General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsA corporation's first allegiance is to its owners (shareholders).
Any increase in cash flow due to lower taxes will be funneled to the shareholders, most likely by one or both of the following mechanisms:
1) Shareholder dividends
2) Stock buybacks, and therefore, a rise in stock prices
The employment fairy does not wave her magic wand and compel corporations to create more jobs when cash flow improves. The building God does not compel them to increase capital expenditures, thereby increasing production capacity.
Generally, a CEO will funnel money to shareholders in order to justify a higher compensation package for himself/herself. Also, a CEO's first duty is to shareholders, not employees. An extremely profitable corporation will not seek to expand capacity just because they are flush with cash. There are more important factors that come into play when making this decision.
This does not translate into a higher GDP, but rather, it provides more wealth to people fortunate enough to have sufficient disposable income to enable them to own stocks.
Haven't really heard this talked about as much as it should be...except on Velshi and Rhule maybe.
Wellstone ruled
(34,661 posts)passes,which appears to be the game plan,we will see one Major Stock Bubble next Fall similiar to October of 1929. The Cake is Baking as we speak.
LuckyCharms
(17,444 posts)Wellstone ruled
(34,661 posts)those of us that have IRA's or 401',are most likely going to get smacked big time. Only seen the one line dealing with the Taxable Liability treatment and it carried a Addendum that this was to be amended will in sixty days of passage.
Have been searching for the Banks and Funds Management as to the Recapture of losses via Customer Accounts. Meaning this,if they run into Financial Hardship,they can liquidate your holdings to fix their Balance sheets.
This is one of Wall Streets got to have things.
Walbash Blues
(18 posts)What then happens when
the cake is gone when no one or the 1% can only buy their goods.
Wellstone ruled
(34,661 posts)all about the Disposable Income of the Bottom 47% that keeps our Economy moving. And this group are the Job Creators. Sure as hell not the top 10% or the Yacht Buying 1%.
gtar100
(4,192 posts)for stimulating the economy. Most of it will go into the savings accounts of people who already have more than the could possibly spend in a lifetime. Hardly likely there will be any increase in trickling from the uber rich.
smirkymonkey
(63,221 posts)How many times do we have to be fooled before this sinks in? Why are people still buying into this myth?
I will never get it, but I suppose people want to believe in miracles.
annabanana
(52,791 posts)No one hires someone until they NEED them. The whole engine is demand-driven.
moondust
(19,993 posts)I've long suspected is an idea left over from the postwar era of the 1950s-70s--before globalization, financialization, and massive corporatization and consolidation; back when Main Street was king and tax cuts could help small businesses get on their feet and/or upgrade their operations. Those investments took place mainly in the U.S. and therefore helped create some jobs and stimulate the U.S. economy. Then Reagan and the terminally greedy supply-siders came along and co-opted the idea to sell their bullshit to the masses. It's hard to believe Republicans are still using the same old tricks that apparently worked for Reagan, but you know what they say about old dogs...
AlexSFCA
(6,139 posts)which would probably kick in soon after 2020 election. The tax bill is clever as its worse impact wont be felt until after 2020 election. Top 1% dreams of a recession so they can buy the entire country. 2008 crisis made them much richer.
disalitervisum
(470 posts)All this "tax" bill does is speed up the rate of surplus value extraction and as a consequence artificially accelerate the boom-bust cycle of capitalism.