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Where companies' new tax savings will likely go

holbritter said:
I doubt that's going to happen. It's been 'brought to the table' through several administrations and they don't touch it.
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I suspect they'll privatize first. Then when a harvest occurs they'll say people were stupid with their investments and it'll just be gone.
 
What if...? said:
I suspect they'll privatize first. Then when a harvest occurs they'll say people were stupid with their investments and it'll just be gone.
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yep, that is definitely a risk. we need to elect a divided government to stop it ASAP.
 
gdgyva said:
as companies pay their dividends, where do you think that money goes?

overseas?

into the economy?

into other investments?

i mean do you really think that the vast majority never sees the light of day?

we are nearing retirement. my wife and i are counting on the dividends to supplement our social security checks so we can continue our current lifestyle. i wonder how many other people use them basically the same way?

not just the .1% own stock and get dividends....regular people do too
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sure, but the top 1% owns something like 70% of the stock market, thus that top 1% will reap 70% of the benefits of the corporate tax cut.


Unless you really believe that corporations are going to cut prices (deflation) or jack up worker compensation to more than what they have to in order to keep and acquire employees. all that's possible, it just never happened in the past. Maybe the future won't resemble the past this time.
 
Jack Hays said:
The preponderance of tax cuts accrue to the top earners because that's where the taxes are. It's just arithmetic. I opposed this tax cut, but your argument against it is unsound.
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A different tax cut scheme could have easily been devised which would have had different results. Like we could have cut the rate of the bottom three tax brackets in half (or to just a token 2%), and kept the personal exemptions while still increasing the standard deduction to $24k. The rich would have still benefited from that because they do pay part of their taxes in those income brackets. We could have left the current death tax intact just like it was and not cut the corporate tax rate.

This would have put most of the money in the hands of the consumer, who would have then spent more, creating a profit motive need for businesses to expand, which would have resulted in new job creation.
 
Jack Hays said:
The "lower class" pays no federal income tax.
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No, but they still pay taxes, federal state and local. Nothing special about the federal income tax. People who don't smoke or drink don't pay the federal excise tax on tobacco or alcohol either - so what.
 
imagep said:
A different tax cut scheme could have easily been devised which would have had different results. Like we could have cut the rate of the bottom three tax brackets in half (or to just a token 2%), and kept the personal exemptions while still increasing the standard deduction to $24k. The rich would have still benefited from that because they do pay part of their taxes in those income brackets. We could have left the current death tax intact just like it was and not cut the corporate tax rate.

This would have put most of the money in the hands of the consumer, who would have then spent more, creating a profit motive need for businesses to expand, which would have resulted in new job creation.
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imagep said:
No, but they still pay taxes, federal state and local. Nothing special about the federal income tax. People who don't smoke or drink don't pay the federal excise tax on tobacco or alcohol either - so what.
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The corporate tax cut was, IMHO, the only important and useful part of the bill.
 
What if...? said:
What is their share of national income?
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You also gotta wonder what their share of actual production is. I would guess that the bottom 60% probably do 90% of the physical labor, 90% of the nasty dirty jobs, 90% of the tedius and boring jobs, etc.

The least paid workers often do the least desirable jobs, and the highest paid workers often have the most glamorous jobs. We should be thanking low wage workers for providing us with goods and services at a bargain price.
 
imagep said:
You also gotta wonder what their share of actual production is. I would guess that the bottom 60% probably do 90% of the physical labor, 90% of the nasty dirty jobs, 90% of the tedius and boring jobs, etc.

The least paid workers often do the least desirable jobs, and the highest paid workers often have the most glamorous jobs. We should be thanking low wage workers for providing us with goods and services at a bargain price.
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I think it would be interesting to see how much money is made in productive versus extractive fiscal activities.

Lots add little if any actual value to the economy overall.

Just ways of using money to put yourself between people and something they need or want. And due to highly concentrated wealth its actually possible to buy enough to cause prices to go up all by yourself. (Or with the help of a few "unconnected" parties).

But yes. Lots of stuff needs doing. Somebody needs to do it. ****ty jobs should pay MORE than cushy jobs, not less.
 
Jack Hays said:
The corporate tax cut was, IMHO, the only important and useful part of the bill.
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Corporate tax cuts are fairly unlikely to to result in additional consumer demand and without additional consumer demand, corporations don't need additional capital and won't create jobs. Without job creation, we aren't producing more and wage increases remain small. Some of that could happen indirectly when stock owners take their profits and dividends, but 70% of that will go to those who are already wealthy, and it's doubtful that they will spend the majority of that.

Other than business expansion, the reasons for corporate tax cuts that I keep here are that companies will use the tax savings to cut prices and/or to increase wages. We shall know in about a year if it really works like that. I kinda doubt it.
 
imagep said:
sure, but the top 1% owns something like 70% of the stock market, thus that top 1% will reap 70% of the benefits of the corporate tax cut.


Unless you really believe that corporations are going to cut prices (deflation) or jack up worker compensation to more than what they have to in order to keep and acquire employees. all that's possible, it just never happened in the past. Maybe the future won't resemble the past this time.
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That is an interesting figure of the top 1% owning 70% of the stock market. I can’t find that figure anywhere. Also, typically the top 1% is a measure of those with the top incomes, not the top wealth. A very complex assertion I would appreciate reading more.


Sent from my iPhone using Tapatalk
 
What if...? said:
I suspect they'll privatize first. Then when a harvest occurs they'll say people were stupid with their investments and it'll just be gone.
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Very doubtful. Bush proposed privatizing 2% of SS and it gained no traction at all. I would like to see it and have more control over my contributions, but it's just not going to happen.
 
AliHajiSheik said:
That is an interesting figure of the top 1% owning 70% of the stock market. I can’t find that figure anywhere. Also, typically the top 1% is a measure of those with the top incomes, not the top wealth. A very complex assertion I would appreciate reading more.


Sent from my iPhone using Tapatalk
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I just pulled that figure out my arse, but I have seen articles about wealth distribution and it's staggering how much the top 1% own.

According to the article below, the top 1% own 62% of business equity, 55% of financial securities, and 50% of stocks. Basically, the top 1% owns 43% of all financial wealth. The figures are from 2013, it's probably worse now. With the bulk of the Trump tax cuts going to the rich, won't be long before the top 50% own as much total wealth as the bottom 99% all put together.

Who Rules America: Wealth, Income, and Power
 
imagep said:
I just pulled that figure out my arse, but I have seen articles about wealth distribution and it's staggering how much the top 1% own.

According to the article below, the top 1% own 62% of business equity, 55% of financial securities, and 50% of stocks. Basically, the top 1% owns 43% of all financial wealth. The figures are from 2013, it's probably worse now. With the bulk of the Trump tax cuts going to the rich, won't be long before the top 50% own as much total wealth as the bottom 99% all put together.

Who Rules America: Wealth, Income, and Power
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"But lots of other people have peasants. I want mine!"
 
imagep said:
Corporate tax cuts are fairly unlikely to to result in additional consumer demand and without additional consumer demand, corporations don't need additional capital and won't create jobs. Without job creation, we aren't producing more and wage increases remain small. Some of that could happen indirectly when stock owners take their profits and dividends, but 70% of that will go to those who are already wealthy, and it's doubtful that they will spend the majority of that.

Other than business expansion, the reasons for corporate tax cuts that I keep here are that companies will use the tax savings to cut prices and/or to increase wages. We shall know in about a year if it really works like that. I kinda doubt it.
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Over time a fair return on investment and a competitive tax regime will provide a sound economic foundation.
 
Jack Hays said:
A sound economy creates opportunity for everyone.
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A sound economy should lift all fully participating members' Boats at about the same rate.

Not equal outcomes.

Proportional sharing in new wealth generated by everybodys' contribution to this great nation. In the aggregate, as part of the design.

Capitalism is a construct.

Why would we make something that everybody has to live with that isn't designed to raise everybody up? Not all to the same level. Just better than our parents. And our kids better than us.

Why make something up that by design concentrates wealth?

And why allow unnatural markets, like housing and health care, to operate without compensatory controls?

Too often people behave as if its some kind of force of nature.

It isn't.
 
What if...? said:
A sound economy should lift all fully participating members' Boats at about the same rate.

Not equal outcomes.

Proportional sharing in new wealth generated by everybodys' contribution to this great nation. In the aggregate, as part of the design.

Capitalism is a construct.

Why would we make something that everybody has to live with that isn't designed to raise everybody up? Not all to the same level. Just better than our parents. And our kids better than us.

Why make something up that by design concentrates wealth?

And why allow unnatural markets, like housing and health care, to operate without compensatory controls?

Too often people behave as if its some kind of force of nature.

It isn't.
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I'm not sure what you're advocating. All I can say is that I started with nothing and it worked out fine.
 
imagep said:
I just pulled that figure out my arse, but I have seen articles about wealth distribution and it's staggering how much the top 1% own.

According to the article below, the top 1% own 62% of business equity, 55% of financial securities, and 50% of stocks. Basically, the top 1% owns 43% of all financial wealth. The figures are from 2013, it's probably worse now. With the bulk of the Trump tax cuts going to the rich, won't be long before the top 50% own as much total wealth as the bottom 99% all put together.

Who Rules America: Wealth, Income, and Power
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Thank you for being forthright. The article itself is constantly changing the yardstick of measures, from the top 1%, top 10% and top 20% across the various text and charts and the chart you reference adds up to 100%. This article I found from 2016 indicates that:

"Foreigners currently own about 25% of outstanding corporate bonds, 15% of American stocks and 12% of agency securities (a category that includes mortgage-backed debt)." https://www.marketwatch.com/story/how-much-of-america-do-foreigners-really-own-2016-09-27

As for your last statement, "won't be long before the top 50% own as much total wealth as the bottom 99% all put together", These percentages overlap so significantly, that the statement becomes meaningless.

Rather than have a long boring discussion about this problem you have with wealth distribution, how about you just present your final vision of wealth distribution. What is the maximum wealth gap between the poorest person in the US and the richest person in the US and how you intend to get us there. Fair enough?
 
AliHajiSheik said:
Thank you for being forthright. The article itself is constantly changing the yardstick of measures, from the top 1%, top 10% and top 20% across the various text and charts and the chart you reference adds up to 100%. This article I found from 2016 indicates that:

"Foreigners currently own about 25% of outstanding corporate bonds, 15% of American stocks and 12% of agency securities (a category that includes mortgage-backed debt)." https://www.marketwatch.com/story/how-much-of-america-do-foreigners-really-own-2016-09-27

As for your last statement, "won't be long before the top 50% own as much total wealth as the bottom 99% all put together", These percentages overlap so significantly, that the statement becomes meaningless.

Rather than have a long boring discussion about this problem you have with wealth distribution, how about you just present your final vision of wealth distribution. What is the maximum wealth gap between the poorest person in the US and the richest person in the US and how you intend to get us there. Fair enough?
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I suppose there isn't a particular amount, but when the top few percent own the majority of everything, they get a huge advantage of economic power. Each additional dollar becomes easier and easier to acquire as we become more able to invest and more able to deal with risk. Many billionairs can make a million bucks in rentier income overnight, but a bottom wage worker has to work his/her arse off for many lifetimes to make that much money and may never have enough income to invest and earn rentier income.


My concern isn't about where we are right now, it's about the trend that the top 1% is gaining wealth faster than the bottom 99%. Graph it out, and eventually the top 1% would own everything, then continue the graph and eventually all wealth would consolidate into the hands of few. I don't claim to know how long that would take, maybe a hundred years or maybe a thousand years, but at that point capitalism would no longer be viable. I do believe in capitalism, but for capitalism we have to have a reasonably free market, so that things like price and quality competition can exist.

If we didn't have a progressive income tax system and an inheritance tax for the past 100 years, we may have already reached the point that wealth consolidation would have ended capitalism. I would suggest that we don't tax people up to the average productivity per worker (around $120k - GDP/workers employed), then for all income over that we tax pretty darned substantially and that we have no special deals for rentier income (capital gains), so all income would be taxed identically regardless of source (no death tax, but we could consider inheritance as regular income taxed just like all other forms of income). Now obviously the tax shouldn't be so high that it is stifling or that we have flight of capital from the US, but something in the range of 30-40% should work. We only need enough taxation to prevent excessive inflation, so if a lower tax rate would work that would be great.
 
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Then the obvious escapes you.
 
Jack Hays said:
A sound economy creates opportunity for everyone.
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Maybe, but that's not what we have. What we have is a boom/bust economy where the top gets to make gigantic leveraged bets in a rigged game. They inevitably make bad bets and lose their shirts, but we who aren't them have to bail them out, time and time again. The crashes also seem to be worse every time.

I hope I can get out of equities and the like before the next one, and that the dollar doesn't go too far south.

This is actually something to watch along with the dollar amount on your portfolio.

https://www.marketwatch.com/investing/index/dxy

Check out the graph for the last year and use that to scale your gains under Trump.
 
<alt>doxygen said:
Maybe, but that's not what we have. What we have is a boom/bust economy where the top gets to make gigantic leveraged bets in a rigged game. They inevitably make bad bets and lose their shirts, but we who aren't them have to bail them out, time and time again. The crashes also seem to be worse every time.

I hope I can get out of equities and the like before the next one, and that the dollar doesn't go too far south.

This is actually something to watch along with the dollar amount on your portfolio.

https://www.marketwatch.com/investing/index/dxy

Check out the graph for the last year and use that to scale your gains under Trump.
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I disagree. We started with $17 in the bank in 1976 (when I began my serious career) and my wife and I are now securely retired in a gated community with ample income and a robust six figure portfolio. We played conservative all the way. I have little sympathy for those who over-leveraged and lost.
 
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