Republican Tax Plan Revealed

[Rasulis]

I'm looking forward to it. It's a tax cut for me but a tax increase for the rich who live in New York and California.

Liberals don't want high taxes vote in republicans who will lower your taxes or leave your shit hole states.

Interestingly enough, only 7 states in the US don't have income tax. One of them, Alaska is currently considering a bill that may reverse the policy.

Even states that don't have income tax will be hurt by the new tax bill. For example, Texas may not have income tax, but it has one of the highest effective property tax rate in the US at 1.97%. More than double that of CA at 0.81%.

[Poopymonster]

If the best states in the country are "shit holes" then what does that mean for the rest of the states? They're just shit?

No, those states are shit holier. Hence you get stupid shit like "Michigan? That's god's country" or the same for West Virginia. They only saw the holier and thought "Gawsh, that's us!"

[Dacien]

This heated exchange is worth a watch. Sherrod Brown, the Democratic Senator from Ohio, rips into Republicans for only caring about the rich, and SFC Chairman Orrin Hatch rips right back and pandemonium breaks loose.

[Cthulhu 2020]

This heated exchange is worth a watch. Sherrod Brown, the Democratic Senator from Ohio, rips into Republicans for only caring about the rich, and SFC Chairman Orrin Hatch rips right back and pandemonium breaks loose.

Senator Hatch be mad that Benet is right.

[Vankrys]

don't believe that blatant lie, company just don't give raise for the goodness of their heart.

Supply and demand. If there is one country that could understand that principle, i thought i would be the US. Supply and demand concept means that if a product is common and available, the price is low and the price go higher with rarity and desirability.

Same for wages. If there is a worker pool with sufficient skill for a given job larger than available jobs, wage are going to be low. If a worker have very specific set of skills, rare and needed, employer will pay good money for it, or see the qualified worker be snatched by competition.

Cutting tax on corporation has never and will never results in higher wages, unless forced by law.

[Kiri]

don't believe that blatant lie, company just don't give raise for the goodness of their heart.

Supply and demand. If there is one country that could understand that principle, i thought i would be the US. Supply and demand concept means that if a product is common and available, the price is low and the price go higher with rarity and desirability.

Same for wages. If there is a worker pool with sufficient skill for a given job larger than available jobs, wage are going to be low. If a worker have very specific set of skills, rare and needed, employer will pay good money for it, or see the qualified worker be snatched by competition.

Cutting tax on corporation has never and will never results in higher wages, unless forced by law.

Disclaimer: I do not believe in trickle down
However, it is important to note that those propagating it are utilizing supply and demand in their deliberations as well. The goal of supply-side economics is usually not to directly cause an increase in wages, but rather an increase in investment. Broken down and simplified, the line of thought goes like this:

Tax the rich less-->Rich have more wealth--> Rich invest more money into the economy-->Supply of goods and services increases--->Price of goods and services decreases-->Consumers can afford more at the same wage
Increased production also --->More demand for labour-->either less unemployment or lower wages

That is the general idea, and most of the economic theory checks out. However, in reality, that trail of logic does not work out. Most specifically, the idea that the rich would put their increased wealth back into the economy by investing is seen as unrealistic.

It is important though, to criticize the right things about trickle-down, otherwise you are countered too easily. The fact that the simplified idea makes sense to the uninitiated is what makes it dangerous.

[Varvara Spiros Gelashvili]

Disclaimer: I do not believe in trickle down
However, it is important to note that those propagating it are utilizing supply and demand in their deliberations as well. The goal of supply-side economics is usually not to directly cause an increase in wages, but rather an increase in investment. Broken down and simplified, the line of thought goes like this:

Tax the rich less-->Rich have more wealth--> Rich invest more money into the economy-->Supply of goods and services increases--->Price of goods and services decreases-->Consumers can afford more at the same wage
Increased production also --->More demand for labour-->either less unemployment or lower wages

That is the general idea, and most of the economic theory checks out. However, in reality, that trail of logic does not work out. Most specifically, the idea that the rich would put their increased wealth back into the economy by investing is seen as unrealistic.

It is important though, to criticize the right things about trickle-down, otherwise you are countered too easily. The fact that the simplified idea makes sense to the uninitiated is what makes it dangerous.

If taxes are high doesn't that mean they will invest that money instead of hording it to avoid paying as much in taxes? Some investments are tax exempt.

[Kujako]

However, it is important to note that those propagating it are utilizing supply and demand in their deliberations as well.

No they're not. Supply and demand would require giving tax breaks to the lower classes, who would spend the money, increasing demand and driving the economy. The Republicans are doing the opposite, giving money to the well off and corporations, who have no economic incentive to do anything with the windfall.

[Dacien]

No they're not. Supply and demand would require giving tax breaks to the lower classes, who would spend the money, increasing demand and driving the economy. The Republicans are doing the opposite, giving money to the well off and corporations, who have no economic incentive to do anything with the windfall.

There is much more wealth, vastly, to be gained by the rich in tax breaks (and therefore more money to invest in the economy) than there is in middle-class tax breaks. The middle class account for a tiny percentage of the overall tax burden, so saving them some money isn't going to generate the kinds of consumer spending power that is equatable with the investment potential by the wealthy.

[Vankrys]

Disclaimer: I do not believe in trickle down
However, it is important to note that those propagating it are utilizing supply and demand in their deliberations as well. The goal of supply-side economics is usually not to directly cause an increase in wages, but rather an increase in investment. Broken down and simplified, the line of thought goes like this:

Tax the rich less-->Rich have more wealth--> Rich invest more money into the economy-->Supply of goods and services increases--->Price of goods and services decreases-->Consumers can afford more at the same wage
Increased production also --->More demand for labour-->either less unemployment or lower wages

That is the general idea, and most of the economic theory checks out. However, in reality, that trail of logic does not work out. Most specifically, the idea that the rich would put their increased wealth back into the economy by investing is seen as unrealistic.

It is important though, to criticize the right things about trickle-down, otherwise you are countered too easily. The fact that the simplified idea makes sense to the uninitiated is what makes it dangerous.

the economy side of it does not check out. It's a fiction to think that it could work.

Company are not forced to make investment. Many would be just happy to increase their networth without any giving back any.

However, if they chose to invest, whenever companies make investments, they expect a return on investments. You can trust that usually, companies are smart about their investments, you know, usually. All that means is that giving them more financial power, with tax cuts, will accelerate the divide between classes.

Moreover, something has to finance the tax cuts, money does grow on trees as my father use to say. To finance that project, government is predicting growth and cutting funding elsewhere. It is not obvious that tax cut will provide growth. And speaking of cutting funding to federal program, like healthcare, education, infrastructure, that mainly affect lower and middle class, directly benefiting from those program.

That tax cut bill is literally taking money from the lower and middle class and giving it to the rich. everything else is deception and smoke screen.


There is no magic solution, there is no short cut. You want your country to grow, you have to invest in the future. That means better education, accessible to everyone, even if those who can't pay. You want to invest in technologies of the future, renewable energy this kind of thing. You want to invest in people, better information, infrastructure, health.

You don't invest in the future by giving money to the rich, that complete BS. Who came up with such moronic idea.

[Gestopft]

There is much more wealth, vastly, to be gained by the rich in tax breaks (and therefore more money to invest in the economy) than there is in middle-class tax breaks. The middle class account for a tiny percentage of the overall tax burden,

This is why I've long said that the middle class needs a raise more than a tax cut.

so saving them some money isn't going to generate the kinds of consumer spending power that is equatable with the investment potential by the wealthy.

Key word bolded. The potential for investment is historically high right now. Corporate profits are high, income and wealth inequality are high, interest rates are low- but the growth isn't happening. These tax cuts do nothing but double down on something that already isn't working.

[Kiri]

the economy side of it does not check out. It's a fiction to think that it could work.

Company are not forced to make investment. Many would be just happy to increase their networth without any giving back any.

However, if they chose to invest, whenever companies make investments, they expect a return on investments. You can trust that usually, companies are smart about their investments, you know, usually. All that means is that giving them more financial power, with tax cuts, will accelerate the divide between classes.

Moreover, something has to finance the tax cuts, money does grow on trees as my father use to say. To finance that project, government is predicting growth and cutting funding elsewhere. It is not obvious that tax cut will provide growth. And speaking of cutting funding to federal program, like healthcare, education, infrastructure, that mainly affect lower and middle class, directly benefiting from those program.

That tax cut bill is literally taking money from the lower and middle class and giving it to the rich. everything else is deception and smoke screen.


There is no magic solution, there is no short cut. You want your country to grow, you have to invest in the future. That means better education, accessible to everyone, even if those who can't pay. You want to invest in technologies of the future, renewable energy this kind of thing. You want to invest in people, better information, infrastructure, health.

You don't invest in the future by giving money to the rich, that complete BS. Who came up with such moronic idea.

That is pretty much what I was saying, haha. I said the simplistic view of the economic theory checks out (which the one I replied to said it did not). As I said, the part where companies will just invest that money is the most unrealistic one and needs to be attacked. I do not disagree with that, I just wanted to focus that person there, in order to improve the criticism.
The funding part is another one to attack, though that one is more connected to the Laffer-curve. Depend on where you are on that one, lowering taxes rates can increase tax revenue, which is what Republicans argue. Hence, the positioning on the Laffer-curve is what we must criticize, not the possibility of tax-cuts improving revenue or at least staying neutral.

[Trifle]

There is much more wealth, vastly, to be gained by the rich in tax breaks (and therefore more money to invest in the economy) than there is in middle-class tax breaks. The middle class account for a tiny percentage of the overall tax burden, so saving them some money isn't going to generate the kinds of consumer spending power that is equatable with the investment potential by the wealthy.

If the government is handing out $1 billion in tax breaks, its still $1 billion whether you give it to rich people or poor people, so that argument really doesn't make any sense. Also, fundamentally rich people don't put as much money into the economy as poor people do because poor people spend everything they get, whereas rich people tend to only spend a fraction of their wealth and just save the rest. This takes the money out of the economy.

[Vankrys]

there is another economic theory which consists in giving money back to the poorest population, to encourage them to consume.

See, if people having just enough money to buy the bare necessities, they won't be able to drive the economy up much. It doesn't matter that you gave apple massive tax cut if people can't buy their ipads.

Instead, if you give that tax break to lower class, suddenly they can afford to buy dvds, books, go to movies, go to restaurant. That's good for them and for the local business. Suddenly that restaurant may have to hire one more waitress or cook, because the influx of new costumers, and suddenly that new waitress has a job, she does not need unemployment benefits.

The idea is to jump start consumption and boost local and national business. Maybe you can call that "trickle up".

[Dacien]

If the government is handing out $1 billion in tax breaks, its still $1 billion whether you give it to rich people or poor people, so that argument really doesn't make any sense.

If you're talking about flat numbers, there's more to offer the rich in tax breaks than there is in the middle class. There quickly comes a point where there is no more tax relief to offer the middle class (since their tax burden is already so small, around 9%). Particularly if you're talking about net taxes, offset by government programs.

Also, fundamentally rich people don't put as much money into the economy as poor people do because poor people spend everything they get, whereas rich people tend to only spend a fraction of their wealth and just save the rest. This takes the money out of the economy.

That's just not true. Apple keeping more of their money means more development is the newest iPhone, which consumers want to buy, or more research into the next iPad, which consumers want to buy, etc. etc. They may also increase hiring. And if Apple keeps their money in a bank, that bank then loans out that money to small businesses, entrepreneurs, and families looking to consolidate debt. These are economic driving factors.

[Grapemask]

there is another economic theory which consists in giving money back to the poorest population, to encourage them to consume.

See, if people having just enough money to buy the bare necessities, they won't be able to drive the economy up much. It doesn't matter that you gave apple massive tax cut if people can't buy their ipads.

Instead, if you give that tax break to lower class, suddenly they can afford to buy dvds, books, go to movies, go to restaurant. That's good for them and for the local business. Suddenly that restaurant may have to hire one more waitress or cook, because the influx of new costumers, and suddenly that new waitress has a job, she does not need unemployment benefits.

The idea is to jump start consumption and boost local and national business. Maybe you can call that "trickle up".

This is actually corroborated by Bush's Stimulus Act of 2008, which directly gave households $300 per person in order to try to avert the coming recession. While it did not ultimately do so (because it didn't fix any of the problems causing the recession), nearly all studies of the outcome were positive.

[Cthulhu 2020]

Disclaimer: I do not believe in trickle down
However, it is important to note that those propagating it are utilizing supply and demand in their deliberations as well. The goal of supply-side economics is usually not to directly cause an increase in wages, but rather an increase in investment. Broken down and simplified, the line of thought goes like this:

Tax the rich less-->Rich have more wealth--> Rich invest more money into the economy-->Supply of goods and services increases--->Price of goods and services decreases-->Consumers can afford more at the same wage
Increased production also --->More demand for labour-->either less unemployment or lower wages

That is the general idea, and most of the economic theory checks out. However, in reality, that trail of logic does not work out. Most specifically, the idea that the rich would put their increased wealth back into the economy by investing is seen as unrealistic.

It is important though, to criticize the right things about trickle-down, otherwise you are countered too easily. The fact that the simplified idea makes sense to the uninitiated is what makes it dangerous.

Most of the time what big corporations use excess wealth for is share buybacks (i.e. they invest in buying back more of their own company that they once sold on the open market) and buying pieces of other big corporations. The money isn't invested back into the economy in any way that meaningfully benefits the middle and lower classes. They increase their own share of wealth.

Wealth begets wealth. I'm sure you're fully aware of all of this though.

The right wing argument that giving them money "makes them invest it back" still means that they own whatever they invest in. The few times they "invest" in something that marginally benefits the middle class, they still own it, further expanding their own wealth.

Sadly, the right does not believe anyone when they are told that just throwing money at wealthy people does not help the middle class as much as social aid programs. But what can you do, they won't listen.

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If you're talking about flat numbers, there's more to offer the rich in tax breaks than there is in the middle class. There quickly comes a point where there is no more tax relief to offer the middle class (since their tax burden is already so small, around 9%). Particularly if you're talking about net taxes, offset by government programs.




That's just not true. Apple keeping more of their money means more development is the newest iPhone, which consumers want to buy, or more research into the next iPad, which consumers want to buy, etc. etc. They may also increase hiring. And if Apple keeps their money in a bank, that bank then loans out that money to small businesses, entrepreneurs, and families looking to consolidate debt. These are economic driving factors.

There will always be money for borrowing, regardless of whether it's from rich corporations or lots of small investors. There is zero reason to praise the ultra wealthy for having their money invested, since that investment, those loans, will be available regardless of whether or not it's the ultra rich or a combination of tons of small investors.

Also, if people do not have the money to buy the new iphone, apple goes under. As pointed out, the middle and lower class make up a vast amount MORE of the actual economic spending than the wealthy do, by an enormous margin, simply because of their numbers. These massive corporations are already making tremendous profits that they ALREADY put into more projects... that people then spend money on. That's the final fact of the equation that supply-side economists always seem to forget.

"Ah yeah they need all this money to invest in projects that keep the middle class alive!" Those investments wouldn't mean anything if there was nobody left to consume them. It's a circle, both need resources to keep the other alive.

And here's our current situation, the middle class is quickly being strangled out of existence. The wealthy are wealthier than ever before in our country's history. Since both need each other, who should we be throwing money at, the people who already have a glut of it, or those who barely have any? If one side of the equation falls apart, so does the other.

Our economy is currently suffering on the demand side. Business and jobs are created by demand for products and services. If you give the wealthy all of the money, what motivation, what reason do they have for simply "giving" their wealth out if nobody exists to buy their products and services? None. The rich are not benevolent. They do not give money out if they just "have it". If big business was in massive debt and FAILING while the rest of the populace was thriving, the solution to that problem would be tax cuts for businesses. But it is the other way around at the moment.

The logic that we must throw money at businesses for them to thrive works in a very certain situation, a situation that does currently not exist in the US.

[alexw]

If you're talking about flat numbers, there's more to offer the rich in tax breaks than there is in the middle class. There quickly comes a point where there is no more tax relief to offer the middle class (since their tax burden is already so small, around 9%). Particularly if you're talking about net taxes, offset by government programs.




That's just not true. Apple keeping more of their money means more development is the newest iPhone, which consumers want to buy, or more research into the next iPad, which consumers want to buy, etc. etc. They may also increase hiring. And if Apple keeps their money in a bank, that bank then loans out that money to small businesses, entrepreneurs, and families looking to consolidate debt. These are economic driving factors.

No actually it doesn't. We are WAAYYYY beyond the point of where additional profit stimulates more investment. Apple is already sitting on $260Bn of cash and is consistently adding to it every month. The same goes with most of the large corporates they have far far more money than they need or know what to do with. Its why interest rates are so low, they all have money they have no idea what to do with so lend it out, and because there is this giant wall of cash to lend with not enough credible borrowers its forced interest rates globally down to zero. That doesn't stop them wanting still more of course. But its a massively dysfunctional thing to do to give them tax cuts because it won't be put to the best economic use. Ideally if the republicans had the slightest bit of economic sense they'd be taxing away these massive lumps of cash to bring the money back into proper economic circulation, because these imbalances are forcing the economy to operate way below optimum. More tax cuts will just make the economic dysfunction worse.

[Cthulhu 2020]

No actually it doesn't. We are WAAYYYY beyond the point of where additional profit stimulates more investment. Apple is already sitting on $260Bn of cash and is consistently adding to it every month. The same goes with most of the large corporates they have far far more money than they need or know what to do with. Its why interest rates are so low, they all have money they have no idea what to do with so lend it out, and because there is this giant wall of cash to lend with not enough credible borrowers its forced interest rates globally down to zero. That doesn't stop them wanting still more of course. But its a massively dysfunctional thing to do to give them tax cuts because it won't be put to the best economic use. Ideally if the republicans had the slightest bit of economic sense they'd be taxing away these massive lumps of cash to bring the money back into proper economic circulation, because these imbalances are forcing the economy to operate way below optimum. More tax cuts will just make the economic dysfunction worse.

Even in my point above, something that needs to be noted by both left and right, is that the economy here is two sided, both supply and demand side.

If one fails, so does the other. Giant piles of cash become garbage if demand dries up and people can't even afford basic necessities of life. At that point people start bartering because bank notes don't mean anything.

Both sides of the supply and demand equation need to be held up. When businesses are in trouble, we should help them. But as you've pointed out, they are not. The middle class is in huge trouble, and the Republicans seem to be in phyiscal pain even considering helping them out at all.

[Breccia]

Axios reports ads being run against the tax cut for the rich, specifically, ads saying that ballooning the deficit is a horrible idea. Specifically,

The first ads highlight promises by GOP senators James Lankford and Bob Corker to oppose any plan that increases the deficit.

will be run in their respective home states.

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Also, the What He Meant Was brigade says Trump would not insist the ACA individual mandate repeal be required in the tax cut for the rich. This, of course, is a 180 within 24 hours from the WH and six days from this tweet.