Lowering taxes on business in the US

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TheBogleWay
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Lowering taxes on business in the US

Post by TheBogleWay » Tue Nov 07, 2017 2:45 am

I want to make this thread on Bogleheads, figured this was the most appropriate section but I hope it's not too off topic.

I don't want to turn this into a political debate, to me it's still investing related. As of today, November 2017, the US is attempting to lower taxes on US business. I'm wondering how this will effect our economy.



This isn't something you could simply ask on Facebook, and it's something that you can find 100 different "economist backed" answers to on Google.

So, I'm wondering. What do the educated people of Bogleheads think, would a tax cut on businesses in the US cause the US economy to thrive? Or, would it hinder economic growth in the US.

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JoMoney
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Re: Lowering taxes on business in the US

Post by JoMoney » Tue Nov 07, 2017 4:05 am

Generally proposed legislation is off topic and now allowed to be discussed here.
Is there a way you can make your question personally actionable whether or not the proposed tax plan passes?

FWIW, I think IF U.S. companies repatriate money to the U.S. (which is questionable regardless if the tax plan is passed) it will be stimulative to the economy. Even if just goes into the stock market via personal savings and corporate buybacks the wealth effect will work its way around. Ideally though, I think it would be better if the money went to building infrastructure and jobs. Unemployment is looking good, but it would be great if there was heavy demand for workers to put more pressure on business to raise wages.
Last edited by JoMoney on Tue Nov 07, 2017 4:11 am, edited 1 time in total.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

TheBogleWay
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Re: Lowering taxes on business in the US

Post by TheBogleWay » Tue Nov 07, 2017 4:10 am

JoMoney wrote:
Tue Nov 07, 2017 4:05 am
Generally proposed legislation is off topic and now allowed to be discussed here.
Is there a way you can make your question personally actionable whether or not the proposed tax plan passes?
Well, I have another chunk of money waiting to be invested (not making this up for the sake of the thread) and I'm debating on whether to add this to my total US or total international portfolio.

It's not big enough to really change my normal split percentages but this is still something I'm wondering for investing purposes, wondering where I'll put this next amount.

Thanks

denovo
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Re: Lowering taxes on business in the US

Post by denovo » Tue Nov 07, 2017 5:37 am

I am not a mod, but in before the lock.

But I am reminded of the Harry Truman joke
“Give me a one-handed Economist. All my economists say 'on hand...', then 'but on the other...”
What do the educated people of Bogleheads think, would a tax cut on businesses in the US cause the US economy to thrive? Or, would it hinder economic growth in the US.
Even worse, if a Boglehead is an MD, PHD in Chemistry, or an engineer, doesn't mean he or she knows squat about economics even though they are certainly educated.
"Don't trust everything you read on the Internet"- Abraham Lincoln

Valuethinker
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Re: Lowering taxes on business in the US

Post by Valuethinker » Tue Nov 07, 2017 6:23 am

TheBogleWay wrote:
Tue Nov 07, 2017 2:45 am
I want to make this thread on Bogleheads, figured this was the most appropriate section but I hope it's not too off topic.

I don't want to turn this into a political debate, to me it's still investing related. As of today, November 2017, the US is attempting to lower taxes on US business. I'm wondering how this will effect our economy.



This isn't something you could simply ask on Facebook, and it's something that you can find 100 different "economist backed" answers to on Google.

So, I'm wondering. What do the educated people of Bogleheads think, would a tax cut on businesses in the US cause the US economy to thrive? Or, would it hinder economic growth in the US.
Even experts disagree.

This thread will get closed down but it's also pointless wondering.

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oldcomputerguy
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Re: Lowering taxes on business in the US

Post by oldcomputerguy » Tue Nov 07, 2017 6:39 am

denovo wrote:
Tue Nov 07, 2017 5:37 am
But I am reminded of the Harry Truman joke
“Give me a one-handed Economist. All my economists say 'on hand...', then 'but on the other...”
Reminds me of the following scene from the Aaron Sorkin TV show "The West Wing":
Leo McGarry: Luther, ballpark, one year from today, where's the Dow?
Economist #1: Tremendous. Up a thousand.
Leo McGarry: Fred, one year from today?
Economist #2: Not good. Down a thousand.
Leo McGarry: A year from today at least one of you's gonna look pretty stupid.
:happy
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

denovo
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Re: Lowering taxes on business in the US

Post by denovo » Tue Nov 07, 2017 7:45 am

oldcomputerguy wrote:
Tue Nov 07, 2017 6:39 am
denovo wrote:
Tue Nov 07, 2017 5:37 am
But I am reminded of the Harry Truman joke
“Give me a one-handed Economist. All my economists say 'on hand...', then 'but on the other...”
Reminds me of the following scene from the Aaron Sorkin TV show "The West Wing":
Leo McGarry: Luther, ballpark, one year from today, where's the Dow?
Economist #1: Tremendous. Up a thousand.
Leo McGarry: Fred, one year from today?
Economist #2: Not good. Down a thousand.
Leo McGarry: A year from today at least one of you's gonna look pretty stupid.
:happy
That show truly had the best writing on television. I can say that about pretty much anything Aaron Sorkin touches. I've rewatched the West Wing on Netflix multiple times.
"Don't trust everything you read on the Internet"- Abraham Lincoln

Bacchus01
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Re: Lowering taxes on business in the US

Post by Bacchus01 » Tue Nov 07, 2017 8:04 am

So, you came here to post about speculative legislation and market timing?

hightower
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Re: Lowering taxes on business in the US

Post by hightower » Tue Nov 07, 2017 8:22 am

Well considering we know that most large US company's (such as Apple and Nike for instance) already shelter hundreds of billions of dollars in countries where they can avoid taxation, I don't see how giving them a tax cut at home is going to help matters much?

http://www.bbc.com/news/world-us-canada-41889787
https://www.usatoday.com/story/news/wor ... 838975001/

These companies already pay very little in taxes at the end of the day and this fantasy that if we give them big tax breaks they will share it with the rest of us is complete garbage. It's not going to happen. Money will continue to accumulate at the top where it will stay. Meanwhile the rest of us will continue to keep working and generating tax revenue to pay for the giant deficit they are creating.

JRB22
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Re: Lowering taxes on business in the US

Post by JRB22 » Tue Nov 07, 2017 8:47 am

hightower wrote:
Tue Nov 07, 2017 8:22 am
Well considering we know that most large US company's (such as Apple and Nike for instance) already shelter hundreds of billions of dollars in countries where they can avoid taxation, I don't see how giving them a tax cut at home is going to help matters much?

http://www.bbc.com/news/world-us-canada-41889787
https://www.usatoday.com/story/news/wor ... 838975001/

These companies already pay very little in taxes at the end of the day and this fantasy that if we give them big tax breaks they will share it with the rest of us is complete garbage. It's not going to happen. Money will continue to accumulate at the top where it will stay. Meanwhile the rest of us will continue to keep working and generating tax revenue to pay for the giant deficit they are creating.
Pretty much what I came in here to say... Will second it before this thread is locked.

lazydavid
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Re: Lowering taxes on business in the US

Post by lazydavid » Tue Nov 07, 2017 9:26 am

In before the lock. The theory is that lower corporate tax rates will reduce the incentive to shelter income in offshore subsidiaries and declare more profits in the US. Unfortunately, the theory is hogwash. To make up some numbers and avoid any politicking, let's say that I proposed reducing the average from 26% to 17%. While 17% is certainly less than 26%, you know what's also less? 0% happens to be less than both, and that's what many of these shelters have to offer.

Valuethinker
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Re: Lowering taxes on business in the US

Post by Valuethinker » Tue Nov 07, 2017 9:27 am

hightower wrote:
Tue Nov 07, 2017 8:22 am
Well considering we know that most large US company's (such as Apple and Nike for instance) already shelter hundreds of billions of dollars in countries where they can avoid taxation, I don't see how giving them a tax cut at home is going to help matters much?

http://www.bbc.com/news/world-us-canada-41889787
https://www.usatoday.com/story/news/wor ... 838975001/

These companies already pay very little in taxes at the end of the day and this fantasy that if we give them big tax breaks they will share it with the rest of us is complete garbage. It's not going to happen. Money will continue to accumulate at the top where it will stay. Meanwhile the rest of us will continue to keep working and generating tax revenue to pay for the giant deficit they are creating.
Whether this is true or not.

You are not without Agency in this-- the ability to act.

You are (I presume) legally able to vote and contribute to political causes in the USA. I do so in the United Kingdom. Yes I live in a safe (Conservative) constituency-- but there's lots else I can do. Not enough. But I do do.

https://www.ctj.org/

is one such organization I found with 3 seconds of googling.

As with recent moves on healthcare, Americans who had never called their Congressperson in their life found themselves calling their Congressperson to express their views, repetitively.

Congresspeople are only afraid of 2 things-- their Primary voters, and their voters. Often more the former than the latter.

It takes an old Star Trek episode, "Mirror, Mirror" to express the point-- Kirk is leaving the alternate universe, where the "evil" Spock lives, and the Evil Captain Kirk is a Starship Captain of a brutal Empire, not the Federation:
Kirk: You're a man of integrity in both universes, Mister Spock.
Mirror!Spock: You must return to your universe. I must have my captain back. I shall operate the transporter. You have two minutes and ten seconds.
Kirk: In that time I have something to say. How long before the Halkan prediction of galactic revolt is realised?
Mirror!Spock: Approximately two hundred and forty years.
Kirk: The inevitable outcome?
Mirror!Spock: The Empire shall be overthrown, of course.
Kirk: The illogic of waste, Mister Spock. The waste of lives, potential, resources, time. I submit to you that your Empire is illogical because it cannot endure. I submit that you are illogical to be a willing part of it.
Mirror!Spock: You have one minute and twenty three seconds.
Kirk: If change is inevitable, predictable, beneficial, doesn't logic demand that you be a part of it?
Mirror!Spock: One man cannot summon the future.
Kirk: But one man can change the present. Be the captain of this Enterprise, Mister Spock. Find a logical reason for sparing the Halkans and make it stick. Push till it gives.
You can defend yourself better than any man in the fleet.
Scotty: Captain, get in the chamber!
Kirk: What about it, Spock?
Mirror!Spock: A man must also have the power.
Kirk: In my cabin is a device that will make you invincible.
Mirror!Spock: Indeed?
Kirk: What will it be? Past or future? Tyranny or freedom? It's up to you.
Mirror!Spock: It is time.
Kirk: In every revolution, there's one man with a vision.
Mirror!Spock: Captain Kirk, I shall consider it.

Valuethinker
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Re: Lowering taxes on business in the US

Post by Valuethinker » Tue Nov 07, 2017 9:29 am

JRB22 wrote:
Tue Nov 07, 2017 8:47 am
hightower wrote:
Tue Nov 07, 2017 8:22 am
Well considering we know that most large US company's (such as Apple and Nike for instance) already shelter hundreds of billions of dollars in countries where they can avoid taxation, I don't see how giving them a tax cut at home is going to help matters much?

http://www.bbc.com/news/world-us-canada-41889787
https://www.usatoday.com/story/news/wor ... 838975001/

These companies already pay very little in taxes at the end of the day and this fantasy that if we give them big tax breaks they will share it with the rest of us is complete garbage. It's not going to happen. Money will continue to accumulate at the top where it will stay. Meanwhile the rest of us will continue to keep working and generating tax revenue to pay for the giant deficit they are creating.
Pretty much what I came in here to say... Will second it before this thread is locked.
You are, I presume, an American citizen and a registered voter?

You are not without agency. You have a voice, and you can make it heard.

The Germans were not stopped at Stalingrad by a political slogan, but by the blood of Soviet citizens and soldiers. Civil Rights were not granted to American blacks and desegregation achieved on internet forums.

Slothmeister
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Re: Lowering taxes on business in the US

Post by Slothmeister » Tue Nov 07, 2017 9:59 am

TheBogleWay wrote:
Tue Nov 07, 2017 2:45 am
So, I'm wondering. What do the educated people of Bogleheads think, would a tax cut on businesses in the US cause the US economy to thrive? Or, would it hinder economic growth in the US.
In the short term, yes. Long term, no.

TheBogleWay
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Re: Lowering taxes on business in the US

Post by TheBogleWay » Tue Nov 07, 2017 3:50 pm

Bacchus01 wrote:
Tue Nov 07, 2017 8:04 am
So, you came here to post about speculative legislation and market timing?
More so about the legislation, if passed, how posters here think it will effect the US economy (and in turn, US stocks).

I'm just wondering where you ask questions like these. Social media of course isn't the place. Google is getting harder, I can find 10 articles stating why milk is good for you, science backed, and I can find 10 articles, science backed, that show why it's bad for you. Same with this potential legislation that could effect our economy.

So, I figured I'd go to the forum where I think the most intelligent people would be. Better shot here than a car forum ;)

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JoMoney
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Re: Lowering taxes on business in the US

Post by JoMoney » Tue Nov 07, 2017 3:58 pm

Reddit has all sorts of places for such discussion, but they tend to be pretty polarized politically one way or another.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

mervinj7
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Re: Lowering taxes on business in the US

Post by mervinj7 » Tue Nov 07, 2017 4:35 pm

Bacchus01 wrote:
Tue Nov 07, 2017 8:04 am
So, you came here to post about speculative legislation and market timing?
Looks like it. And that's precisely why this thread needs to be locked.

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LadyGeek
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Re: Lowering taxes on business in the US

Post by LadyGeek » Tue Nov 07, 2017 4:55 pm

This thread has run its course and is locked. See my detailed explanation here: Political comments and proposed tax plan remain off-topic

Also see: Non-actionable (Trolling) Topics
If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:
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  • discussions of the crimes, shortcomings or stupidity of other people, whether they be political figures, celebrities, CEOs, Fed chairmen, subprime mortgage borrowers, lottery winners, federal "bailout" recipients, poor people, rich people, etc. Of course, you are welcome to talk about the stupid financial things you have done.
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