Tax reform

[zork 629]

This topic is concerning the tax reform that was passed and signed in Dec '17.  At the time the CBO was referencing some statistics then.  Here is a revised estimate with stronger growth perhaps?  What say you?  Will the Fed allow the growth necessary to make this a net positive for the economy assuming a recession doesn't blow it all up?

https://www.cnbc.com/video/2018/04/11/tax-cuts-are-beginning-to-pay-for-themselves-says-researcher.html

[Incredulity 11859]

Shhhhhh!!!!!!.....trickle down is complete horseshit.

Liberal Moose out front shoulda told ya.

[Aqua Buddha 14782]

Most of the corporate tax cuts have gone to share buybacks.

[zork 629]

5 minutes ago, Aqua Buddha said:

Most of the corporate tax cuts have gone to share buybacks.

So 3% growth was inevitable this late in the, even tepid, well extended, growth cycle?  

[Aqua Buddha 14782]

6 minutes ago, zork said:

So 3% growth was inevitable this late in the, even tepid, well extended, growth cycle?  

Well, the tax cuts have only been in effect a few months so I'm not sure how much impact they had on growth.  Most wage earners got very little money so there won't be much consumer spending to show for it.

The real risk is inflation.  The tax cuts by themselves will only drive a small part of it but in the context of current labor constraints, raw material pricing, tariffs, and capacity constraints in trucking and shipping, we're about to see serious inflation.  The tax cuts were just throwing gas on the fire.  So, that $10/month the average tax payer got will be a fraction of what they'll pay for consumer goods.

[Bozo_Casanova 26773]

The question is not whether stimulus stimulates. The question is only whether the stimulus pays for itself. If it doesn't, it's ultimately a net drag on growth. These cuts, like the 2001 and 2003 cuts* will  structurally expand the deficit and the national debt. The corporate rate cuts were too large and the individual changes are just ridiculous. and while it will provide some modest level of stimulus, the Fed will effectively dampen it by raising the cost of money to contain inflation. 

 

 

 

* I predicted that, accurately, at the time back on Hornfans. @TahoeHorn, I seem to recall that you argued with me about that and suggested that we wait and see. Do you still think they were smart?

Edited April 12, 2018 by Bozo_Casanova

[zork 629]

15 minutes ago, Bozo_Casanova said:

The question is not whether stimulus stimulates. The question is only whether the stimulus pays for itself. If it doesn't, it's ultimately a net drag on growth. These cuts, like the 2001 and 2003 cuts* will  structurally expand the deficit and the national debt. The corporate rate cuts were too large and the individual changes are just ridiculous. and while it will provide some modest level of stimulus, the Fed will effectively dampen it by raising the cost of money to contain inflation. 

 

 

 

* I predicted that, accurately, at the time back on Hornfans. @TahoeHorn, I seem to recall that you argued with me about that and suggested that we wait and see. Do you still think they were smart?

I also argued against the continued expanding spending levels proposed and agreed upon in W's years.  I argued that across the board cuts were needed, even if they were gradual, so that individual emotional arguments against cutting, anywhere, could be more easily defended against.

We don't cut anymore.(since I don't know when)  And that is not even arguing that we don't cut spending in actual dollars(not inflation adjusted dollars where a 'cut' in DC terms actually increases the dollar outlays for XYZ programs due to the inflation adjusted dollar component).

Trump said his tax cuts would stimulate growth and that would give a way forward since the economy would grow our way out of the deficit.  Clearly the Fed doesn't want to risk inflation although the tax cuts with reduced regulation might countermand even the Fed if this report mentioned continues.  Doubtful I know. 

The Debt growth from Clinton, to W, to Obama has been nearly perfectly logarithmic.  Unless that was to change by growth or some other factor, the logarithmic debt growth is on track under Trump and it will get really ugly perhaps unless the magical ignoring of it continues by the public/press at large.  It is a real problem.  You have mentioned that it is virtually unfix-able.  My not too probable hope was that maybe some growth, even with some more inflation(and perhaps devaluation with it) might generate some push back to get us off the logarithmic debt growth at minimum.(given the lack of spending cuts that would be needed)

Edited April 12, 2018 by zork

[Aqua Buddha 14782]

Conservatives seem to think government spending is guaranteed to cause inflation but tax cuts have no impact on it at all.

[Bozo_Casanova 26773]

Conservatives seem to think government spending is guaranteed to cause inflation but tax cuts have no impact on it at all.

Conservatives don’t think that, that’s just Republicans.


Sent from my iPhone using Tapatalk

[SmokeyBear1861 107]

US Dollars are fucked from fractional reserve lending. It's an instrument to be toyed with indefinitely because low interest rates have caused it to become completly unreliable. Inflation has been accelerating for a while now, at least I get more money on my check as to help since the pay will be slower to correct for higher prices.

 

[zork 629]

24 minutes ago, Aqua Buddha said:

Conservatives seem to think government spending is guaranteed to cause inflation but tax cuts have no impact on it at all.

 

 Edit:  adding Bozo's post:
Conservatives don’t think that, that’s just Republicans.

Sent from my iPhone using Tapatalk

--------------------------

I'm quasi conservative now compared to back in the '90's having graduated from UT economics with the basic understanding of autarky comparitive economics and free trade discussion. 

Now seeing how China and the rest of the world have used protection tactics to influence trade I have come off the basics(when they don't fairly exist) and decided that there is a need to protect your side of the trade equation if the other side is going to start their negotiations with a 25% tariff vs 2.5% tariff is free trade.  That is BS.  It is the reality though that few, I believe, understand to be the actual case now.(wrt existing China vs US auto tariffs for instance)

The case of expanding inflation in the US has been manipulated with great effect by the Fed and the US treasury in concert with the other G8 economies in the world more than is likely quantifiable by any but the most advanced trading floors in the few places in the world that would even try.  

Paying back 21 Trillion in debt(growing at a near logarithmic rate), not to mention all of the unfunded, etc, debts off the books, will be difficult without some inflation.  China was able to grow, even if you discount their official growth rates for local fraud, with inflation rates well above 2%.  It seems allowing the US to grow at 3 or even 4% could be managed given the current pickle the debt situation is growing into and becoming.  

But I never anticipated QE, to infinity(or however you describe it), and the other magical tools that have been used in the last decade since the time of Lehman's failure in 2008.

Inflation is bad if you let it get out of control.  Restrained economic growth to 2% doesn't seem to give you a way to get out of 21 trillion and growing debt.  What do you do if stimulus is not allowed to grow your way to a more controlled situation?(given spending won't be curtailed)

Edited April 12, 2018 by zork

[SmokeyBear1861 107]

3 minutes ago, Bozo_Casanova said:

Conservatives don’t think that, that’s just Republicans.


Sent from my iPhone using Tapatalk

Correct.

Government spending typically leads to waste as they will figure a way to squander that money without providing the services to the public as expected. Tax cuts are good for the consumer economy as everyday people have of their labor turned into currency to spend. 

Neither cause inflation. Over expansion of the money supply causes inflation. The money isn't produced by the FED and passed through business to workers for their labor, the money is created from an ever expanding debt bubble. This is to the point where the debt bubble is so big it costs a lot because servicing that debt requires more debt.

In short, switching to some type of limited supply currency like bitcoin or gold backed currency would solve the inflation issue. This could keep the value of the currency rising instead of falling. But then, interest rates would be forced to return to normal high amounts and less people would extend themselves into a huge amount of debt - this is what a large part of the economy is based on now so it would be chaos.

[Washpark 176]

 

[Bat Guano 363]

13 hours ago, zork said:

 

 ....

Inflation is bad if you let it get out of control.  Restrained economic growth to 2% doesn't seem to give you a way to get out of 21 trillion and growing debt.  What do you do if stimulus is not allowed to grow your way to a more controlled situation?(given spending won't be curtailed)

If it is a given that spending won't be curtailed (probably a realistic assumption) and you don't want rampant inflation, then the only other way to significantly reduce the debt is to raise taxes. Gotta be one or the other, inflation or taxes; take your pick.

[Bozo_Casanova 26773]

Hold up - inflation isn't "bad", provided that it's controlled* and slower than the rate of economic growth.  My point wasn't that the cuts were bad because they were inflationary, my point was that because they are, the Fed will have to contain inflation by raising rates (which was the plan all along), which will in turn dampen the stimulus effect of the cuts.

 

 

 

* That's what Central banks do. 

[David Dennison 19439]

It wasn't tax reform. It was a tax cut.

[Hugo Stiglitz 23367]

It was wealth consolidation. 

[Brew 3049]

On 4/12/2018 at 10:23 AM, David Dennison said:

It wasn't tax reform. It was a tax cut.

It was ultimately both. There are a number of good components in what was passed including a simplification of filing for a majority of tax payers and an attempted equalization of taxes across multiple entity structures.

[FWD 297]

As we hit the top of the economic cycle, every other rich country is using this time to pay down debt. Only the U.S. is rapidly increasing its debt over the next 5 years. It is a bold strategy, we'll see what happens.

 

[Trey3216 15450]

12 minutes ago, FWD said:

As we hit the top of the economic cycle, every other rich country is using this time to pay down debt. Only the U.S. is rapidly increasing its debt over the next 5 years. It is a bold strategy, we'll see what happens.

 

I have a hard time Germany's debt:GDP ratio will be declining with the 1+mm 'immigrants' that have inhabited their nation in the last 20 months.  

[Brisketexan 106610]

15 minutes ago, FWD said:

As we hit the top of the economic cycle, every other rich country is using this time to pay down debt. Only the U.S. is rapidly increasing its debt over the next 5 years. It is a bold strategy, we'll see what happens.

 

Our stupidity is a real stand-out here.  Like, jaw-droppingly so.  We are so hellbent on doing things the wrong fucking way, it boggles the mind.

2 minutes ago, Trey3216 said:

I have a hard time Germany's debt:GDP ratio will be declining with the 1+mm 'immigrants' that have inhabited their nation in the last 20 months.  

Economic indicators don't give a shit whether you believe in them or not.  Interestingly enough, this week's Economist has a great extended piece on Germany, including its economic performance.  Summary: they're doing quite well.  The refugee/immigrant situation has had pluses and minuses in that respect, but in the final analysis, the German economy is pretty solid.  Don't believe the hysteria you read on Breitbart - review the actual economic performance data.

[wildcat09 29555]

9 minutes ago, Brisketexan said:

Our stupidity is a real stand-out here.  Like, jaw-droppingly so.  We are so hellbent on doing things the wrong fucking way, it boggles the mind.

Economic indicators don't give a shit whether you believe in them or not.  Interestingly enough, this week's Economist has a great extended piece on Germany, including its economic performance.  Summary: they're doing quite well.  The refugee/immigrant situation has had pluses and minuses in that respect, but in the final analysis, the German economy is pretty solid.  Don't believe the hysteria you read on Breitbart - review the actual economic performance data.

People who read Breitbart (for more than shits and giggles) lack the capacity to comprehend data of any kind.

[Trey3216 15450]

18 minutes ago, Brisketexan said:

Our stupidity is a real stand-out here.  Like, jaw-droppingly so.  We are so hellbent on doing things the wrong fucking way, it boggles the mind.

Economic indicators don't give a shit whether you believe in them or not.  Interestingly enough, this week's Economist has a great extended piece on Germany, including its economic performance.  Summary: they're doing quite well.  The refugee/immigrant situation has had pluses and minuses in that respect, but in the final analysis, the German economy is pretty solid.  Don't believe the hysteria you read on Breitbart - review the actual economic performance data.

I don't read Breitbart, or watch Fox.  Yes, their economy is doing well.  Ours is doing pretty solid as well.  I don't like the increasing debt situation we're in, but until people start saving and reinvesting rather than spending every dime then we're going to be in a vicious spend cycle.  I just don't see the math working out as well as that article in The Economist would like to portray given the increased, almost entirely government subsidized population influx they are going through.  

 

It would be the equivalent of adding 6mm people in 1 year inside the US and 90% of those people completely on the govt take.  

Edited April 18, 2018 by Trey3216

[Bozo_Casanova 26773]

OFFS


Sent from my iPhone using Tapatalk

[wildcat09 29555]

17 minutes ago, Trey3216 said:

I don't read Breitbart, or watch Fox.  Yes, their economy is doing well.  Ours is doing pretty solid as well.  I don't like the increasing debt situation we're in, but until people start saving and reinvesting rather than spending every dime then we're going to be in a vicious spend cycle.  I just don't see the math working out as well as that article in The Economist would like to portray given the increased, almost entirely government subsidized population influx they are going through.  

 

It would be the equivalent of adding 6mm people in 1 year inside the US and 90% of those people completely on the govt take.  

I haven't done the math, but I suspect that'd be cheaper than our airstrike on Syria last Friday was.

As for the rest of your post, I don't know why you seem to connect our national debt to personal saving.

[Brisketexan 106610]

1 minute ago, Trey3216 said:

I don't read Breitbart, or watch Fox.  Yes, their economy is doing well.  Ours is doing pretty solid as well.  I don't like the increasing debt situation we're in, but until people start saving and reinvesting rather than spending every dime then we're going to be in a vicious spend cycle.  I just don't see the math working out as well as that article in The Economist would like to portray given the increased, almost entirely government subsidized population influx they are going through.  

Your last paragraph is still all about your beliefs, not data.

[Trey3216 15450]

1 minute ago, wildcat09 said:

I haven't done the math, but I suspect that'd be cheaper than our airstrike on Syria last Friday was.

As for the rest of your post, I don't know why you seem to connect our national debt to personal saving.

It's more of a general topic.  Spending less, both on the micro and macro level, and investing/saving more, tends to lower debt levels relative to production.  On the macro level, investing in things such as infrastructure (while it is spending) is an investment in future productivity growth.  Investing in your people leads to higher productivity on all levels (Germany is highly successful in this endeavor as well).  It was a relative remark.  

[Trey3216 15450]

Just now, Brisketexan said:

Your last paragraph is still all about your beliefs, not data.

 

Just now, Brisketexan said:

Your last paragraph is still all about your beliefs, not data.

Fair enough

[zork 629]

Quote

'Strong economic growth'

On a separate issue, Mnuchin said rising economic growth will help pay for a temporary shortfall in tax receipts.

"We're now at a point where we're comfortably within our 3 percent or higher sustained economic growth," he said. "The difference between 2.2 and 3 percent will pay for the tax cuts."

Congress passed a White House-backed bill in December 2017 that slashed the corporate rate from 35 percent to 21 percent and rolled back rates for millions of Americans.

Critics say it will blow a hole in the federal budget, and the Congressional Budget Office last week said the deficit will reach $1 trillion by 2020.

However, Mnuchin and other administration officials maintain that while tax receipts may be slow at first, the accelerated pace of growth will more than make up for the difference.

"We're seeing very strong economic growth," he said. "We literally have met with hundreds of executives, small companies, big companies, and thousands of workers. We're beginning to see the impact of the tax cuts, specifically people investing large amounts of money back into the United States."

https://www.cnbc.com/2018/04/17/treasury-secretary-mnuchin-our-long-term-3-percent-growth-outlook-will-pay-for-the-tax-cuts.html

This was from an interview reported yesterday.  That is interesting that the former Yale graduate, former Goldman Sachs man, and current Treasury Secretary would go that far out on a limb.  

 

Here is more from Steve from a recent interview when he visited UCLA back in February:

 

Interview Q/A text in the spoiler:

 

Amidst a boisterous crowd, Treasury Secretary Steven Mnuchin briefly lectured students and visitors at the UCLA Burkle Center for International Relations in Los Angeles before settling in for an interview with Marketplace host Kai Ryssdal. The wide-ranging interview touched on topics as diverse as the Trump administration’s stance on North Korea, the impact of the recently passed tax overhaul and the Trans-Pacific Partnership. Below is an edited version of the interview. To hear the full interview and audience Q&A session, click on the audio player at the end of the story. Additionally, UCLA has published video of the entire event.

Kai Ryssdal: First of all, thank you all for coming. I appreciate you taking the time on this afternoon. Secretary, thank you also for your time. Let me ask you a kind of a framing question here. There was a story I read in researching this talking about you being the finance chairman for the Trump campaign. And people were saying, "Steve, why are you doing this?" And you said, "Look, if this works out, nobody nobody's going to ask me why I was doing this." So the question is, how is it working out for you?

Steven Mnuchin: Actually, the question was slightly different. OK. And let me first say, I consider it a great honor to serve the country. [Applause and hissing.] So I think we live in it, we live in a democracy. We're lucky to live in this country. We're lucky to have differences of opinions. And for me, I was never involved really in politics. Some people spend their entire life in politics. I recognized that there were certain issues that were in this country, and that's that's why I participated in the campaign. So, you know, that's why I'm here.

Ryssdal: What was it about the president's approach to the American economy that made you say, "I want to work for this guy"? [Hissing from audience.]

Audience: Ignore them.

Ryssdal: That's a good point.

Mnuchin: No, I think they're going to get more tired than I am. So, you know, that's kind of —

Audience: Fat chance.

Mnuchin: Fat chance? Oh yeah, I'm dealing with students, I forgot. There's a lot of students.

Ryssdal: So what was it about the president's economic agenda made you say, "I want to do this and work on this?"

Mnuchin: I go back to the comment of the financial crisis impacted lots of people. I operated banks [hissing from audience] that were that went under during the financial crisis. I saw the impact of what went on and how important banks are to local communities and the economic issues. And I felt an obligation to try to do things that would help people and help the economy and particularly the middle class. And I think we're very proud of these accomplishments.

Ryssdal: So we'll get to that in a minute. We'll get to the tax bill and all that in a minute. But I want to talk about the last section of your remarks here about the sanctions that you are in charge of and responsible for, specifically the North Korean sanctions that were announced on Friday, the new round. Sanctions, as you know, take years and decades to play out. The question is, do you, and more particularly, the president, have the patience to let them play out with North Korea?

Mnuchin: Well, I'm not going to comment on kind of what we're going to do going forward and what patience we have and what patience we don't have. But I don't agree with you on your premise.

Ryssdal: That they take decades?

Mnuchin: Yeah, I don't agree with that at all.

Ryssdal: North Korea's been under sanctions for decades, sir. Iran under sanctions for decades. It is true.

Mnuchin: OK, well let me give you the facts, because this we can have a debate about. [Hissing from audience.]

Ryssdal: Sure.

Mnuchin: There's 500 sanctions on North Korea since 2005. Basically half have been done in the last year. We have more sanctions authority now than we've ever had before. So for example, we have now powers that we can sanction anybody who's doing trade with North Korea. So I would in all disrespect, I would, I would say, or respect, [laughter] I would say that these things take some time, but it is not decades, and we've seen evidence that they are already having an impact. But let me also make a comment. Our issue is not with the people of North Korea. So we want to be careful that we're not doing things — there are things that we could sanction that impact the people. What we're trying to do is cut down his ability to do ballistic missiles and nuclear weapons.

Ryssdal: And you're satisfied that these sanctions you announced on Friday are tightening the noose?

Mnuchin: Absolutely. So what we started with was illegal ship-to-ship transfers. These are very granular. We now have identified ships that are violating U.N. sanctions, and these ships will be prevented from doing this again. We've also put out Coast Guard advisories. We're working with the the Navy. This is a full effort across the government.

Ryssdal: As you know, Ivanka Trump was in South Korea [hissing from audience] for the Olympic delegation. She also, as you know, briefed the South Korean president, President Moon, on these sanctions. Given that she's a family member of the president without a permanent security clearance, do you think that was appropriate?

Mnuchin: I absolutely think it was appropriate. [Hissing from audience.]

Ryssdal: How so?

Mnuchin: Again, she's an assistant to the president. She didn't travel as a family member. She traveled as assistant to the president. I briefed her. You're not aware of what security clearance is needed one way or another for these things. [Hissing from audience.] And again I'm very comfortable with what she did representing the country on a very important issue, I might add.

Ryssdal: Let me take it to the tax law. [Hissing from audience.] You and the president and the Congress passed last year, the president signed it, it took effect on the first of January, as you know. During your confirmation hearings, you said whatever tax reform the Trump administration is going to work on will not add to the debt and the deficit.

Mnuchin: That's true and I stand behind that. [Hissing from audience.]

Ryssdal: Sir, the tax bill that's enforced now adds a trillion and a half dollars to the deficit.

Mnuchin: No, that's not the case. [Hissing from audience.] The tax bill scored on a static basis adds a trillion and a half — let me just go through the numbers — there is a half a trillion dollars difference between what's called baseline and policy. Those are things that were gonna be extended anyway. That takes the number down to a trillion dollars. We believe that, with 90 basis points of growth, there will be over — 

Ryssdal: Why don't you explain what 90 basis points means?

Mnuchin: Ninety basis points of GDP. So GDP going from basically 2.1 percent to 3 percent. And for you math majors in the room, the break even is about 35 basis points.

Ryssdal: So in other words, three-tenths of 1 percent on growth.

Mnuchin: That's correct.

Ryssdal: OK. The catch of course is, and as you know, you did have two quarters of 3 percent economic growth this past year, but year-over-year growth in the American economy was 2.3 percent. So you're still far away from the target, right?

Mnuchin: Absolutely. That's why we're doing all of these things. So these things have some impact. And all of our economic plans are about creating sustained economic growth. [Hissing from audience.]

Ryssdal: Help me understand then with some specificity how you're going to do that. Because the numbers that were engineered by the White House and the Council of Economic Advisers that went into the tax plan were, "We're going to get 3 percent. Here's how," as opposed to, "These are our policies, which is going to get us to 3 percent."

Mnuchin: Well, you must seem to have a bias because you're using the words "engineered," [hissing from audience] so you obviously think that it was the policy the policies were created. Again, what I would say is we fundamentally believe that we will have economic growth, and again, 35 basis points is the break even. And we're already seeing this. By the way, we're seeing companies give millions and millions of workers [hissing from audience] bonuses all as a result of this. And for people who are getting these thousand-dollar bonuses, these are not crumbs.

Ryssdal: Absolutely not, and I'm not going to imply that at all. You said 4 million workers in this economy?

Mnuchin: Four and a half million.

Ryssdal: Four and a half million have gotten one-time bonuses.

Mnuchin: Yes.

Ryssdal: So this is a labor pool of 155 million people, sir.

Mnuchin: So are you, tell me, are you, for those four and a half million workers —

Ryssdal: So my question is —

Mnuchin: in one month. That's a big deal. That's a big deal. Four and a half million workers have already seen this impact.

Ryssdal: By some estimates —

Mnuchin: I understand you're doing the math.

Ryssdal: No. So the Americans for Tax Reform say plus or minus, 86 companies have given wage increases, 250 companies have given one-time bonuses, and I guess the question is, what would you rather have? Would you rather have a one-time bonus or a consistent wage increase over the next couple of years?

Mnuchin: We fundamentally believe that there will be wage increases going through to the workers. [Hissing from audience.]

Ryssdal: Why do you believe that?

Mnuchin: Again, I just went through why we believe it. It's a function of economic policy, it's a function of making a more competitive system that companies can invest. And again, there is research that 70 percent of the tax burden is borne by the workers. So this is all about making a more competitive U.S. system for jobs. [Applause.] Thank you.

Ryssdal: So let me ask you about something you said about 10 days, two weeks ago that after the president said at Davos, "You know what, we might get into the Trans-Pacific Partnership" the Obama-negotiated deal that President Trump pull this out early in his administration. President said, "You know, I might be able to get back into that if we could work out a way that's advantageous." And you said the other day the president and his administration will be willing to go, and these are your words, go multilateral. That deal is going to be signed and done on the eighth of March, sir. So what interest do you think the other Trans-Pacific Partnership countries —

Mnuchin: I think they have a lot of interest. I've met with them a lot recently. And to the extent that they they are absolutely willing to have discussions with the United States if that's something we want to pursue.

Ryssdal: And you fully expect that they will let America back into the TPP?

Mnuchin: Again, it's not a question of letting us back in or not letting us back in.

Ryssdal: Well, the president pulled us out, sir.

Mnuchin: Again, what I would say is they're interested in us being in agreement. Right now the president is more focused on bilateral trades, and that's our priority and that's what we're negotiating. What the president has said is kind of when we get done with the bilaterals that we're focused on, to the extent that kind of the TPP will change, we will consider — not a question of whether they will let us back in — we will consider whether we want to go into the multilateral agreement.

Ryssdal: That sounds very much like, and I apologize for characterizing your words, but it sounds very much like you're saying we will deign to have a conversation with them in which they might be allowed to trade with us.

Mnuchin: That's not what I said. So again let me just, let's just be clear. The United States is the largest trading market in the world. Everybody wants to do business in the United States. The United States has the lowest tariffs, has the lowest barriers. Every single country wants to do business in the United States. And, by the way, to the extent that we can do business with other countries on the exact same terms, OK, and our companies can be treated the exact same way, we believe in reciprocal free trade. So that's our objective.

Ryssdal: One of the one of the things the president has said and his advisers have said is, "Listen, we need to fix regulation in this country, financial regulation, the Dodd-Frank financial reform law is too strict, we need to loosen it up a little bit." Brian Moynihan, the CEO of BofA, said the other day, "Dodd-Frank's fine. What are we doing?"

Mnuchin: You know why? Because the top eight banks control all the assets in the United States and they don't want anybody else to compete. So what we're trying to do, and by the way, there is bipartisan support for this, and I think this legislation will be passed in the next three months to modify Dodd-Frank so that commercial banks, regional banks, community banks can succeed. Our objective is we don't want just eight large banks in the United States. So the modifications on Dodd-Frank are all designed to help community banks and regional banks.

Ryssdal: Even though community banks are making record profits this past year.

Mnuchin: Again, that's because the economy is doing better. But yes. Do you want them all to be gobbled up by Brian Moynihan? No. We want to make sure that we have a healthy broad-based banking system.

Edited April 18, 2018 by zork

[FWD 297]

2 hours ago, Trey3216 said:

I don't read Breitbart, or watch Fox.  Yes, their economy is doing well.  Ours is doing pretty solid as well.  I don't like the increasing debt situation we're in, but until people start saving and reinvesting rather than spending every dime then we're going to be in a vicious spend cycle.  I just don't see the math working out as well as that article in The Economist would like to portray given the increased, almost entirely government subsidized population influx they are going through.  

 

It would be the equivalent of adding 6mm people in 1 year inside the US and 90% of those people completely on the govt take.  

Germany has run a budget surplus for the past 4 years. Last year it was the highest ever, at 1.1% of GDP.

[FWD 297]

5 minutes ago, FWD said:

Germany has run a budget surplus for the past 4 years. Last year it was the highest ever, at 1.1% of GDP.

For context, the U.S. budget deficit has gone from 2.5% of GDP in 2016 to 4% of GDP this year, and is forecast to worsen rapidly in the next few years, even under rosy assumptions about economic growth.

Edited April 18, 2018 by FWD

[Sawbonz 28081]

Germans don’t fuck around. Reagan convinced us we could have guns and butter and it’s been downhill ever since

[softlynow 1893]

6 hours ago, zork said:

That is interesting that the former Yale graduate, former Goldman Sachs man, and current Treasury Secretary would go that far out on a limb.  

 

  Reveal hidden contents

Amidst a boisterous crowd, Treasury Secretary Steven Mnuchin briefly lectured students and visitors at the UCLA Burkle Center for International Relations in Los Angeles before settling in for an interview with Marketplace host Kai Ryssdal. The wide-ranging interview touched on topics as diverse as the Trump administration’s stance on North Korea, the impact of the recently passed tax overhaul and the Trans-Pacific Partnership. Below is an edited version of the interview. To hear the full interview and audience Q&A session, click on the audio player at the end of the story. Additionally, UCLA has published video of the entire event.

Kai Ryssdal: First of all, thank you all for coming. I appreciate you taking the time on this afternoon. Secretary, thank you also for your time. Let me ask you a kind of a framing question here. There was a story I read in researching this talking about you being the finance chairman for the Trump campaign. And people were saying, "Steve, why are you doing this?" And you said, "Look, if this works out, nobody nobody's going to ask me why I was doing this." So the question is, how is it working out for you?

Steven Mnuchin: Actually, the question was slightly different. OK. And let me first say, I consider it a great honor to serve the country. [Applause and hissing.] So I think we live in it, we live in a democracy. We're lucky to live in this country. We're lucky to have differences of opinions. And for me, I was never involved really in politics. Some people spend their entire life in politics. I recognized that there were certain issues that were in this country, and that's that's why I participated in the campaign. So, you know, that's why I'm here.

Ryssdal: What was it about the president's approach to the American economy that made you say, "I want to work for this guy"? [Hissing from audience.]

Audience: Ignore them.

Ryssdal: That's a good point.

Mnuchin: No, I think they're going to get more tired than I am. So, you know, that's kind of —

Audience: Fat chance.

Mnuchin: Fat chance? Oh yeah, I'm dealing with students, I forgot. There's a lot of students.

Ryssdal: So what was it about the president's economic agenda made you say, "I want to do this and work on this?"

Mnuchin: I go back to the comment of the financial crisis impacted lots of people. I operated banks [hissing from audience] that were that went under during the financial crisis. I saw the impact of what went on and how important banks are to local communities and the economic issues. And I felt an obligation to try to do things that would help people and help the economy and particularly the middle class. And I think we're very proud of these accomplishments.

Ryssdal: So we'll get to that in a minute. We'll get to the tax bill and all that in a minute. But I want to talk about the last section of your remarks here about the sanctions that you are in charge of and responsible for, specifically the North Korean sanctions that were announced on Friday, the new round. Sanctions, as you know, take years and decades to play out. The question is, do you, and more particularly, the president, have the patience to let them play out with North Korea?

Mnuchin: Well, I'm not going to comment on kind of what we're going to do going forward and what patience we have and what patience we don't have. But I don't agree with you on your premise.

Ryssdal: That they take decades?

Mnuchin: Yeah, I don't agree with that at all.

Ryssdal: North Korea's been under sanctions for decades, sir. Iran under sanctions for decades. It is true.

Mnuchin: OK, well let me give you the facts, because this we can have a debate about. [Hissing from audience.]

Ryssdal: Sure.

Mnuchin: There's 500 sanctions on North Korea since 2005. Basically half have been done in the last year. We have more sanctions authority now than we've ever had before. So for example, we have now powers that we can sanction anybody who's doing trade with North Korea. So I would in all disrespect, I would, I would say, or respect, [laughter] I would say that these things take some time, but it is not decades, and we've seen evidence that they are already having an impact. But let me also make a comment. Our issue is not with the people of North Korea. So we want to be careful that we're not doing things — there are things that we could sanction that impact the people. What we're trying to do is cut down his ability to do ballistic missiles and nuclear weapons.

Ryssdal: And you're satisfied that these sanctions you announced on Friday are tightening the noose?

Mnuchin: Absolutely. So what we started with was illegal ship-to-ship transfers. These are very granular. We now have identified ships that are violating U.N. sanctions, and these ships will be prevented from doing this again. We've also put out Coast Guard advisories. We're working with the the Navy. This is a full effort across the government.

Ryssdal: As you know, Ivanka Trump was in South Korea [hissing from audience] for the Olympic delegation. She also, as you know, briefed the South Korean president, President Moon, on these sanctions. Given that she's a family member of the president without a permanent security clearance, do you think that was appropriate?

Mnuchin: I absolutely think it was appropriate. [Hissing from audience.]

Ryssdal: How so?

Mnuchin: Again, she's an assistant to the president. She didn't travel as a family member. She traveled as assistant to the president. I briefed her. You're not aware of what security clearance is needed one way or another for these things. [Hissing from audience.] And again I'm very comfortable with what she did representing the country on a very important issue, I might add.

Ryssdal: Let me take it to the tax law. [Hissing from audience.] You and the president and the Congress passed last year, the president signed it, it took effect on the first of January, as you know. During your confirmation hearings, you said whatever tax reform the Trump administration is going to work on will not add to the debt and the deficit.

Mnuchin: That's true and I stand behind that. [Hissing from audience.]

Ryssdal: Sir, the tax bill that's enforced now adds a trillion and a half dollars to the deficit.

Mnuchin: No, that's not the case. [Hissing from audience.] The tax bill scored on a static basis adds a trillion and a half — let me just go through the numbers — there is a half a trillion dollars difference between what's called baseline and policy. Those are things that were gonna be extended anyway. That takes the number down to a trillion dollars. We believe that, with 90 basis points of growth, there will be over — 

Ryssdal: Why don't you explain what 90 basis points means?

Mnuchin: Ninety basis points of GDP. So GDP going from basically 2.1 percent to 3 percent. And for you math majors in the room, the break even is about 35 basis points.

Ryssdal: So in other words, three-tenths of 1 percent on growth.

Mnuchin: That's correct.

Ryssdal: OK. The catch of course is, and as you know, you did have two quarters of 3 percent economic growth this past year, but year-over-year growth in the American economy was 2.3 percent. So you're still far away from the target, right?

Mnuchin: Absolutely. That's why we're doing all of these things. So these things have some impact. And all of our economic plans are about creating sustained economic growth. [Hissing from audience.]

Ryssdal: Help me understand then with some specificity how you're going to do that. Because the numbers that were engineered by the White House and the Council of Economic Advisers that went into the tax plan were, "We're going to get 3 percent. Here's how," as opposed to, "These are our policies, which is going to get us to 3 percent."

Mnuchin: Well, you must seem to have a bias because you're using the words "engineered," [hissing from audience] so you obviously think that it was the policy the policies were created. Again, what I would say is we fundamentally believe that we will have economic growth, and again, 35 basis points is the break even. And we're already seeing this. By the way, we're seeing companies give millions and millions of workers [hissing from audience] bonuses all as a result of this. And for people who are getting these thousand-dollar bonuses, these are not crumbs.

Ryssdal: Absolutely not, and I'm not going to imply that at all. You said 4 million workers in this economy?

Mnuchin: Four and a half million.

Ryssdal: Four and a half million have gotten one-time bonuses.

Mnuchin: Yes.

Ryssdal: So this is a labor pool of 155 million people, sir.

Mnuchin: So are you, tell me, are you, for those four and a half million workers —

Ryssdal: So my question is —

Mnuchin: in one month. That's a big deal. That's a big deal. Four and a half million workers have already seen this impact.

Ryssdal: By some estimates —

Mnuchin: I understand you're doing the math.

Ryssdal: No. So the Americans for Tax Reform say plus or minus, 86 companies have given wage increases, 250 companies have given one-time bonuses, and I guess the question is, what would you rather have? Would you rather have a one-time bonus or a consistent wage increase over the next couple of years?

Mnuchin: We fundamentally believe that there will be wage increases going through to the workers. [Hissing from audience.]

Ryssdal: Why do you believe that?

Mnuchin: Again, I just went through why we believe it. It's a function of economic policy, it's a function of making a more competitive system that companies can invest. And again, there is research that 70 percent of the tax burden is borne by the workers. So this is all about making a more competitive U.S. system for jobs. [Applause.] Thank you.

Ryssdal: So let me ask you about something you said about 10 days, two weeks ago that after the president said at Davos, "You know what, we might get into the Trans-Pacific Partnership" the Obama-negotiated deal that President Trump pull this out early in his administration. President said, "You know, I might be able to get back into that if we could work out a way that's advantageous." And you said the other day the president and his administration will be willing to go, and these are your words, go multilateral. That deal is going to be signed and done on the eighth of March, sir. So what interest do you think the other Trans-Pacific Partnership countries —

Mnuchin: I think they have a lot of interest. I've met with them a lot recently. And to the extent that they they are absolutely willing to have discussions with the United States if that's something we want to pursue.

Ryssdal: And you fully expect that they will let America back into the TPP?

Mnuchin: Again, it's not a question of letting us back in or not letting us back in.

Ryssdal: Well, the president pulled us out, sir.

Mnuchin: Again, what I would say is they're interested in us being in agreement. Right now the president is more focused on bilateral trades, and that's our priority and that's what we're negotiating. What the president has said is kind of when we get done with the bilaterals that we're focused on, to the extent that kind of the TPP will change, we will consider — not a question of whether they will let us back in — we will consider whether we want to go into the multilateral agreement.

Ryssdal: That sounds very much like, and I apologize for characterizing your words, but it sounds very much like you're saying we will deign to have a conversation with them in which they might be allowed to trade with us.

Mnuchin: That's not what I said. So again let me just, let's just be clear. The United States is the largest trading market in the world. Everybody wants to do business in the United States. The United States has the lowest tariffs, has the lowest barriers. Every single country wants to do business in the United States. And, by the way, to the extent that we can do business with other countries on the exact same terms, OK, and our companies can be treated the exact same way, we believe in reciprocal free trade. So that's our objective.

Ryssdal: One of the one of the things the president has said and his advisers have said is, "Listen, we need to fix regulation in this country, financial regulation, the Dodd-Frank financial reform law is too strict, we need to loosen it up a little bit." Brian Moynihan, the CEO of BofA, said the other day, "Dodd-Frank's fine. What are we doing?"

Mnuchin: You know why? Because the top eight banks control all the assets in the United States and they don't want anybody else to compete. So what we're trying to do, and by the way, there is bipartisan support for this, and I think this legislation will be passed in the next three months to modify Dodd-Frank so that commercial banks, regional banks, community banks can succeed. Our objective is we don't want just eight large banks in the United States. So the modifications on Dodd-Frank are all designed to help community banks and regional banks.

Ryssdal: Even though community banks are making record profits this past year.

Mnuchin: Again, that's because the economy is doing better. But yes. Do you want them all to be gobbled up by Brian Moynihan? No. We want to make sure that we have a healthy broad-based banking system.

No, it's not in the least interesting that anyone in this administration would say something so idiotic.

[zork 629]

43 minutes ago, softlynow said:

No, it's not in the least interesting that anyone in this administration would say something so idiotic.

I guess it has been sooooo long since we have had 3% growth that it might seem idiotic.  

[Nice Guy Eddie 13706]

7 hours ago, zork said:

https://www.cnbc.com/2018/04/17/treasury-secretary-mnuchin-our-long-term-3-percent-growth-outlook-will-pay-for-the-tax-cuts.html

This was from an interview reported yesterday.  That is interesting that the former Yale graduate, former Goldman Sachs man, and current Treasury Secretary would go that far out on a limb.  

 

Here is more from Steve from a recent interview when he visited UCLA back in February:

 

Interview Q/A text in the spoiler:

  Reveal hidden contents

Amidst a boisterous crowd, Treasury Secretary Steven Mnuchin briefly lectured students and visitors at the UCLA Burkle Center for International Relations in Los Angeles before settling in for an interview with Marketplace host Kai Ryssdal. The wide-ranging interview touched on topics as diverse as the Trump administration’s stance on North Korea, the impact of the recently passed tax overhaul and the Trans-Pacific Partnership. Below is an edited version of the interview. To hear the full interview and audience Q&A session, click on the audio player at the end of the story. Additionally, UCLA has published video of the entire event.

Kai Ryssdal: First of all, thank you all for coming. I appreciate you taking the time on this afternoon. Secretary, thank you also for your time. Let me ask you a kind of a framing question here. There was a story I read in researching this talking about you being the finance chairman for the Trump campaign. And people were saying, "Steve, why are you doing this?" And you said, "Look, if this works out, nobody nobody's going to ask me why I was doing this." So the question is, how is it working out for you?

Steven Mnuchin: Actually, the question was slightly different. OK. And let me first say, I consider it a great honor to serve the country. [Applause and hissing.] So I think we live in it, we live in a democracy. We're lucky to live in this country. We're lucky to have differences of opinions. And for me, I was never involved really in politics. Some people spend their entire life in politics. I recognized that there were certain issues that were in this country, and that's that's why I participated in the campaign. So, you know, that's why I'm here.

Ryssdal: What was it about the president's approach to the American economy that made you say, "I want to work for this guy"? [Hissing from audience.]

Audience: Ignore them.

Ryssdal: That's a good point.

Mnuchin: No, I think they're going to get more tired than I am. So, you know, that's kind of —

Audience: Fat chance.

Mnuchin: Fat chance? Oh yeah, I'm dealing with students, I forgot. There's a lot of students.

Ryssdal: So what was it about the president's economic agenda made you say, "I want to do this and work on this?"

Mnuchin: I go back to the comment of the financial crisis impacted lots of people. I operated banks [hissing from audience] that were that went under during the financial crisis. I saw the impact of what went on and how important banks are to local communities and the economic issues. And I felt an obligation to try to do things that would help people and help the economy and particularly the middle class. And I think we're very proud of these accomplishments.

Ryssdal: So we'll get to that in a minute. We'll get to the tax bill and all that in a minute. But I want to talk about the last section of your remarks here about the sanctions that you are in charge of and responsible for, specifically the North Korean sanctions that were announced on Friday, the new round. Sanctions, as you know, take years and decades to play out. The question is, do you, and more particularly, the president, have the patience to let them play out with North Korea?

Mnuchin: Well, I'm not going to comment on kind of what we're going to do going forward and what patience we have and what patience we don't have. But I don't agree with you on your premise.

Ryssdal: That they take decades?

Mnuchin: Yeah, I don't agree with that at all.

Ryssdal: North Korea's been under sanctions for decades, sir. Iran under sanctions for decades. It is true.

Mnuchin: OK, well let me give you the facts, because this we can have a debate about. [Hissing from audience.]

Ryssdal: Sure.

Mnuchin: There's 500 sanctions on North Korea since 2005. Basically half have been done in the last year. We have more sanctions authority now than we've ever had before. So for example, we have now powers that we can sanction anybody who's doing trade with North Korea. So I would in all disrespect, I would, I would say, or respect, [laughter] I would say that these things take some time, but it is not decades, and we've seen evidence that they are already having an impact. But let me also make a comment. Our issue is not with the people of North Korea. So we want to be careful that we're not doing things — there are things that we could sanction that impact the people. What we're trying to do is cut down his ability to do ballistic missiles and nuclear weapons.

Ryssdal: And you're satisfied that these sanctions you announced on Friday are tightening the noose?

Mnuchin: Absolutely. So what we started with was illegal ship-to-ship transfers. These are very granular. We now have identified ships that are violating U.N. sanctions, and these ships will be prevented from doing this again. We've also put out Coast Guard advisories. We're working with the the Navy. This is a full effort across the government.

Ryssdal: As you know, Ivanka Trump was in South Korea [hissing from audience] for the Olympic delegation. She also, as you know, briefed the South Korean president, President Moon, on these sanctions. Given that she's a family member of the president without a permanent security clearance, do you think that was appropriate?

Mnuchin: I absolutely think it was appropriate. [Hissing from audience.]

Ryssdal: How so?

Mnuchin: Again, she's an assistant to the president. She didn't travel as a family member. She traveled as assistant to the president. I briefed her. You're not aware of what security clearance is needed one way or another for these things. [Hissing from audience.] And again I'm very comfortable with what she did representing the country on a very important issue, I might add.

Ryssdal: Let me take it to the tax law. [Hissing from audience.] You and the president and the Congress passed last year, the president signed it, it took effect on the first of January, as you know. During your confirmation hearings, you said whatever tax reform the Trump administration is going to work on will not add to the debt and the deficit.

Mnuchin: That's true and I stand behind that. [Hissing from audience.]

Ryssdal: Sir, the tax bill that's enforced now adds a trillion and a half dollars to the deficit.

Mnuchin: No, that's not the case. [Hissing from audience.] The tax bill scored on a static basis adds a trillion and a half — let me just go through the numbers — there is a half a trillion dollars difference between what's called baseline and policy. Those are things that were gonna be extended anyway. That takes the number down to a trillion dollars. We believe that, with 90 basis points of growth, there will be over — 

Ryssdal: Why don't you explain what 90 basis points means?

Mnuchin: Ninety basis points of GDP. So GDP going from basically 2.1 percent to 3 percent. And for you math majors in the room, the break even is about 35 basis points.

Ryssdal: So in other words, three-tenths of 1 percent on growth.

Mnuchin: That's correct.

Ryssdal: OK. The catch of course is, and as you know, you did have two quarters of 3 percent economic growth this past year, but year-over-year growth in the American economy was 2.3 percent. So you're still far away from the target, right?

Mnuchin: Absolutely. That's why we're doing all of these things. So these things have some impact. And all of our economic plans are about creating sustained economic growth. [Hissing from audience.]

Ryssdal: Help me understand then with some specificity how you're going to do that. Because the numbers that were engineered by the White House and the Council of Economic Advisers that went into the tax plan were, "We're going to get 3 percent. Here's how," as opposed to, "These are our policies, which is going to get us to 3 percent."

Mnuchin: Well, you must seem to have a bias because you're using the words "engineered," [hissing from audience] so you obviously think that it was the policy the policies were created. Again, what I would say is we fundamentally believe that we will have economic growth, and again, 35 basis points is the break even. And we're already seeing this. By the way, we're seeing companies give millions and millions of workers [hissing from audience] bonuses all as a result of this. And for people who are getting these thousand-dollar bonuses, these are not crumbs.

Ryssdal: Absolutely not, and I'm not going to imply that at all. You said 4 million workers in this economy?

Mnuchin: Four and a half million.

Ryssdal: Four and a half million have gotten one-time bonuses.

Mnuchin: Yes.

Ryssdal: So this is a labor pool of 155 million people, sir.

Mnuchin: So are you, tell me, are you, for those four and a half million workers —

Ryssdal: So my question is —

Mnuchin: in one month. That's a big deal. That's a big deal. Four and a half million workers have already seen this impact.

Ryssdal: By some estimates —

Mnuchin: I understand you're doing the math.

Ryssdal: No. So the Americans for Tax Reform say plus or minus, 86 companies have given wage increases, 250 companies have given one-time bonuses, and I guess the question is, what would you rather have? Would you rather have a one-time bonus or a consistent wage increase over the next couple of years?

Mnuchin: We fundamentally believe that there will be wage increases going through to the workers. [Hissing from audience.]

Ryssdal: Why do you believe that?

Mnuchin: Again, I just went through why we believe it. It's a function of economic policy, it's a function of making a more competitive system that companies can invest. And again, there is research that 70 percent of the tax burden is borne by the workers. So this is all about making a more competitive U.S. system for jobs. [Applause.] Thank you.

Ryssdal: So let me ask you about something you said about 10 days, two weeks ago that after the president said at Davos, "You know what, we might get into the Trans-Pacific Partnership" the Obama-negotiated deal that President Trump pull this out early in his administration. President said, "You know, I might be able to get back into that if we could work out a way that's advantageous." And you said the other day the president and his administration will be willing to go, and these are your words, go multilateral. That deal is going to be signed and done on the eighth of March, sir. So what interest do you think the other Trans-Pacific Partnership countries —

Mnuchin: I think they have a lot of interest. I've met with them a lot recently. And to the extent that they they are absolutely willing to have discussions with the United States if that's something we want to pursue.

Ryssdal: And you fully expect that they will let America back into the TPP?

Mnuchin: Again, it's not a question of letting us back in or not letting us back in.

Ryssdal: Well, the president pulled us out, sir.

Mnuchin: Again, what I would say is they're interested in us being in agreement. Right now the president is more focused on bilateral trades, and that's our priority and that's what we're negotiating. What the president has said is kind of when we get done with the bilaterals that we're focused on, to the extent that kind of the TPP will change, we will consider — not a question of whether they will let us back in — we will consider whether we want to go into the multilateral agreement.

Ryssdal: That sounds very much like, and I apologize for characterizing your words, but it sounds very much like you're saying we will deign to have a conversation with them in which they might be allowed to trade with us.

Mnuchin: That's not what I said. So again let me just, let's just be clear. The United States is the largest trading market in the world. Everybody wants to do business in the United States. The United States has the lowest tariffs, has the lowest barriers. Every single country wants to do business in the United States. And, by the way, to the extent that we can do business with other countries on the exact same terms, OK, and our companies can be treated the exact same way, we believe in reciprocal free trade. So that's our objective.

Ryssdal: One of the one of the things the president has said and his advisers have said is, "Listen, we need to fix regulation in this country, financial regulation, the Dodd-Frank financial reform law is too strict, we need to loosen it up a little bit." Brian Moynihan, the CEO of BofA, said the other day, "Dodd-Frank's fine. What are we doing?"

Mnuchin: You know why? Because the top eight banks control all the assets in the United States and they don't want anybody else to compete. So what we're trying to do, and by the way, there is bipartisan support for this, and I think this legislation will be passed in the next three months to modify Dodd-Frank so that commercial banks, regional banks, community banks can succeed. Our objective is we don't want just eight large banks in the United States. So the modifications on Dodd-Frank are all designed to help community banks and regional banks.

Ryssdal: Even though community banks are making record profits this past year.

Mnuchin: Again, that's because the economy is doing better. But yes. Do you want them all to be gobbled up by Brian Moynihan? No. We want to make sure that we have a healthy broad-based banking system.

Simple politics.  Repeat something enough times, people start to believe it.   And if facts ultimately get in your way, blame another policy or the inevitable economic cycle for it.

[Francisco 2.0 32542]

MAGA!!!!!!!

https://www.politico.com/story/2018/06/26/republican-tax-law-churches-employees-670362

Quote

Republicans have quietly imposed a new tax on churches, synagogues and other nonprofits, a little-noticed and surprising change that could cost some groups tens of thousands of dollars.

Their recent tax-code rewrite requires churches, hospitals, colleges, orchestras and other historically tax-exempt organizations to begin paying a 21 percent tax on some types of fringe benefits they provide their employees. 

That could force thousands of groups that have long had little contact with the IRS to suddenly begin filing returns and paying taxes for the first time.

Many organizations are stunned to learn of the tax — part of a broader Republican effort to strip the code of tax breaks for employee benefits like parking and meals— and say it will be a significant financial and administrative burden.

It also means political peril for lawmakers, many of whom were surely unaware of the provision when they approved the tax plan. Churches’ tax-exempt status, in particular, has long been considered sacrosanct and Republicans are relying on the faithful to back them in the November elections.

 

[Chuckie Finster 22978]

46 minutes ago, Francisco 2.0 said:

MAGA!!!!!!!

https://www.politico.com/story/2018/06/26/republican-tax-law-churches-employees-670362

 

It also means political peril for lawmakers, many of whom were surely unaware of the provision when they approved the tax plan. Churches’ tax-exempt status, in particular, has long been considered sacrosanct and Republicans are relying on the faithful to back them in the November elections.

This is hilarious to me.

Edited June 26, 2018 by Chuckie Finster

[Mojo Hand 4580]

That is awesome.   And hilarious.   And good, churches should pay taxes.  And good, Republicans should get flack for the mistakes they made in a law that was rammed through without the normal process by which errors are discovered and provisions debated. 

[Brew 3049]

The article is poorly written and makes some pretty out there representations on the effects. The tax law made 3 fringe benefits nondeductible to for profit entities which are qualified transportation benefits, qualified parking facilities, and on premise athletic facilities. Then it went further and said that nonprofits should be treated equally on those fringe benefits and pay UBIT on them. It is definitely an issue though, especially on the parking side in cities where private parking lots are the primary parking available and a fringe benefit is provided.

[lemonlime 5503]

It's also going to decrease charitable giving, including to churches.  Most taxpayers will not be able to write off their donations starting this year because they basically ended itemizing.

[Aqua Buddha 14782]

Corporate America threw Wall Street a record-shattering party last quarter.

Flooded with cash from the Republican tax cut, US public companies announced a whopping $436.6 billion worth of stock buybacks, according to research firm TrimTabs.

Not only is that most ever, it nearly doubles the previous record of $242.1 billion, which was set during the first three months of the year.

https://money.cnn.com/2018/07/10/investing/stock-buybacks-record-tax-cuts/index.html

[FWD 297]

 

 

[David Dennison 19439]

Shocking.

 

[Js1 86924]

Quote

Many, especially in the political system, have claimed that the corporate tax cuts are being rapidly passed into wages, citing bonuses as an example.

That's not how bonuses work in regards to wages?

[Nice Guy Eddie 13706]

Silly to think that most companies will give wages or bonuses because they are more profitable due to tax changes.  It doesn't mean that it's 0 but wages and bonus increases would mainly be due to performance and market forces not because Uncle Sam gave them a break. 

The only exception that I can see is if a company needed to increase wages or bonuses but couldn't do so because of lack of funds, and the tax break gave them the funds.  You could argue the tax break helped this 1 specific scenario.

[Aqua Buddha 14782]

17 minutes ago, Nice Guy Eddie said:

Silly to think that most companies will give wages or bonuses because they are more profitable due to tax changes.  It doesn't mean that it's 0 but wages and bonus increases would mainly be due to performance and market forces not because Uncle Sam gave them a break. 

The only exception that I can see is if a company needed to increase wages or bonuses but couldn't do so because of lack of funds, and the tax break gave them the funds.  You could argue the tax break helped this 1 specific scenario.

Not many large corporations were in that scenario, though.  Most of them were sitting on a mountain of cash before the tax cut.

[zork 629]

http://www.presidency.ucsb.edu/economic_reports/2018.pdf

[Message Board User 12405]

And how much did this raise the deficit?

[CooterBrown 18272]

6 hours ago, Aqua Buddha said:

Not many large corporations were in that scenario, though.  Most of them were sitting on a mountain of cash before the tax cut.

For any large company, the hierarchy of who is gonna get theirs is:

shareholders > corporate officers > customers > employees.

First two can be flipped depending on the company.

[Bozo_Casanova 26773]

This thing was a wealth transfer from the many tomorrow to the few today. It will never pay for itself.

Where’s the coffee man? I’d like to talk about Bugtussle, and what it will be like there after he passes out of this world.