Trump's Tax Reform

[~Rocktar~]

Yeah- this is basically what the CBO, Allan Greenspan, and every Democrat said would happen.

Legalizing stock buybacks in the 80s was one of the worst decisions we've made re: income inequality.

I would argue that repealing Glass-Steagall, allowing lending rates on short term credit to go as high as 1600% APR and more, free government lending via Freddie Mack, Fannie Mae and Student Loans have done far far more to cause income inequity than stock buybacks ever could.

[time4fun]

I would argue that repealing Glass-Steagall, allowing lending rates on short term credit to go as high as 1600% APR and more, free government lending via Freddie Mack, Fannie Mae and Student Loans have done far far more to cause income inequity than stock buybacks ever could.

Don't take my response as attempting to downplay how dangerous the repeal of Glass-Steagall was, or the fact that it has exacerbated income inequality- in large part because it's what allowed the 2008 crash to happen. (Fun side note- the GOP just pushed through a bill to roll back the financial regulations we put into place after 2008 to try to keep it from happening again)

But Steagall was repealed (mostly) in 1999, and income inequality in this country was already skyrocketing at that point. The biggest factor was around tax cuts. Income inequality actually didn't move much up until the very late 1970s/early 80s. Around that time is when we had a significant drop in the top marginal tax rate, In 1982 there was a 20% decrease, and in 1986 there was another 12% decrease. From 1982-1988, the Top 1% went from owning 11% of the income to about 15%. In the next 10 years, it went up around another 3%.

But stock buybacks are more pernicious than most people realize. From 2007-2016 54% of all corporate profits went into stock buybacks. Meanwhile wages have been stagnant during that time. Companies are actually incurring debt to buy their stock back.
It matters because the top 10% of households own 84% of all stocks. Last year, 4% of the US's GDP went to stock buybacks. That means that 84% of 4% of our entire GDP went to the top 10% of earners and not to wages, training, etc.

It's...bad. REALLY bad.

[Keller]

There is no "this". Nobody knows what the conference will produce, or whether it will pass reconciliation rules, or whether it will pass either house of Congress.

Nobody's been seriously interested in cutting since Nixon. Once Reagan invented defense welfare spending that was history. The only choices that could actually happen are increase taxes or go ever deeper into debt.

So today I was cleaning up my bookmarks and was like "I've not been to the PC in a while, let's go see what that cesspool of social rejects and malcontents is up to."

I clicked through a few of the most recent pages and then this thread piqued my interest since I know a thing or two about taxes.

Reading the thread I remarked, "that Latrinsorm is quite intelligent, articulate, and enjoyable. I'd really like the PC more if it was more Latrin and less other people." Cheers to you, Latrin. I'm impressed you've stuck around here as long as you have.

[Gelston]

So today I was cleaning up my bookmarks and was like "I've not been to the PC in a while, I think I'll go be a dirty troll."

ftfy

[Fortybox]

ftfy

I guess this is what someone, who doesn’t pay any taxes, does in the middle of the day.

[RichardCranium]

So today I was cleaning up my bookmarks and was like "I've not been to the PC in a while, let's go see what that cesspool of social rejects and malcontents is up to."

I clicked through a few of the most recent pages and then this thread piqued my interest since I know a thing or two about taxes.

Reading the thread I remarked, "that Latrinsorm is quite intelligent, articulate, and enjoyable. I'd really like the PC more if it was more Latrin and less other people." Cheers to you, Latrin. I'm impressed you've stuck around here as long as you have.

Son. I am disappoint.

[Keller]

Son. I am disappoint.

Just because I like Latrin's posting doesn't mean I don't like yours, too. You were always one of the more reasonable and emotionally stable people on the PC. <3

[RichardCranium]

No, I'm disappointed you came back to this cesspool.

[Gelston]

Can you take Necro with you when you leave again?

[ClydeR]

How is the tax cut package passed last December affecting the economy? So far, it's mostly fueling stock buybacks. But if the Federal Reserve stops raising interest rates and Trump solves the tariff war, then the tax cuts could boost the general economy, which could lead to increases in wages.

Some of the biggest winners from President Donald Trump’s new tax law are corporate executives who have reaped gains as their companies buy back a record amount of stock, a practice that rewards shareholders by boosting the value of existing shares.

A POLITICO review of data disclosed in Securities and Exchange Commission filings shows the executives, who often receive most of their compensation in stock, have been profiting handsomely by selling shares since Trump signed the law on Dec. 22 and slashed corporate tax rates to 21 percent. That trend is likely to increase, as Wall Street analysts expect buyback activity to accelerate in the coming weeks.


“It is going to be a parade of eye-popping numbers,” said Pat McGurn, the head of strategic research and analysis at Institutional Shareholder Services, a shareholder advisory firm.

More...

To be sure, 44 percent of companies say they also plan to reinvest some savings in their operations through initiatives like new factories, research and development and higher wages, according to Morgan Stanley. That's the kind of uses that featured prominently in Republicans’ marketing of their tax bill.

But that spending hasn’t been as immediate and could be headed off by economic headwinds. The Federal Reserve has cited anecdotal evidence of companies scaling back planned capital expenditures over fears of a trade war. And while more than two dozen companies announced one-time bonuses to employees after the tax bill, wage growth is still sitting at a lackluster 2.7 percent.

“What did companies do with their cash?” said the Morgan Stanley analysis. “In short, a large increase in stock buybacks was the biggest change” in the first quarter of this year from the last quarter of 2017.