In the coming weeks this to shall pass
The bond market is going to crash after the tax cut is passed.
The US treasuried underpin all the banking instruments amd more.
The rich will not get paid without a tax hike on themselves. They have the money to tax.
The wild card will this admin call for a tax hike?
We should start calling for a tax hike. We could prove things are better with us.
I agree with you. We are at a tipping point with the federal deficit. We do need to raise taxes… along with cutting federal spending GROWTH.
I’m not advocating taking a meat clever to the government, but there needs to be a spending freeze in a lot of areas, and slowing growth in others.
Here are a couple to things to think about. In 2017, I didn’t think lowering the tax rates was necessary. They did it because the main goal was to lower the corporate income tax rate. The US rate of 28% had become one of the highest in the world. Corporations were moving their headquarters overseas to avoid the higher taxes and stashing cash overseas also. The administration at the time (Trump) knew that it would create a political nightmare that the other party would jump all over in the next election to only lower corporate taxes. They made the individual cuts temporary so that the budget numbers down the road did not look so horrendous.
If congress does nothing, then the tax rates return to where they were pre 2017, and we get a tax increase.
Another point I’ll make is this. Right now the top 20% of income earners pay approximately 87% of the federal income tax. If you consider the pareto distribution this seems fairly close to how it should be. To me that takes the “make the rich pay their fair share” off the table… they are.
If congress wants to tax the ultra rich and extra percentage point or two a year, go for it. It wouldn’t upset anything overall in the economy.
I do agree, our government has been in a headlong spiral for quite awhile now. You’re already seeing the cracks forming in the treasury auctions. There is a lot of debt to be sold in the coming months, it’ll be interesting to see how that pans out.
My two cents,
Darryl
We dont need spending cuts.
We need a corporate tax hike for gdp growth
First of all i didn’t advocate spending cuts. I said SLOW THE GROWTH. That is a reasonable approach. We are spending like a bunch of drunken sailors.
Secondly, lets raise the corporate tax. It’s currently at 22%. Should we increase it to 28%, 35%, or maybe 40%… Ireland is sitting out there with a corporate tax rate of 12.5%. Ever wonder why their GDP is kicking Englands behind? They aren’t the only ones. At 22% we are at the average world wide corporate tax rate. Let’s incentivise american corporations to start stashing cash overseas again.
I don’t like where we are anymore than you or anyone else. However, there are economic realities that we must realize and live with.
To add to what I posted before, my opinion is that we should not only NOT prolong the 2017 tax cut, but increase the tax brackets to where they were when Clinton left office. The only thing I would add is this. The government should calculate what income level the standard household needs to live properly. Any household at that level or below should be excempt of federal income taxes. Make it up with the people who do have the money. It wouldn’t be noticed by anybody but their accountants.
Thanks. I came up with that Idea back in the 80’s one night while doing my taxes. Businesses only pay taxes on profits, i.e. “That left over money they didn’t spend on anything.” Other than that meager standard deduction and that metaphysical number arrived at by dropping acid or eating infected clams called a personal exemption, Ralph Kramden and Ed Norton were paying what amounted to a gross receipts tax. Why don’t I get a deduction for “inventory” and costs of doing business?
Thanks for my first laugh of the day!
That is not the issue. Ireland is not heavy industry.
Heavy industry is builtout in countries with higher corporate taxes because the companies expense against the marginal tax rate.
Yes the financials won’t be happy but we do not have supply side economics any longer. We have demand side economics and we need to optimize our economy.
Interesting, now I’ve got something to think about. I don’t want you to think I’m ghosting you. I’m traveling right now and don’t have the time to dig into this. I’m getting back home tomorrow. I want to look into this further. I agree that while supply side economics worked in the 80s, they aren’t going to work the same way today.
Thanks, I’ll post more later this week.