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Home » Flame

What Republicans really think about tax reform. December 29, 2017 8:48 pm hank

http://www.foxbusiness.com/politics/2017/12/29/tax-reform-may-help-us-corporations-little-too-much-rubio-says.html

“I thought we probably went too far on (helping) corporations. By and large, you’re going to see a lot of these multinationals buy back shares to drive up the price. Some of them will be forced, because they’re sitting on historic levels of cash, to pay out dividends to shareholders. That isn’t going to create dramatic economic growth.”
–Marco Rubio (R-FL)

During an interview with FOX Business earlier this month, former Pepsi president and Apple CEO John Sculley voiced similar concerns, saying that while there is reason to believe companies would bring money back onshore, “the real question is what these big companies will do with this capital. Will they in fact invest – or will they buy back stock?”

Isn’t it interesting how Fox Business has a much more realistic view of the world than their Cable TV Propaganda Ministry?

Corporate America doesn’t invest windfall profits into jobs and production capacity. Come to think of it, no businessman ever does, it makes no sense from a purely practical point of view. Those profits are just that, profits. They’ll go straight to the stockholders–and CEO bonuses; and both of those will be in the form of deferred equity income taxed piecemeal at super-low capital gains rates whenever the stock is eventually sold. That is, if we still have capital gains taxes in the future, the Republicans are always working to reduce or abolish them, using the same bogus “investment for jobs” argument they are using to justify this tax cut.

Facility and job expansion is best financed with borrowed money, especially in times like now when interest rates are extremely low and when projected deficits will probably precipitate massive inflation in the near future. (And when interest payments and potential losses can be written off of future taxable income altogether!) No enterprise uses its own money on big ticket items, it puts all its excess cash into operations and profits in order to reward and attract more stockholders. THAT’s where the borrowed money for expansion comes from. Business would much rather reward its investors than the banks, or (heaven forbid) its employees.

Cash reserves are kept as small as possible, just big enough to deal with unexpected emergencies and shortfalls, or to take advantage of sudden opportunities. Anybody who knows anything about business could tell you that. Not that Trump voters know anything about business; they’ve just been brainwashed into thinking they do by people who are much smarter (and successful) at it than they are.

So if they’re “sitting on historic levels of cash”, and if the economy is doing so good now (as Trump reminds us daily), WHY do we need such a corporate-friendly tax cut? Its going to cost the Deplorables $1.5 x 10^12 in deficits to find out; the rest of us already know.

That sound you hear isn’t wealth trickling down off the groaning tables of the 1%, its the gentle tinkle of the GOP pissing in your ear.

  • An exception? by SDG 2018-01-03 09:16:50
    • Debt and investment. by hank 2018-01-03 11:05:08
      • Small businesses aren't really businesses. by hank 2018-01-03 10:37:55

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