Cont: The Trump Presidency Part III

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Segnosaur said:
There is some evidence that employment and corporate taxes are related to each other.

From: http://scholarship.richmond.edu/cgi/viewcontent.cgi?article=1056&context=spcs-faculty-publications
Regression results confirm the observation that lower corporate taxes have a significant and positive effect on employmentgrowth....
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Those are state taxes. Give companies big tax breaks and they move to your state. That kind of leverage pits states against states with the only real winners being the corporations.

All anyone has to do to see what this is about is to see the chart showing all the growth in corporate profits and little to no growth in real wages. Why has all that growth in profits not translated into higher wages? How is a big GOP/Trump tax cut for the rich going to be any different?

Figure A (scroll down) Disconnect between productivity and a typical worker’s compensation, 1948–2014

Notice the big change in 1973. What happened in 1973, among other things?
3. The New Deal and its extension through the programs of LBJ's Great Society (Medicare, food stamps, welfare, Head Start, Corporation for Public Broadcasting) hit the wall in January 1973 with the rise of the Nixon counterrevolution. The Nixon forces (later Reagan forces) pushed back against the idea of governmental paternalism. Nixon's second inaugural, delivered on January 20, 1973, was a call to arms. "Government must learn to take less from people so that people can do more for themselves," Nixon declared. Truman's and Johnson's passing were corporeal manifestations of the political break with the spirit of the New Deal and the Great Society. America was to be defined not by a government that would look out for the common good, but as a collection of individuals who would take responsibility for their own lives and thereby transform society. "From this day forward," Nixon said in his second inaugural, "let each of us make a solemn commitment in his own heart: to bear his responsibility, to do his part, to live his ideals--so that together, we can see the dawn of a new age of progress for America."
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Note to mods: please if you think the discussion of Trumponomics is off topic, split the thread. This is not a derail. Thanks.
 
WilliamSeger said:
Companies with more money have an easier time expanding, of course, but companies also expand by going into debt or selling equity whenever they think the expansion will be profitable. That's the part that seems to be left out of the analysis: Companies only expand or get created because someone perceives an expanding market. Somehow the supply side seems to take care of itself if they can make a convincing case to the people who control the capital.
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You can't expand if you have no customers.
 
Whereas despite the loss of some jobs, raising the minimum wage results in net job growth overall.
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Actually, that's the type of assertion that has mixed results, and while you may point to some studies that show raising the Minimum wage is neutral or improves employment growth, it is easy to find studies that show that increased minimum wages cause a loss of jobs.

From: http://www.frbsf.org/economic-resea...cember/effects-of-minimum-wage-on-employment/
Researchers offer conflicting evidence on whether or not raising the minimum wage means fewer jobs for these workers. Some recent studies even suggest overall employment could be harmed.
here is some evidence that employment and corporate taxes are related to each other.

From: http://scholarship.richmond.edu/cgi/...y-publications
Regression results confirm the observation that lower corporate taxes have a significant and positive effect on employmentgrowth....
Click to expand...
Those are state taxes. Give companies big tax breaks and they move to your state.
Click to expand...
Yes, it is referring to state taxes. But the same logic should apply when comparing tax rates across national boundaries as it does across state boundaries... companies will move to countries where they can get the best deal.
That kind of leverage pits states against states...
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Which is why I pointed out that it can result in a sort of 'race to the bottom'.
...with the only real winners being the corporations.
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I wouldn't say that the only winners are the corporations.

If a lower tax rate causes some company to move from another country/state to your current location, the winners can also include individuals who might otherwise be unemployed if the company stayed in its previous location. Yes, the corporations may have huge benefits, but that doesn't mean the potential doesn't exists for others to be better off too.

All this doesn't necessarily mean that I agree with Trump's plans. I think there is plenty of reason to be critical:
- Reducing corporate taxes may stimulate the economy, but I don't think it will make up for the loss of government revenue, which can be a big problem. (Trump seems to be overly optimistic regarding just how much benefit there will be.)
- The way he has communicated his tax plans has been deceiptful
- Although reducing corporate taxes may be beneficial, the government may be better off to instead spend the money on things like infrastructure, which may have a better long-term benefit to the economy
 
Without reading all posts that are discussing how which taxes affect employment and wages: I think it is fair to assume the plausibility that any tax cut (which results in someone other than the government having more money at their disposal) will increase payrolls (employment and/or wages) somewhere. This is offset somewhat by the government having less money and thus being less able to generate payroll. Still, many tax cuts may plausibly have a net positive payroll effect.

The question is: How efficient is that? And I think that a YUGE tax cut for those already filthily rich having only a very moderate positive effect on working America would be quite the wrong way, as benefitting consumers is likely to be the more efficient instrument. Or benefitting small business, which tend to create wealth with relatively more labour.
 
Segnosaur said:
Actually, that's the type of assertion that has mixed results, and while you may point to some studies that show raising the Minimum wage is neutral or improves employment growth, it is easy to find studies that show that increased minimum wages cause a loss of jobs.

From: http://www.frbsf.org/economic-resea...cember/effects-of-minimum-wage-on-employment/
Researchers offer conflicting evidence on whether or not raising the minimum wage means fewer jobs for these workers. Some recent studies even suggest overall employment could be harmed.

Yes, it is referring to state taxes. But the same logic should apply when comparing tax rates across national boundaries as it does across state boundaries... companies will move to countries where they can get the best deal.

Which is why I pointed out that it can result in a sort of 'race to the bottom'.

I wouldn't say that the only winners are the corporations.

If a lower tax rate causes some company to move from another country/state to your current location, the winners can also include individuals who might otherwise be unemployed if the company stayed in its previous location. Yes, the corporations may have huge benefits, but that doesn't mean the potential doesn't exists for others to be better off too.
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Needs a new thread. You're wrong and I have addressed these things in other threads. I agree to disagree unless this discussion gets its own thread in which case I will elaborate further and then agree to disagree because you guys are convinced that supply side economics works even when the evidence is overwhelming it doesn't.

Segnosaur said:
All this doesn't necessarily mean that I agree with Trump's plans. I think there is plenty of reason to be critical:
- Reducing corporate taxes may stimulate the economy, but I don't think it will make up for the loss of government revenue, which can be a big problem. (Trump seems to be overly optimistic regarding just how much benefit there will be.)
- The way he has communicated his tax plans has been deceiptful
- Although reducing corporate taxes may be beneficial, the government may be better off to instead spend the money on things like infrastructure, which may have a better long-term benefit to the economy
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How will tax cuts for the rich stimulate the economy? I just posted several links showing many large corporations are flush with cash. Why aren't they going nuts with expansion?:rolleyes:
 
Oystein said:
Without reading all posts that are discussing how which taxes affect employment and wages: I think it is fair to assume the plausibility that any tax cut (which results in someone other than the government having more money at their disposal) will increase payrolls (employment and/or wages) somewhere. This is offset somewhat by the government having less money and thus being less able to generate payroll. Still, many tax cuts may plausibly have a net positive payroll effect.

The question is: How efficient is that? And I think that a YUGE tax cut for those already filthily rich having only a very moderate positive effect on working America would be quite the wrong way, as benefitting consumers is likely to be the more efficient instrument. Or benefitting small business, which tend to create wealth with relatively more labour.
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I repeat: How will tax cuts for the rich stimulate the economy? I just posted several links showing many large corporations are flush with cash. Why aren't they going nuts with expansion?
 
Chad has withdrawn from the battle against Boko Haram after Trump's travel ban.

President Donald Trump’s decision to place Chad on his revised travel ban shocked experts and former U.S. officials*who warned it could have major consequences for the fight against*terrorism in Africa.

And it appears Trump’s controversial decision may have already damaged alliances on the continent—which is threatened by a range of militants, including affiliates of Al-Qaeda and the Islamic State militant group.

Chad has pulled hundreds of troops from neighboring Niger, where they had been stationed to assist in a regional fight against Boko Haram, the Nigerian militant Islamist group, Reuters reported.

Chad’s government has not given any explanation for the withdrawal, which took place over the past two weeks. But in the wake of Trump’s pronouncement on September 24, Chad’s communications minister Madeleine Alingué*said that the decision “seriously undermines Chad’s image and the good relations between the two countries, notably in the fight against terrorism.”
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WilliamSeger said:
And if you turn down an opportunity to exploit a market because the tax rate on the profits are too high, you're too stupid to be running a business.
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Argumentum ad absurdum...

Suppose the tax rate was 100%?

99%?

90%?

...and so on...

I suspect if you drove on down these descending tax rates, the willingness to “exploit a market” might very well be represented by a curve - as so many things in economics (and physics) are.
 
WilliamSeger said:
I think he meant the rich need tax cuts so they can drive stock market prices even higher, whereupon a few people will get obscenely rich by accurately predicting the inevitable collapse. That will be the main effect of the tax cuts the GOP is pushing. The idea that rich people create jobs because they have money they don't know what to do with is simply idiotic. If Trump actually believes that, he's a *********** moron, but the people who own the GOP surely know the real story.
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I assume he must believe it because he is clearly a motherraping moron!!!!!!!
 
I knew this sounded wrong as soon as I heard it.

President Trump, who once referred to a nonexistent African country named Nambia, said he spoke to the "president of the Virgin Islands" in a speech Friday.

Of course, because the Virgin Islands is a U.S. territory, Trump is its president.
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Trump to Values Voter Summit: "We don't worship government, we worship God." Wrong. You, Donnie, worship gold, just like that alloy of a wooden cross and a golden calf those "value" folks bow to. When you boys graduate to virtues and walking the talk, maybe you'll get some adult respect. Until then, go play outside where I can't hear or see you.
 
Roger Ramjets said:
Suppose a business isn't making a profit, do they refuse to 'exploit' a market because of it? And why should they care what the tax rate on profits is if they aren't making one?
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They do need to look at the tax rate on profits if they are making decisions on investment, as companies are trying to maximise shareholder benefit, and if their shareholders can get better returns* by putting their money in the bank, the share price will fall.

Similarly, if your part of the business is profitable, but not making enough profits, and doesn't seem to have the potential for growth, it might be used as a cash cow, but a rational management won't put in investment that could be better spent in either shareholder dividends, buybacks, or investment in other parts of the business.


*Profits and growth, including in share price
 
Conflict of interest?

http://www.politico.com/story/2017/10/12/trump-noaa-chief-accuweather-barry-myers-243735

As a top executive at AccuWeather, Barry Myers has pushed for limits on the kinds of products that the National Weather Service offers to the public, saying they offered unfair competition to his industry.

Now, President Donald Trump's nomination of Myers to lead the weather service's parent agency could allow him to make those kinds of restrictions mandatory — to the benefit of his family-run forecasting company.
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