Oh Dear! Did the Trump Tax Cuts Really "Pay For Themselves"?

https://www.reuters.com/world/us/us-...84-2022-01-27/

decrease in purchases of motor vehicles, which are scarce because of a global chip shortage, was offset by increases in spending on healthcare as well as at membership clubs, sports centers, parks, theaters and museums.

https://www.brookings.edu/blog/up-fr...tself-in-2018/

While some TCJA supporters are touting that nominal revenues were higher in fiscal year (FY) 2018 than in FY2017, that comparison does not address the question of TCJA’s effects. Nominal revenues rise because of inflation and economic growth. Adjusted for inflation, total revenues fell from FY2017 to FY2018 (Figure 1). Adjusted for the size of the economy, they fell even more. The most appropriate test of the revenue impact of TCJA is to compare (a) actual revenues in FY2018 with (b) predicted revenues in FY2018 assuming Congress had not passed the legislation. In fact, the actual amount of revenue collected in FY2018 was significantly lower than the Congressional Budget Office (CBO)’s projection of FY2018 revenue from January 2017—before the tax cuts were signed. The shortfall is $275 billion, or 7.6 percent of revenues that were expected before the tax cuts took place. Given that the economy grew, unless one can find some other change that caused a large revenue loss, the data imply that TCJA reduced revenues (Figure 1) – substantially. Originally Posted by WTF

I would love to hear from you and lusty just where all that free money wound up? Originally Posted by WTF

Please think like the businessman you are instead of a politician. Let's use the corporate tax cut as an example. You as a shareholder are the owner. This isn't far off given you own shares in American companies.

First, about your last point. That's not "free money." Rather, the federal government is only taking 21% of YOUR income, instead of 35%. You and your employees worked hard for that money. How's it free?

The federal government, when it cut the corporate rate, left you with 79% of your before tax income instead of 65%. That's another 14% to invest and expand. You go out and hire more employees, and invest in more working capital and equipment than you would have otherwise. What's the effect on the amount of tax you initially pay? Well, it goes down. It's going to take a while to train people, and you're writing off a a good chunk of your capital investment in the first year through Section 179 deductions and in the 2nd and 3rd years through accelerated depreciation.

But as the effects of that additional investment kick in, you realize more income from your bigger operation. Repeat year after year and achieve the returns I know you're capable of, 15% per year, and your income goes up. At some point maybe you're paying more tax than if the government hadn't "reinvested" more in your business by allowing you to keep and invest more of YOUR money.

Think of this like the government's the mafia. If it drains off too much money from the people it's extorting money from, in the long run it can end up with less. They're not going to thrive and expand. Maybe they'll quit and move or do something else. Please note the relevance of this analogy to Lusty Lad's point about American companies bringing more money back to the USA because of the TCJA. And fewer American companies moving investment and operations out of the USA.

And getting back to employees, it's not going to take as long for the favorable effects of the tax cut to be seen in their pockets. Your business and others are hiring more people, driving down unemployment and driving up wages. In 2019, in fact, one short year after the tax cuts were implemented, unemployment went to 50 year lows and, for the first time since the Clinton administration, real median household wages showed a big jump up. Those employees, with their higher wages, pay more tax btw.

Perhaps it just took longer for the positive effects of the tax cuts on business to manifest in higher government revenues.

I won't say that the TCJA necessarily paid for itself. But I don't know, maybe at least parts of it did. Regardless I'd like to see more money stay in the private sector, and less syphoned off by an inefficient federal government.

The Waco Kid said it better and more succinctly than I did,

"In principle, a tax cut could “pay for itself” if it spurred substantial economic growth. Revenues would rise from the combination of higher wages and hours worked, greater investment returns, and larger corporate profits. Under this scenario, that “dynamic” effect would more than offset the entire “static” revenue loss of the tax cut." Originally Posted by The_Waco_Kid

Wtf does that philosophic bs even mean?

Your right thing may differ from another's right thing.

What they should do is stat reducing deficits and debt....something Trump lied about doing. Originally Posted by WTF

The "Right Thing" isn't up for debate. Taxes are mishandled by politicians that's why they are always looking for the people to pay more taxes. You can't Tax a country into prosperity, it's impossible. Your gibberish is wishful thinking.

... Regardless I'd like to see more money stay in the private sector, and less syphoned off by an inefficient federal government..., Originally Posted by Tiny

Personally, I don't think the chimp is a chump. He has a decent understanding of money than the classic Left-tard. However, I've always found this simple question stumps the average Chump: How much of my earnings are mine? Same for a business.

The problem comes down to their pathetic envy of others accomplishments. Think of the ding-bat they just put in the Ministry of Truth singing: Who do I have to fvck... If they were capable of earning a good wage and not take on ridiculous student debt that they can't pay off, then why can't they donate whatever portion of their take home pay to the whatever causes they believe in? After all, those are deductible and ultimately reduces their taxes. And WTF can't they get their pee brains around a flat tax? Because -- jealousy...

The Federal government was designed to have a most minimal role and it certainly is not to be anyone's Nanny. We also have to stop supporting other idiot countries. We are currently paying countries to enforce their borders and not our own. Sorry, but IDGAF about Ukraine's border, but I dang sure do our own. Not sorry. WTF?!?

Personally, I don't think the chimp is a chump. He has a decent understanding of money than the classic Left-tard. However, I've always found this simple question stumps the average Chump: How much of my earnings are mine? Same for a business.

The problem comes down to their pathetic envy of others accomplishments. Think of the ding-bat they just put in the Ministry of Truth singing: Who do I have to fvck... If they were capable of earning a good wage and not take on ridiculous student debt that they can't pay off, then why can't they donate whatever portion of their take home pay to the whatever causes they believe in? After all, those are deductible and ultimately reduces their taxes. And WTF can't they get their pee brains around a flat tax? Because -- jealousy...

The Federal government was designed to have a most minimal role and it certainly is not to be anyone's Nanny. We also have to stop supporting other idiot countries. We are currently paying countries to enforce their borders and not our own. Sorry, but IDGAF about Ukraine's border, but I dang sure do our own. Not sorry. WTF?!?


Originally Posted by Why_Yes_I_Do

Good post. You kind of lost me here -- could you please explain:

"Think of the ding-bat they just put in the Ministry of Truth singing: Who do I have to fvck... If they were capable of earning a good wage and not take on ridiculous student debt that they can't pay off, then why can't they donate whatever portion of their take home pay to the whatever causes they believe in?"

Ukraine is way beyond my pay grade. But I can't help but think this is something that never had to happen. Fifteen or twenty years ago people, including Vladimir Putin, thought Russia would eventually join NATO, instead of becoming its archenemy. Trump, for all his faults, had some intriguing ideas about getting Russia back on that track. But it was not meant to be. Bigger tragedies than the $33 billion in U.S. taxpayer funds are the lives lost, people displaced, and carnage to the economy in Ukraine. I'm not sure whether enabling the Ukrainians in going up against an enemy that's eventually going to win is a good idea. The Ukrainians look like cannon fodder.

Please think like the businessman you are instead of a politician. Let's use the corporate tax cut as an example. You as a shareholder are the owner. This isn't far off given you own shares in American companies.

First, about your last point. That's not "free money." Rather, the federal government is only taking 21% of YOUR income, instead of 35%. You and your employees worked hard for that money. How's it free?

The federal government, when it cut the corporate rate, left you with 79% of your before tax income instead of 65%. That's another 14% to invest and expand. You go out and hire more employees, and invest in more working capital and equipment than you would have otherwise. What's the effect on the amount of tax you initially pay? Well, it goes down. It's going to take a while to train people, and you're writing off a a good chunk of your capital investment in the first year through Section 179 deductions and in the 2nd and 3rd years through accelerated depreciation.

But as the effects of that additional investment kick in, you realize more income from your bigger operation. Repeat year after year and achieve the returns I know you're capable of, 15% per year, and your income goes up. At some point maybe you're paying more tax than if the government hadn't "reinvested" more in your business by allowing you to keep and invest more of YOUR money.

Think of this like the government's the mafia. If it drains off too much money from the people it's extorting money from, in the long run it can end up with less. They're not going to thrive and expand. Maybe they'll quit and move or do something else. Please note the relevance of this analogy to Lusty Lad's point about American companies bringing more money back to the USA because of the TCJA. And fewer American companies moving investment and operations out of the USA.

And getting back to employees, it's not going to take as long for the favorable effects of the tax cut to be seen in their pockets. Your business and others are hiring more people, driving down unemployment and driving up wages. In 2019, in fact, one short year after the tax cuts were implemented, unemployment went to 50 year lows and, for the first time since the Clinton administration, real median household wages showed a big jump up. Those employees, with their higher wages, pay more tax btw.

Perhaps it just took longer for the positive effects of the tax cuts on business to manifest in higher government revenues.

I won't say that the TCJA necessarily paid for itself. But I don't know, maybe at least parts of it did. Regardless I'd like to see more money stay in the private sector, and less syphoned off by an inefficient federal government.

The Waco Kid said it better and more succinctly than I did, Originally Posted by Tiny

You did nothing to address the point of injecting 6 trillion dollars into the economy. Free money referred to the Covid money.

You can not objectively look at the Trump tax cuts and say they worked. At least they didn't in 2018 and 2019.

After that there was Covid and a huge injection of money into the system. So lustylad was disingenuous to try and do so. Be like Hoover saying his policies worked and bringing up the year 1947 as an example of them working!

And the fucking WackoKid didn't say that. He quoted it from someone much brighter than he.

You did nothing to address the point of injecting 6 trillion dollars into the economy. Free money referred to the Covid money.

You can not objectively look at the Trump tax cuts and say they worked. At least they didn't in 2018 and 2019.

After that there was Covid and a huge injection of money into the system. So lustylad was disingenuous to try and do so. Be like Hoover saying his policies worked and bringing up the year 1947 as an example of them working!

And the fucking WackoKid didn't say that. He quoted it from someone much brighter than he. Originally Posted by WTF

it is the first paragraph from your Brookings institute article. the article is outdated, from 2019 and only had the first year of data after the tax cut. no one would expect the cut to increase revenue in one year. now the data shows the cut did increase profits that were used to grow business.



the high corporate tax rates in the US, the highest of the G20 nations is one of the reasons US companies outsourced labor overseas. and used tax havens in countries like Ireland.



if you really think the covid stimulus is the main driver of higher corporate revenue and thus tax paid then you are an idiot.

You did nothing to address the point of injecting 6 trillion dollars into the economy. Free money referred to the Covid money.

You can not objectively look at the Trump tax cuts and say they worked. At least they didn't in 2018 and 2019.

After that there was Covid and a huge injection of money into the system. So lustylad was disingenuous to try and do so. Be like Hoover saying his policies worked and bringing up the year 1947 as an example of them working!

And the fucking WackoKid didn't say that. He quoted it from someone much brighter than he. Originally Posted by WTF

I just don't see how you can possibly believe this, at least for the corporate tax cuts:

You can not objectively look at the Trump tax cuts and say they worked. At least they didn't in 2018 and 2019.

Add in an average state income tax rate and our total corporate rate before the TCJA was around 40%. That's just not competitive with the rest of the world. The rest of the world came to the conclusion years ago that rates that high didn't make sense.

You should go back and read what I wrote. It's logical for it to take time for the tax cuts to result in higher taxable income, for businesses anyway. I'm sure that the CBO or the Tax Foundation or anyone else who includes dynamic effects in its analysis is going to show the "loss" in taxes on business as a % of GDP shrinking with time.

And yeah, when you jack up inflation with 6 trillion in stimulus, including the last 1.9 trillion that Larry Summers and Republicans were fighting tooth and nail against, you're probably going to jack up nominal tax revenues. However I bet if you looked at tax revenues as a % of GDP from the corporate tax, they'd be up in 2021 compared to 2017. I'm too lazy to look that up -- why don't you check it. You can hold it over my head if I'm wrong.

Originally Posted by Why_Yes_I_Do

LOL!

I just don't see how you can possibly believe this, at least for the corporate tax cuts:

You can not objectively look at the Trump tax cuts and say they worked. At least they didn't in 2018 and 2019.

Add in an average state income tax rate and our total corporate rate before the TCJA was around 40%. That's just not competitive with the rest of the world. The rest of the world came to the conclusion years ago that rates that high didn't make sense.

You should go back and read what I wrote. It's logical for it to take time for the tax cuts to result in higher taxable income, for businesses anyway. I'm sure that the CBO or the Tax Foundation or anyone else who includes dynamic effects in its analysis is going to show the "loss" in taxes on business as a % of GDP shrinking with time.

. Originally Posted by Tiny

What you should look at was the effective tax rate.
You sure that as a % of GDP the Trump tax cuts will show that?

It's a well known fact that corporations recorded record "lossers" under trumpy and now are recording record "profits" under Biden

Dah...pay some taxes butt buy back massive stocks and fuck Americans

However I bet if you looked at tax revenues as a % of GDP from the corporate tax, they'd be up in 2021 compared to 2017. I'm too lazy to look that up -- why don't you check it. You can hold it over my head if I'm wrong. Originally Posted by Tiny

You're not wrong.

"In fact, corporate tax collections this year are about 25 percent higher than the $297 billion collected in 2017, prior to passage of TCJA. Likewise, as a share of GDP, corporate tax collections are higher this year (1.63 percent) than in 2017 (1.52 percent)."


https://taxfoundation.org/corporate-...lections-2021/

Good post. You kind of lost me here -- could you please explain:"Think of the ding-bat they just put in the Ministry of Truth singing: Who do I have to fvck... If they were capable of earning a good wage and not take on ridiculous student debt that they can't pay off, then why can't they donate whatever portion of their take home pay to the whatever causes they believe in?"... Originally Posted by Tiny

Two thoughts, one paragraph. <party foul?> The Czar of the Ministry of truth wanted to know whom she had to fuck to be rich and famous. My guess it is because of staff turn over on Team Kamala. She could have just asked Harris the question instead of posting the silly song on the internets.

Other is why should anyone care if someone's degree in Underwater Basket Weaving, which they went in debt to finance, is not paying the debt or putting food on the table? Most interesting proposal I've seen regarding this is to put the guarantee on the Universities. If your degree don't pay, you don't pay.

...Ukraine is way beyond my pay grade. But I can't help but think this is something that never had to happen. Fifteen or twenty years ago people, including Vladimir Putin, thought Russia would eventually join NATO, instead of becoming its archenemy. Trump, for all his faults, had some intriguing ideas about getting Russia back on that track. But it was not meant to be. Bigger tragedies than the $33 billion in U.S. taxpayer funds are the lives lost, people displaced, and carnage to the economy in Ukraine. I'm not sure whether enabling the Ukrainians in going up against an enemy that's eventually going to win is a good idea. The Ukrainians look like cannon fodder. Originally Posted by Tiny

First, let me tweekerize one statement of yours: "Russia would eventually join NATO, instead of becoming its archenemy." s/b Russia would eventually join NATO, instead of remaining its archenemy. A much bigger win at that. Least we forget the pressure Trump put square on the shoulders of the welshing EU countries to pony up their NATO payments.

Agree with the cannon fodder bit. I also do not believe we are the good guys in that quagmire. Trump was right and actually leveraged a couple bad experiences that Russia had in recent wars: Crimea and Afghanistan. Syria to some extent as well. Seems to have been a golden opportunity to turn them away from the Dark Side. Now O'Biden has screwed that pooch. We have now lost them to Chyyna, probably for good.

Recall our electorate can change 180 degrees on one election cycle. Chyyna and Russia do not variate that often. (see table below and think how US policy/priorities shifted) BTW: Hillary and Nueland had absolute hard-ons for Russia under the Obama years and now under Bidem <head scratcher moment>

For those that think Ukraine is turning the tide -- watch the Donbass. It is pretty well surrounded, supply lines are cut, the Ruskies have the high ground and they have command/control of the air space.

It's a well known fact that corporations recorded record "lossers" under trumpy and now are recording record "profits" under Biden.. Originally Posted by Tsmokies

Are you suggesting the stock indexes are popping through the ceiling at the moment?

You're not wrong.

"In fact, corporate tax collections this year are about 25 percent higher than the $297 billion collected in 2017, prior to passage of TCJA. Likewise, as a share of GDP, corporate tax collections are higher this year (1.63 percent) than in 2017 (1.52 percent)."


https://taxfoundation.org/corporate-...lections-2021/ Originally Posted by lustylad

Are you two really going to discount the 6 trillion stimulus and laude the Trump tax cuts as the impetus to increased tax revenue in 2021?

May I suggest you two read this link that touches on how other countries tax vs the US so you will not continually compare apples to kumquats.

https://taxfoundation.org/us-tax-revenue-2021/


the United States, individual income taxes (federal, state, and local) were the primary source of tax revenue in 2019, at 41.5 percent of total tax revenue. Social insurance taxes made up the second-largest share, at 24.9 percent, followed by consumption taxes, at 17.6 percent, and property taxes, at 12.1 percent. Corporate income taxes accounted for 3.9 percent of total tax revenue in 2019, the second year after passage of the Tax Cuts and Jobs Act, and 1.9 percentage points less than in 2017.