Tax reform

[JimmyJames 12271]

25 minutes ago, Brew said:

Based on your past posting in this thread, I’m not sure why I’m even asking this. However, what exactly is your question?

Here is your quote:

 

“There are plenty of privately held entities that sell on an annual basis and most sell under an asset sale scenario. The gains over depreciation recapture are taxed at capital gains rates just like a stock sale.”

 

And here is my question?

“And what would the percentage of privately held companies would that be? “

Im not sure how I can make the question clearer for you.

[TwiceHorn 31280]

13 hours ago, Brew said:

That’s not true at all. There are plenty of privately held entities that sell on an annual basis and most sell under an asset sale scenario. The gains over depreciation recapture are taxed at capital gains rates just like a stock sale.

I'm not familiar with this practice.  What is the purpose of such transactions?

[Incredulity 11554]

52 minutes ago, TwiceHorn said:

I'm not familiar with this practice.  What is the purpose of such transactions?

if you purchase the assets of a business the purchaser gets the assets at the basis of the sales price and depreciates them as categorized.

if you purchase the entire stock of a business you get the assets of the purchased business at the already partially depreciated basis they were on that entities books at.

[Brew 3047]

You also cut off the liability of the old entity rather than assuming it with a stock sale. Asset sales outnumber stock sales in our client base 99-1 at least. I have one stock transaction currently and that is the first one in quite a while other than a couple here and there to private equity groups.

[Washpark 176]

Feign shock!

 

Quote

Trump Tax Law Has Led to Repatriation of Just 3% of the Cash He Promised It Would

https://www.thedailybeast.com/trump-tax-law-has-led-to-repatriation-of-just-3-of-the-cash-he-promised-it-would

[zork 629]

On 7/11/2018 at 7:57 PM, Bozo_Casanova said:

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.

 

He left with a rep of 6 after 590 posts.  I multi-rep'd him several times just to keep the crowd sourcing socks from killing him.  Maybe he tired of the crucible this board now creates for those that disagree unlike in the past when things were more reasonable.(IMHO) 

Insert wargames meme/pic about the only move is not to play.  

 

[Bozo_Casanova 26281]

He left with a rep of 6 after 590 posts.  I multi-rep'd him several times just to keep the crowd sourcing socks from killing him.  Maybe he tired of the crucible this board now creates for those that disagree unlike in the past when things were more reasonable.(IMHO) 
Insert wargames meme/pic about the only move is not to play.  
 

That’s pretty much it. The dialogue got too toxic, the debates didn’t have enough substance and it he told me wasn’t fun for him anymore.
it’s a shame, I miss having him around. Washparkhorn also.

[TwiceHorn 31280]

2 minutes ago, Bozo_Casanova said:

That’s pretty much it. The dialogue got too toxic, the debates didn’t have enough substance and it he told me wasn’t fun for him anymore.
it’s a shame, I miss having him around. Washparkhorn also.

Washpark is around, as washpark, I believe.

[Anastasis 23395]

2 hours ago, TwiceHorn said:

 Washpark is around, as washpark, I believe.

pretty sure thats a different poster. 

[sidis 9754]

2 hours ago, Bozo_Casanova said:

That’s pretty much it. The dialogue got too toxic, the debates didn’t have enough substance and it he told me wasn’t fun for him anymore.
it’s a shame, I miss having him around. Washparkhorn also.

aww, things got a bit too toxic for the biggest troll on the board and his robert e. lee day threads?  that's a shame.

 

2 hours ago, TwiceHorn said:

Washpark is around, as washpark, I believe.

[Washpark 176]

5 minutes ago, Anastasis said:

pretty sure thats a different poster. 

1234

[Hugo Stiglitz 23356]

17 hours ago, zork said:

He left with a rep of 6 after 590 posts.  I multi-rep'd him several times just to keep the crowd sourcing socks from killing him.  Maybe he tired of the crucible this board now creates for those that disagree unlike in the past when things were more reasonable.(IMHO) 

Insert wargames meme/pic about the only move is not to play.  

 

 

Just like to say I’ve always been opposed to the crowdsource banning on the political talk board. It’s why I don’t give neg rep.  I’ve been the victim of mob rule online before and it’s not cool.  Yeah, trolls suck and drag down the forum but we should be better at dealing with them than resorting to instant neg rep banning.  I also don’t like the idea of people being shy from freely express their opinions because they’re afraid of rep damage.  In fact, I think the forum would be better without rep across all boards and just go with likes/dislikes.

Bans should be left to the discretion of the administrators.  

JMO

[Bozo_Casanova 26281]

7 hours ago, TwiceHorn said:

Washpark is around, as washpark, I believe.

Washparkhorn is actually around as washparkhorn, but doesn't post but rarely. 

[TwiceHorn 31280]

Oh.

 

Why are there two variants of washpark?  Wtf is a washpark?

[Horn Under a Bad Sign 20344]

2 hours ago, Bozo_Casanova said:

Washparkhorn is actually around as washparkhorn, but doesn't post but rarely. 

 

It's hard for anybody to defend the current insanity emanating from the White House, let alone a reasonable righty like Washpark. 

[Nivek 16859]

That’s pretty much it. The dialogue got too toxic, the debates didn’t have enough substance and it he told me wasn’t fun for him anymore.
it’s a shame, I miss having him around. Washparkhorn also.

Who?

[sheeeit 129]

On 8/10/2018 at 10:15 AM, TwiceHorn said:

I'm not familiar with this practice.  What is the purpose of such transactions?

Did you get an answer to this?  Are you asking about the sale of private businesses?  It happens everyday.  There is massive investment in private businesses.  The idea in most cases is to provide cash for the business in exchange for a % of the ownership.  The business uses the cash to grow the business.  If a dividend is paid, as stated, it is taxed accordingly.  The hope is that the business grows and then is sold.  Think of the Shark Tank guys.  they have almost no interest in dividends.  They put $100K in a business and get a 10% ownership stake which values the business at $1M.  They business uses the $100K to expand and grow and then they hope to sell the business in a few years for $10M.  The investor gets a gain of $900K on his $100K initial investment and pays capital gains on the $900K.  

Personally, I dislike all forms of capital gains taxes because the investments are made with post tax dollars.  I see it as double taxation but I completely understand why it exists and realize that it is never going away.

But in the scenario above, there is certainly no guarantee that the business that is invested in will actually survive and most do not get the growth they envision.  And if you tax the gains from a potential sale at 40% then hardly anyone is going to invest.  The performance of the business would have to be spectacular for the investor to justify the investment.  But it is good for everyone to have that investment.  The investor is likely already rich and needs incentive to fund the endeavors of people that are not rich.  The owner still has 90% of the value and has a chance to get rich.  The business will create jobs.  

Using investors is usually much preferred to taking on debt.  Debt can be crushing if the business does not ramp up as quickly as hoped.  Hope that helps.

[Francisco 2.0 32340]

https://www.axios.com/republicans-tax-cuts-2018-midterms-internal-poll-1b38b9a8-18ed-4c0e-abcb-d6b82732e193.html

 

Quote

More than 60% of voters believe the GOP tax law benefits “large corporations and rich Americans” over “middle class families,” according to a new survey commissioned by the Republican National Committee that was obtained by Bloomberg News.

Why it matters: Republicans just got confirmation — from their own poll — that what they've thought was going to be their winning issue in 2018 might not help them after all. It also confirms that Democrats' strategy of tying health care and taxes together is working.

Quote

The survey declares Republicans have "lost the messaging battle" on tax cuts. It also notes that most voters believe Republicans want to cut Social Security and Medicare "in order to provide tax breaks for corporations and the wealthy.”

By the numbers: 63% of independent voters think the tax law mostly benefits wealthy Americans and large corporations, compared to just 27% who think it benefits middle-class families.

That's nearly flipped among Republican voters (63% think it benefits middle-class Americans).

44% of voters approve of the tax law overall, though, compared to 45% who don't. 

Bottom line: This should worry the GOP — they haven't been able to talk about health care after they failed to repeal and replace the Affordable Care Act, and now they can't even talk about their key legislative accomplishment.

 

 

[happyfunball 481]

More data tax cuts weren't needed and harmful.

Quote

    The sweeping corporate tax cuts Donald Trump signed into law almost a year ago have had little or no effect on most US companies’ hiring and investment plans, according to a business survey released on Monday.

The National Association for Business Economics found buoyant conditions in the third quarter of 2018, with its members reporting rising sales and improved profit margins, but reported that the Republican tax reform “has not broadly impacted hiring and investment plans”.

The survey, conducted between September 26 and October 11, adds to a growing body of evidence that much of the windfall from tax reform has been spent on share buybacks rather than investment, jobs or research and development.

Republicans had predicted their changes to the tax code as would trigger a boom in corporate investment and hiring, particularly in the US. On the day he signed the bill into law, Mr Trump said: “It’s going to be a tremendous thing for the American people. It’s going to be fantastic for the economy. It’s going to keep companies from leaving our shores and opening up in other countries.”

The tax act both cut the federal corporate income tax rate from 35 per cent to 21 per cent and encouraged companies to repatriate roughly $1tn in cash accumulated abroad from their foreign earnings. In a paper published last month, Federal Reserve economists showed the bulk of the repatriated cash had been spent on buybacks and found limited evidence of an analogous increase in investment.
 

https://www.ft.com/content/e9bccd00-db98-11e8-8f50-cbae5495d92b

[wildcat09 29255]

Whocouldanode!?

[Bozo_Casanova 26281]

I feel like the hippie shock/horror reaction gif from Italian Spider-Man fits here.

 

[Js1 85110]

3 minutes ago, Bozo_Casanova said:

I feel like the hippie shock/horror reaction gif from Italian Spider-Man fits here.

 

No wai!!!

[FondrenRoad 4378]

On 9/17/2018 at 2:53 PM, Washpark said:

Feign shock!

 

https://www.thedailybeast.com/trump-tax-law-has-led-to-repatriation-of-just-3-of-the-cash-he-promised-it-would

Of course.  Companies need to hedge against this shitshow we have going on here.  If Apple keeps that Irish cash in Euros, it gives them a nice little nest egg to run to if we implode here.

Edited October 29, 2018 by FondrenRoad

[Buzzrock 14871]

Unsurprisingly he oversold it, but repatriations are still crushing previous year numbers.

https://www.wsj.com/articles/companies-arent-all-rushing-to-repatriate-cash-1537106555?mod=hp_lead_pos3

Per the WSJ about a half a trillion came back in Q1 and Q2. A huge number but far short of 4-5 trillion.

[Js1 85110]

Also no mention the bigly number of Costco Memberships we can all afford now.

[babysdaddy 2718]

Given the bill was not passed until the end of the year and it was far from certain it was even going to pass, some capital investment projects were not in 2018 budgets.  We are expecting the capital investment to be more robust during 2019 given the time to plan.  We will see.  Budgets have a way of being written in stone unless the bottom falls out due to the Fed and Trade War activity.

[Bateshorn 9902]

24 minutes ago, babysdaddy said:

Given the bill was not passed until the end of the year and it was far from certain it was even going to pass, some capital investment projects were not in 2018 budgets.  We are expecting the capital investment to be more robust during 2019 given the time to plan.  We will see.  Budgets have a way of being written in stone unless the bottom falls out due to the Fed and Trade War activity.

[Bozo_Casanova 26281]

41 minutes ago, babysdaddy said:

Given the bill was not passed until the end of the year and it was far from certain it was even going to pass, some capital investment projects were not in 2018 budgets.  We are expecting the capital investment to be more robust during 2019 given the time to plan.  We will see.  Budgets have a way of being written in stone unless the bottom falls out due to the Fed and Trade War activity.

 

[sidis 9754]

16 hours ago, babysdaddy said:

Given the bill was not passed until the end of the year and it was far from certain it was even going to pass, some capital investment projects were not in 2018 budgets.  We are expecting the capital investment to be more robust during 2019 given the time to plan.  We will see.  Budgets have a way of being written in stone unless the bottom falls out due to the Fed and Trade War activity.

 

[Brisketexan 104622]

[Billy and April]  So....TOMORROW'S the big day?  [/Billy and April]

[wildcat09 29255]

 

[Incredulity 11554]

The image in the twitter link is interesting by itself.

The article calls out the areas in purple(highest percentage of raises) as low wage cost areas.  Those areas are also lower state tax areas(Florida being an exception).  The tax reform really fucked people and companies(specifically pass thrus) in high state tax areas.

[NBMisha 224]

On this we agree!

[Brew 3047]

4th quarter and 2019 will tell the tale for capital investment. Personally I don’t see many reinvesting abnormally in the size range I work with. Most of the companies I deal with were already making capital investments under the old 179 format, so they are staying consistent. They are all looking at ways to avoid tax under the new law though and taking home more money.

The employee side is going to be hard to track. Everyone is trying to use technology to reduce head count. We met this morning about eliminating some positions even with a growing top line because we can’t keep them busy with new scanning software we use.

[Incredulity 11554]

1 minute ago, Brew said:

4th quarter and 2019 will tell the tale for capital investment. Personally I don’t see many reinvesting abnormally in the size range I work with. Most of the companies I deal with were already making capital investments under the old 179 format, so they are staying consistent. They are all looking at ways to avoid tax under the new law though and taking home more money.

The employee side is going to be hard to track. Everyone is trying to use technology to reduce head count. We met this morning about eliminating some positions even with a growing top line because we can’t keep them busy with new scanning software we use.

Damn near all automation projects I have seen recently have been based on the inability to get enough bodies.

On CapEx the lag is at LEAST 26 weeks.  Most of the smallest lead times I am aware of are 12 weeks on raw materials to assemble machinery or buildings.  I think Q4 is still early.  

[Aqua Buddha 14518]

GM laying off 15,000 people.  I was told that they'd hire more after a tax cut.  Is that wrong?

[gmr548 16513]

The image in the twitter link is interesting by itself.

The article calls out the areas in purple(highest percentage of raises) as low wage cost areas.  Those areas are also lower state tax areas(Florida being an exception).  The tax reform really fucked people and companies(specifically pass thrus) in high state tax areas.

 

It may be an unnecessary, ineffective attempt at economic stimulus, and it may have been outlandishly irresponsible to institute a structural increase to the deficit that is borderline irreversible in a practical sense... But it was worth it to own the libs.

 

Sent from my SM-G920V using Tapatalk

 

 

 

[atomheartbevo 89447]

1 hour ago, Aqua Buddha said:

GM laying off 15,000 people.  I was told that they'd hire more after a tax cut.  Is that wrong?

Fake news.   GM doesn’t know who they are playing with and damn well better open up another factory.  

[zork 629]

16 hours ago, Aqua Buddha said:

GM laying off 15,000 people.  I was told that they'd hire more after a tax cut.  Is that wrong?

 

14 hours ago, atomheartbevo said:

Fake news.   GM doesn’t know who they are playing with and damn well better open up another factory.  

Quote

As GM (GM) adjusts to changing customer behavior it is also planning ahead for the future. The company announced massive layoffs and is closing five North American facilities as it transitions to self-driving, electric cars of the future.

Chevy aint selling cars , so they are downsizing:

https://www.wsls.com/automotive/gm-will-no-longer-make-these-6-cars

https://www.statista.com/statistics/199974/us-car-sales-since-1951/

Trucks are selling though:

https://www.statista.com/statistics/199980/us-truck-sales-since-1951/

Electric cars are being hurt by lower gas prices:

https://www.statista.com/statistics/204740/retail-price-of-gasoline-in-the-united-states-since-1990/

[Captainant 27463]

Oh, you mean the lower gas prices in exchange for covering up a journalists murder? The lower oil prices that are decimating American energy companies?

[woohorn 1131]

Electric cars are being hurt by lower gas prices:

So Trump did this?

[Francisco 2.0 32340]

Not really tax reform, but tax related. 

https://jalopnik.com/the-white-house-wants-to-end-the-7-500-ev-tax-credit-a-1830828005

Quote

President Donald Trump has been teasing a super vague threat to end “all” of General Motors’ tax subsidies, in response to the automaker’s plan to cut 14,000 jobs and potentially close four U.S. plants. On Monday, Trump economic advisor Larry Kudlow elaborated that the White House would like to happen by 2020 at the earliest. But the administration will need help from Congress to pull that off.

 

Quote

Speaking with reporters on Monday, Kudlow said he “expected” the $7,500 federal tax credit offered to electric vehicle buyers will end in 2020 or 2021, Reuters reported, which added this vague context:

Kudlow said the Trump administration will end other subsidies, including on “renewables.”

 

 

Quote

I can’t tell you what “other” might entail, but it’s worth underscoring how much this could be a detriment to automakers, almost all of which are rolling out dozens of EVs in the coming months. Next year and 2020 are set to be big ones as EVs come to take up huge parts of car lineups, and automakers were counting on that tax credit to help sell them to new buyers and start getting costs down. 

But as we noted last week, Trump almost certainly can’t do this on his own, and it seems like Kudlow’s alluding to this reality by suggesting 2020 as a target to wind down the subsidy.

 

 

[Biff Tannen 45495]

Horses and buggies for all!

[LonghornJudas 1090]

Here it comes.

https://www.bloomberg.com/news/articles/2018-12-03/morgan-stanley-predicts-ford-to-cut-25-000-jobs-in-restructuring

 

[Captainant 27463]

3 minutes ago, LonghornJudas said:

Here it comes.

https://www.bloomberg.com/news/articles/2018-12-03/morgan-stanley-predicts-ford-to-cut-25-000-jobs-in-restructuring

 

[pyrohornIII 4809]

Opinion: The tax cut isn’t trickling down to workers

https://www.marketwatch.com/story/the-tax-cut-isnt-trickling-down-to-workers-2018-12-03

 

Nearly one year ago, the Republican Congress passed and the president signed the controversial and partisan Tax Cuts and Jobs Act (TCJA). Proponents sold this law as a middle-class tax cut that would dramatically increase business investment, raise wages, and simplify the tax code.

But more than 11 months later, there is little sign that any of these promises will be fulfilled. Instead, it is increasingly clear that the tax law isn’t just a wasteful giveaway — it is harming the economy, workers, and the U.S. fiscal position in important ways.

Real wage growth has been largely nonexistent for the average worker since the tax bill passed. Production nonsupervisory workers only saw a 0.2% year-over-year increase in average hourly earnings last quarter.

The people who did benefit, however, made out like bandits. Analysts from the Tax Policy Center estimate that the top 1% of earners will receive a larger share of the tax cut this year than the entire bottom 60% combined, with the average one-percenter receiving a windfall of more than $50,000 — a result of the enormous tax cuts for corporations and large pass-through businesses, which are disproportionately owned by the wealthy.

Unfortunately, the authors of the tax cuts ignored the historical evidence showing that companies don’t use their windfalls to create jobs or invest in workers or innovation. In fact, the trend has been the opposite, with cuts to long-term investment in favor of short-term payouts.

 

Quote

And so far, it appears that corporations are passing along their tax breaks to wealthy shareholders, primarily by buying back stock. In fact, as real after-tax corporate profits shot up by more than 16% in the third quarter of 2018, stock buybacks are on track to reach $1 trillion — a record high — by the end of the year.

 

Sadly, the TCJA’s approach to corporate taxes fuels three damaging economic trends. The first is corporate short-termism, as there is new evidence that executives tend to cash out their stocks in buybacks rather than show confidence in the long-term growth of their companies.

Second, TCJA cash is fueling a record year for mergers and acquisitions, as the largest corporations are gobbling up competitors and further concentrating economic power. The negative impacts of excessive mergers and declining competition are increasingly widespread, harming workers’ wages, family farmers, innovation, and overall economic opportunity.

Lastly, the TCJA still contains perverse incentives for U.S. companies to lower their tax obligations by investing offshore. This is not the way to rebuild U.S. productivity and competitiveness.

Proponents of the bill claimed that it would give typical families a $4,000 boost in real wages after a few years, on the theory that a boom in business investment would increase productivity, with the gains ultimately trickling down to workers.

But there is no sign of any investment boom. For workers to see real gains, we would need to see much higher and sustained investment. In addition, workers would need the power to bargain for their share of increased productivity — but the Trump administration has been doing everything in its power to undermine workers.

All signs point to a law that, as predicted, featured a massive tax cut to wealthy individuals and large corporations and hardly any benefits to working- and middle-class Americans.

This giveaway didn’t come without cost to U.S. fiscal capacity. The TCJA was the largest contributor to deficit increases this year and is projected by the Congressional Budget Office to cost $1.9 trillion by 2028.

What’s more, the legislation contained timing gimmicks that ended several provisions early to keep down costs. If extended — as Congressional Republicans are working to do — these provisions would add another $650 billion to deficits over the next 10 years, and an additional $3 trillion between 2029 and 2038.

The costs could run even higher if well-heeled individuals and businesses exploit the law’s many loopholes and gaming opportunities more than originally anticipated.

What this does is to use federal borrowing capacity — itself an important national resource — without addressing any of the biggest challenges we face in America today, like stagnant wages and struggling regions and communities, structural inequality, deteriorating infrastructure, climate change, and more.

Rather than solve real problems for working-class Americans and communities left behind, the TCJA takes federal tax dollars and throws them down the drain because trickle-down economics does not work.

That’s not only wasteful, but with millions of Americans still facing job loss and dislocation, it’s deeply wrong. Precisely when we need new, bold approaches to fiscal policy, targeted workforce initiatives, and other investments to counter the middle-class squeeze that working families are facing across America, the TCJA tells ordinary tax-paying Americans that their pain is simply a distraction from the business of helping the largest and most profitable companies.

To add insult to injury, these deficit hikes also increase pressure to cut critically important programs, including Social Security, Medicare, Medicaid, and even nutrition assistance for poor families. Even before the law was passed, we saw members of Congress making their intentions clear — that they intended to help pay for their bill by cutting assistance programs that help families in need and working and middle-class families rely on.

Nor does this capture the increased risk of a financial crisis, which has large and costly impacts on the economy and the federal fiscal position. Financial stability risks are growing with the series of attacks on key pillars of financial reform by Congress and Trump’s financial regulators, such as the Volcker Rule ban on banks’ high-risk trading, and oversight of other big financial firms.

Those who voted for the TCJA made their priorities clear, and fiscal responsibility is not one of them.

Federal fiscal capacity is a national asset that should be managed in a prudent way and deployed to make the lives of working Americans better over the long-term. Tax policy should increase opportunity and reduce inequality, while shoring up fiscal and financial stability.

Trump and the last Congress got it backwards on all fronts. The good news is that another path is possible: a progressive approach to fiscal responsibility can rebuild communities, restore opportunity, and reduce inequality. In the coming year, let us focus on that.

Andy Green is managing director for economic policy at the Center for American Progress. Galen Hendricks is special assistant for economic policy at CAP.

And what is the definition of madness again?  Will we ever learn?  

[David Dennison 18658]

Approximately 20 days to go until the deficit is super important again.

[Biff Tannen 45495]

On 12/4/2018 at 9:19 AM, pyrohornIII said:

Opinion: The tax cut isn’t trickling down to workers

https://www.marketwatch.com/story/the-tax-cut-isnt-trickling-down-to-workers-2018-12-03

 

Nearly one year ago, the Republican Congress passed and the president signed the controversial and partisan Tax Cuts and Jobs Act (TCJA). Proponents sold this law as a middle-class tax cut that would dramatically increase business investment, raise wages, and simplify the tax code.

But more than 11 months later, there is little sign that any of these promises will be fulfilled. Instead, it is increasingly clear that the tax law isn’t just a wasteful giveaway — it is harming the economy, workers, and the U.S. fiscal position in important ways.

Real wage growth has been largely nonexistent for the average worker since the tax bill passed. Production nonsupervisory workers only saw a 0.2% year-over-year increase in average hourly earnings last quarter.

The people who did benefit, however, made out like bandits. Analysts from the Tax Policy Center estimate that the top 1% of earners will receive a larger share of the tax cut this year than the entire bottom 60% combined, with the average one-percenter receiving a windfall of more than $50,000 — a result of the enormous tax cuts for corporations and large pass-through businesses, which are disproportionately owned by the wealthy.

Unfortunately, the authors of the tax cuts ignored the historical evidence showing that companies don’t use their windfalls to create jobs or invest in workers or innovation. In fact, the trend has been the opposite, with cuts to long-term investment in favor of short-term payouts.

 

And what is the definition of madness again?  Will we ever learn?  

WE LANDED ON THE MOON!!!

[Brisketexan 104622]

Opinion: The tax cut isn’t trickling down to workers

https://www.marketwatch.com/story/the-tax-cut-isnt-trickling-down-to-workers-2018-12-03
 
Nearly one year ago, the Republican Congress passed and the president signed the controversial and partisan Tax Cuts and Jobs Act (TCJA). Proponents sold this law as a middle-class tax cut that would dramatically increase business investment, raise wages, and simplify the tax code.
But more than 11 months later, there is little sign that any of these promises will be fulfilled. Instead, it is increasingly clear that the tax law isn’t just a wasteful giveaway — it is harming the economy, workers, and the U.S. fiscal position in important ways.
Real wage growth has been largely nonexistent for the average worker since the tax bill passed. Production nonsupervisory workers only saw a 0.2% year-over-year increase in average hourly earnings last quarter.
The people who did benefit, however, made out like bandits. Analysts from the Tax Policy Center estimate that the top 1% of earners will receive a larger share of the tax cut this year than the entire bottom 60% combined, with the average one-percenter receiving a windfall of more than $50,000 — a result of the enormous tax cuts for corporations and large pass-through businesses, which are disproportionately owned by the wealthy.
Unfortunately, the authors of the tax cuts ignored the historical evidence showing that companies don’t use their windfalls to create jobs or invest in workers or innovation. In fact, the trend has been the opposite, with cuts to long-term investment in favor of short-term payouts.
 

And so far, it appears that corporations are passing along their tax breaks to wealthy shareholders, primarily by buying back stock. In fact, as real after-tax corporate profits shot up by more than 16% in the third quarter of 2018, stock buybacks are on track to reach $1 trillion — a record high — by the end of the year.
  Sadly, the TCJA’s approach to corporate taxes fuels three damaging economic trends. The first is corporate short-termism, as there is new evidence that executives tend to cash out their stocks in buybacks rather than show confidence in the long-term growth of their companies.
Second, TCJA cash is fueling a record year for mergers and acquisitions, as the largest corporations are gobbling up competitors and further concentrating economic power. The negative impacts of excessive mergers and declining competition are increasingly widespread, harming workers’ wages, family farmers, innovation, and overall economic opportunity.
Lastly, the TCJA still contains perverse incentives for U.S. companies to lower their tax obligations by investing offshore. This is not the way to rebuild U.S. productivity and competitiveness.
Proponents of the bill claimed that it would give typical families a $4,000 boost in real wages after a few years, on the theory that a boom in business investment would increase productivity, with the gains ultimately trickling down to workers.
But there is no sign of any investment boom. For workers to see real gains, we would need to see much higher and sustained investment. In addition, workers would need the power to bargain for their share of increased productivity — but the Trump administration has been doing everything in its power to undermine workers.
All signs point to a law that, as predicted, featured a massive tax cut to wealthy individuals and large corporations and hardly any benefits to working- and middle-class Americans.
This giveaway didn’t come without cost to U.S. fiscal capacity. The TCJA was the largest contributor to deficit increases this year and is projected by the Congressional Budget Office to cost $1.9 trillion by 2028.
What’s more, the legislation contained timing gimmicks that ended several provisions early to keep down costs. If extended — as Congressional Republicans are working to do — these provisions would add another $650 billion to deficits over the next 10 years, and an additional $3 trillion between 2029 and 2038.
The costs could run even higher if well-heeled individuals and businesses exploit the law’s many loopholes and gaming opportunities more than originally anticipated.
What this does is to use federal borrowing capacity — itself an important national resource — without addressing any of the biggest challenges we face in America today, like stagnant wages and struggling regions and communities, structural inequality, deteriorating infrastructure, climate change, and more.
Rather than solve real problems for working-class Americans and communities left behind, the TCJA takes federal tax dollars and throws them down the drain because trickle-down economics does not work.
That’s not only wasteful, but with millions of Americans still facing job loss and dislocation, it’s deeply wrong. Precisely when we need new, bold approaches to fiscal policy, targeted workforce initiatives, and other investments to counter the middle-class squeeze that working families are facing across America, the TCJA tells ordinary tax-paying Americans that their pain is simply a distraction from the business of helping the largest and most profitable companies.
To add insult to injury, these deficit hikes also increase pressure to cut critically important programs, including Social Security, Medicare, Medicaid, and even nutrition assistance for poor families. Even before the law was passed, we saw members of Congress making their intentions clear — that they intended to help pay for their bill by cutting assistance programs that help families in need and working and middle-class families rely on.
Nor does this capture the increased risk of a financial crisis, which has large and costly impacts on the economy and the federal fiscal position. Financial stability risks are growing with the series of attacks on key pillars of financial reform by Congress and Trump’s financial regulators, such as the Volcker Rule ban on banks’ high-risk trading, and oversight of other big financial firms.
Those who voted for the TCJA made their priorities clear, and fiscal responsibility is not one of them.
Federal fiscal capacity is a national asset that should be managed in a prudent way and deployed to make the lives of working Americans better over the long-term. Tax policy should increase opportunity and reduce inequality, while shoring up fiscal and financial stability.
Trump and the last Congress got it backwards on all fronts. The good news is that another path is possible: a progressive approach to fiscal responsibility can rebuild communities, restore opportunity, and reduce inequality. In the coming year, let us focus on that.
Andy Green is managing director for economic policy at the Center for American Progress. Galen Hendricks is special assistant for economic policy at CAP.

And what is the definition of madness again?  Will we ever learn?  

You know, that anyone with any sense knew exactly what was going to happen. Yet the idiots went ahead and said “no, THIS TIME, Lucy won’t pull the football away.” Fucking idiots.

Approximately 20 days to go until the deficit is super important again.

And definitely this. The GOP can get back to what it’s really good at: yacking about “fiscal responsibility!” as loud as they can...and pretending that they didn’t spend the previous two years utterly fucking the deficit.

[NBMisha 224]

I'm going to promise myself I won't beat my head against the wall when this happens.  It is as certain as my golf slice.