GOP TAX PLAN - Striper Talk Striped Bass Fishing, Surfcasting, Boating

detbuch · 11-21-2017, 01:20 AM

Quote:

Originally Posted by spence

No, the 2017 law is already set.

The tax benefit to the Middle Class is minimal. The real recipients are the super wealthy and corporations who will, if history is any guide, use the savings to buy back stocks and increase dividends.

Companies in the US area already sitting on over 2 trillion in cash with another 2.5 trillion overseas. A lack of funds isn't inhibiting domestic growth.

You're not going to see much economic impact from this plan if it passes. Many think the market is already overvalued and the idea that more free cash will lead to wage growth is silly. Companies pay based on perceived value, not available money to spend.

You seem to have a static view rather than a dynamic one. The history of buying back stocks and increasing dividends wasn't always, as in the past eight years, dependent on quantitative easing with its huge influx of government money. Rather it was based on money generated by business, and yes, also helped by favorable tax rates which was not an excess of money as is government pumping an over supply of money.

Money generated by private sector business creates actual wealth which makes possible a real and expanding market. Fiat money not based on actual business is a hope and prayer that somehow it will stimulate rather than inflate. The recent government pumping has created more inflation than stimulation. And if corporations merely sit on cash, it loses value (inflation). And if investors can hedge against inflation by buying stocks and bonds before the price inflates, then sell them later for gains to those who don't have that initial pile of fiat money to spend, they'll do that rather then risking investing in new business ventures.

And lowering business taxes along with decreasing regulations that benefit the large corporations at the expense of the smaller businesses, can make small business startups more economically feasible (create perceived value, as you put it). As well, there will be less incentive to move money and jobs out of the country.