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Thread: The Trump Tax Cut: Even Worse Than You’ve Heard

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Quote Originally Posted by Conservative View Post
    You have provided no official data to support that claim only a Wall Street article that you don't even understand, getting really tired of arguing numbers with someone who is clueless about the numbers. You don''t like Trump got it, but his economic results have blown obama's away and if you think that his military spending was that much greater than Obama's you are truly very poorly informed. The growth has been in consumer spending. How do you explain 4.7 million NEW jobs created, military spending?
    The only results that have "blown Obama away" are his rising deficits. Obama cut deficits every year.
    Those who can make you believe absurdities can make you commit atrocities.
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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Quote Originally Posted by iguanaman View Post
    The only results that have "blown Obama away" are his rising deficits. Obama cut deficits every year.
    Why don't you tell us all how Obama cut the deficits? What exactly did he propose to do that? I know that you will let us all know when the Trump deficits equal the 9.3 trillion Obama DEBT

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Quote Originally Posted by iguanaman View Post
    What part of 1/2 of the increased GDP growth under Trump is from increased govt. spending don't you understand? Anyone can increase growth with more spending and trillions in tax cuts as stimulus. Reagan proved that years ago. Are you forgetting that the piper always get his due and yearly deficits are nearing a trillion again after Obama cut them in half?

    https://www.wsj.com/articles/governm...wth-1540459800
    Quote Originally Posted by iguanaman View Post
    So you think the WSJ is lying when they say that increasing govt. spending increases GDP? That is basic economics.
    With all due respect iguanaman, you have missed many of the finer aspects of the subject of economics. And Conservative is correct. You latch onto a piece of data and misconstrue its meaning to suit your needs. For instance, you are correct in stating Government spending is included in the calculation of GDP. What you missed is the logical implications of what this really means. Step away from numbers for a minute and put away all your preconceived notions and lets just look at it from a more logical and intuitive approach. One which doesn't require number crunching and stale equations which often do more to obfuscate matters than enlighten. If you really want to understand the real issues the study of economics seeks to address you must follow these guidelines in order to arrive at an unbiased understanding (as is the case for studies of all the sciences).

    1. You make a mistake in assuming GDP is the be-all and end-all measure of economic prosperity. Precisely because GDP and Real GDP calculations include government spending. This is no subtle matter. Key aspects you should consider are
    a. Does government spending equivocate to private production in terms of benefit to the People? Remember, benefit to the People is the goal we all, conservative and liberal alike, seek to achieve. Not only does government spending NOT equivocate with private production, in many cases government spending is actually a net negative. I'll let you come to your own assessment and assume you will forego the futility of arguing to the contrary as ample evidence and testimony exists which has fully settled this argument back as far as the 1950's. Even liberal economists have conceded this point. Yet by the time the matter was resolved BEA had extensively adopted this manner of statistical tracking and as a bureaucratic institution founded on Keynesian principles continues to this day.
    b. Government spending is not a free lunch. No matter how the government chooses to fund its spending it is provided for through the taxation of its citizenry. Period. Government has 4 choices in this regard... printing currency, printing Treasuries, direct taxation, or default. These all result in public detriment due to inflation (albeit delayed a few years), future cuts in government revenues at maturity, immediate loss of purchasing power, or ruin respectively. It's all a matter of when and how the public pays for the governments expenditures. Again, there is no such thing as a free lunch. If you examine the graphs you provided you will see not only drastic increases in the GDP calculation during WWII but also might notice the negative swings got bigger too. This is the bill coming due for the lunch. Not that it was a bad thing, as winning the war was paramount at the time, but I only wish to convey it wasn't free. The whole point was to drive production up during the war and pay for it later. Also note government deficits during the entire span of your graph existed due to Keynesian monetary policy. These are responsible for the decline in non-cyclic GDP mean.
    Last edited by LibDave; 01-09-19 at 02:51 AM.

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    c. GDPP is the more valid data in regards to the welfare of the citizenry. Its drawbacks are less pronounced than that of GDP (even GDPP should be examined under the circumstances of the time). A case in point is the decline in GDPP seen around the early 90's. The decline was due in large part on two phenomenon contemporary to the time. First, a huge tax increase by the Clinton administration and second by large defaults by foreign governments due to ill-conceived 3rd world loans. The Reagan era brought about huge increases in wealth combined with low interest rates. Banks were awash with capital and the need to find higher interest markets for this capital resulted in the banking industry "discovering" 3rd world markets for this capital. Many in the financial industry put on blinders to the risk involved in investing in developing nations awash in corruption and lacking any maturity in their banking regulations. As is always the case, the People ended up footing the bill for these ill-advised loans. In this case when the GHW Bush administration bailed out the Savings and Loan industry at public expense. A moral mistake as I believe those who invest for reward should endure the consequences of neglected risk. Regardless, had the investors in the banking institutions footed the bill instead of the Treasury the economy would have felt the impact. How much was due to the Savings and Loan fiasco and how much was a consequence of the Clinton Tax increases can never be known. So even using GDPP it is important to look past just the numbers. It is a mistake to attribute any economic data without a full understanding of contemporary issues.
    d. Population increases between 1.5 and 2 percent per year. So a baseline for zero actual improved standards is about 1.5 to 2 percent in kind. So many consider the real measure of recession to be growth less than 1.5 instead of 0%.

    Nonetheless, a historic charting of GDPP gives a much clearer indication of the impacts of public monetary policy. It clearly indicates a decline in the wealth of the nation and the average American during the Obama years and is largely responsible for the rejection of DNC leadership by the voters in 2016. They didn't need numbers to know things weren't getting better for them. GDPP not only didn't meet the 1.5% minimum for maintaining wealth, it saw an unprecedented drop in GDPP every single year for an 8 year consecutive stretch. The worst since and on par with the Great Depression. To further add insult to injury, the Bush Loans were recorded as deficits during his administration. They were all paid back during the 1st 2 years of the Obama administration, thereby reducing the apparent debt during this same period. In other words, Obama's deficits were actually close to 1 Trillion$ higher than advertised.

    GDPP likewise gives a better assessment of the situation during WWII. Ask your grandparents and great-grandparents about the struggles during the war. I promise you they won't tell you stories about how wonderful it was under such a dramatic increase in the GDP. As I'm sure you will concede the public endured unprecedented hardships and deprivations during the struggle to defeat the Axis powers. War always destroys wealth, it never creates it. Although the victor traditionally confiscates it from the conquered after the dust settles. Humanity always loses out.

    Finally, Obama didn't cut the deficits and it is disingenuous to claim otherwise. And while lowering taxes is a great start for Trump, decreasing spending is next to unheard of under the current US system. Budgets are no longer passable and therefore spending inevitably remains the same as previous years plus COLA. Any spending increase by ANY Congress remains in perpetuity until the Conservative party enjoys a super majority in both houses and the Executive. Though this has never materialized I suspect even then spending cuts would be damn near impossible. The reason, Congress gets its power from spending.

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Quote Originally Posted by Conservative View Post
    Increases in wages also without an offsetting increase in sales will generate less profit to the corporation
    True.

    and thus lower taxable income.
    I suspect not.

    The government would get less from corporate tax, more from income tax.

    Given that the tax bracket for those making over $40,000 is 22% and that corporations are better at tax dodging than individuals (e.g. even before the tax cuts, some corporations paid no corporate tax), I'd expect an increase in tax revenue if money went directly from the corporate bottom line to the pockets of workers.

    Even increases in wages to the poor could in net save the government money if reduced corporate income tax revenue were eclipsed by reduced welfare spending.

    But any way, the government deficit rose by 17% (from $666 billion [mark of the devil] to $779 billion) in 2018 despite economic growth because the vast majority of the tax cuts didn't go to higher wages.

    That is exactly what happened when the tax cuts were applied as corporations took a lot of the benefits they received and paid it out in expense generated items like bonuses, healthcare benefit increases, pay raises. The basic concept remains the more spendable income Corporations and the American taxpayer has the less need there is for that massive central govt. being promoted by the left. More spendable income leads to more spending and thus more tax receipts at the state and local levels giving them the resources to take on social issues and fulfill their social responsibilities
    Trump went bankrupt 6 times. Generally speaking, it makes sense to increase deficit spending when the economy is terrible and minimize it or even have a surplus while the economy is healthy.

    I agree these tax cuts are good for the economy in the short run. It is difficult to say by how much - the economy was already strong and growing. It was probably a good idea to reduce the corporate tax rate in particular, in the long run.

    But I don't think it was right to pass a deficit increasing tax cut during such good economic times. They should have either found a way to pay for it or have not done it. Times like these are when we should be increasing our rainy day fund, not behaving like profligates.

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Quote Originally Posted by Yarn View Post
    True.



    I suspect not.

    The government would get less from corporate tax, more from income tax.

    Given that the tax bracket for those making over $40,000 is 22% and that corporations are better at tax dodging than individuals (e.g. even before the tax cuts, some corporations paid no corporate tax), I'd expect an increase in tax revenue if money went directly from the corporate bottom line to the pockets of workers.

    Even increases in wages to the poor could in net save the government money if reduced corporate income tax revenue were eclipsed by reduced welfare spending.

    But any way, the government deficit rose by 17% (from $666 billion [mark of the devil] to $779 billion) in 2018 despite economic growth because the vast majority of the tax cuts didn't go to higher wages.



    Trump went bankrupt 6 times. Generally speaking, it makes sense to increase deficit spending when the economy is terrible and minimize it or even have a surplus while the economy is healthy.

    I agree these tax cuts are good for the economy in the short run. It is difficult to say by how much - the economy was already strong and growing. It was probably a good idea to reduce the corporate tax rate in particular, in the long run.

    But I don't think it was right to pass a deficit increasing tax cut during such good economic times. They should have either found a way to pay for it or have not done it. Times like these are when we should be increasing our rainy day fund, not behaving like profligates.
    Look, why do you and others worry so much about how much money the federal govt. gets? This is as if you buy that the govt. needs the budget they ask for. When people get to keep more of what they earn don't they need less of that so called govt. help offered? Why isn't spending more of an issue along with the true role of the federal govt.

    I really don't care how many times Trump has gone bankrupt, I care about what he is doing as President and the results generated. There seems to be a total lack of understanding as to the role of the federal, state, and local governments, no understanding of the taxes we pay or their purpose, or any understanding of the economic results being generated including record tax revenue collected in income streams other than FIT and Corporate taxes.

    You are right, people are paying more federal income taxes when they make more income, corporations will pay less income taxes when they make less money because of raises, benefit increases. I don't agree that the economy was strong and growing under Obama as there are no results showing that. It is strong and growing now because of tax cuts that have boosted economic activity and created 4.7 million jobs in 2 years, 3% annual growth, and historical low unemployment. People spending more of what they earn always does increase economic activity as the largest component of GDP is consumer spending

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Quote Originally Posted by Yarn View Post
    True.



    I suspect not.

    The government would get less from corporate tax, more from income tax.

    Given that the tax bracket for those making over $40,000 is 22% and that corporations are better at tax dodging than individuals (e.g. even before the tax cuts, some corporations paid no corporate tax), I'd expect an increase in tax revenue if money went directly from the corporate bottom line to the pockets of workers.

    Even increases in wages to the poor could in net save the government money if reduced corporate income tax revenue were eclipsed by reduced welfare spending.

    But any way, the government deficit rose by 17% (from $666 billion [mark of the devil] to $779 billion) in 2018 despite economic growth because the vast majority of the tax cuts didn't go to higher wages.



    Trump went bankrupt 6 times. Generally speaking, it makes sense to increase deficit spending when the economy is terrible and minimize it or even have a surplus while the economy is healthy.

    I agree these tax cuts are good for the economy in the short run. It is difficult to say by how much - the economy was already strong and growing. It was probably a good idea to reduce the corporate tax rate in particular, in the long run.

    But I don't think it was right to pass a deficit increasing tax cut during such good economic times. They should have either found a way to pay for it or have not done it. Times like these are when we should be increasing our rainy day fund, not behaving like profligates.
    Trump did not go bankrupt 6 times. Good lord what a deliberate misstatement. The economy was not strong. No it does not make sense to increase spending during down cycles and decrease during up cycles. Keynesian economics is a proven fallacy. Get with the program.

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Just did a prelim tax return on TurboTax. Made the same as last year, same payroll deductions, everything is the same but one thing. I usually get a 3-5k federal tax refund. This year, I owe them 2 grand. That 10k limit on state taxes? That covers my property tax bill, nothing else. I lost around 15k in deductions because Trump and Ryan want to screw California. Just wait until millions of Californians do their taxes and find out they owe the Feds money.
    Republicans are like religion. They create the problem and charge you for the solution.

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Quote Originally Posted by Rogue Valley View Post
    The Trump Tax Cut: Even Worse Than You’ve Heard





    The article explains what was promised, and what actually has happened, and it's not pretty.
    Pathetic. Trump and his fellow billionaires have hijacked America, and are laughing all the way to the bank.

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    Re: The Trump Tax Cut: Even Worse Than You’ve Heard

    Quote Originally Posted by Media_Truth View Post
    Pathetic. Trump and his fellow billionaires have hijacked America, and are laughing all the way to the bank.
    Jealousy, class envy, promotion for class warfare!! How has any rich person hurt you, your family, the country or prevented from joining them?? Look in the mirror for the reasons you aren't among them. Why are you so angry over rich people? Why aren't you touting the economic results being generated?

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