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Republican tax cuts will hurt Americans. And Democrats will pay the price

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...Republicans are pushing the tax cut at breakneck speed precisely because they know they are probably going to lose next year and in 2020 as well. The tax cut, once enacted, however, will bind the hands of Democrats for years to come, forcing them to essentially follow a Republican agenda of deficit reduction and prevent any action on a positive Democratic program. The result will be a steady erosion of support for Democrats that will put Republicans back in power within a few election cycles.

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Bruce Bartlett worked as an adviser for Ronald Reagan and George HW Bush. His new book is The Truth Matters


https://www.theguardian.com/commentisfree/2017/nov/20/republ...
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Bruce Bartlett is a clueless know nothing.
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Everybody wants tax reform. The current Byzantine mess is a jobs program for CPA's.

I have a question; The current proposal as I understand it proposes a huge tax amnesty for corporations that hold their money offshore. The idea is that by repatriating that money the entire economy will be boosted and all boats shall rise. Now the question. if that is truly the impetus for the tax amnesty, then why doesn't the the new tax law demand reinvestment in domestic manufacturing and infrastructure? For instance; In order to receive the highly discounted tax rate, 60% of repatriated funds must be invested in USA based manufacturing and infrastructure. This would still provide a enormous windfall to those corporations and insure the funds are beneficial to the United States of America.

Without restrictions written into the law, corporations will most likely institute share buyback programs and dividend increases and pay larger bonus, as they did the the banking bailout. They have a fiduciary responsibility to increase the wealth of their stockholders, nothing else. And relying on them to distribute the goods to help our country is contrary to their mission. And a fools game.
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Now the question. if that is truly the impetus for the tax amnesty, then why doesn't the the new tax law demand reinvestment in domestic manufacturing and infrastructure? For instance; In order to receive the highly discounted tax rate, 60% of repatriated funds must be invested in USA based manufacturing and infrastructure. This would still provide a enormous windfall to those corporations and insure the funds are beneficial to the United States of America.

Perhaps it should. Nothing to my knowledge in the current law provides any incentive to actually use the money once it's back in the US. You're probably correct that they'll just buy back shares with the extra cash.
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Without restrictions written into the law, corporations will most likely institute share buyback programs and dividend increases and pay larger bonus, as they did the the banking bailout.


I love how the wannabe economists on this site seem to have all the answers...really is funny.
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Attack the poster good on ya

That is why i haven't posted in so long. No room for discussion just attack attack attack.
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I think Ollos is on the right track, but I it also might be good to include a timeframe in which that investment must be made. Perhaps I'm overly suspicious, but I think it also might be wise to include some provision so that the money doesn't just wind up in a US holding company with actual production/operations elsewhere.
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It would have to have a realistic timeline. "shovel ready projects" take years to develop and execute so a ten year timeline for implementation is workable for most projects.
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The current proposal as I understand it proposes a huge tax amnesty for corporations that hold their money offshore.

I've not read that. Got link?

I know that idea was tossed around quite a bit, but I don't see that it made it into the final bill. offshore money still gets taxed at the new reduced corp rate (just like domestic earnings). There is no "territorial" tax system created in this law that I have seen.

But again, if you read that somewhere, please share it.
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Attack the poster good on ya

Yeah, if you can't stand the heat-- best to leave.
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No link. Just what I have heard and read. So it still amounts in my mind to tax forgiveness if revenue earned overseas at at particular rate, is allowed to repatriate at a lesser rate. And still no guarantee that the money would be reinvested into the US economy.
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I have a thick skin. I am looking for discussions of issues that can lead to equitable solutions to the problems we have. Apparentley this is not that forum. name calling and such here is just so senseless, and i don't think I have the time to wade through to find snippets of useful information.

I used to think many of the posters here were intelligent informed people. I guess it is a symptom of the anonymous media that brings out the worst in people.
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"I used to think many of the posters here were intelligent informed people. I guess it is a symptom of the anonymous media that brings out the worst in people."

Or true colors are often revealed. "Worst" may just be what many people are.

Ken
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I used to think many of the posters here were intelligent informed people.

Stay on this site long enough and you will understand. If you are looking for an open and honest discussion of the issues, this is definitely not the site. I learned that a long time ago. For this reason, I rarely spend much time on any one of my posts, because I have learned it is not worth it.
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So it still amounts in my mind to tax forgiveness if revenue earned overseas at at particular rate

That isn't factual.

The US is one of just six out of about 36 developed countries that doesn't use a territorial tax system. It isn't tax forgiveness, it is double taxation. And again, it isn't even in the bill. A reduction to 20% is for all income, foreign and domestic.

https://taxfoundation.org/territorial-tax-system-oecd-review...
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I used to think many of the posters here were intelligent informed people. I guess it is a symptom of the anonymous media that brings out the worst in people.


___________________

Not since Trump won the election.

Now it is one inane Trump bash after another.
Give the left a dose of their own medicine and as you might have noticed the last day or so the left has completely lost it.

I had to put up my asbestos screen saver. ;)
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I dont see the double tax. Is it because the host state imposes a tax and also the US as the nation of incorporation?
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I dont see the double tax. Is it because the host state imposes a tax and also the US as the nation of incorporation?

Yes.

It can create an uncompetitive tax environment for our corporations. Personally, I would prefer no corporate taxes and all the income generated to be pass-through with higher taxes to individuals. Make our corporations as competitive as possible.

A link from when Obama was POTUS:

https://www.rpc.senate.gov/policy-papers/territorial-vs-worl...

Most countries have a territorial system. Among G-7 countries, only the U.S. has a worldwide tax system. Among OECD nations, 26 have territorial systems including Australia, Canada, France, Germany, Japan, Spain, and the United Kingdom. Eight OECD nations have worldwide systems, including the U.S., Greece, Ireland, South Korea, and Mexico. The other OECD nations with worldwide tax systems have top tax rates far below the top U.S. corporate tax rate.

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President Obama’s Fiscal Commission: “A territorial tax system should be adopted to help put the U.S. system in line with other countries, leveling the playing field.”

President Obama’s Export Council: “A competitive territorial tax system for the United States should broadly follow the practice of our trading partners … to make the U.S. tax system more competitive with its major trading partners.”

President Obama’s Jobs Council: “Many members of the Council agreed that the United States should move to a territorial system of taxing corporate income akin to the practices of the other developed economies.”

Commerce Secretary’s Manufacturing Council: “Move the United States from a worldwide to a territorial tax system…to allow manufacturers to make greater investment in expansion, innovation and job creation.”

Treasury Secretary Geithner: “‘The goal is territorial,’ Geithner said, starting to pull back. ‘I’m not sure we can commit to completely territorial. Maybe 95 or 96 percent.’” (Quoted in The Price of Politics, by Bob Woodward)

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Ok, I understand, but a corporation that does business overseas should already be aware of the laws of both countries. So the business was developed with the understanding that Nation A would be taxing our revenue at x rate in addition to the taxes required by the US.

Realizing that maybe it was a mistake or that the tax burden is so onerous that operating at a competitive level is impossible, now the company lobbies to receive a more reasonable tax structure and moving forward can compete on amore level field. All good, but the taxes incurred under the previous rules should still be paid. Otherwise this is a tax amnesty for tax evaders. And we the US may grant a reduction of those taxes, but there should be a caveat attached, by which that(old) repatriated money is required to be invested back into the US economy.

And with a ten year window, a well managed company would recoup a good portion of even those revenues before implementation
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<i.Ok, I understand, but a corporation that does business overseas should already be aware of the laws of both countries.

How is that relevant? You appear to not realize that this isn't a problem of overseas countries. This is a problem of the US tax system.

Telling GM that "they should have known better" is to excuse and accept the fact that we have a tax environment that ONLY HURTS US CORPS. Our tax system doesn't hurt or hinder Nissan from selling cars in the US, it doesn't impact the tax Nissan pays, they would not pay any less if we used a territorial system, it only hurts GM selling cars in Japan. It makes us less competitive.

All good, but the taxes incurred under the previous rules should still be paid.

Two things:

1. Why? It isn't tax amnesty to tell a person that saved money in an IRA, under current tax law, that in 2018, they are going to pay less taxes because we changed the tax rates. This is essentially the same thing for US corps with assets held overseas. They followed the law on income, the rules change, and they take advantage of the new rules just like individuals would do. That doesn't make them tax evaders, it makes them smart for following the laws.

2. And so what? Nothing keeps us from saying that starting in 2018, such profits would be taxed under a territorial system.

required to be invested back into the US economy.

I don't have an argument against that, but nearly everything else you have posted on this topic is incorrect - including the assumption that there is a tax holiday for such earnings (still no link from you on that assumption).
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I am glad we can agree that there should be a re investment clause! I read your reply a number of times and I agree with most of what you said. I found common ground and that is good enough for me. thank you for a cordial discussion.
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