Tax Reform

The Darkest Day of the Year

Why The GOP Tax Bill Stinks

|The Volokh Conspiracy |

So here we are, awakening on the darkest day of the year—speaking objectively, and astronomically, of course—with a new spring in our step, buoyed up by the unbearable lightness of Republican tax policy.

There are any number of awful things about the new Tax Cuts and Jobs Act (aside from its inferior acronym—the unpronounceable TCJA—"TicJa"?). Now that the dust has settled, the bill's outlines are pretty clear. No simplification—that idea got dropped pretty early on. Some tax reductions for the "middle class"; individuals with incomes from around $38,000 to $425,00 will, for instance, see their rates fall from a range of 25-33% to a range of 22-32%. Coupled with other changes (doubling the standard deduction, increasing the child care credit) many taxpayers will see a reduction in their tax liability, though TCJA's new limits on deductions (for state and local taxes, mortgage interest) and the elimination of the personal exemption, will offset that for a number of taxpayers and will result in somewhat higher tax bills.

But the big reduction is of course reserved for the corporations (and other "pass-through" business enterprises), who will see much more substantial reductions in their liability.

Maybe this will work, and will give the economy a big boost, raise wages, increase investment, etc. I'm no expert, and my ability to foresee the future is no better than anyone else's. It does strike me as peculiar to believe, at a time when US corporations are sitting on around $2 TRILLION of cash—a record high, by the way [see here and here]—that what the economy really needs is more cash for the corporations, that they're just waiting for some additional cash to get moving on all that job-creation, empolyee raises, capital investment and the rest of it—even though they're not spending the cash they already have. You'd think that before you decide to water the garden, you'd check to see if it looks like it needs water.

But like I said, I'm no expert, and I suppose we'll see.

It will also be interesting to see if the GOP can sell this to their base—especially to their base—as being part of their new 'populist' agenda. I guess I thought that there was all this anger, among the GOP base, at "Wall Street" and the small cadre of "elites" who have managed to rig the system to their advantage—where did that go? It's a strange kind of populism, that's for sure, that showers money onto Wall Street and into corporate coffers, on the hope that the money will be used for more than just the benefit of corporate shareholders and corporate officers and executives.

And it will be interesting to see if the Republicans will really have the chutzpah, when it comes to "entitlement reform," to demand cuts in Medicaid, Medicare, and/or Social Security, on the grounds that there is—surprise!!—no money any more to pay for these programs.

But whatever damage the bill may or may not inflict on the US economy over the coming years, it has already inflicted damage, which might be considerable, via the manner in which it was foisted on the American people. Not a single public hearing on a bill that has the potential to be the most significant economic legislation in decades. No real public debate, because nobody—except the lobbyists, of course—knew what was in the (400-page) bill until it was basically time to vote. No "experts"—God forbid!—giving us their analyses of the bill's provisions; the only interest anyone seemed to have in the CBO analyses was in the estimate of the cumulative 10-year effect on the deficit, and that was only because a too-large number would have taken the bill outside the "reconciliation" process in the Senate and required 60 votes (i.e., same small measure of Democratic support) (a problem the GOP solved by early termination of the individual, but not the corporate, tax breaks—Nice!). No attempt whatsoever to try to find any sort of bipartisan common ground.

I know there are some people who respond to this charge with some variant of "Well, the Democrats did that too, when they controlled Congress and the White House, in 2008-09, with Obamacare . . ." The response is the same as to the "But he started it!" defense familiar to anyone with a 9-year old around the house: other peoples' misbehavior does not justify your own. There's a right, and there's a wrong, way to conduct yourself, and it does not depend on the extent to which others do or do not conform. The Republicans had a chance to do this the right way, a chance I thought they might seize after the initial failure of the Obamacare repeal. But they didn't seize it. Quite the contrary; they've made it, I fear, the new normal. And we will pay the price for that down the road, for sure.

[UPDATE: Because of a technical glitch, the author's name didn't at first appear at the top of the post; this has now been fixed.]

NEXT: The Year in Teen Sexting Panic

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  1. “But like I said, I’m no expert, and I suppose we’ll see.”

    This would be easier to evaluate if this post had somebody’s name on it.

    1. It’s the new “guess the blogger” feature.

      1. (and no, it’s not me!)

      2. My guess is David Post.

        1. I think you’re correct. It’s got all the hallmarks. Whining, hysterics, anti-Republican derangement.

          1. My thought after the first paragraph

          2. There are perhaps two Conspirators who do not incessantly whine. Not all readers are immune to right-wing whining.

            Carry on, clingers.

      3. I have confirmed that it’s a David Post post.

    2. I’m not sure it would be easier to evaluate with the poster’s name on it, but it would be easier to evaluate if we knew where he copied all the talking points from.

  2. “I know there are some people who respond to this charge with some variant of “Well, the Democrats did that too, when they controlled Congress and the White House, in 2008-09, with Obamacare . . .” The response is the same as to the “But he started it!” defense familiar to anyone with a 9-year old around the house: other peoples’ misbehavior does not justify your own. There’s a right, and there’s a wrong, way to conduct yourself, and it does not depend on the extent to which others do or do not conform. The Republicans had a chance to do this the right way, a chance I thought they might seize after the initial failure of the Obamacare repeal. But they didn’t seize it. Quite the contrary; they’ve made it, I fear, the new normal. And we will pay the price for that down the road, for sure.”

    In theory, I agree. That said, Republicans have been taking the “moral high road” for the past 70 years, while the country rapidly moves farther and farther to the left. Civility should not be a suicide pact.

    1. The “suicide” is failing to adhere to the norms. You can’t save the baby by killing it.

      And your premise is ludicrous since Republicans haven’t held both houses of Congress for the past 70 years.

      1. Things I miss:

        ? “Like” feature
        ? “Ignore” feature

        1. Appropriately, also:

          ? Edit feature

      2. No, it’s not. The Republicans have always played by the rules. The Democrats don’t. They follow a “by any means necessary” approach.

        1. Merrick Garland.

          1. First time the Republicans didn’t.

            1. Ell oh ell.

          2. Just because y’all didn’t like the GOP advice on Garland doesn’t mean it wasn’t given. IOW they followed the Rules as written and put in place by Democrats.

            Now if you want to bring that up, shall we talk about Progressive Democrats with complete control of Congress couldn’t even pass a budget for over 5 years? The only thing they passed in the tax realm was PPACA which they claimed wasn’t a tax bill.

            1. “…shall we talk about Progressive Democrats with complete control of Congress couldn’t even pass a budget for over 5 years?”

              What are you talking about? The last time Democrats controlled both houses for 5 or more years was in the early 90s.

          3. What rule was violated with Garland?

            1. The rule that you respect the Office of the President enough to give its nominees to the Supreme Court good faith consideration.

              1. So no rule.

              2. The Senate has the power to make its own rules, and they can certainly pass a rule saying that a nominee must be given a vote, or that a nominee who has not been given a vote is deemed consented to. Perhaps the Dems will win control of the Senate and pass such a rule.

                But there is currently no such rule, and it seems odd that you would insist that there is.

            2. Bob, are you being disingenuous?
              There are rules that are not laws.

              1. “There are rules that are not laws.”

                Of course, did I say otherwise. There are procedures and regulations and rules too, all written when it comes to government action.

                If a rule was violated, what was it?

                Hearings only? Committee vote? Full senate vote?

                None of these are required by any rule.

                1. I have my opinion (Hearing) but the more ridiculous thing is your requirement that a rule be something you can write down. If you could write it down, someone would.

                  Can you write down everything that is required by courtesy? Respect? Good faith? No. But I sure know when someone isn’t offering those things to me.

                  1. I think what you’re talking about is a “convention.” Conventions are not binding rules but customs. And I agree that you can’t write down all conventions.

                    The questions in the Garland case are – what precisely was the convention, and when is it bad form to flout a convention ? The two questions are obviously related.

                    Was there a special convention for SCOTUS nominees which didn’t apply to other nominees as to their “right” to a floor vote ? The trouble with conventions not being that well defined is that there is plenty of room for disagreement about the contents of the convention.

                    As to the propriety of flouting a convention, we need to look at the purpose and value of conventions. And as has been said elsewhere, in a two person game, if the first player flouts conventions, then the incentive for the second player to abide by convention is reduced. The GOP has somehow got the impression that the Dems are not big on following convention when it’s their at bat. Perhaps it’s al very sad, and the Dems never felt they were breaking convention when they changed the filibuster rule on a straight majority vote. But somehow the GOP got the impression that they were. And so even if the GOP had thought that denying a SCOTUS nominee a floor vote was a breach of convention, they could see a dozen Dem breaches of convention sitting on the Courts of Appeals and no longer felt that that turning the other cheek was the right convention to follow.

                  2. “But I sure know when someone isn’t offering those things to me.”

                    Sure. Courtesy is a lot like pornography.

                    1. What’s obscene is a question based on norms, so you get the exact same fuzziness in nailing that down as well.

                  3. There are nearly a dozen non votes of USSC nominations in the last 100 years. There is no rule. Wiki has the list.

                2. Yes, full Senate vote. Because that’s what the Constitution stipulates?the advice and consent of the Senate?not of the majority caucus, still less of the leader of the majority caucus.

                  Understanding that, of course, still leaves aside the outrage of asserting that no other nominee from Obama would get full Senate review either. Yeah, that breaks a rule.

                  And today, this afternoon, McConnell was interviewed on NPR clucking about the necessity for Democrats to render bi-partisanship while Republicans start their planned attack on Social Security and Medicare. I don’t like Democrats, mostly. I think they are spineless. But I doubt McConnell will discover they are that spineless.

                  1. Stephen L : “Yes, full Senate vote. Because that’s what the Constitution stipulates?the advice and consent of the Senate?not of the majority caucus, still less of the leader of the majority caucus.”

                    You’re misreading it. It’s a Presidential power, subject to a condition (the advice and consent of the Senate.) If, and only if, the condition is fulfilled, does the President have the power to convert his nomination into an appointment. So yes a full Senate vote to consent is required to meet that condition – consent of the majority Leader is insufficient. But a full Senate vote to refuse consent is not required to fail the condition. Any states of the world, except a full Senate vote in favor, is the absence of consent by the Senate. Such states can include a full Senate vote declining consent. But it also includes the nominee being held in Committee, the nominee never even making it into Committee, the complete lack of any Committee system in the Senate, the lack of a quorum to conduct a Senate vote, the adjournment of the Senate, and the Senate being swallowed whole by a large Swamp Crittur. All of these things are examples of the absence of consent by the Senate.

                    1. That reading of “advice and consent” is hard to square with the recess appointment power.

                    2. The recess appointment power is an explicit exception. Which is limited to temporary appointments, and it is plainly consistent with the idea that the Presidential appointment power is conditional on Senate consent.

                      When, by reason of it being in recess, it is impossible for the Senate to consent, the President is allowed to do a short term fill in, since there might be an emergency requiring an officer asap. But he’s not allowed to make an indefinite or lifetime appointment.

                      Moreover from a purely textual point of view the recess appointment power confirms the reading I have explained. It shows that – absent the recess appointment power – it is clear beyond doubt that the Senate’s failure to consent, however that failure comes about is sufficient to prevent the President making a regular appointment. And it shows that the Senate has no duty to vote on a nomination.

              2. “There are rules that are not laws.”

                There are also rules that are not rules. This is one.

            3. Nothing in the Constitution suggests that the intention of having the Senate “advise and consent” on judicial appointment was to give the Senate (and the House, by virtue of the rule that the two houses must consent to an adjournment of more than three days and the now-holding regarding “recess” appointments) the power to completely usurp the presidential prerogative to make judicial appointments. That’s the “rule” in question here. A simple flouting of the constitutional structure.

              1. Obama made an appointment, nothing was usurped.

                What part of the “constitutional structure” requires hearings or votes? Plenty of judges have never gotten them.

                1. Do you think you’re convincing anyone, Bob? Anyone at all? Even people who like that Garland was blocked? Not even ARWP is with you.

                  1. “Do you think you’re convincing anyone, Bob? ”

                    If that was the standard, the internet would be barren.

                    12 and Lee agree with me in any event.

                    As Lee says, it was a loose custom, not rule. It is a custom to put up a Christmas tree if you celebrate Christmas, it is not a rule.

                    If a vacancy is too close to the election, the custom is not followed. Happens all the time for lower courts.

              2. 1. “Usurp” doesn’t mean what you think it means. The Senate would have usurped the President’s power if it had started appointing judges itself.

                2. Actually the condition that the President’s judicial nominations require the advice and consent of the Senate before he can make an appointment is pretty clear evidence that the Constitution not merely “intends” but states explicitly that the Senate has complete power to prevent the President making appointments without consent.

                3, Just out of interest, what’s your view of the Constitution’s “intentions” regarding Congress’s power to pass laws ? Is a Presidential veto an abuse of Congress’s prerogative in the legislative realm ? Or an explicit power granted to the President intended to fetter Congress’s legislative power, whose exercise its entirely consistent with the Constitutional scheme ?

          4. wiki has a whole list of nominations never voted on for the supreme Court. It is about a dozen. But keep thinking Garland was the first narrative since it fits your narrative.

            1. Yes, this Garland thing is indistinguishable from other nominations that weren’t voted on.

              Sheesh.

              1. How about this one:

                “Early in 1881, President Rutherford B. Hayes nominated Thomas Stanley Matthews for the position of Associate Justice. Matthews was a controversial nominee due to his close ties to the railroad industry,[18] and as the nomination came near the end of Hayes’s term, the Senate did not act on it.”

                Senate did not act on a last year of a term nomination, just like Garland.

                1. Since the exception goes back to 1881, you’ve just proven the rule.

                  1. How many Supreme Court vacancies occurred in the last year of a presidency with the opposition party in control of the Senate since 1881?

                    Rule: Civil War is impossible in the US. Reply: We had one in 1861. NtoJ: Ha, you have to go back to 1861, rule proven!

                    1. Thomas got a vote 17 months before the end of HW’s term, Kennedy got a vote 14 months before Regan’s term ended. Stevens got a vote 14 months before Ford’s term ended. Matthews’ predecessor William Burnham Woods was confirmed a year before Hayes’s term ended. Melville Fuller was confirmed in Cleveland’s last year.

                      But why use Matthews? He was confirmed shortly after when the next president nominated him. That didn’t happen to Garland.

                2. Garland was not a controversial nominee – Obama was the problem.

                  So still not a precedent, Bob.

              2. “Yes, this Garland thing is indistinguishable from other nominations that weren’t voted on.”

                Aren’t you the one always whining about people not making substantive comments? Where’s the substance here? If you think it’s distinguishable, then distinguish it. And make a case for why your chosen metric actually matters.

                1. The substance is that Bob’s statement that the Garland/Gorsuch fracas is nothing special is incorrect.

                  Bob provided no examples, so I didn’t have anything to distinguish. Then he came back with one, which a number of people including myself have issues with.

                  So yeah, I’m pretty comfortable with my substance level.

                  1. “So still not a precedent, Bob.”

                    Sure it is, you cannot wave it away by focusing on “controversial”. Garland was controversial since he would tip the GOP/Dem balance. I do like the racism card casually played.

                    I would also point to multiple court of appeals/district ct. nominations in many administrations that are not voted on in the last months of the term.

                    1. Controversial for partisan reasons is a completely different thing from partisan for specific personal history.

                      Appellate Courts could be a precedent, but again they’ve always had at least the appearance of being held back for judge-specific reasons, not party-specific reasons.
                      =====================
                      It’s weird how you’re working so hard to build up pretense for this nakedly pretenseless partisan act.

  3. Who is the author of this article?

    1. Somebody working for George Soros?

    2. Per curiam?

    3. I’m assuming David Post, from the tone.

      1. That was my guess, too.

  4. If I go to the previous post and look at the prev/next breadcrumbs at bottom of the post, it looks like this is an Ilya Somin post. But there’s no mention of the name on this page in an apparent author-identifying position. (Nor is there in the feed, which is where I originally noticed the absence of author info.) Meanwhile, if I look at this earlier post, it clearly identifies Ilya as author just to the left of the date atop the post.

    So I’m confused: is this an Ilya Somin post, or someone else? My best guess would be David Post, even if that contradicts the weak breadcrumb evidence.

    1. I assume it’s Somin, given that his name appears attached to the “Next” article when you read Kerr’s post about Katz. I’m new to Reason, but does its “PREV/NEXT” feature regularly screw that up?

      1. I’m new to regularly reading comments on any portion of Reason now, so I couldn’t say about prev/next screwups. 🙂

        I don’t think it’s Ilya because Ilya’s posts mostly seem to me to be unfailingly earnestly analytical and not particularly conversational in tone. David Post seems likely because he does write somewhat conversationally, he’s opposed to a lot of Trump and current Republican ideas (or “ideas”, depending how snarky one wants to be), and other conceivable suspects seem out. (Orin’s not going to complain about policy he’s not familiar with, EV generally touches on policy only through the legal lens, the ideas here don’t clearly interest Sasha, the other recent new faces have only talked about law stuff and not politics before, etc.) Even if that means assuming the prev/next thing is a site bug.

        1. Certainly looks like a bug to me, now that Eugene has posted about the duty to retreat. The “Previous” article at the bottom doesn’t have a byline attached.

      2. What!? No political ignorance…foot voting….open borders…..or visceral hatred of Trump? And a libertarian feigning ignorance of whether a tax cut might be good? No way.

        1. Meh. How do Ilya’s anonymous blog posts usually sound?

          1. Not like they were written to be posted on Daily Kos

  5. It’s a fun new game on the VC: Guess the author of the post!

    I guess … David Post.

    1. Reasoning: he’s the most apt to regurgitate lefty talking points, like here.

  6. I love this post, even more because it’s anonymous.

  7. I am having the exact opposite reaction as the author. For the first time in a long time I feel a sense of calm optimism about our economic future. And I am amazed that the Republicans were actually able to do something this smart!

    I am struck by the alternative reality implicit in the criticisms of the plan. Critics claim that the tax bill gives money away, when quite the opposite is true. The tax bill is just that, a tax bill. It will extract massive amounts of money from the US economy, mostly from the rich and corporations (as it does today).

    Consider that only 20 years ago, the top tax rate was 28%, yet it will be 40.8% once the bill is signed (when one considers the 3.8% Obamacare surcharge). 40.8% is higher than the top rate of the Clinton tax hike, which defined the “fair share” of taxes owed by top earners as 39.6%.

    US Federal taxes are still high, but at least Congress and President Trump together took a small step in the right direction.

    1. I am struck by the alternative reality implicit in the criticisms of the plan. Critics claim that the tax bill gives money away, when quite the opposite is true. The tax bill is just that, a tax bill. It will extract massive amounts of money from the US economy, mostly from the rich and corporations (as it does today).

      As somebody whose property taxes alone make up 80% of the new itemized deduction limit, I’m struck by how little connection you appear to have to this particular reality.

      1. So you are paying lots of taxes? Exactly my point.

        1. I’ll be paying more than I would have, which is? the opposite of your point.

          1. So you are saying that you can deduct all of your property taxes?

            1. Are my property taxes the only deduction that’s capped?

          2. You’ll be paying the same amount of taxes as a guy with your income would in a red state. Horrible.

            1. No, I won’t.

              1. federal taxes.

                1. So you’re in favor of centralized federal power?

                  1. In levying federal taxes, who’s against centralised federal power ?

    2. Consider that only 20 years ago, the top tax rate was 28%

      Well, to start with it was 28% only from 1988 through 1990. In addition, dividends received no special tax treatment, and capital gains were more highly taxed than they are today.

      1. You are correct that there has been some slight relief on the corporate earnings front:

        1988: 33% corporate rate + 28% personal rate * 67 cent distribution after corporate tax = 51.76%

        2017: 21% corporate rate + 23.8% * 79 cent distribution after corporate tax = 39.8%

        So there has been a 23% tax cut for corporate earnings over 20 year and 45.7% increase in taxes on ordinary income, essentially eliminating the penalty for C corporation earnings vs. other earnings.

        1. OK, maybe moderate relief. (I miss the WaPo edit feature–but nothing else.)

      2. Capital gains and dividends were taxed at 28% 20 years ago and 23.8% today. Not much of a cut.

        1. 15% for non-putocrats.

  8. So far it’s all ‘who’se responsible this!!??’ and that three named guy wishing for more petty revenge.

    Darkest indeed.

    1. When authors have always identified themselves before, the one post that seemingly doesn’t stands out.

      Also seems like there are a ton more tax policy experts around here familiar with all the various components of the bill, than I’d expect. 😉 I didn’t touch the policy of it because while I can have an opinion on any individual part of the bill, I don’t have near the sense of the overall bill to say which of positives and negatives is greater.

      1. Well, that’s part of the process complaint related to the bill:

        Not a single public hearing on a bill that has the potential to be the most significant economic legislation in decades. No real public debate, because nobody – except the lobbyists, of course – knew what was in the (400-page) bill until it was basically time to vote. No “experts” – God forbid! – giving us their analyses of the bill’s provisions; the only interest anyone seemed to have in the CBO analyses was in the estimate of the cumulative 10-year effect on the deficit?

        1. Fair enough. I’m not particularly happy about the process here, nor the bare partisan vote rather than attempting to garner even a little bit of support from the other side. (And I think some was plausible if a revenue-neutral bill had been attempted, a la 1986, or something more in that direction.)

          But I’m misrepresented by the Feinstein/Harris/Eshoo triad, and there’s not a chance in the world anything I could have done would have affected their votes, or gotten them to make contributions to the bill to improve it even while they voted against the final product. (For starters, I think that SALT deduction absolutely should go — even if it hurts me.) So because it’s pointless for me to have cared about how we were getting here, I’ve never tried to dig into a full list of all the most notable changes made.

          1. I just really wish I’d known the SALT deduction hit was on the table before I bought my condo in July. And I really don’t think Walters is doing me any favors down here.

            1. Maybe you should work to get your state/local governments to lower their taxes then.

              1. I think I’ll just help to take the House of Representatives from you next year.

                1. Go ahead. That won’t restore the lost partial deduction.

                  1. You wanna bet, Bob?

                    1. You realize, Ike, that tax changes take both the Senate and president to agree right?

              2. The race to emulate Alabama-Mississippi-Oklahoma-[insert backwater state]?

                Carry on, clingers. So far as your lousy educations, bigoted souls, superstition-laced gullibility, and can’t-keep-up-backwaters can carry you, anyway.

            2. SALT deduction doesn’t effect your mortgage interest deduction… Unless your mortgage is more than 750k you’re not effected.

  9. “Why the GOP Tax Bill Stinks”

    “Maybe this will work, and will give the economy a big boost, raise wages, increase investment, etc. I’m no expert, and my ability to foresee the future is no better than anyone else’s.”

    What an interesting writing style you have.

  10. IIRC, at least one Conspirator supported Eric Holder’s nomination for AG, praising his ethics. Does anybody remember who that was? Given that, this article is not that surprising.

  11. Maybe this will work, and will give the economy a big boost, raise wages, increase investment, etc. I’m no expert, and my ability to foresee the future is no better than anyone else’s.

    It doesn’t take a highly trained chef to smell a rotten egg.

    This bill is an abomination. Almost every argument in its favor is a lie, including, as the cherry on top, Trump’s claim that it will cost him dearly. (Nice going, Sen. Hatch, sneaking a few million extra for real estate developers in in secret.)

    1. Even the Tax Policy Center stated this bill makes the tax code more progressive than it currently is. The rich will pay a higher percentage of the federal taxes.

    2. Even the Tax Policy Center stated this bill makes the tax code more progressive than it currently is. The rich will pay a higher percentage of the federal taxes.

  12. High partisanship post. Poster thinks corporations are evil entities, as opposed to being owned by individuals such as myself. (retirement stock accounts) Thinks that for some reason cutting taxes on corporations will not benefit individuals at all. I’m wondering if they ever took an economics course so lets try basic math.

    The $2Trillion sitting overseas is not going to be taxed by the US until it is brought back. Previously this would have been at 35%, pretty much the highest in the world. Lowering it to 21% brings this in line with most of the rest of the world. And from the response so far is encouraging the money to be brought back.

    So, 35% of nothing is nothing. 21% of $2 Trillion is $420 Billion.

    1. The point of the $2 trillion isn’t the tax revenue. It’s that you, an investor, clearly aren’t getting the returns on it that you think you will, and lowering taxes isn’t going to make it more likely than today that the $2 trillion (plus) will get spent.

      1. Eh ? There’s no reason why corporations with a big pile of untaxed money outside the United States can’t invest it in projects outside the united States. A hefty tax bill on repatriation simply deters investment in projects in the United States, creating jobs in the United States. But, hey, whatever floats your boat.

        1. If what you’re looking to deal with is the repatriation hit, guaranteed there are better ways to do it than this bill.

          1. I’m open to suggestions. I don’t know whether there’ll be a lot of cash repatriated at a 21% rate, but if there is, at least it’ll raise some revenue. The Bush 5% special deal certainly helped repatriate profits, but it didn’t raise much tax money.

            The thing with taxes is that people – particularly corporations which do a lot of actual calculating – take into account expectations of future tax rates as well as current rate. If you expect tax rates to come down, you’ll keep your money offshore. If you think tax rates are going to stay the same or rise you have more incentive to bite the bullet. The GOP having shot its corporate tax bolt, corporations will not be expecting any more tax cuts. Meanwhile through the Obama years they could afford to sit and wait. There was always the possibility of a tax cut in the future.

            My guess is that there’ll be quite a bit of repatriation and quite a bit of tax raised as a result. But it’s only a guess. But if you have a good plan that’ll encourage more repatriation and raise some revenue let Gary Cohn know. I’m sure he’d be interested. And if you and Gary Cohn can agree then it’ll sail through Congress next year, I promise.

    2. It doesn’t take believing corporations are evil to realize that even a 21% tax rate isn’t going to make them return their legal domiciles to America.

      1. You are totally right, its an expensive move to make whether you are leaving or coming back.

        But its not a bad idea to remove the incentive to leave, even if you can’t get everyone that has already gone to come back.

        We should also go with a territorial tax system for individuals, I hope that is coming soon too.

        1. I don’t think we can compete with the countries that are popular tax havens.

          Don’t most countries have some excise tax or something that disincentivizes offshoring?

          I’m not optimistic any fundamental changes to the status quo are coming soon, but do you have any links that explain what a territorial tax system is?

          1. A territorial tax system is one that taxes income based on where it was earned, not the national status of the corporation or person. The main reason its a problem for people is the IRS’s draconian record keeping requirements for people that live overseas.

            U.S. FATCA tax law catches unsuspecting Canadians in its crosshairs

            Or take the case of an American retiree who moves to Thailand to retire and opens a bar with his Thai wife. He then has to file taxes based on not only his US pensions and Social Security, but all of his income from his bar, including self employment taxes, and any interest he may receive from a Thai bank, or capital gains if he sells his Thai condo. He can deduct any foreign taxes he has to pay but the record keeping would be a nightmare. A fair and reasonable system would be for him to pay taxes on his US derived income, and pay Thai taxes on his Thai income but not have to keep records and file any US return on foreign income when he is residing of foreign soil.

            1. As an ex-expatriate (repatriate? Patriot?) this is a bit overblown. Yes, you have to file your taxes. But unless you are actually living in a tax haven, you don’t have to pay any taxes to the US government, unless you’re earning a lot more money than the average American. The recordkeeping isn’t really a nightmare, presuming that you’re actually paying local taxes. Also, I’m not sure a retiree on a pension opening a bar is anywhere close to the typical situation for expats.

              But, speaking to Sarcastr0’s question about offshoring, yeah, it’s really hard to compete with Hong Kong’s 0% tax on profitable transactions with no physical presence on the island (and maximum 16% tax on all other profitable transactions). Not only is it hard, it’s a really dumb idea, because businesses don’t invest in the United States to evade taxes (and they never will), they do it to gain access to American wallets. And if the tax cut isn’t doing that much to further open American wallets, the reason you don’t change your business strategy is because there’s no different business to be had, no matter how attractive the tax rate is.

    3. So, is that what this is? We’re taking on $1 trillion in debt to fatten your stock portfolio?

      1. Yes, it’s a total shame that the Republicans couldn’t also pass massive spending cuts. Maybe when the Democrats take over next year, they’ll be able to reduce the deficit and debt by not spending so much.

      2. The surging stock market must also be doing something for all those seriously underfunded public employee pension systems, too — no?

        1. It’s amazing that the public employee pension systems are still so underfunded in spite of the stock market hitting record after record. It just goes to show how mismanaged those systems are as well as how much governments everywhere overpromise benefits that the law makes very difficult to undo.

      3. Why are liberals so concerned with the 1 trillion from this bull when the baseline deficits prior to the bill are already more than ten trillion? It just makes you seem dishonest.

        1. If Dems are being dishonest with their sudden deficit concerns, what about the GOP’s decades-long concerns suddenly becoming less important?

  13. High partisanship post. Poster thinks corporations are evil entities, as opposed to being owned by individuals such as myself. (retirement stock accounts) Thinks that for some reason cutting taxes on corporations will not benefit individuals at all. I’m wondering if they ever took an economics course so lets try basic math.

    The $2Trillion sitting overseas is not going to be taxed by the US until it is brought back. Previously this would have been at 35%, pretty much the highest in the world. Lowering it to 21% brings this in line with most of the rest of the world. And from the response so far is encouraging the money to be brought back.

    So, 35% of nothing is nothing. 21% of $2 Trillion is $420 Billion.

  14. Maybe this will work, and will give the economy a big boost, raise wages, increase investment, etc. I’m no expert, and my ability to foresee the future is no better than anyone else’s. It does strike me as peculiar to believe, at a time when US corporations are sitting on around $2 TRILLION of cash?

    Maybe what we should do is lower the corporate tax rate, which will encourage them, instead of sitting on cash, to expand their businesses, purchase more materials, and hire more workers, since no longer would an inordinate amount of the additional income from such expansion be confiscated by the government. Just a thought.

    1. What do you think they are earning on that cash? Even allowing for taxes, they probably would not need for new projects to be wildly profitable to beat the return on cash. Maybe the incremental profits just aren’t there. Build all the factories you want. If nobody buys the stuff you make the tax date is irrelevant.

      Why do you think a roomful of CEO’s told Gary Cohn they did not expect to expand much in response to the tax cut?

      1. Even allowing for taxes, they probably would not need for new projects to be wildly profitable to beat the return on cash.

        What’s the return on cash now? About 1.5%? What’s the average annual net profit of a small business?

        The average net profits of a small manufacturing wood products business, with $2 million in revenue annually, according to the website “Biz Stats,” is 14.56 percent per year. Medical equipment and suppliers, with $2 million in revenue, have a net profit margin of 26.95 percent annually. By contrast, computer and electronics products return a net profit of 53.94 percent, and the food processing sector, according to “Biz Stats,” has a net profit margin of 10.28 percent. http://smallbusiness.chron.com…..23368.html

        This looks like a better way of investing the money. Of course, if the stock market is booming then that’s a good bet, but that can’t be counted on. And if they invest in expanding their own business they know what they’re doing, unlike when they invest in the stock market.

        1. I don’t doubt that the return on capital in a small business is going to be better than sticking the money in the bank – albeit much riskier. But I think the figures you link to need to be taken with a large pinch of salt. You’re looking at some pretty small businesses there, with “net margins” of a few hundred thousand dollars. I would be fairly confident that in a small family business with profits of say $300,000 a goodly chunk of those profits are really wages for the owner (and family) in disguise. The actual return on capital is likely to be rather lower.

          My cousin for example makes between $100,000 and $300,000 a year from a couple of small businesses that he owns, but there’s probably only $200,000 capital employed. He’s not getting a 100% return on capital. The “profits” are basically a (variable) wage for the work he and his wife do.

      2. Why do you think a roomful of CEO’s told Gary Cohn they did not expect to expand much in response to the tax cut?

        Your link is broken but I know what you’re talking about. However, this study compared the effects of high and low state income tax and found that unions and employers share tax savings associated with low tax rates. In particular, workers in a fully unionized form capture roughly 54% of the benefits of low tax rates. An earlier paper found that firm owners bear roughly 40% of the incidence of state corporate taxes, while workers and landowners bear 30-35% and 25-30%, respectively.

        If investor A invests in company X it must be because he expects company X to be more profitable than other types of investments. The investor is satisfied that company X’s business activities can provide the dividends or growth desired. If company X has the option of expanding its business why would the investors be opposed to that if they’re happy with the way the company is run? Wouldn’t an expansion just give them more of what they already determined they like?

    2. You don’t actually work in executive management, do you?

      1. Another drive-by insult.

        1. Drive-by compliment more like. It’s not like he called you a lawyer.

        2. That’s a “No?”

          1. What’s a “No” to what ?

            1. The original question.

            2. To clarify, I was responding to swood1000. This? isn’t a great commenting system.

              1. Oh, OK. Obviously I don’t know whether swood works in “executive management.”

                But if the question was intended as an ad hominem, then while it’s probably true that the majority of people who understand how businesses appraise investment opportunities do work in executive management, they’re not the only ones.

                There’s advisers and consultants of all sorts ; investment bankers; and academics (some of whom will know something about the practicalities as well as the theory, as they may also be consultants or former consultants.) And there’ll be retired versions of these folk. So not everyone who understands the subject stands to benefit from corporate tax cuts. Indeed those who advise specifically on the tax aspects – probably stand to lose. Just as a lower tax rate increases the return on productive investment, it reduces the return on tax planning.

                Moreover, only a minority of people working in executive management will understand how investment appraisal is done in real life, since lots of them will be worrying about sales or personnel or IT systems.

                All in all it’s a pretty low grade ad hominem. If swood was a major league corporate director in charge of investment projects, he* probably wouldn’t have the time to post here.

                * I use the traditional unisex “he” – if swood is female and objects I preemptively apologise

                1. Lee, you seem to be approaching this from the analysis of an investor. That’s not what I understood swood to be talking about:

                  Maybe what we should do is lower the corporate tax rate, which will encourage them, instead of sitting on cash, to expand their businesses, purchase more materials, and hire more workers, since no longer would an inordinate amount of the additional income from such expansion be confiscated by the government. Just a thought.

                  He’s talking about businesses expanding. The tax code really doesn’t do much to guide business expansion. Like, I’m an executive in manufacturing, and we’re definitely going to be buying more raw material and machinery over the next 12 months but we made that call long before this week. Because the tax code isn’t what’s guiding us.

                  1. Like, I’m an executive in manufacturing, and we’re definitely going to be buying more raw material and machinery over the next 12 months but we made that call long before this week. Because the tax code isn’t what’s guiding us.

                    But wouldn’t there be many who would make that call now, because the increased net income makes opportunities available that weren’t available before? Sure, investors could demand that it be released to them in dividends but if they don’t think the company is a good investment why did they invest in it in the first place? Furthermore aren’t there many who would prefer an action that tends to produce capital gains upon selling their stock, over one that will produce dividend income?

                  2. I don’t follow the distinction between the “analysis of an investor” and “[the analysis of] businesses expanding.”

                    A business expands by making investments. It might invest by buying a competitor, hiring more workers, stockpiling raw materials, building a new factory, and so on. All these require capital (a new worker doesn’t start making you profits on day 1.) Appraising business expansion possibilities IS the “analysis of an investor.”

                    If you mean there’s a difference between deciding what stocks to buy based on published financial data, and deciding whether to build a new factory and hire 800 new workers to work in it, the difference is in the detail not the substance. It’s all about answering the question – has this got good odds of making a good return, and is it a better bet than the alternatives. The expected return (including taxes) is critical. As of course is the risk.

    3. I have a hard time believing that anyone who believes this crock knows anything about managing a business.

      Here’s a tip: You don’t hire people or invest in materials (“materials”?) unless you can make a business case for it. Do you actually need that worker? Do you need more inventory or production capacity? Lowering the tax bill frees up cash, but it’s not like corporations lacked cash. Interest rates have been low, corporate profits high. All that a tax cut really means for them, in terms of cash flow needs, is that they have access to a little more cash interest-free. Which no business worth its salt was actually holding its breath for.

      That’s why the stock market is up and the corporate executives are grinning. They know what they’re going to do with this money, and it’s: buy back stock. Pay dividends to shareholders. Engage in M&A. Oh, and gosh, wouldn’t you know? It’ll do wonders for their compensation packages. We’ll see a burst of frothy activity and then you’ll have to just pray that Trump doesn’t invite a nuclear war or have to steer us through a major economic crisis – because it’ll be all well-primed to come crashing down again.

      1. Half of America owns stock in some account or another. Buybacks and dividends will benefit many, many people.

        1. You could also, y’know, just directly lower the taxes of those many, many people by even more if that’s really what you want to do.

          1. Now that is pretty funny. You’re OK with reducing taxes directly on investors, but not OK with reducing taxes on corporate profits. What’s the difference ? Well reducing taxes on investors benefits investors. Reducing taxes on corporate profits benefits investors…to some extent. But some – perhaps most (see Buffett W on this) – of the benefit will leak out into the pockets of employees (new jobs, higher wages) and customers (lower prices.) And what sticks in your gullet is,,,,,the benefits to employees and customers !

            Just out of interest does the B in Ike B. stand for Burns ? Was your grandpa called Montgomery ?

            1. I’m responding to buddhastalin’s argument that the tax cut is good because it will lead to dividends and stock buybacks. Which, to me, isn’t like a great thing to be incentivizing through the tax code, but even if it was, this bill isn’t a super efficient way to do it, right?

              1. That wasn’t buddhastalin’s argument though.

                SimonP claimed the only result would be buybacks and buddhastalin said what’s wrong with buybacks.

                And the answer is there’s nothing wrong with buybacks. But as discussed Simon P is wrong. His temper has got the better of him. More buybacks will be some of the result (resulting in more taxable income btw.) But the rest of the result will be more investment projects going ahead, lower prices, higher wages and more jobs.

      2. Here’s a tip: You don’t hire people or invest in materials (“materials”?) unless you can make a business case for it. Do you actually need that worker? Do you need more inventory or production capacity?

        I’m sorry if I gave you the impression that I thought that business would take actions without having a valid business plan. Businesses that have no ideas about how to expand their operations will likely pay it out in dividends. But many businesses no doubt have many ideas about how to expand their operations. If they have been a profitable company why wouldn’t that be an attractive way of increasing their profits?

        Furthermore, there’s no doubt that a lower corporate tax rate will encourage foreign investment in this country.

        1. Foreign incorporation.

  15. The corporate tax rate cut was a long time coming. Obama suggested it should be cut to 28%, so that tells you right there that it was way too high.

    We had the highest statuatory rate and almost the highest effective corporate tax rate.

    “Out of the 34 countries in the OECD, America ranks first with a 39.1 percent corporate tax rate, compared to an OECD average of 24.1 percent. The OECD figure is what’s called the statutory rate, meaning the base rate applied to corporate profits.”

    “The most recent estimate comes from the World Bank and International Finance Commission, which put the United States’ effective rate for 2014 at 27.9 percent. That’s second-highest behind New Zealand among OECD countries and 15th-highest among the 189 countries measured.”

    Does the U.S. have the highest corporate tax rate in the free world?

    1. From the same article:

      Another 2011 study by the Congressional Research Service put the U.S. effective rate at 27.1 percent, slightly lower than the OECD average of 27.7 percent.

      1. You can always tell when someone replies without reading your comment.

        What’s the difference between the 27.9 2014 effective tax rate I quoted and the 27.1 2011 rate you quoted?

        1. I read your comment. Why do you think otherwise?

          The difference is that in one case the US rate is average, in the other it’s high. There is a lot of discussion of this point. Was it too high? Maybe. You would have gotten some agreement from Democrats on that, as you point out. But that doesn’t make the cut to 21% justified.

    2. This canard comes with too many hidden caveats that it really needs to stop being passed about. Talking about the nominal corporate tax rate, in isolation from an entire structure of tax rates, is highly misleading (and many of you have been easily misled by it).

      So, sure, you look at that 39.1% number – yeah, seems high. But what about VAT? What about individual tax rates? The comparison you’re drawing is cherry-picking at its finest, omitting contextualizing comparisons showing how the U.S. is substantially below average – we don’t even have a VAT, unlike virtually every other developed economy in the world.

    3. The effective rate is a meaningless number, since no income is taxed at that rate.

      It is the marginal rate that matters, since that is the tax rate on the next dollar of income.

      1. Depends on what you are evaluating. If you are looking at the overall tax burden the effective rate does matter.

        Besides which, it is not necessarily the case that the nominal top rate is the marginal rate. Some investments enjoy various tax privileges which effectively reduce their taxes, marginal or not.

  16. “Why the GOP Tax Bill Stinks”

    1. Progressive Democrats have been crapping on it.
    2. Progressive propagandists (MSM) have been crapping on it.
    3. Progressives never clean up their crap.

    It’s no wonder it stinks with so much crap floating around.

    1. Lots of words to say ‘Fake News.’

      If you don’t engage the substance of why the criticism is crap, then all you’re doing is validating your side by hating on the opposition.

      Such tribal disengagement by all sides is dangerous in a Republic.

  17. Someone misplaced their Democratic Conference talking points…

  18. The Conspiracy proudly presents its version of the low information blogger. With so many errors, clerical and substantive, I wouldn’t sign it either. But, let’s start with this. The real corporate tax rate should be zero. This because, fundamentally, corporations are tax collectors not tax payers. The only thing a corporate tax does, and it does this well, is distort the efficient access to capital.

    could explain this but I won’t; You figure it out.

  19. Best thing about this bill is the “tax” for not having health insurance was zeroed out.

  20. While I agree with the spirit of the comment that notes that no tax measure “gives away” anything [“Critics claim that the tax bill gives money away, when quite the opposite is true. The tax bill is just that, a tax bill. It will extract massive amounts of money from the US economy, mostly from the rich and corporations (as it does today).”], I’d clarify that a tax which is lower than a previous tax presents a unique opportunity: while one is required to accept and pay a higher tax rate, one is NOT forced to accept a pay a tax rate lower than that which he currently pays.

    One who is opposed to his new lower tax rate is free to voice his objection by refusing to pay lower taxes: in contrast, one who is opposed to a higher tax rate must actually pay the higher rater. Imagine if just two of the multi-millionaire one-percenters in Congress (perhaps Democrat Pelosi in the house and Democrat Warner in the Senate) refused their tax cuts!

    The fact that a lowered tax rate presents an alternative to every taxpayer distinguishes the product of Trump’s Congress from that of (for example) the Obama/Pelosi Congress, which used its power to saddle every American with a massive tax increase (euphemistically called “The Mandate” in an effort to make the rotten fish smell better). The final paragraphs of the original post neglect the distinction, leading to a logically flawed argument.

    1. Don’t worry, I won’t have the choice – I’ll get to pay more in taxes, right from day one. I don’t know why I, an upper middle class professional living in a blue city and state, needed to pay more so that corporations could pay half as much, but so goes the boundless wisdom of the modern GOP.

      My only consolation is that the rest of you wage-earners will catch up in a few years. Again, so that corporations could get their permanent tax cut. Because businesses don’t do so well with uncertainty, y’see, unlike us lowlifes.

      1. It is not clear why blue state folks should be able to vote for higher Federal taxes and then shelter their own citizens via the SALT deduction (leaving red state folks who voted against higher Federal taxes holding the bag).

        This is an equity issue that is unrelated to the corporate tax rate.

  21. Why might a corporation already sitting on a large pile of cash invest more money if the tax rate is reduced ?
    It’s a puzzle to David Post, because he’s not an expert. Fair enough, we can’t all be experts in everything.

    He should look up “return on investment.”

    Not only will it help him crack the puzzle, but it’ll also help him with his own finances.

    1. You don’t actually work in executive management, do you?

      1. Right-wing goobers are natural, avid consumers of voodoo economics.

        1. Arthur,

          I don’t think it’s fair to call this voodoo economics. Certainly the after tax rate of return is critical to investment decisions.

          The issue here is how much difference the tax rate makes in the current situation. I think that with companies not having to rely much on outside financing, which is costly, because they are holding so much cash they already have substantial incentives to invest in expansion if they see opportunities, taxes notwithstanding.

          OTOH, I am amazed that some, apparently including our Treasury Secretary, still claim, and others believe, the tax bill will not increase the deficit. There’s your voodoo.

          1. ‘Tax cuts will pay for themselves’ not only is voodoo economics but also is a policy argument at the level of ‘we should not worry about environmental problems because they’ll be solved by the Rapture.’

    2. Lee,

      What is the return on those cash holdings? Do corporations pay tax on that meager return?

      When you are sitting on piles of cash, and rates are low, your marginal cost of capital is very low. The notion that cutting the tax rates will bring a boom in investment is not justified. Certainly it is not justified in the current economic environment, where we are already growing.

      Just how many projects are there that are worthwhile at a 21% tax rate but not at 28%? Or 39.1% if you insist. Some, maybe, but there are lots of other reasons they hold cash. Look at the news about Cohn’s famous meeting.

      1. Just how many projects are there that are worthwhile at a 21% tax rate but not at 28%?

        Thousands. Literally thousands. It’s good that you understand that the appropriate term is “worthwhile” rather than “profitable” as it indicates that you appreciate what a lot of naifs don’t – that when you are considering a new investment, the revenues, costs and profits are uncertain. Investments are risky (unlike bank deposits.) A cut in the tax rate from 28% to 21%, increases the post tax return from 72% to 79%. 10% better. But what does that mean ? It means that a project for which there were expected (but risky) pre tax profits of 100 and which was marginal, has now come to look like a project with expected (but risky) profits of 110. Not so marginal. If you imagine that corporations don’t think a 10% extra margin for error in a new investment is potentially decisive, you’re mistaken.

        Now when I say thousands, bear in mind that that still makes a small proportion of the new projects being pursued anyway. It’s an incremental addition. But a difference between 2.2% growth and 2.4% growth is worth having. + 350,000 jobs a month beats +325,000.

        1. I accept that plenty of big companies won’t be adding investment, they’ll be buying back shares. Lots of mature companies don’t have good investment opportunities in their line of business. They succeed on squeezing costs and efficiencies, taking over competitors etc. But that simply recycles the new investment to other more vibrant companies via the stock market. Typically it’s the smaller younger businesses that are the main engines of growth.

          And if you don’t believe that the corporate tax cut is likely to bring more jobs and investment to the US, you’re welcome to your opinion. The Germans think otherwise :

          https://global.handelsblatt.com/
          politics/germans-fear-
          huge-loss-of-jobs-from-us-tax-reform-865577?
          ref=NzgzMjI2&utm_source=outbrain
          &utm_medium=contentmarketing_
          campaign=outbrain-retfeb17

          apologies for cannibalising the link in chunks – it’s the comments system

          1. The study underlying that article says the current “Effective tax burden” on corporations is 36.5%.

        2. Lee,

          I do understand the issue of risk and return around projects. There is no reason for you to be familiar with my background, any more than I am with yours, so let me tell you that I have decades of business experience, almost all with small companies and much of it in the financial management area. In addition I have considerable training at the post-graduate level in economics and especially finance, a subject I have also taught. So yes, I am speaking somewhat knowledgeably here.

          To your point, there are certainly some investments at the margin which will be made under the new tax code, but did not pass muster under the higher rate. That doesn’t seem to me to be a strong enough argument, though, for several reasons:

          1. There can easily be better, cheaper, ways to induce more investment. Sales affect returns, after all. A bigger cut at lower income levels might do more than this, by stimulating demand.

          2. We are now running at 3% or so annual growth. There is surely some danger of inflation, and of course that also means there is not a great need for a stimulus. Maybe we should, in good Keynesian fashion, follow the advice Joseph gave Pharaoh (more or less) and reserve borrowing capacity for when it is needed.

          3. Without knowing the size of the effect it is hard to know what the impact on the economy will be. Two-tenths of a percent increase in growth is worth having, but what is the basis of that number?

          (continued)

          1. 1, apologies if that came across as patronising. You don’t know who you’re going to meet on a legal blog. In my decades of business experience I have come across a lot of lawyers, many of them clever, but surprisingly few of whom have been comfortable when it comes to arithmetic, and even fewer who could have attempted a discounted cash flow calculation with confidence.

            2. you sound like more of a macroeconomics fellow than I am. I’m always sceptical of “demand” arguments. I like “supply” better. Demand will follow supply. I like stuff that increases supply and that’s mostly to be found in microeconomics

            3. and the return on investment is pretty important to supply. Whatever you think about the theory, increased supply seem to be very dependant on investment. (I mean investment with a view to profit. Command economies invest too, but badly.)

            4. I’m all for cutting taxes on the low paid, but not because I think it will cause a boost to output and jobs comparable to improving the return on investment

            5. No it’s primarily a welfare question. There’s absolutely nothing better for the poor, the not very clever and the not very productive than a JOB. Not only is it a flow of income, it’s workplace companionship and the feeling of rowing your own boat, rather than being a helpless cork bobbing on the ocean. It gives structure to life. Welfare is soul destroying. So anything that helps keep the poor in jobs is a good thing. Even if it’s not very economically “efficient.”

        3. (continuation)

          Also, there are provisions that, IMO, are just egregious. The changes in the estate tax, the big cut in the top rate, the treatment of pass-throughs, including the developer giveaway, are unjustified, I think. Despite Trump’s promises no change was made in the carried interest loophole. Whatever the costs of these things, they scream fairly loudly that the whole point here was to give GOP donors, not to mention some legislators and Trump himself, a huge tax break.

          1. It also doesn’t help that Republican Congressmen said fairly loudly that the whole point here was to give GOP donors a huge tax break.

          2. I’m certainly not going to argue with you. There’s some ugly sausage meat in there.

  22. No, it hasn’t been fixed. And, maybe you should have mentioned your mane in the update, just in case?

  23. Aside from incorrect history on Obamacare, very well said.

  24. For the record, the author’s name still does not appear.

    1. Quite true. In the meantime, for anyone who didn’t skim all the comments, this one confirms it’s David Post, as most of us commenting here had guessed.

  25. You should have wiped the WaPo off your feet before you came in here.

    1. Yes, a post not of your ideological safe space.

      The usual prescription is to find some fact or reasoning to disagree with, this sharpening your point of view.

      These days, just pointing and yelling ‘OUTSIDER’ seems more common though.

      1. TommyD2000 taking the usual prescription below.

  26. I like the post, and share the suspicions and the well-articulated uncertainty.

  27. “It does strike me as peculiar to believe, at a time when US corporations are sitting on around $2 TRILLION of cash – a record high, by the way [see here and here] – that what the economy really needs is more cash for the corporations, that they’re just waiting for some additional cash to get moving on all that job-creation, empolyee raises, capital investment and the rest of it – even though they’re not spending the cash they already have. You’d think that before you decide to water the garden, you’d check to see if it looks like it needs water.”

    This completely misunderstands the reform. That cash is held overseas due to the fact that the US taxes profits overseas if it is ever repatriated. From the S&P article you linked to, “In 2016, these companies’ total debt outstanding rose by almost $200 billion, exceeding their cash growth, as companies continued to borrow as a form of “synthetic” cash repatriation.” Companies are able to bring cash to the US tax free by raising debt instead and get the added benefit of the interest deduction from their taxes (another distortion that is ameliorated in the new bill). The reform moves to a territorial tax system that only taxes profits in the US so that cash can now come back to the US without being taxed (with some restrictions on intellectual property shenanigans and a one-time tax rate for the deferred profits).

  28. “I’m no expert, and my ability to foresee the future is no better than anyone else’s.”

    Given your post about the impending financial collapse in the wake of Trump’s election, I would say that your ability to foresee the future is significantly worse than most peoples.

    “It does strike me as peculiar to believe, at a time when US corporations are sitting on around $2 TRILLION of cash – a record high, by the way [see here and here] – that what the economy really needs is more cash for the corporations, that they’re just waiting for some additional cash to get moving on all that job-creation, empolyee raises, capital investment and the rest of it – even though they’re not spending the cash they already have.”

    Recent announcements from a number of major corporations again suggest that you just aren’t very good at reading the tea leaves. The Johnson County Sheriff’s Department might still be hiring–you’d fit in there.

    1. That corporate fawning seemed more creepy and a bit fascistic than anything (YMMV of course), and seem to largely be respinning already planned policies.

      But that was at least more substance than saying ‘you were wrong in the past, so I’ll bet you’re wrong now’ which is center-mass ad hominem.

  29. “And it will be interesting to see if the Republicans will really have the chutzpah, when it comes to “entitlement reform,” to demand cuts in Medicaid, Medicare, and/or Social Security, on the grounds that there is – surprise!! – no money any more to pay for these programs.”

    I’m no expert, either, but I understand that the Social Security Trust Fund is funded via payroll taxes. How does cutting income tax reduce the funding for SS?

  30. There are undoubtedly tax law changes which would more directly address the problem of corporations sitting on profits, rather than disbursing them as dividends or investing them in productive enterprises. But I can only report that, as I left on my vacation a couple days ago, they were discussing at work our impending purchase of production equipment should the tax bill pass.

    So this bill isn’t a complete nothingburger.

    1. Could be. I honestly hope so. Might be my partisanship showing, but things have felt shaky still.

      We shall see if your anecdote translates into statistics.

  31. The left (and especially the mainstream media) have unceasingly smeared conservative tax reform and misreported every aspect and anticipated consequence of it.

    They won’t change their tune merely because Trump’s political triumph turns out to be a magnificent real-world success. Since left wingers write most history, they will ignore all contrary evidence and try to convince posterity that this tax bill was a disaster for the nation.

  32. DP : The response is the same as to the “But he started it!” defense familiar to anyone with a 9-year old around the house: other peoples’ misbehavior does not justify your own. There’s a right, and there’s a wrong, way to conduct yourself, and it does not depend on the extent to which others do or do not conform.

    My eyes must have skipped over this first time. But they spotted it second time. There’s an elephant int the room, but this time it’s an elephant that DP sees, but which isn’t actually there. And that’s the parent of the 9 year old.

    There’s no parent. No police force. No Angel of the Lord stepping in and keeping these kids from each other’s throats. It’s just the kids. And that’s a totally different dynamic. It’s the game that is played between two equals, where there’s no umpire. And study after study, trial after trial proves that there’s no better strategy than Tit-For-Tat. The other 9 year old cheats, you cheat right back. When the other guy plays fair, you play fair.

    Tit-For-Tat-Tat-Tat-Tat-Tat-Tat hasn’t won any of the game theory contest yet. Not likely to either.

  33. I’m nowhere close to rich and my best estimate is an extra $500/month in my pocket. Enough to pay for one kid in daycare for the month. That’s not chump change and it seems I’m not uncommon in that respect.

    The people who seem like they’re going to pay more, are rich folks in liberal land, ie the people who’ve been demanding higher taxes for decades. Now that they’re gonna get it, all they can do is bitch and moan…..

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