From Sean:
Oh, and by the way, we've now got a year of government revenue data post-tax cuts, and …. They're not paying for themselves!
Before inflation, tax revenues fell last year by 1% (so in real terms, about a 4% drop).
NYT's Jim Tankersley
All the winning!
The dirty little secret of economics and politics is that by and large is that tax rates have little effect on the economy as a whole. That's particularly true when we are talking about statutory rates which often have little to do with taxes actually imposed. That's why the economy can perform well when tax rates are high.
ReplyDelete--Hiram
Maybe... Though as we know many companies make important decisions based on those rates.
ReplyDeleteAs do the people who can afford accountants.
I really don't think companies think much about tax rates when making decisions about their business. When Medtronic moved their po box to Ireland to evade taxes, they didn't move their actual business.
ReplyDelete--Hiram
So why do you think companies move their businesses and American Consumers love to buy products from lower cost countries?
ReplyDeleteI of course am making an assumption that fewer regulations and lower taxes are part of why those are "lower cost" countries.
It's much cheaper to manufacture abroad.
ReplyDelete--Hiram
And why is it "lower cost" there and "higher cost" here?
ReplyDeleteWhat factors drive this?
Lots of countries employ slave labor in abysmal working conditions. Also, employers in other countries aren't responsible for health care and pensions for their employees.
ReplyDelete--Hiram
ON the other hand, take a look at Minnesota. We have ridiculously high tax rates combined with high wages yet our state does pretty well. A bad, even horrible, business environment doesn't necessarily translate into a poor economy.
ReplyDelete--Hiram
I agree that regulations and taxes are only one factor in business decision making. But they definitely are a big factor.
ReplyDeleteWhere as I am pretty sure most American consumers do not care where their products were made or what those employees made...
The fact is, the tax code views business expansion very favorably. Lots of deductions. Now there are businesses that are there to manufacture tax benefits. They are affected by tax changes, but they aren't the kind of businesses that put people to work.
ReplyDelete--Hiram
If you say so... However I have never been to excited to spend $100 to save $30...
ReplyDelete"I have never been to excited to spend $100 to save $30..."
ReplyDeleteWhat if you were planning to spend $80?
Moose
Tax just don't play that big a role in expansion decisions. And bear in mind, while Republicans are good for managers, they are bad for stocks and businesses generally. The loss in stock value recently has more than wiped out the value of any tax cuts.
ReplyDelete--Hiram
Moose,
ReplyDeleteBefore planning to spend there is usually a decision point.
Hiram,
I guess I disagree or tax free incentive zones would not be so useful to cities and states to attract companies.
"Before planning to spend there is usually a decision point."
ReplyDeleteYou didn't answer my question.
If you planned to spend $80, but find out that if you spend $100 you can get $30 back, do you spend $80 or $100?
Moose
You spend $80 and get $27 back....
ReplyDeleteRight. I see you're bad at this.
ReplyDeleteMoving on.
Moose
Or your question did not make sense.
ReplyDeleteAre you proposing that companies pay taxes based on total revenue instead of total profit?