What an amazing year ! new tax law primes US for growth

And it's passed the House (again)...on it's way to Trump's desk.

Done deal.

#winning

The expectations of net profits figures strongly in where companies build and expand.

But even in the static case you present--an existing company gets more profit because its taxes go down--there are likely to be increases in job opportunities for workers because (1) the company may well invest those profits in expanding the business; or (2) the higher profits may inspire additional suppliers to similarly invest.

Why? Simply because they can? No. They won't do that if there isn't a demand for it. The money that corporations save on taxes will primarily go towards increasing shareholder value.

Again, no. There's no incentive for them to invest in expanding the business simply because they can.

That's a one-time deal. Expanding the business provides on-going returns.

Again, huh? Do you think businesses don't seek to expand where they can? Do investors look for businesses that don't expand and that don't get more valuable?

Would YOU invest in a company that's going to have 0% growth in sales for the next 10 years? Why would you? You're not going to make any money.

If your Subway sandwich shop is really profitable, what's the next thing you probably invest in? Another Subway sandwich shop.

That's how it works.

Oh, paint fumes, that explains it.

Why the hell should they? They just got a huge windfall for not investing.

And btw, as long as the US doesn't introduce outright slave labour, costs of doing business will always be worse there than in the many countries that do. That's a downward spiral. The only way to growth is to invest in increased wealth for the buying market. Which is why the predictions of trickle-down economics have never ever come true. Not once.

He is so not tererun.

Smart business does not expand without demand. When you choke the mass of consumers in the economy there is no reason for business to expand because it would be wasteful. You really have no concept of the basics of economics do you?

Seriously?

You're a businessowner. You've got more money in your pocket because your taxes are lower. What do you do?

All the more reason for taxes to be lower. High taxes and high labor rates? Sounds like a place I'd want to invest.

Or lower prices that allow for more consumption.

If tax rates don't matter, make 'em 100%.

When you get to this point in the argument, you realize you're not dealing with someone who lives on anything approaching planet Earth.

Certainly not someone who's ever been involved in running a business.

No really, if there is no demand there is no reason to do anything but pocket the money. You are really this stupid? You really think people with money just create jobs for amusement? The only person stupid enough to just throw money away on shit investments with no demand is our president. He fucked up owning a casino because he just kept on expanding when there was no demand.

You all are trump stupid.

Give myself a pay rise, if the immoral fucktards you're ACTUALLY talking about are any indication.

Again, the economy has been growing for years, and these fuckers haven't invested. They're not going to invest NOW, either. Not in the US, anyway.

I was going to say, how can you even speak about a topic like this when you don't understand such an important, fundamental aspect of it.

Everyone I know in business is always seeking to expand in one form or another. Everyone. If you don't, your competitors will eat you alive and you'll be out of business before you know it.

Ah, I think we have the nub of the issue. Pally owns a business. Of course, he doesn't own a business large enough to understand that some CEOs will absolutely not invest and just pocket the cash, because his business is still at the "expand or die" stage. We're talking folk at the "if the company folds I'm still fucking made for life, so hey why don't I use this tax cut to expand my golden parachute options a bit wider? Or hell, just buy another house" stage.

Like Trump. If you can afford to list $900 million in losses and the worst you get out of it is a 25-year tax break, you don't fucking give a shit about investing in new jobs.

Is this a trick question? Go on vacation? Buy another expensive status symbol. Buy a yacht?

If I am a successful businessman I have a revenue stream coming in. I am already spending on investments. Extra money is just extra money because my investments are already set. I could go bet it all on black at the roulette table. It does not make any difference to me because I do business to make money not get tax breaks. That means follow demand not just create jobs because I am feeling wastefully energetic.

My god you are dumb as a stump on the leg of an Arkansas gym teacher.

My thought is Palladian might not be a good business owner if he just spends money to expand and spend money. That is a great way to overextended and fail.

Okay, let's say that's what you do.

Someone else with money to invest looks at your business and says "Wow, that CEO was just able to give himself a fat raise. Maybe I should invest in that kind of business."

There's been a shitload of investment. It just hasn't been here.

I'm astonished that the belief seems to have taken hold that businesses don't take tax rates into account when they choose where to invest and in what.

Just look at all those failures on the Dow Jones. Why didn't their owners just have the good sense to pocket the money they made rather than reinvest? So much tragedy could've been avoided! Steve Jobs would've quit at the Apple II if he was a halfway reasonable man.

Depends. I have just learned that I will make more money in the US if I invest less there. I might decide to invest somewhere else; or I might invest in actual growth models in the US, even though the new tax scheme disincentivise that, if my business model is strong enough; or I might just take my winnings home.

So you are in favour of slave labour?

Part of the downward spiral, since that doesn't work for premium products; and in the middle to long run it doesn't work at all, because remember, you're competing with 0% tax rate and slave labour.

Tax rates do matter. That's why this bill is horrendous. Nobody has suggested 100%; but you are suggesting competing with 0%. By lowering taxes. Why you think you can compete for lowest tax rate against 0% tax by lowering taxes to 35% is beyond me. That's like saying you're going to run faster than a car by shaving another two seconds off your marathon.

Yeah, that's one of the things I've noticed over the years about leftists in general and American liberals in particular: the odd belief that you can raise business taxes arbitrarily with no secondary effects on the overall economy. Usually accompanied by the idea that businesses don't pass on the increased costs to their customers.

Fucking hilarious when stale old teachers lecture people in business on business, so comical

Don't you have a paper to grade bitch?

I don't have any faith that it will, but I still hope this works. I would be glad to end up wrong on this.

Of course, the US remains a staggeringly lax area of corporate taxation and has been for decades, but the lobbyists would have you believe the opposite.

To date you haven't invested anything more than you did before the tax rates went down. The question is: since the tax rates are lower, are you more or less likely to invest that extra money?

Of course you might.

How do lower taxes on business profit discincentivize investment?

How does that work exactly?

Business owner: "I'm going to invest $1000 in a new business opportunity and hopefully get $50 in profits after taxes."
Government: "Well, now you get $100 in profits instead."
Business owner: "Fuck that! I was interested, but now...no way!"

Absurd.

And even if you do, other investors may look at your fat profits and decide to invest in the same sector.

How is creating more job opportunities for people making them slaves?

There aren't many opportunities for working class people here because the jobs aren't being created here. Part of the reason is that it's too expensive to do so. You're arguing against making it cheaper, which means you're arguing against more opportunities not fewer. And workers benefit from more opportunities.

I could as easily ask you if you're in favor of keeping people in the lowest end jobs...or permanently unemployed.

Business A and Business B both compete for my patronage. Are they driven out of business through competition? Do they both ultimately sell products below cost?

No. You're assuming that competition drives things to destruction, when, in reality, it drives things to optimal. Slave labor and 0% tax rates are not on offer and never will be.

I believe the new rate is 20%, hardly 0%.

Again, 0% isn't on offer. 20% is what we can do, and that will produce plenty of positive results.

@Paladin isn't arguing that more money is a sufficient condition for job creation, but rather a necessary condition.

Furthermore, demand for a company's product/service isn't a sufficient condition for job creation either. Far from it. The fastest growing sector in decades has been technology -- most tech companies operate on the scalable business model.

Jaron Lanier writes about this in his prophetic book Who Owns The Future? He uses the example of Kodak which was founded in 1880, and at its peak employed nearly 145,300 people, with many more indirectly employed via suppliers and retailers. Kodak’s founding family, the Eastmans, became wealthy, while providing skilled jobs for several generations of middle-class Americans. Contrast that with the recent tech company Instagram. Founded in 2010, Instagram only had 13 employees, but they had over 30 million users when they were acquired by Facebook for over one billion dollars!

TLDR: Demand doesn't drive greater job creation than competitive tax laws.

lol sorry to hear your meds ran out, my condolences to your family

We'll have to agree to disagree on the ACA individual mandate, but do you honestly believe reducing corporate tax rates is a good thing? Trickle-down economics has proven to be an abysmal failure over the last several decades. Take Kansas for example--the legislature/executive of Kansas was considering shutting down vast portions of its education system to make up for its abysmal economy in the wake of trickle-down economics. The Kansas Supreme Court actually had to order the government to keep the schools open.

Do you think that allowing corporations to horde more profits, rather than encouraging them to reinvest those profits into expanding the economy, is a good thing? And how is it a good thing?

False. I have invested less, and that made the tax rate go down.

Do I want the taxes to continue to get lower? Then I'll continue to invest less, at least in the US, since that is what made taxes go down. At least if I'm purely profit-driven, and/or don't think that I have such an extraordinarily great business model that I can beat the new taxation system that incentivizes disinvenstment.

Yes, and if you are right that the tax rate is the decisive factor, then I always will as long as the US collects any taxes at all, because some other places collect none.

Because in the current tax bill, they are a reward for destroying jobs.

Nope. That's not how it works anymore, which is why this tax bill is a bad idea. Here's the situation you have created:

Business owner: "I used to have $1000 invested here, but business is cheaper in China. I will take $500 there and eliminate half of the jobs I had in the US. I still hope to get $100 for my $500 in the US though, where I previously got $200 for $1000."
Government: "Our unemployment is rising! We need to lower taxes. You will now receive $120 for your $500."
Business owner: "Thank you! Now I have an extra $20, where should I invest them? Well, China still offers much lower labour costs and lower taxes, I'll take them there. In fact, I'll move another $250 from the US to China. My remaining $250 in the US should still earn me $60, that is, as long as I keep them in the US; I will of course eventually move the whole of my investments to China. But for now, I'll just eliminate another half of my workforce in the US. "
Government: "Unemployment has risen again! Quick, we must lower the tax even further! You will now get $80 for your investment."
Business owner: "Wow, thank you so much! You must truly love your country. If I take another $125 out of the US, will you lower taxes again?"
Government: "Of course, that's the only way we can get the economy working again!"
Business owner: "Then that's what I'll do, I guess."

There are only two ways to break that cycle: Create conditions for production that are as bad or even worse than they are in China; or compete in ways other than through reduced taxes and reduced workers' rights, for instance, through better infrastructure, better education, and a more productive workforce. All of which requires more state investment.

But they too make more money elsewhere.

It isn't. But you want to compete with slave labour at 0% taxation. You will not win that competition downwards until you have copied slave labour at 0% taxation. At which point we're no longer talking about job opportunities at all.

What is your explanation for why this has never happened in the recorded history of modern capitalism?

Only when you artificially reward destruction with lowered taxes.

But 20% is higher than 0%, and according to your model, the jobs will go where the tax rate is lower. That's 0%, which is the case in several parts of the world. The only reason why all employers do not move there is because your model is wrong: Employers need other things as well as good tax rates. Those things are provided by open societies and stable, well-funded governments. These require sufficient taxation.