allow this.

 

My business is an LLC and the business itself is not taxed. All pay and profits flow directly to my personal return for taxes.

 

I completely agree with you. That's why I have advocated for a very long time to put the corporate tax rate at a very low rate or even make it ZERO. Then, offset that by taking out loopholes and deductions so that the people who benefit from that corporation pay their fair share of taxes.

 

The entity of a company (especially when you talk public companies) is nothing more than a shell that within it, people work and gain financial benefit. So, taxing the shell where the work is done makes no sense. Tax the people who take money out of the company for personal benefit.

 

That's why I have no problem with the 15% corporate tax rate....as long as their are other tax reforms that go along with it.

 

And...personally....just my own opinion is that it should be illegal for the government to take more than 30% of anyone's income. But....that might be for another discussion.

 

The problem with setting the corporate tax rate (or an income tax rate) low is that it encourages the corporations to hold onto their money as opposed to spending it. And spending is what drives the economy.

 

I'd be all for setting the corporate tax rate low or even to zero if there was a way to minimize their saving and maximize their spending. And I'd be even more in favor of it if the corporation was encouraged to spend on it's middle-class and lower employees (however we want to define that). But I don't know of a good way to do either of those things.

 

I don't buy that.

 

Ultimately, the company is going to spend the money. Even if they don't, they aren't going to put it in a bank earning .00001% interest. They are going to invest it in maybe other company stocks which that company is using it to invest and grow.

 

Tell me......why would I allow our company to grow it's savings to millions of dollars and do absolutely nothing with it? A company would love to have a certain level of savings just like a married couple with kids for security. But, that company isn't saving for retirement. Once it has a certain level of savings, there really isn't a need to keep it growing. The stock holders are going to want that money working for them.

 

You're right that over a sufficiently long period of time, the company will spend that money. Here's an article discussing Google's and Apple's cash positions (I think the article is from 2016, but the exact period this covers doesn't matter) that shows that it is possible for corporations to have huge cash reserves. That's tens to hundreds of billions of dollars for each company (depending on your definition of "cash"), so not an insignificant sum, and so far the investors have not made them spend that money (or at least when that article was written).

 

The problem lies in when the corporations save and for how long. Corporations will tend to save when there isn't a better way to spend their money - usually that will coincide with a poorly performing economy. And corporations saving instead of spending hurts the economy, which leads to worsening economic conditions and more corporations saving. There's obviously a lot of factors I'm leaving out here for simplicity, but that's the basic idea.

 

My solution is to limit their saving in all economic conditions, which obviously isn't optimal but should minimize the vicious cycle I described. If you've got an idea to fix that saving vs spending in varying economic conditions, I'm all ears.

 

A second-order problem is that even if the investors make the corporations hand out that cash to investors, the rich tend to have more investments and can save more than they spend (as compared to people who need to spend that money), so we've shifted the problem from corporations saving instead of spending to individuals saving instead of spending. I'm not sure if that's better or worse for the economy.

 

From your first article.

 

 

If you notice, the vast majority of this is in long and short term securities. Those are largely going to be stocks and bonds. Both of which, when invested, benefit other people. This is where I'm saying that money is still working for the economy as it's invested in ways it's still working. Is it the same as handing the cash out to the poor? No, but it's far from not being in the economic system.

 

Also, you are looking at two very odd companies. These two companies are not the normal corporations in the US in many ways.

 

One more thing. How much of this is the money that Trump would like to get repatriated back into the US? Tech companies tend to have a problem with this.

 

The bolded part at the end of your post is simply not a factor to me...IF....the appropriate tax reform is done. Anytime I have talked about this, I have said that I am fine with drastically lowering corporate tax rates IF appropriate tax reform is done along with it. I have said repeatedly, that we need to be taxing the people who benefit from the corporation. That would be employees AND investors.

 

So, by investors wanting that money distributed to them (which is perfectly understandable and shouldn't be looked at as horrible or evil) they would then be kicking in a taxable transaction and the government would get their share.