Larry Kudlow (heard on Cumulus Radio on the weekend) has been advising Trump for months and sketching out the outline of Trump’s economic plan. The most important item on the list is lowering the Corporate tax rate to 15%. That is (generally) a great idea. Because the current rate is so high, management of corporations spend more time on tax planning and strategic mergers than they do on building and selling products.
Corporations create wealth. Governments consume wealth. Corporations not only pay income taxes, but they pay FICA (Social Security), Unemployment taxes, property taxes – and they employ people who pay taxes and buy stuff. It’s the ultimate economic multiplier effect. Keynesians understand that governments spending money creates more economic activity than just the original boondoggle – cutting corporate taxes does the same thing which will create much more economic activity.
In 2015, the Corporate income tax of all corporations was only $344 Billion, less than 10% of what the government spent
Pie Chart
One of the unintended consequences is some corporations might have huge losses. I know that sounds counterintuitive – the problem (Brian might be able to explain it better) is that corporations have “saved up” losses to use to offset against future taxes. Successful company A will buy up Company B that is ready for bankruptcy because Company B has never made a profit and had “Tax loss carry forwards”. This is a way that a company that does make a profit can end up paying no taxes. If the tax rate is cut from 35% to 15%, the accountants will have to right down those assets. Corporations also account for things like depreciation, using one rate / method for Wall Street and a different calculation for income taxes. That will trickle down as well.
The big qualifier I want to slap on this change is “for corporations publicly traded on US regulated Stock Exchanges”. I want to bring back the America where Ma and Pa could buy stock in companies they knew and respected, not companies owned by Private equity firms using money from unknown sources with unknown motives.
Is Trump running a deep Machiavellian game?
You all that bother to read my stuff have no doubt noted that sometimes I just don’t understand what Trump is doing. Hillary is such a big target. Tell people what you plan to do to improve the economy, and beat her senseless with it.
Saw this on another forum ” Lets us assume Trump is on top of the game and knows that Hillary is the easiest one to beat. Obviously then, it would not do to spook the DNC into replacing her for ‘health’ reasons or whatever.
So, maybe the Trumpis laying in the weeds like a big Pike ( fish) (metaphor there) until that day the ‘point of no return’ for the DNC. They have to stick with Hillary because it is too late to gin up another candidate. (Biden) ”
“Then Trump unleashes the dogs (metaphor there) and totally destroys Hillary and wins that landslide that many here think is already locked in. ”
They say, timing is everything. We can only hope.
what do you think guys & Gals ?
a parrott
We’re almost at that point. Deadlines are slipping by for putting names on the November ballots. There is a ton of gray area. Let’s say hypothetically that Trump withdraws in September, but his name still will be on the ballot. What are the electors’ obligations in December? Do they vote for Trump, the Trump alternative or are they free agents?