From whom have these $300b supposedly been (or will be) raised. If it’s from consumers that’s a consumption tax which just raises the costs of goods. If it’s from the retailer and wholesalers who eat some of the tariff, then that's a tax on businesses. I thought you Republican types were anti-tax, particularly on businesses. Doesn't that essentially negate the 2017 and 2025 tax reductions on businesses that you, Lusty and TC brag added so much wealth across the board to the economy (though I'd say it made the rich richer and did little for the middle class - but that's a different discussion).
Originally Posted by 1blackman1
Lambasting the corporate tax cut of 2017 seems to be a favored go-to element of the compendium of rhetoric employed by the AOC/Bernie wing of the Democratic party for the purpose of blasting the "big, beautiful bill." Apparently, in their minds, fiscal sanity could be largely restored by making all those "rich people" pay their "fair share." But that's utter nonsense!
Substantially increasing the corporate tax rate is one of the worst ways to raise more revenue. For starters, the corporate tax rate (21%) is in line with the OECD average. Jacking it up would render American firms less competitive internationally and would incentivize the sort of inversions that were beginning to be a problem 10 or 12 years ago.
Besides, who do you think actually pays the corporate income tax? (Before some simpleton says something like, "Corporations, of course, you dumbass!," they might want to think through the issue of what is referred to as "tax incidence.")
To wit:
https://taxfoundation.org/blog/who-b...corporate-tax/
https://taxfoundation.org/research/a...corporate-tax/
https://danieljmitchell.wordpress.co...mpetitiveness/
Note also that the leaders of Scandinavia's social democracies understand the value of competitive corporate tax rates. Why don't American "progressives?"
https://reason.com/2021/04/01/joe-bi...-norway-sweden
(We covered all this in a thread on this topic last year. I think Tiny, Lustylad, and the Waco Kid, all of whom understand the topic very well, participated. Perhaps some of our progressive friends missed it!)
... exactly how does one account for the TRILLIONS of dollars, invested by others, into locating factories into our country, account for in the age of AI? Think very carefully before you respond.
Originally Posted by Why_Yes_I_Do
That question was posed in reply to my earlier post. Thanks for the admonishment to "think carefully" before I respond, but I might point out that I rarely say anything without thinking, so you need not worry!
But I must say that I was a bit nonplussed by your question, as it's a bit difficult to divine what you're asking, given the way you crafted the query.
Judging from earlier posts, I'm guessing that it's a rhetorical question intended to make the point that a new AI-related investment boom is likely to power the economy through headwinds generated by tariff imposition and other factors with which the economy is struggling.
And maybe it will! That's one of the biggest debates taking place in the investment world today.
One thing to note is that the current run rate of AI-related investment in data centers, chip technology, foundry production, etc. is rocking along at about 1.2%, more or less, of GDP! That's more than the increase in domestic consumer-related consumption over the last couple of quarters.
Wrapped together with all of this is the
political question of whether the "BBB" will look like a winner or loser to America's working- and middle class during the run-up to the next election cycles. If an AI-led productivity boom comes to fruition as wonderfully as envisioned by optimists, the economy may turn up roses. If not, it won't. (I suppose that since this is a
political discussion forum, the politics of this are just as important as the economics.)
Tyler Cowen, who I consider one of the more interesting thinkers today, made the following point about the BBB in connection with a discussion about Trump's economic policy agenda writ large.
That is, with provisions such as allowing expensing rather than amortization of certain forms of new capital investment, along with other measures contained in the BBB, Trump is doing the metaphorical equivalent of pushing all the chips to the center of the table and making an all-in bet on the US economy -- and especially on technological advancement -- including but not limited to AI-related developments and total-factor productivity growth arising therefrom.