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Trickle Down Tax Effect?
8 years ago
Dragonwuff Musings
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Vrghr has been hearing a LOT of "dark side" comments regarding the new tax relief plan. About how the CEOs are going to just "hoard" all the profits and use them to only benefit themselves and shareholders. About how there won't be any new investment in America. How the "little folks", employees, customers, etc. are not going to see any of that corporate windfall.
Perhaps there will be some truth to this, as companies take advantage of the new funds to re-position their financial exposure, reduce debt, or improve their dividends to shareholders. And there will certainly be some sleazy corps that do exactly what the worst predictions amount to.
But here's proof that the OTHER side of this coin is equally true: Corporations WILL invest more in America. Employees WILL benefit; not only from potential reductions in their individual tax burden, but from "pass through" in wages and benefits as well.
Wuff's Author works in a "Fortune 5" company. And they JUST sent an email to all employees. Vrghr has edited it to keep from running afoul of corporate email policy, but the lines below are taken verbatim from the message:
"Tax reform provides more investment and special bonus
"To: All U.S. employees
"...Once tax reform is signed into law, we plan to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 of our U.S. employees — all union-represented, non-management, ... as added recognition for their dedication and hard work. If the President signs the bill before Christmas, employees will receive the bonus over the holidays. ... "
At least in this instance, "trickle down" WORKS! The gamble on corporate investment in America WORKS! Wage and Benefit improvements are REAL!
And, in a competitive business environment, don't for a moment believe that other major corps won't be doing the same thing! Or they'll be at the bottom of the ladder when it comes time to find good, qualified employees willing to work for them. The word will spread, and "me too" will be a thing among other industry.
Just thought wuff's followers could use a little good news to balance some of the bad predictions this holiday season.
Merry Christmas and may your Holiday Season be Joyous!
Perhaps there will be some truth to this, as companies take advantage of the new funds to re-position their financial exposure, reduce debt, or improve their dividends to shareholders. And there will certainly be some sleazy corps that do exactly what the worst predictions amount to.
But here's proof that the OTHER side of this coin is equally true: Corporations WILL invest more in America. Employees WILL benefit; not only from potential reductions in their individual tax burden, but from "pass through" in wages and benefits as well.
Wuff's Author works in a "Fortune 5" company. And they JUST sent an email to all employees. Vrghr has edited it to keep from running afoul of corporate email policy, but the lines below are taken verbatim from the message:
"Tax reform provides more investment and special bonus
"To: All U.S. employees
"...Once tax reform is signed into law, we plan to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 of our U.S. employees — all union-represented, non-management, ... as added recognition for their dedication and hard work. If the President signs the bill before Christmas, employees will receive the bonus over the holidays. ... "
At least in this instance, "trickle down" WORKS! The gamble on corporate investment in America WORKS! Wage and Benefit improvements are REAL!
And, in a competitive business environment, don't for a moment believe that other major corps won't be doing the same thing! Or they'll be at the bottom of the ladder when it comes time to find good, qualified employees willing to work for them. The word will spread, and "me too" will be a thing among other industry.
Just thought wuff's followers could use a little good news to balance some of the bad predictions this holiday season.
Merry Christmas and may your Holiday Season be Joyous!
And every one of those places which have attempted it have ALL told themselves, "It didn't work for THEM, but WE'LL get it right this time!"
It hasn't happened yet!
Isn't it funny how repeating previous successful action, causes repeated successes?
Will be REALLY interesting to see what effect this might have on the strength of the dollar in world markets.
Wuffy remembers those interest rates, AND gas rationing too! And definitely does NOT want to return to either one of those!
This is one of the things that has astounded this wuff about the recent change in policies and taxes: we're seeing nearly IMMEDIATE results! The GAO is predicting 4% growth in the 4th quarter of this year, after 7 years of stagnation. The tax bill isn't even signed yet, and Fortune 5 companies and others are already broadcasting major improvements to wages, bonuses, capital investment, and other goodness.
And it is almost literally happening OVERNIGHT!
Guess it goes to show just how horrible past policies were on the capitalistic corporate environment, with all of this being pent up and looking for an outlet!
V.
*HUGS*
You raise taxes on everybody and in order for US companies to still turn a profit they have to send their companies to other countries, never before have I seen more companies do this then under the Obama administration because they were simply being taxed to death.
Then you get the other side of the coin and lower everyone's taxes, companies stay in the US, hire more people, give raises, and bonuses (congrats on that by the way )
Even with just the promise of lower taxes consumer spending has exploded this year.
For the last 7 years when filing taxes by biggest refund has been around $50, and even when I was still in the ARMY my annual pay wasnt over $25,000, I should have gotten just about every penny back and last year for some unknown reason I actually OWED around $2,500 and people where I work that make over $100,000 were getting about $10,000 in returns.
The only thing that socialism is good for is keeping the rich rich and the poor poor. And the Obama's and Clinton's have all the liberals brainwashed into thinking that socialism is a good thing?
Tell me, if these folks weren't going to get something out of it, like more power and riches, WHY would they be trying so hard to institute it?
Now, the common folk may have a good point or two, regarding the 'safety nets' and other benefits provided. But there are so many safer ways to obtain those. The fruit of the poisoned tree ultimate serves no one, even though the flesh may taste sweet at the time!
But of course, now were the bad people because we want to help them become employable and show them how to make their own living instead of leaching off everyone else. The people pushing the socialism agenda want nothing more then to keep the people reliant on their help, by doing so they can dictate exactly how you live, or don't live as stipulations in the Obamacare bill show.
Washington Post says it was after negotiating with union head: https://www.washingtonpost.com/busi.....=.0664c09d87cd
Thanks for those links!
And a Merry Christmas to you too! May your Holiday Season be Joyous, and likewise the year to come!
I see much talk of the cut of the corporate rate making us more competitive, and that'll be true for companies considering whether to put an HQ here or in the EU, but ultimately, our government isn't competing with other governments charging 20%, but with those charging 0%, and we just can't compete with 0. If what I've read about the legislation is correct, they'll still be able to move profits to those tax-free PO boxes, then immediately turn it around and return it to the US tax-free.
Certainly, lowering the tax rate will at least bring us in line with a lot of the more developed nations in the EU and Asian areas. Proof of that is all the squawking currently going on in EU area about how unfair it is for the USA to lower their taxes. They wouldn't be raising such a ruckus if they didn't think there was a pretty good chance of this action moving business and such out of their area.
There's also a LOT of capitol sitting in overseas accounts that companies would love to use here in the USE for improving their infrastructure, buying back debt, and other purposes, but the confiscatory tax structures of the past made it better for them just to stash it elsewhere. If even a portion of that flows back here, it's a good thing.
As for the gaps, wuff is an optimist who believes a rising tide floats all boats. The gaps might remain, or even widen, but if everyone's income is going up, the gap seems less an issue.
But only time will tell how it will eventually end.
They say a rising tide lifts all boats, but recent US history repudiates that. The bottom 90% of us have a smaller share of the pie than we did when I was young, and that inequality is growing at an accelerating rate. The tide is indeed rising, with more productivity and more wealth being created, but a handful of yachts with drilling rigs have bored holes so deep beneath them that they float in tiny, miles-deep private lakes surrounded by dry land. This doesn't come as a surprise, either. Unless something is done to stop it from happening, the natural outcome for any economy is for all of its wealth to wind up in the hands of the few people who are best at getting it.
I think we're boned, but I always think we're boned.