Split Thread Trickle-down economics

[The Great Zaganza]

you are kidding - you must be.

Why don't you read up on companies polluting Native America lands?

US uranium mining companies - for pure profit - refuse to clean up the mess they made, demanding the State does it at taxpayer expense, causing steady pollution and making cleanup harder every year.
The EPA has been reduced to a skeleton staff, and pressured to let horrendous violations to stand. And regulations get written by former and later members of the companies they are supposed to police.

no, companies, as you said, want to make money, and if they can make more by poisoning people, because they can get away with it with fines, than that is what "Shareholder Value" DEMANDS.

That is why they are called Limited Liability: because they shield their owners completely or partially from personal criminal consequences, they are set up to get away with causing harm that everyone agrees a person should go to prison for, because you can always make more money by hurting those who can't fight back.

 

[dirtywick]

while you're at it check out what fracking companies do when the wells run dry

 

[Roger Ramjets]

Why don't you read up on companies polluting Native America lands?

US uranium mining companies - for pure profit - refuse to clean up the mess they made, demanding the State does it at taxpayer expense, causing steady pollution and making cleanup harder every year.

Mining has always been a dirty business, and miners have always had a slack attitude towards the environment. But mining companies don't set out to poison people. At worst they just don't care.

In most countries mining rights are issued by the government, which stipulates any environmental rules that must be followed. In this case the government was more interested in getting uranium for nuclear bombs etc. than making sure it was safe.

The companies involved who aren't being made to clean up the mess disappeared 50 years ago. A superfund was established in the late 70's to fund cleanup when there is no viable responsible party. In the past it was primarily funded by excise taxes on chemicals and petroleum products, but now it comes from the general tax fund. Where parties are identified which are capable of paying they do, even if bankrupt. In 2025 the EPA assessed $1.16 billion in civil penalties, criminal fines and restitution, and $6 billion to return facilities to compliance ($1 billion more than the previous year under Biden).

The EPA has been reduced to a skeleton staff, and pressured to let horrendous violations to stand. And regulations get written by former and later members of the companies they are supposed to police.

As directed by the president which the people elected to Make America Great Again. You might not agree with the Trump administration's cuts, but this is what the American people wanted.

But is your assertion true?
EPA Staffing Fact Sheet

As of September 2025, EPA had 12,198 staff, which is... 25% (about 4,000 staff) below Pre-Trump levels (16,155)... The FY 2026 bipartisan appropriations law signed by president Trump cuts EPA’s operating budget by 4.0%... the cuts in appropriated funding do not reflect a reduced workload expectation from congress – rather, these reductions are expected to be offset or exceeded by increases in Superfund tax revenue, which are not included in the appropriations process.

A significant reduction for sure, but not a 'skeleton staff'.

But more importantly, how has it affected compliance?
Enforcement and Compliance Assurance Annual Results for FY 2025

By taking a compliance first approach, the U.S. Environmental Protection Agency (EPA) helps companies and communities understand their obligations under our environmental laws and regulations... In FY 2025, EPA conducted over 14,000 compliance monitoring activities, surpassing the totals of many previous years

no, companies, as you said, want to make money, and if they can make more by poisoning people, because they can get away with it with fines, than that is what "Shareholder Value" DEMANDS.

"Shareholder Value" is constrained by the requirement to follow the law. Shareholders don't have to push for maximum monetary value. They could for example demand that the company not poison people.

That is why they are called Limited Liability: because they shield their owners completely or partially from personal criminal consequences, they are set up to get away with causing harm that everyone agrees a person should go to prison for, because you can always make more money by hurting those who can't fight back.

Limited liability was introduced to prevent shareholders from being held personally liable for debts incurred by the business. It doesn't shield them from criminal prosecution.

You're trying to say that corporations are inherently bad because they are focused on profit. But that applies to all businesses. A corporation just decouples the business from individuals so it can continue to operate no matter who owns it. This makes it easier to enforce environmental regulations. A company may change hands many times and still be 'on the hook' for fines and cleanup costs.

 

[Trausti]

you are kidding - you must be.

Why don't you read up on companies polluting Native America lands?

US uranium mining companies - for pure profit - refuse to clean up the mess they made, demanding the State does it at taxpayer expense, causing steady pollution and making cleanup harder every year.

How many of the mining companies that extracted uranium on/near Navajo nation from 1944 to 1986 even exist today? That's probably why the feds are the primary funder of the cleanup. End of the Cold War, Start Treaty, and the stupid moral panic against nuclear power kind of decimated the industry.

 

[Frank Newgent]

... the Australian government introduced the category of "Instant Asset Write-off" (I guess you call it section 179) which allowed a business to fully write off the cost of an asset as an expense.

Glad you noticed. That is pretty much the same mechanism as the IRS Section 179 deduction and the IRS Bonus Depreciation tax provision.

Started down this road with you earlier when you were asserting the opposite.

Capital expenditure is not an expense but an investment and therefore, does not affect profit.

Under "Instant Asset Write-Off", Section 179, and IRS Bonus Deduction, small businesses claim an immediate tax deduction for the cost of the qualifying assets, rather than depreciating the cost over several years. Like a formal and instant acceleration of the depreciation schedule.

Don't know how that does not affect profit LOL. What it does is lower net income drastically, immediately, resulting in a large upfront tax break.

I know about how capital business expense can be claimed as an immediate full tax deduction because I took advantage of the provision a number of times as a sole proprietor.

Because "Instant Asset Write-Off", Section 179, and the IRS Bonus Depreciation all allow a business to immediately expense the full cost of an asset, it distorts GAAP-type financial reporting for that year.

That's how you got hung up. You seem somehow unaware small businesses are not required to use GAAP to file their taxes, instead just using simple cash basis or tax basis accounting. Lot easier.

 

[psionl0]

Under "Instant Asset Write-Off", Section 179, and IRS Bonus Deduction, small businesses claim an immediate tax deduction for the cost of the qualifying assets, rather than depreciating the cost over several years. Like a formal and instant acceleration of the depreciation schedule.

Don't know how that does not affect profit LOL.

You quoted the wrong paragraph (and why you felt the need to hide the quote, I don't know):

The fact is that when you purchase an asset you gain the asset and its value has to be written off as an expense somehow (especially if you want to claim the expense as a tax deduction). Traditionally, this was through depreciation - the difference between the current value of the asset and its previous value. But the tax office may allow different methods for writing off the value of the asset.

In case the highlighted goes over your head, it means that an asset is not an expense (and therefore its purchase doesn't affect profits) until its value is written down or written off.

It's the same principle in retail sales. Stock is not a tax deductible expense (it is an asset) until it is sold. The tax office expects the retailer to use the formula opening stock + purchases - closing stock = cost of goods sold in their tax returns.

 

[Frank Newgent]

You quoted the wrong paragraph (and why you felt the need to hide the quote, I don't know):

In case the highlighted goes over your head, it means that an asset is not an expense (and therefore its purchase doesn't affect profits) until its value is written down or written off.

It's the same principle in retail sales. Stock is not a tax deductible expense (it is an asset) until it is sold. The tax office expects the retailer to use the formula opening stock + purchases - closing stock = cost of goods sold in their tax returns.

I wasn't quoting you, psionl0. I was quoting Australian tax law. Which states, under "Instant Asset Write-Off" the asset is written off as a deduction immediately.

An instant asset write-off lets eligible businesses claim an immediate tax deduction for the business-use portion of qualifying assets, rather than depreciating the cost over several years.

Instant asset write-off explained

See how the instant asset write-off helps small businesses claim tax deductions, improve cash flow and plan purchases. Learn how NAB can help your business.

www.nab.com.au

I am writing from the perspective of a small businessperson who is not required to to prepare GAAP-compliant financial statements. One who uses cash basis / tax basis accounting. Using one set of books that lines up internal reporting with the business federal income tax return preparation

You seem to view these things exclusively from the perspective of financial performance and external shareholders. Generally used by investors, lenders, and regulators. Using two sets of books, one compliant with Generally Accepted Accounting Principles for investors and financial reporting, and the other compliant with tax laws.

You are aware there is a difference? You don't act like it.

Side note to this, and maybe more on topic: the Australian "Instant Asset Write-Off" along with the IRS Bonus Depreciation and Section 179 deduction are classic examples of supply-side economic policy, sometimes known as trickle-down economics.

 

[Roger Ramjets]

Side note to this, and maybe more on topic: the Australian "Instant Asset Write-Off" along with the IRS Bonus Depreciation and Section 179 deduction are classic examples of supply-side economic policy, sometimes known as trickle-down economics.

Not really.

Supply-side economics

Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.

Businesses have been able to depreciate assets since the 19th century. Australia's "Instant Asset Write-Off" was a temporary measure to mitigate the effects of Covid lockdowns. The depreciation would be applied anyway, this just moves it forward a bit for some items. So the taxes aren't lowered, just claimed back earlier. This may help a business in the short term but overall it's a wash.

This is different from 'trickle-down' economics which:-

disproportionately favor the upper tier of the economic spectrum (wealthy individuals and large corporations). The term has been used broadly by critics of supply-side economics to refer to taxing and spending policies by governments that, intentionally or not, result in widening income inequality; it has also been used in critical references to neoliberalism. These critics reject the notion that spending by this elite group would "trickle down" to those who are less fortunate

The problem with these 'elites' is that they tend to hold onto money instead of passing on the savings. For individuals this is obvious. For corporations the problem is the tax windfall may be used to eg. buy back stocks rather than lowering prices. The problem for government is that the marginally increased economic activity doesn't compensate for the loss of tax revenue.

To prevent widening income inequality a progressive taxation scheme is needed. Lowering taxes on the rich works against this. The government distributes money and services to the poor. A smaller tax take works against this too.

 

[Frank Newgent]

Not really.

Supply-side economics

Businesses have been able to depreciate assets since the 19th century. Australia's "Instant Asset Write-Off" was a temporary measure to mitigate the effects of Covid lockdowns. The depreciation would be applied anyway, this just moves it forward a bit for some items. So the taxes aren't lowered, just claimed back earlier. This may help a business in the short term but overall it's a wash.

This is different from 'trickle-down' economics which:-

The problem with these 'elites' is that they tend to hold onto money instead of passing on the savings. For individuals this is obvious. For corporations the problem is the tax windfall may be used to eg. buy back stocks rather than lowering prices. The problem for government is that the marginally increased economic activity doesn't compensate for the loss of tax revenue.

To prevent widening income inequality a progressive taxation scheme is needed. Lowering taxes on the rich works against this. The government distributes money and services to the poor. A smaller tax take works against this too.

Calling supply side "trickle down economics" was a term coined to parody Ronald Reagan's policies, not much more to it than that.

Spreading the cost of a new business vehicle out over a five year depreciation schedule vs being able to immediately deduct the entire amount is not a wash. I speak from experience as a small businessperson, being able to expense the total all at once was always a win.

In the US this Section 179 deduction had nothing whatsoever to do with COVID. It was first started in the late 1950s, then expanded under Reagan in the 1980s.

 

[psionl0]

I wasn't quoting you, psionl0. I was quoting Australian tax law. Which states, under "Instant Asset Write-Off" the asset is written off as a deduction immediately.

"Immediately" means at the end of the financial year when the tax return needs to be prepared.

But even if you write it off at the time of purchase, you still need to do more than just call the asset an "expense" (if you want to do the bookkeeping correctly).

If you purchase a motor vehicle for your business at say $10,000 then your trial balance sheet should include the following:

ASSETS
MOTOR VEHICLE
PURCHASE PRICE $10,000
LESS ACCUMULATED DEVALUATION -$10,000
-------- $0

EXPENSES
INSTANT ASSET WRITE-OFF $10,000

 

[psionl0]

Australia's "Instant Asset Write-Off" was a temporary measure to mitigate the effects of Covid lockdowns.

Australia still has it today. In fact, it is now a permanent thing.

On 12 May 2026, as part of the 2026–27 Budget, the Government announced it will permanently increase the instant asset write-off for small businesses to $20,000 from 1 July 2026 to help improve cashflow and reduce compliance costs.

https://www.ato.gov.au/about-ato/new-legislation/in-detail/businesses/20000-dollars-instant-asset-write-off

 

[Roger Ramjets]

Calling supply side "trickle down economics" was a term coined to parody Ronald Reagan's policies, not much more to it than that.

Wikipedia says different.

In 1896, United States Democratic presidential candidate William Jennings Bryan claimed in his Cross of Gold speech that his opposition based their policies on the idea that the success of the rich would "leak through" to the lower classes, stating: "There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below."

In 1932, humorist and social commentator Will Rogers wrote a column criticizing Herbert Hoover's policies and approach to The Great Depression and stated: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot."

We all know how well that went.

That fall, Hoover pushed the FFB into full action, lending to farmers all over the country and otherwise subsidizing farming in an attempt to keep prices up. The plan failed miserably, as subsidies encouraged farmers to grow more, exacerbating surpluses and eventually driving prices way down. As more farms faced dire circumstances, Hoover proposed the further anti-market step of paying farmers not to grow.

The ultimate supply side strategy, pay businesses to not make stuff so prices can stay up. What could possibly go wrong?

But what does Investopedia say about it?

a policy is considered “trickle-down” if it disproportionately benefits wealthy businesses and individuals in the short run but is designed to boost standards of living for all individuals in the long run... Both President Herbert Hoover’s stimulus efforts during the Great Depression and President Ronald Reagan’s use of income tax cuts were described as “trickle-down.”

Critics say these benefits for the wealthy can skew the economy, worsening income inequality among lower-income earners who don't get equal tax cuts. Many economists counter that cutting taxes for the poor and working families boosts the economy by increasing spending on goods and services whereas a tax cut for a corporation may go to stock buybacks or increased savings for the wealthy.

 

[Roger Ramjets]

Australia still has it today. In fact, it is now a permanent thing.

Yes, I knew that. The important thing is that after the policy has been in place for a few years it effectively becomes a wash for large businesses because they are regularly replacing stuff as it wears out.

For small businesses it can be advantageous because buying eg. a motor vehicle can be a big expense. But we're not concerned about small businesses here.

 

[psionl0]

Yes, I knew that. The important thing is that after the policy has been in place for a few years it effectively becomes a wash for large businesses because they are regularly replacing stuff as it wears out.

For small businesses it can be advantageous because buying eg. a motor vehicle can be a big expense. But we're not concerned about small businesses here.

I think you have that backwards. Instant asset write-off is not available for large businesses (those with an aggregated turnover of more than $10 million).

 

[Frank Newgent]

Yes, I knew that. The important thing is that after the policy has been in place for a few years it effectively becomes a wash for large businesses because they are regularly replacing stuff as it wears out.

For small businesses it can be advantageous because buying eg. a motor vehicle can be a big expense. But we're not concerned about small businesses here.

I think you have that backwards. Instant asset write-off is not available for large businesses (those with an aggregated turnover of more than $10 million).

The ignorance many people show towards the realities of business is not good.