The Trump Tax Cut: Even Worse Than You’ve Heard

[Pete F.]

As has been claimed here by several for more than a year
“Skeptical reporting has still been too favorable.
The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big promises about soaring investment and wages, and also assured everyone that it would pay for itself; none of that has happened.

Yet coverage actually hasn’t been negative enough. The story you mostly read runs something like this: The tax cut has caused corporations to bring some money home, but they’ve used it for stock buybacks rather than to raise wages, and the boost to growth has been modest. That doesn’t sound great, but it’s still better than the reality: No money has, in fact, been brought home, and the tax cut has probably reduced national income. Indeed, at least 90 percent of Americans will end up poorer thanks to that cut.
Let me explain each point in turn.“
But you’ll have to open the link and read the concise point by point explanation.
https://www.google.com/url?sa=i&sour...46490561312958

[Jim in CT]

almost everybody saw an increase in take-home pay. If your gross pay stayed the same, your net almost certainly increased, especially if you have dependent children.

Your hit piece left that out. That and favorable unemployment trends as well. I wonder why.

[Pete F.]

Originally Posted by Jim in CT

almost everybody saw an increase in take-home pay. If your gross pay stayed the same, your net almost certainly increased, especially if you have dependent children.

Your hit piece left that out. That and favorable unemployment trends as well. I wonder why.

So if I gave you a dollar today and stole it plus interest from you tomorrow, you would be alright with that? Trump's math doesn't work and he doesn't care as long as he can con his base into believing it's a good thing. Simple elegant solutions to complex problems are typically incorrect but espoused by populists like Trump and Sanders.
Here's the rest of the body of the article you think is a hit piece, Unfortunately I can't copy the graphs

"Let me explain each point in turn.

First, when people say that U.S. corporations have “brought money home” they’re referring to dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of those subsidiaries to the home companies; these transactions also showed up as a reduction in the measured stake of the parents in the subsidiaries, i.e., as negative direct investment ( figure 1)
But these transactions are simply rearrangements of companies’ books for tax purposes; they don’t necessarily correspond to anything real. Suppose that Multinational Megacorp USA decides to have its subsidiary, Multinational Mega Ireland, transfer some assets to the home company. This will produce the kind of simultaneous and opposite movement in dividends and direct investment you see in Figure 1. But the company’s overall balance sheet – which always included the assets of MM Ireland – hasn’t changed at all. No real resources have been transferred; MM USA has neither gained nor lost the ability to invest here.
If you want to know whether investable funds are really being transferred to the U.S., you need to look at the overall balance on financial account – or, what should be the same (and is more accurately measured), the inverse of the balance on current account. Figure 2 shows that balance as a share of GDP – and as you can see, basically nothing has happened.


Figure 2CreditBureau of Economic Analysis
So the tax cut induced some accounting maneuvers, but did nothing to promote capital flows to America.

The tax cut did, however, have one important international effect: We’re now paying more money to foreigners.

Bear in mind that the one clear, overwhelming result of the tax cut is a big break for corporations: Federal tax receipts on corporate income have plunged (Figure 3).
The key point to realize is that in today’s globalized corporate system, a lot of any country’s corporate sector, our own very much included, is actually owned by foreigners, either directly because corporations here are foreign subsidiaries, or indirectly because foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to foreign nationals – which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer, not richer.

And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit.

Meanwhile, since the tax cut isn’t paying for itself, it will eventually have to be paid for some other way – either by raising other taxes, or by cutting spending on programs people value. The cost of these hikes or cuts will be much less concentrated on the top 10 percent than the benefit of the original tax cut. So it’s a near-certainty that the vast majority of Americans will be worse off thanks to Trump’s only major legislative success.

As I said, even the mainly negative reporting doesn’t convey how bad a deal this whole thing is turning out to be.

[Jim in CT]

Originally Posted by Pete F.

So if I gave you a dollar today and stole it plus interest from you tomorrow, you would be alright with that? Trump's math doesn't work and he doesn't care as long as he can con his base into believing it's a good thing. Simple elegant solutions to complex problems are typically incorrect but espoused by populists like Trump and Sanders.
Here's the rest of the body of the article you think is a hit piece, Unfortunately I can't copy the graphs

"Let me explain each point in turn.

First, when people say that U.S. corporations have “brought money home” they’re referring to dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of those subsidiaries to the home companies; these transactions also showed up as a reduction in the measured stake of the parents in the subsidiaries, i.e., as negative direct investment ( figure 1)
But these transactions are simply rearrangements of companies’ books for tax purposes; they don’t necessarily correspond to anything real. Suppose that Multinational Megacorp USA decides to have its subsidiary, Multinational Mega Ireland, transfer some assets to the home company. This will produce the kind of simultaneous and opposite movement in dividends and direct investment you see in Figure 1. But the company’s overall balance sheet – which always included the assets of MM Ireland – hasn’t changed at all. No real resources have been transferred; MM USA has neither gained nor lost the ability to invest here.
If you want to know whether investable funds are really being transferred to the U.S., you need to look at the overall balance on financial account – or, what should be the same (and is more accurately measured), the inverse of the balance on current account. Figure 2 shows that balance as a share of GDP – and as you can see, basically nothing has happened.


Figure 2CreditBureau of Economic Analysis
So the tax cut induced some accounting maneuvers, but did nothing to promote capital flows to America.

The tax cut did, however, have one important international effect: We’re now paying more money to foreigners.

Bear in mind that the one clear, overwhelming result of the tax cut is a big break for corporations: Federal tax receipts on corporate income have plunged (Figure 3).
The key point to realize is that in today’s globalized corporate system, a lot of any country’s corporate sector, our own very much included, is actually owned by foreigners, either directly because corporations here are foreign subsidiaries, or indirectly because foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to foreign nationals – which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer, not richer.

And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit.

Meanwhile, since the tax cut isn’t paying for itself, it will eventually have to be paid for some other way – either by raising other taxes, or by cutting spending on programs people value. The cost of these hikes or cuts will be much less concentrated on the top 10 percent than the benefit of the original tax cut. So it’s a near-certainty that the vast majority of Americans will be worse off thanks to Trump’s only major legislative success.

As I said, even the mainly negative reporting doesn’t convey how bad a deal this whole thing is turning out to be.

so now you’re saying that policies which provide economic benefit today but which must be paid for by borrowing with interest, are bad. there is logic to that, i mean that. i bet you never expressed that concern from 2009-2016.

again, can we have a consistent set of standards,applied equally to all presidents? is that too much to ask?

both sides are guilty of this hypocrisy. it gets us nowhere, and it’s intellectually lazy.

your article says that overseas money brought home, doesn’t necessarily correspond to anything real.

Bullsh*t.

Apple brought home $250 billion, and paid 38 billion in federal income tax on that. thirty eight billion dollars isn’t real?

the article is a political hit piece. unless you feel that 38 billion is nothing.
Posted from my iPhone/Mobile device

[Pete F.]

Originally Posted by Jim in CT

so now you’re saying that policies which provide economic benefit today but which must be paid for by borrowing with interest, are bad. there is logic to that, i mean that. i bet you never expressed that concern from 2009-2016.

again, can we have a consistent set of standards,applied equally to all presidents? is that too much to ask?

both sides are guilty of this hypocrisy. it gets us nowhere, and it’s intellectually lazy.

your article says that overseas money brought home, doesn’t necessarily correspond to anything real.

Bullsh*t.

Apple brought home $250 billion, and paid 38 billion in federal income tax on that. thirty eight billion dollars isn’t real?

the article is a political hit piece. unless you feel that 38 billion is nothing.
Posted from my iPhone/Mobile device

Corporate income taxes paid went down by HALF, how much any individual corporation paid is immaterial in funding the government.

[Jim in CT]

Originally Posted by Pete F.

Corporate income taxes paid went down by HALF, how much any individual corporation paid is immaterial in funding the government.

Well the corporate tax rate didn't get cut in half, so something else is at play there which may or may not have anything to do with the tax cut.

I have news for you...when corporations have more after tax income, that doesn't only benefit the wealthy. I have spent my career so far in a cubicle, I am a worker bee not an executive. And I have worked for some huge companies (Aetna, Travelers, The Hartford). And I know for sure, that the more money the company has at the end of the year, the better my raise and bonus will be. They share profits with the workers, they have to, or the good workers will all leave.

Corporate America isn't the plantation you seem to think it is.

[Jim in CT]

Originally Posted by Pete F.

So if I gave you a dollar today and stole it plus interest from you tomorrow, you would be alright with that? Trump's math doesn't work and he doesn't care as long as he can con his base into believing it's a good thing. Simple elegant solutions to complex problems are typically incorrect but espoused by populists like Trump and Sanders.
Here's the rest of the body of the article you think is a hit piece, Unfortunately I can't copy the graphs

"Let me explain each point in turn.

First, when people say that U.S. corporations have “brought money home” they’re referring to dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of those subsidiaries to the home companies; these transactions also showed up as a reduction in the measured stake of the parents in the subsidiaries, i.e., as negative direct investment ( figure 1)
But these transactions are simply rearrangements of companies’ books for tax purposes; they don’t necessarily correspond to anything real. Suppose that Multinational Megacorp USA decides to have its subsidiary, Multinational Mega Ireland, transfer some assets to the home company. This will produce the kind of simultaneous and opposite movement in dividends and direct investment you see in Figure 1. But the company’s overall balance sheet – which always included the assets of MM Ireland – hasn’t changed at all. No real resources have been transferred; MM USA has neither gained nor lost the ability to invest here.
If you want to know whether investable funds are really being transferred to the U.S., you need to look at the overall balance on financial account – or, what should be the same (and is more accurately measured), the inverse of the balance on current account. Figure 2 shows that balance as a share of GDP – and as you can see, basically nothing has happened.


Figure 2CreditBureau of Economic Analysis
So the tax cut induced some accounting maneuvers, but did nothing to promote capital flows to America.

The tax cut did, however, have one important international effect: We’re now paying more money to foreigners.

Bear in mind that the one clear, overwhelming result of the tax cut is a big break for corporations: Federal tax receipts on corporate income have plunged (Figure 3).
The key point to realize is that in today’s globalized corporate system, a lot of any country’s corporate sector, our own very much included, is actually owned by foreigners, either directly because corporations here are foreign subsidiaries, or indirectly because foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to foreign nationals – which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer, not richer.

And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit.

Meanwhile, since the tax cut isn’t paying for itself, it will eventually have to be paid for some other way – either by raising other taxes, or by cutting spending on programs people value. The cost of these hikes or cuts will be much less concentrated on the top 10 percent than the benefit of the original tax cut. So it’s a near-certainty that the vast majority of Americans will be worse off thanks to Trump’s only major legislative success.

As I said, even the mainly negative reporting doesn’t convey how bad a deal this whole thing is turning out to be.

"Meanwhile, since the tax cut isn’t paying for itself, it will eventually have to be paid for some other way – either by raising other taxes, or by cutting spending on programs people value"

Or by cutting waste. Why isn't that a possibility, Pete?

"And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit."

Again, demonstrably false bullsh*t. My taxes went down by $200 a month.

The article is desperately trying to paint the cut, as something that benefitted the wealthy, and did nothing for everyone else. It's not true, it's not close to being true.

CBS (not a conservative outlet) looked at 3 families in 3 different parts of the country. Here is the impact of the tax cut.

https://www.cbsnews.com/news/how-the...ican-families/

[Pete F.]

Originally Posted by Jim in CT

"Meanwhile, since the tax cut isn’t paying for itself, it will eventually have to be paid for some other way – either by raising other taxes, or by cutting spending on programs people value"

Or by cutting waste. Why isn't that a possibility, Pete?

"And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit."

Again, demonstrably false bullsh*t. My taxes went down by $200 a month.

The article is desperately trying to paint the cut, as something that benefitted the wealthy, and did nothing for everyone else. It's not true, it's not close to being true.

CBS (not a conservative outlet) looked at 3 families in 3 different parts of the country. Here is the impact of the tax cut.

https://www.cbsnews.com/news/how-the...ican-families/

Based on prior history our government does not cut waste.
Unless you think the current funding situation will continue indefinitely it will never happen.

Your taxes withheld or owed went down?
Have you done your taxes yet?

[Jim in CT]

Originally Posted by Pete F.

Based on prior history our government does not cut waste.
Unless you think the current funding situation will continue indefinitely it will never happen.

Your taxes withheld or owed went down?
Have you done your taxes yet?

"Based on prior history our government does not cut waste."

Then perhaps we need to demand it from our elected officials, or else vote for people who will cut waste.

"Your taxes withheld or owed went down?"

On Feb 1, when my company adopted the new tax rates, my withholding went down $200 a month. Every cent of that was because of the tax cut.

I then spoke to a CPA. I usually break even at the end of the year, sometimes I owe as much as $500, or get back as much as $500, I like to keep it as neutral as possible. I wanted to make sure I wasn't going to owe that much more at the end of the year. CPA says my reduced withholdings will not impact my return in a real way, even with the new limitation of deducting state and local taxes at 10k. If not for that, I would have seen an even bigger bump from the tax cuts.

The tax rate in my income bracket decreased. On top of that, I have 3 dependent children, and there were big increases to child tax credits. I benefitted from those two shifts, as did everyone else like me.

Pete, I do feel the cuts gave too much to business, not enough to regular folks. But you cannot accurately say that regular folks are not benefitting. Almost everyone will see an increase in take home pay, that's just fact.

And if you think that companies, by and large, will not share the windfall of the lower corporate tax rates, I don't agree. I can't prove it. But in my experience, the companies I have worked for have always shared some portion of profits, with cubicle dwellers like me. They have to, or we will all go someplace else that does.

[wdmso]

Trump cancels pay raises for almost 2 million federal workers
‘In light of our nation’s fiscal situation
But a tax cutting is ok

Seems you missed that
Posted from my iPhone/Mobile device

[detbuch]

Originally Posted by wdmso

Trump cancels pay raises for almost 2 million federal workers
‘In light of our nation’s fiscal situation
But a tax cutting is ok

Seems you missed that
Posted from my iPhone/Mobile device

Should we raise everyone's taxes so the federal workers can get a pay raise?

[Jim in CT]

Originally Posted by detbuch

Should we raise everyone's taxes so the federal workers can get a pay raise?

and if they didn’t get raises, their take home pay still likely increased, thanks to the tax cuts. but we should
ignore that, because we don’t like Trump.
Posted from my iPhone/Mobile device

[wdmso]

Originally Posted by Jim in CT

and if they didn’t get raises, their take home pay still likely increased, thanks to the tax cuts. but we should
ignore that, because we don’t like Trump.
Posted from my iPhone/Mobile device

Wow that’s some crazy thinking they should be thankful for the tax cut in place of a raise that affects their retirement down the road??
Posted from my iPhone/Mobile device

[The Dad Fisherman]

Originally Posted by wdmso

Wow that’s some crazy thinking they should be thankful for the tax cut in place of a raise that affects their retirement down the road??
Posted from my iPhone/Mobile device

Were you this concerned in 2011, 2012, and 2013 when Obama cancelled the government pay raises? just trying to establish some consistency in logic

also of note is that Obama didn't increase the Locality adjustment in 2010,2011,2012,2013,2014,and 2015, which also affects retirement.

[Jim in CT]

Originally Posted by wdmso

Wow that’s some crazy thinking they should be thankful for the tax cut in place of a raise that affects their retirement down the road??
Posted from my iPhone/Mobile device

WDMSO, is it that much better to get a $100 raise, than it is to get a $100 tax cut? At the end of the day, if you have $100 more to spend, do you care which column in the balance sheet it came from? If so, could you please explain why? Because I couldn't give a rat's azz.

[wdmso]

Originally Posted by detbuch

Should we raise everyone's taxes so the federal workers can get a pay raise?

Not really the point is it

But let’s give corporate America huge tax breaks removing money from the budget.. then screw the workers. Saying sorry we can’t afford your raise .... we’re broke
Posted from my iPhone/Mobile device

[Jim in CT]

Originally Posted by wdmso

Not really the point is it

But let’s give corporate America huge tax breaks removing money from the budget.. then screw the workers. Saying sorry we can’t afford your raise .... we’re broke
Posted from my iPhone/Mobile device

If there's currently too much being taken from individuals and corporations, then it's just to give it back to them.

[wdmso]

Originally Posted by Jim in CT

If there's currently too much being taken from individuals and corporations, then it's just to give it back to them.

Trump helping the little guy. Wait he thinks all federal employees are democrats .. now it makes sense
Posted from my iPhone/Mobile device

[detbuch]

Originally Posted by wdmso

Not really the point is it

But let’s give corporate America huge tax breaks removing money from the budget.. then screw the workers. Saying sorry we can’t afford your raise .... we’re broke
Posted from my iPhone/Mobile device

If Krugman's assertion is that overall wages in the private economy have not gone up, then what is the point of raising public sector wages which depend on income derived from taxing the private sector? And if government workers already have better job security, better guaranteed pension and health insurance than the average private sector worker, as well as, on average, higher pay, then what is the problem with cutting some of that fat from government spending?

And if the reason for corporate tax cuts is to create more jobs, then those cuts are a boon to the "little (unemployed or underemployed) guy." Unemployment numbers are significantly down. That aspect of the tax cuts is working.

And, what TDF said, Obama did it too, so it must be good because Obama is a way better POTUS than Trump.

And, yeah, the government is broke, has been broke . . . and the Krugman/Keynesian deficit spending model will ensure that it will remain broke for a long time . . . or forever.

[Jim in CT]

Originally Posted by detbuch

If Krugman's assertion is that overall wages in the private economy have not gone up, then what is the point of raising public sector wages which depend on income derived from taxing the private sector? And if government workers already have better job security, better guaranteed pension and health insurance than the average private sector worker, as well as, on average, higher pay, then what is the problem with cutting some of that fat from government spending?

And if the reason for corporate tax cuts is to create more jobs, then those cuts are a boon to the "little (unemployed or underemployed) guy." Unemployment numbers are significantly down. That aspect of the tax cuts is working.

And, what TDF said, Obama did it too, so it must be good because Obama is a way better POTUS than Trump.

And, yeah, the government is broke, has been broke . . . and the Krugman/Keynesian deficit spending model will ensure that it will remain broke for a long time . . . or forever.

I didn't even see that Paul Krugman wrote this, I should have guessed! Krugman previously said that the US economy would never recover from a Trump presidency, meanwhile the economy is rolling along better than it was 2 years ago by just about any conceivable measure. the guy has exactly ZERO credibility, he's not a scientist, he's a liberal advocate. Everything he says and writes, shows a clear liberal bias.

[Jim in CT]

Originally Posted by detbuch

If Krugman's assertion is that overall wages in the private economy have not gone up, then what is the point of raising public sector wages which depend on income derived from taxing the private sector? And if government workers already have better job security, better guaranteed pension and health insurance than the average private sector worker, as well as, on average, higher pay, then what is the problem with cutting some of that fat from government spending?

And if the reason for corporate tax cuts is to create more jobs, then those cuts are a boon to the "little (unemployed or underemployed) guy." Unemployment numbers are significantly down. That aspect of the tax cuts is working.

And, what TDF said, Obama did it too, so it must be good because Obama is a way better POTUS than Trump.

And, yeah, the government is broke, has been broke . . . and the Krugman/Keynesian deficit spending model will ensure that it will remain broke for a long time . . . or forever.

WDMSO, detbuch asks a tremendous question. If wages are not going up in the private sector, then even if tax rates were unchanged, that means tax revenue collected stays the same, so by what logic should public sector workers than get raises?

You have fun answering that one.

[Jim in CT]

Stock buybacks are good for everyone who owns stock. Stock ownership isn't just for the wealthy anymore. Everyone who has an IRA or a 401(k) benefits from that.

I didn't see much talk about everyone's taxes going down, or the 20,000 jobs that Apple pledged, or the massive infrastructure investment Cox is making, or the raises and bonuses that we all heard about.

I think the tax cut gave too much to business, not enough to the middle class. But to imply it didn't help anyone, is just false.

Pete, when you ignore all the benefits that the tax cut provided, and only look at the flaws, I admit it looks like stupid policy. But in an honest world, we evaluate public policy based on the good and the bad that it does - not just the bad. A lot of Americans will see a meaningful increase in take home pay. I did. And I'm not the only one.

Obama's "stimulus" also cost almost a trillion dollars, and I don't know that I know anyone who benefitted a nickel because of it. But maybe it helped get unemployment under control, I don't know.

Almost everyone I know, is seeing a benefit from the GOP tax cuts.

[wdmso]

2 million civilian workers. The Federal Government is the nation's single largest employer. this includes the military

The public sector employs 20.2 million people in the US, approximately 14.5 percent of the workforce.

Seeing the private sector and republicans have screwed 85.5 % of the american worker now they are after the other 14.5 because they have to much to funny

[Jim in CT]

Originally Posted by wdmso

2 million civilian workers. The Federal Government is the nation's single largest employer. this includes the military

The public sector employs 20.2 million people in the US, approximately 14.5 percent of the workforce.

Seeing the private sector and republicans have screwed 85.5 % of the american worker now they are after the other 14.5 because they have to much to funny

oh, everybody in the private sector is screwed? but of course. i’d
much rather be a public worker, especially here in CT, where public pensions ( after decades of pure liberalism) are funded at approximately 0%. the liberals are really looking out for the public workers!!!

nobody gets screwed worse than state workers. the union lies to them to get their dues, democrat
politicians lie to them to get their votes. i wouldn’t trust my financial
security to these people
for a day.
Posted from my iPhone/Mobile device

[wdmso]

Originally Posted by Jim in CT

oh, everybody in the private sector is screwed? but of course. i’d
much rather be a public worker, especially here in CT, where public pensions ( after decades of pure liberalism) are funded at approximately 0%. the liberals are really looking out for the public workers!!!

nobody gets screwed worse than state workers. the union lies to them to get their dues, democrat
politicians lie to them to get their votes. i wouldn’t trust my financial
security to these people
for a day.
Posted from my iPhone/Mobile device

just a general statement but republicans have been after union workers for decades and they only account for 10% of the us work force ... dont understand so much attention against so few

[Jim in CT]

Originally Posted by wdmso

just a general statement but republicans have been after union workers for decades and they only account for 10% of the us work force ... dont understand so much attention against so few

republicansnate after corruption and waste, and ground zero for that, is unions and democrats. look at what unions and democrats did to CT, and try to make me wrong. you can’t.
Posted from my iPhone/Mobile device

[Pete F.]

Originally Posted by Jim in CT

republicansnate after corruption and waste, and ground zero for that, is unions and democrats. look at what unions and democrats did to CT, and try to make me wrong. you can’t.
Posted from my iPhone/Mobile device

Who controls both branches of government in the 20 states with the lowest household income?
Try and make that a shining star for Republicans
Posted from my iPhone/Mobile device

[detbuch]

Originally Posted by Pete F.

As has been claimed here by several for more than a year
“Skeptical reporting has still been too favorable.
The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big promises about soaring investment and wages, and also assured everyone that it would pay for itself; none of that has happened.

Yet coverage actually hasn’t been negative enough. The story you mostly read runs something like this: The tax cut has caused corporations to bring some money home, but they’ve used it for stock buybacks rather than to raise wages, and the boost to growth has been modest. That doesn’t sound great, but it’s still better than the reality: No money has, in fact, been brought home, and the tax cut has probably reduced national income. Indeed, at least 90 percent of Americans will end up poorer thanks to that cut.
Let me explain each point in turn.“
But you’ll have to open the link and read the concise point by point explanation.
https://www.google.com/url?sa=i&sour...46490561312958

As Jim noted, Krugman doesn't discuss things that run counter to what he is trying to say here. Instead, he focusses on international corporate investment and its influence on federal government revenues, and he reverts to his usual sweeping, generalized theories within theories which forces him to inject weasel words such as "probably" and "don't necessarily correspond to anything real" which give a shadowy image of plausibility to his assertions.

Within his narrow, limited focus he somehow manages to refer to a "national" income, which is presumably the rest of us, and that 90% of Americans will end up poorer because of the tax cuts. I didn't find in his point by point analysis how the tax cuts made me poorer. So far, I am getting more money, not less.

Now, if he is referring to inflation, which I didn't find a reference to in his article, he may have a point. But inflation generally reflects markets improving too rapidly (which may be why he didn't mention it), which can be induced by lowering taxes. So, yes, lower taxes can lead to market expansion, which means the tax cuts are working, maybe too well. But the Fed tries to control that by raising interest rates to slow down market transactions, which creates a market slowdown and gives the false appearance that tax cut policy is not working.

Another inflationary cause is the previous administration's massive money pumping that wasn't used as intended because it basically couldn't find a demand for it in a stagnant market, but is now flooding an expanding market with more money than needed, thus lowering that money's purchasing value. So there is an added layer of inflation that is not a result of the tax cuts.

So he manufactures a global centric argument about money not returning to America because of the tax cuts, but actually flowing to foreign investors who profit because of lower taxes, which, supposedly, in effect, somehow means that the tax cuts are not only not working but they are making 90% of us poorer. But, as I said, he doesn't specifically say how that is so regarding us as individual tax payers. But he implies that is so because the tax cuts also benefit foreign investors. Nor does he mention how the foreign investors contribute to the market in the first place.

But his whole thesis rests solely on his narrow focus on what he claims is money not returning to America, but merely benefitting large corporations, one third of which are owned directly or through investment by foreigners. He disregards the multi-faceted purpose of the tax cuts, the least of which is not to "bring back money" to the U.S., but to bring back and/or create more jobs, including those produced by foreign entrepreneurs moving here. As well, the freeing up of money already here to create more jobs. And, as I can personally attest, to keep some of the people's money in their pocket rather than in the government's. But all of that, to his chagrin, means government wealth shrinks and so will some programs that some "people value" (He didn't say "some", I made the clarification to be more precise.)

He, in the final analysis, worries more about the loss of government income than in individuals gains in money and jobs. But in the end, our federal government never loses money. It refuses to. Even if it has to bleed us to get it.

[wdmso]

fyi for those who forget history

https://money.cnn.com/2018/01/18/new...ges/index.html


Shocking the decline of the private sector pay is because of private companies

but lets blame public sector unions

[Jim in CT]

Originally Posted by wdmso

fyi for those who forget history

https://money.cnn.com/2018/01/18/new...ges/index.html


Shocking the decline of the private sector pay is because of private companies

but lets blame public sector unions

Public sector unions have nothing to do with private sector salaries.

Public sector unions have a lot to do with state taxes and debt. The marriage of public unions and democrats is working out awesome in CT and IL.