Corporate Tax Cut - the numbers don't add up

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JTsyo

Lifer
Nov 18, 2007
11,709
871
126
As tax rates approach zero, revenue rises to infinity. Everyone knows this.

One time, the Laffer curve was humped in the middle....now it simply goes up and up as tax rates go down.

Trump and the new GOP tried to TradeMark the curve but spelled it wrong...it's now the Laugher Curve (TM - 2017 - T-Rump Incorporated)
So if we have negative tax rates we go past infinity? For every million in profit the company makes, the government gives them $10K. We should tweet this to Trump.
 

fskimospy

Elite Member
Mar 10, 2006
83,719
47,408
136
As tax rates approach zero, revenue rises to infinity. Everyone knows this.

One time, the Laffer curve was humped in the middle....now it simply goes up and up as tax rates go down.

Trump and the new GOP tried to TradeMark the curve but spelled it wrong...it's now the Laugher Curve (TM - 2017 - T-Rump Incorporated)

Don't worry, if Trump's tax cut blows a hole in the budget we'll just have to enact another tax cut to pay for it. I'm sure it will all work out.
 
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pauldun170

Diamond Member
Sep 26, 2011
9,133
5,072
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An astute observation:

800px-Employment_growth_by_top_tax_rate.svg.png

While I know that context matters and there are lots of complexities that need to be discussed, I hereby award you the LOL of the week award.

Lovely way to make that point.
 

KMFJD

Lifer
Aug 11, 2005
29,044
41,734
136
So in order for this to work the economy has to grow at a rate that the US has only seen since before the Oil Crisis in 73? What could go wrong?
 
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dullard

Elite Member
May 21, 2001
24,998
3,327
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You need to delete your post and start over. Here is a hint, corporations aren't taxed on revenue, they are taxed on profits. Assuming no deduction eliminations (which I don't think is a valid assumption) the economy would need to grow a hell of a lot more than 7.3%.
Point taken. But you know as well as I do that your request is not realistically possible for an internet forum post.

A service based industry that grows results in the growth being nearly pure profit. For example, a hairstylist that gets another customer has virtually no extra costs. So growth there would be virtually all into the profit (and taxable) category. Note: I realize that not that many hairstylists are corporations, it is just a simple example and just about any service based corporation would be similar.

As for resellers or similar corporations with small profit margins, increases in growth often are associated by increases in costs. Selling one more widget at $1, probably meant say $0.90 in costs to buy the widget from the manufacturer. So, in that sense it is only 10% profit. However, now you have to look at the manufacturer. Part of that $0.90 is profit. Then you have to look at all the part suppliers for that manufacturer, etc. Keep going down the line and you are left with a good chunk of that $1 was profit and not much was actual raw materials (and even then the raw material miners are often profiting and will then be taxed).

Yes, the net result will be more than 7.3%, but not as much more than you think.
 
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dainthomas

Lifer
Dec 7, 2004
14,572
3,401
136
Question: Do Republican voters, the majority - not the very small number of extremely wealthy ones, even care about tax cuts and tax strategies ?

From what you hear it seems like it's more abortion, religion, gays, guns, supreme court justices (which I believe goes back to abortion, religion gays & guns), and dangerous immigrant stories.

This is just my impression from all the noise they make. Don't hear much else. It would make sense though, the ultra elite that push these tax policies are a very small number. Even people making six figure salaries are peasants to those people, barely removed from welfare recipients in contrast to the wealth they have.

Don't forget "stickin' it to dem libruhls".
 
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Engineer

Elite Member
Oct 9, 1999
39,234
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https://www.thestreet.com/story/141...d-everyone-s-hopes-for-a-tax-cut-miracle.html

"The Tax Policy Center estimated in November that Trump's 15% proposal, coupled with a repeal of the corporate Alternative Minimum Tax, could reduce revenue by about $2.4 trillion in the first decade. With reduced revenue for the government will likely come cuts across many sectors of the U.S. economy. That could stunt the effect of Trump's tax cut."

Government will absolutely spend every nickel of the $2.4 trillion and put it into the economy with much of in eventually going to the same people that the tax cut in question would have gone to directly....question is, will the 'job creators' at the top, receiving 51% of the tax cuts, do the same?