A Philosopher's Blog

Tax Cuts & Employment

Posted in Law, Philosophy, Politics by Michael LaBossiere on December 13, 2017

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It is a matter of faith (or talking point) for most Republicans that tax cuts will increase employment. The most appealing argument for this claim certainly makes sense: if taxes are cut for businesses, then they will have more money. If they have more money, then they will hire more people. From these two premises it follows that if taxes are cut for businesses, then they will hire more people. Going along with this valid hypothetical syllogism (If P, then Q; If Q, then R; so if P, then R) is another stock argument: if taxes are cut for the wealthy, then they will invest more in businesses. If the wealthy invest more in businesses, then businesses will have more money. So, if taxes are cut for the wealthy, then business will have more money. This is also a hypothetical syllogism and is thus a valid argument (the truth of its premises guarantees the truth of its conclusion). These two arguments can be combined into an extended argument which leads from the premise that “if taxes are cut for the wealthy, then they will invest more in businesses” to the conclusion that “if taxes are cut for the wealthy, then businesses will hire more people.” There are also similar arguments about how tax cuts for the wealthy will result in more spending by the wealthy and thus provide businesses with more money to hire people.

In addition to the unquestionable logic of such hypothetical syllogisms (or chain arguments, as they are sometimes called), there is the intuitive appeal of the claim that tax cuts will lead to more hiring because businesses will have more money. But, as every logic teacher points out, a valid argument can have false premises and a false conclusion. There is also the fact that what is intuitively appealing might not be true. As such, what is needed is actual evidence for (or against) the key premises.

Since tax cuts, especially for the wealthy and businesses, are a highly partisan issue any evidence offered will be instantly assaulted as biased by those who disagree. As would be expected, those on the left tend to claim that tax cuts of this sort do not create jobs. Conservatives tend to claim that they do. Politicians, usually from necessity, tend to speak in vague generalities and craft policy aimed at ensuring their funding for their next re-election bid. As such, they are not a good source of evidence for this matter—because of the influence of bias.

From a rational standpoint, the most sensible approach would be to find what the majority of qualified experts in the field believe about the matter, taking into account the influence of possible biases. That is, to use a standard argument from authority. A 2012 survey shows that 35% of economists think that tax cuts do increase growth. About 35% were uncertain. A mere 8% disagreed.

Economists, unlike most politicians, can consider nuanced plans. Interestingly, the general consensus is that certain tax cuts, combined with certain spending cuts can boost economic growth and increase employment. Interestingly, there is strong support that tax cuts for the bottom 90% of income earners does increase employment and create jobs. This is not surprising. According to Senator Charles Grassley, there are people who invest and those who are “spending every darn penny they have, whether it’s on booze or women or movies.” While Grassley’s point was that the investors should be rewarded for their investing by getting rid of the estate tax (which only impacts singles with estates of more than $5.5 million and couples with estates of more than $11 million), he is right to point out that there are people who spend on such things as movies and booze. This spending creates jobs for people who create and sell these things. So, if the lower income spenders have their taxes cut, they will spend more “darn pennies” and improve the economy. Tax cuts aimed at the bottom 90% of income earners would thus be a boon to the economy by getting more money directly into the economy. In contrast, the trickle-down approach seems to have never worked. As such, it is tax cuts for the rest of us that would grow the economy, not tax cuts for the top earners.

But, it can be argued, tax cuts for businesses would surely pay off in more jobs. With lower taxes, companies would have more money and they would then hire more people. While this seems to make sense, what is needed is actual evidence that companies would, in fact, plow that tax cut money into more jobs.

Interestingly enough, while the Republican party was trying hard to sell tax cuts as a means of increasing employment and wages, businesses have been candid about how they will respond to such a tax cut. While some have claimed that they will invest in growth, they seem to mostly have planned to do that already. In general, most companies seem unlikely to convert tax cuts into increased employment or employee wages.  This makes sense because companies, in general, are already doing quite well.

One of the main arguments against the claim that a tax cut for companies will result in increased employment and better wages is because companies are already doing extremely well. Since 2007, companies have been enjoying excellent post tax profits but they have not been matching this increase in profits with increased investment. Superstar companies, like Apple, are flush with cash and yet do not use that cash to increase employment or raise wages. As has been often pointed out, it is a time of record profits but stagnant wages for the workers.

If companies are already enjoying high post-tax profits but are not investing or increasing wages, then there is no reason to think that a tax cut will suddenly spur them into action. To use an analogy, if I have piles of extra money but I am not using it to improve my house, then it would be rather odd to claim that if I was given a tax cut I would suddenly engage in home improvements. After all, I already have the money to make improvements and would do so if that was what I wanted to do.

But, perhaps the argument is that if companies had even more money then they would suddenly be motivated to increase their investment, hiring and wages. Going back to my analogy, the argument would be that even if I could easily afford the improvements I would be pushed into making those improvements once I had somewhat more money. While not impossible, this seems rather odd. A better explanation is that the companies are not interested in increasing wages, investing more or hiring more people. Likewise, the best explanation as to why I do not spend on new home improvements I can easily afford is not that I am waiting for a tax cut but that I have no interest in those home improvements.

Now, if companies were short on cash, then this sort of argument would make more sense—assuming that there is evidence companies wanted to invest more, pay more, and hire more people and were hampered by a lack of money. Going back to the analogy, if there were good reasons to believe that I wanted to make home improvements but merely lacked the funds, then it would make sense to argue that a tax cut that would allow me to afford the improvements would spur me to make those improvements. But, if I am sitting on stacks of cash and not making home improvements, the best explanation is that I do not want to make those improvements and giving me a tax cut would not change things.

 

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  1. TJB said, on December 13, 2017 at 7:57 pm

    Mike, do you know where Apple is keeping all its cash? Do you know why it is there?

    • WTP said, on December 13, 2017 at 9:37 pm

      How could that possibly be relevant? Mike has demonstrated time and time again, over nearly a dozen years, not only an ignorance of economic matters but a refusal to even try to understand such things.

      Might as well ask a fish what might be clogging your fuel injectors.

    • Michael LaBossiere said, on December 19, 2017 at 7:18 pm

      Mostly overseas in countries that are happy to give Apple sweet tax deals and let the United States expend blood and treasure maintaining the world order that allows Apple to survive and thrive. It is there because the top folks at Apple would rather not pay taxes that would be used to pay for all those liberal projects they profess to love.

      • dh said, on December 19, 2017 at 9:26 pm

        The current tax overhaul is addressing this issue, offering repatriation incentives to companies like Apple. Do they go far enough? Remains to be seen – but the incentives are significant. Are there loopholes? Of course. The bottom line is that for every incentive that repatriates every dollar from every company benefits the US.

        You are correct, to a point, about the hypocrisy of the Apple executives – but I do not know a single person, Liberal, Conservative or anywhere in between, who would not take advantage of every single tax benefit available to them, or find whatever loophole would increase their profitability, their income, their market share, or their power. Do you? Do you look at your own 1040 and say, “Gee, that hardly seems like enough … I’m going to send more!”

        Barack Obama had a 1:1 sit-down with Steve Jobs, and asked him directly what it would take to bring all those assets back to the US. Jobs was just as direct – “Unless you lower the US corporate tax, it ain’t gonna happen”. Score one for Trump.

        http://abcnews.go.com/Technology/steve-jobs-biography-jobs-warned-obama-hed-term/story?id=14786074

        We can hate Trump for his crudeness, his Tweets, his willingness to address the cold truth of business, or we can admire Jobs for his liberal attitude, his innovation, his black turtleneck, his beard, his employee-friendly corporate culture, but the two of them are more alike than we’d like to admit. And Barack Obama has no seat at this table.

  2. Anonymous said, on December 14, 2017 at 1:35 am

    “Superstar companies, like Apple, are flush with cash and yet do not use that cash to increase employment or raise wages.”

    Are you serious about this claim? Where did you get the information?

    In Apple’s 2012 annual report, filed with the US SEC, Apple revealed that they had 72,000 Full Time Equivalent (FTE) employees, up from 60,400 the previous year.

    In their 2013 annual report, the headcount grew to 80,300.
    In 2014, the number reported was 92,600.
    In 2015 it was 110,000.
    In 2016 it was 116,000
    and in 2017 the number reported was 123,000.

    This information is freely available on the Internet, and taken directly from the legal audited documents filed with the US Government by Apple. I suppose they could be lying, but it would have to be a pretty big lie.

    According to indeed, a software engineer at Apple averages $144,000, which is almost 50% above the national average for that job.

    Development Manager – $185,000 – 98% above the national average
    Hardware Engineer – $146,000 – 45% above the national average

    …and on and on. You can go to the web site and scroll down to see the average salaries in many categories. Some salaries are, of course, at or below the national average, but most are above. The delta for the salaries that exceed the national average is much higher than those below.

    Apple stock is one of the most valuable equities to own. You, as an employee of Florida A&M University, are entitled to invest in the FRS Investment Plan (over and above the defined-benefit retirement you enjoy at taxpayer expense). You have some choices about where your money can be invested – there is a Large Cap (US) fund, and a US Stock Market Index Fund, among others.

    Take a guess what the largest holding of each of those equity funds is?

    Before you go around making claims like the one you just did, you should do what I did – take a look at the SEC filings over the last 10 years of those greedy companies you hate so much – Google, Facebook, Amazon, Microsoft, WalMart, Netflix … take a look at the rising curves that represent their employee headcounts and their average wages, and then think about how and why that situation is what it is.

    Here’s a hint. Companies, large and small, are based on one major principle – if you want to use a simple word, you can use the word “Greed”. Ayn Rand said it best in “Atlas Shrugged” – “Greed Is Good”.

    Giant companies like Apple, Amazon, Google, Neflix, Facebook and others are no different than smaller companies like the Ace Hardware franchise or the microbreweries in my town – they all want to make money. The more money they make, the more they want to make.

    They do not make money by stuffing cash in their mattresses, they make it by investing it. True, they do not “create jobs” out of charity or entitlement or by their own philanthropy or generosity. They put additions on their retail spaces so they can sell more products; they sell more products by hiring more salespeople. They build more factories, lease more warehouse space, subcontract more delivery people – they hire engineers to innovate, designers for products, UX/UI, packaging, they hire salespeople to sell, and they increase their space to put all these people in.

    To say “everyone knows trickle-down doesn’t work” is just plain ignorant. It’s a talking point.

    Once again, I feel I have to remind you to do your homework, and to engage in your own “Critical Thinking”. Here’s a start.

    The economy is like a merry-go-round. It works like a perpetual motion machine. People work and earn money, they use the money to buy products which creates demand. Manufacturers, service providers, and other companies have to accelerate their production to meet that demand. They do this by expanding, hiring more people, and supporting secondary employment like delivery, warehousing, construction, etc. As their expansion creates more jobs, there are more people with money to spend; when they spend it, it creates more demand, and the cycle continues.

    This is not rocket-science, it’s Economics 101.

    So when the economy stalls, there needs to be an infusion of capital somewhere – some kind of stimulus. But where to put it?

    Keynes says to put it in the hands of the people who will spend it, which will create demand and increase spending, and stimulate manufacture from the bottom up.

    Smith and others say to put it at the top – to stimulate growth which will then put the money into the hands of people who earn it, and will spend it, and get the merry-go-round turning again.

    The real truth is that both of these theories are correct – the difference being all the other issues surrounding the stagnating economy. Sometimes a top-down stimulus is appropriate, sometimes it’s the other way around.

    Here’s the dirty little secret about what’s going on today … Corporations are indeed making money hand over fist – not just the Apples and Amazons, but the mid-cap and small-cap companies as well. Unemployment is at an extremely low rate right now – the U6 rate is at 4.5%. (If these companies are hoarding their cash, who is doing all the hiring? The government?)

    BUT – if the unemployment rate goes too low, inflation will increase. The two are inversely related. Why? High employment means increased demand – increased demand means higher prices. Higher prices results in higher wage demands, and in periods of low unemployment, employers have to meet these demands because the pool of able workers is very limited.

    So “Greed” is more complex than companies hoarding cash, underpaying and overworking employees, and shipping their money offshore to avoid taxes and just pile it up in rooms.

    In 1963, JFK proposed a major tax cut across-the-board. It was implemented by LBJ after his death. These tax cuts were responsible for contributing over 6% to the economy, and creating 9.3 million jobs.

    In 1981 and 1986, Reagan signed into law two separate tax cuts. The results were an 11 percent expansion of the economy and almost 12 million new jobs.

    “After all, I already have the money to make improvements and would do so if that was what I wanted to do.”

    Pretty short sighted. So maybe you don’t want to make improvements. What do you do with your money? It doesn’t matter, as long as you spend it – and I don’t really think you stick it under your bed or bury it in your back yard. You buy cars, electronics, clothing, appliances. You go out to dinner, you go to the movies, you go on vacations. You buy gasoline, you get your car repaired, you buy groceries. You save money in your retirement plan, you invest it, you buy stocks, bonds, mutual funds. It doesn’t matter what you do with the money as long as you spend it – and every cent you spend is spent to improve your own life – even donating to charity makes you feel better about yourself – and every cent you spend, believe it or not, creates jobs. Carpenters, house painters, roofers? Maybe not – but car salesmen, Best Buy floor managers, Barristas, or the owner of Lucky’s Market or the Piggly Wiggly. How do I know this? Because I also know that these stores close – and they close for only one reason and you know what that is.

    Everything Apple does is for one reason alone – to make them more money and increase their market share. And there’s really only one way to do that, and you know that too.

    “Tax Cuts For The Rich” is a talking point based on envy – treating taxation not as economic policy based on any kind of theory, but on the worst kind of greed – coveting what others have, and wanting to take them down a notch for no reason other than their own discontentment.

    It’s also a tautology. Any tax cut, by definition, is going to benefit the wealthy more than the poor – for the same reason that cost Mitt Romney the presidency in 2008. The rich pay more taxes than the poor – in fact, the bottom 40 percent of income earners pay no individual income tax – so how can they benefit from a tax cut? If you are in that bottom 40%, anyone who is in a position to pay any tax is better off than you – some are even downright rich! Forget economic policy – bring them down a notch or two! Why should they get all the gravy?

    It’s just not that simple – unless you listen to talking points and do no thinking of your own.

    • WTP said, on December 14, 2017 at 5:34 am

      Thank you for a very well written, well researched, and well reasoned response regarding this subject. You put far more thinking into this comment than what can be wrung from the author’s post. Pity your numerous and well reasoned arguments will be either ignored or dismissed with the very same weak reasoning that created the need for your response in the first place. Doubt the Clown Nose will come out here, but it is a third distinct possibility.

      This is not rocket-science, it’s Economics 101.
      See my much shorter reply to TJ above. Been here, done this for ten years now.

    • WTP said, on December 14, 2017 at 5:36 am

      Meant to add…I would quibble on the reasoning behind inflation and a few other minor points here, but such is an argument for another time and place.

      • dh said, on December 14, 2017 at 8:57 am

        Thanks. Yes, I understand the frustration in posting answers like this, but even when I direct my comments to a specific person, I don’t really expect to change anyone. I enjoy the debate at face value, which is why I participate.

        And your “quibble” on the reasoning behind inflation and other points – I would even “quibble” with your choice of the word “quibble” – the arguments for and against all of this reasoning are hotly debated in economic circles, and are deeply nuanced and affected by a huge number of factors. My point is that to say “Trickle Down” doesn’t work, or even “Keynesian Economic Theory is Wrong” is an oversimplification in the extreme. As usual. it comes down to a purposeful mis-read of a complex topic in order to parse it to a political talking point.

        The sad thing is that those who are running the show know this – they all studied economics in school and have been doing this for a long time, but they are satisfied with the headline and Twitter posts if they result in a successful election.

        Sadder still is that Americans, in general, believe the headlines and rally behind their team without doing any research at all.

        • WTP said, on December 14, 2017 at 1:20 pm

          I don’t really expect to change anyone.
          Me neither. At least not necessarily the person that I am debating. But it depends on the person. In general, believe such an expectation is folly and such is not necessarily the main reason for debate. The minds that are up for grabs however, are those who watch on the sidelines. A second reason is…

          I enjoy the debate at face value, which is why I participate.
          As do I…well not so much for “face value” but I enjoy having my ideas challenged. I value dissent. I can argue many sides of a given issue. What I find most frustrating is that often times I can come up with better arguments against what I believe than certain other persons do. This is why I vociferously believe in freedom of speech and that attempts to suppress such animate me so.

          the arguments for and against all of this reasoning are hotly debated in economic circles, and are deeply nuanced and affected by a huge number of factors.
          Agree. Economics, much like environment issues and other highly complex systems, cannot be truly understood to the degree that most talking heads, college professors, poets, priests, politicians, and proles on all sides of these issues pretend. We know these sorts of things in a very approximate manner. But to give one example of what we do know is that socialism has been tried time and time and time again and has failed. Don’t want to get into debate about that right now, just saying where I see the edges of these things.

          Yet because such subjects are so complex, all the more reason to have a good debate on the subjects. It’s like the parable of the blind men and the elephant. No mortal can get his hands around such a complex subject. Each observer will have their own unique perspective. Only through combining such viewpoints can we hope to learn anything.

          The sad thing is that those who are running the show know this
          Some yes. But at the risk of sounding naive, over the years it has become clearer and clearer to me that those who are running the show have very little understanding of what it is that they are running. Hanlon’s Razor here. Stupidity often trumps malice.

          Sadder still is that Americans, in general, believe the headlines and rally behind their team without doing any research at all.
          Don’t think Americans are all that unique in this manner. And while many “woke”-ish types malign the Low Information Voter (LIV) I tend to cut them some slack. People have lives to live, jobs (often demanding jobs) to do, children to raise and they can’t be expected to pull every little piece of information needed. News organizations and educational institutions ostensibly exist for this purpose. And it is THIS that I find most infuriating. Not that each individual element of either institution gives bad information, but that so much of it is driven by taxpayer infused dollars to push a political agenda. I speak not only of the public-facing parts of these institutions but the back end “studies” that drive the news quasi-monopolies. Thankfully due to the ‘net these monopolies are starting to crumble. Again, a much bigger and complex issue than I have time for here. But you get the idea.

    • Michael LaBossiere said, on December 19, 2017 at 7:32 pm

      If those are the right numbers, then I will admit to being wrong specifically about Apple not hiring more people. As you note, as their profits piled up, they did hire about 43,000 people and they do pay software engineers a decent wage. This was, presumably, as the result of growth, etc.

      However, my generally point would still seem to stand: Apple is flush with cash, so if it really wanted to hire even more people and pay them more, they could easily use those billions to do so. They already pay very little in taxes (by various clever and perhaps legal means) so it seems very unlikely that a tax cut in the US would push them to hire significantly more people and raise wages even more. After all, they could do that right now. Unless, of course, they have some rule about requiring tax cuts to expand hiring and salaries.

      There are also all the other companies that are doing very well, but are flat in terms of hiring and wage increases. So, the general point still remains even if Apple is a special exception.

      • dh said, on December 19, 2017 at 9:06 pm

        Well, I’ll let you do your own research, but I don’t believe that Apple is a “special exception”. The point is that there is no requirement that there be a direct connection between tax cuts and hiring – no company is required to show a minimum amount of employment increase in order to qualify for a tax cut.

        OK, maybe I’ll do a little of the research for you:

        Amazon – Just added another 31,000 employees to bring its headcount to 382,000 – with plans to add another 50,000 employees in the next year. Their employee population exceeds that of Cleveland, OH, and there are no plans to scale back.

        https://www.geekwire.com/2017/amazon-adds-another-31k-employees-bringing-global-headcount-382k/

        Netflix: 2015: 3700 full time,
        Netflix: 2016: 4700 full time

        Facebook has tripled its employee headcount in the last three years, despite declining revenue:

        https://qz.com/975081/facebook-fb-is-adding-employees-at-a-faster-clip-even-as-revenue-growth-slows/

        Google: 2011: 31,000
        Google: 2016: 53,000
        Google: 2017: 62,000

        Microsoft: 2007: 78,000
        Microsoft: 2011: 90,000
        Microsoft: 2017: 124,000

        https://news.microsoft.com/facts-about-microsoft/

        The point is that Apple, Microsoft, Netflix, Facebook, Google, and every other company at every level will use this tax cut for one purpose only – and that is to increase profits. No individual or corporation in their right economic mind would just hoard the cash – if they do keep it in reserve, it is for a specific purpose aimed toward growth, expansion, and additional profit.

        For some, like Amazon, it will be direct – it will be hiring and job creation, if the hiring and job creation are the most direct route towards increased profitability. For others, like Apple and Microsoft, it will be research and development for new innovative products that they believe will increase their market share next year or the year after, or in five years or ten years – which will then create jobs. For still others, like AliBaba, it will be expansion and acquisition – but in any case, it will result in a dramatic increase in economic activity of all sorts, which will either directly or indirectly result in jobs this year or at some point in the future.

        Spending money results in economic activity. Economic activity means buying, selling, supply, demand, import, export, warehousing, development, design, manufacture, service – in short, employment

        When the government takes money out of our pockets, we are not free to spend it. It means I don’t go out to dinner once a week and a waiter doesn’t get a tip; it means my lawyer brother-in-law doesn’t go on vacation or buy a new car or boat, which means that everyone that supports those activities don’t make money – it means that the big FANG stocks (Facebook,Amazon,Netflix, Google) have less to buy with, less to expand with, less to warehouse with, less to deliver, less to pay commission on, less to purchase wholesale, less to develop, less to design with – and all that money goes to the black-hole of government and entitlements.

        On the other side of this, when these companies are profitable, it means higher stock prices and dividends – which are NOT mostly paid to the Wall Street “fatcats”, but to rank-and-file pensioniers like you and me who hope and pray that our 401-K’s are robust enough to offset Social Security and Medicare when we retire so that we can continue to be self-sufficient, or at least less dependent on the government. I would suggest you look at the prospectuses of not only your own investment account, but those of public-service unions (police, teachers, etc), and of private companies as well.

        Profits for companies are GOOD. We all benefit – increased employment, lower taxes, lower prices, and better retirement account performance.

        Critics are very quick to excoriate this tax plan for its future negative possibilities – I heard commentators on the news tonight decrying the middle class tax cut because it will expire in 10 – 12 years. Proponents of the tax reform claimed that Congress will take steps over the next 10 years to prevent this expiration, or to preserve this benefit. Which sounds more reasonable? Does anyone really believe that a Representative or Senator will, if these cuts are successful, risk his reelection by letting them expire?

        It’s the same critics that decry the permanence of benefits for the middle class who complain about the lack of direct and immediate hiring increases as a result of the tax cuts. I will not grant them the benefit of calling them “short-sighted” or even “ignorant”. These people understand economics, but prefer to put politics ahead of that understanding. They know that if Apple or Netflix plow the increased profits into R&D and even show a short-term reduction in employment, they are doing this for a long-term benefit that will explode on the economic front in 2, 3, or 5 years. Their problem is that they just can’t afford for that to happen – because in 2 years there will be a presidential election campaign, in 3 there will be the election itself, and in 5 there will be midterms again.

        It’s one thing to fight for what you believe in, but quite another to set that aside and lie about what you know and understand for anticipated political power and gain.

      • dh said, on December 19, 2017 at 9:30 pm

        My comment is “awaiting moderation”,presumably because of the number of links embedded. The following is the gist of the comment without the links. You can do your own Googling.

        “Well, I’ll let you do your own research, but I don’t believe that Apple is a “special exception”. The point is that there is no requirement that there be a direct connection between tax cuts and hiring – no company is required to show a minimum amount of employment increase in order to qualify for a tax cut.

        OK, maybe I’ll do a little of the research for you:

        Amazon – Just added another 31,000 employees to bring its headcount to 382,000 – with plans to add another 50,000 employees in the next year. Their employee population exceeds that of Cleveland, OH, and there are no plans to scale back.

        Netflix: 2015: 3700 full time,
        Netflix: 2016: 4700 full time

        Facebook has tripled its employee headcount in the last three years, despite declining revenue:

        (Please Google “Facebook Headcount” to see the foundation for the above comment)

        Google: 2011: 31,000
        Google: 2016: 53,000
        Google: 2017: 62,000

        Microsoft: 2007: 78,000
        Microsoft: 2011: 90,000
        Microsoft: 2017: 124,000

        (Please Google “Microsoft Headcount” for several articles supporting the above numbers)

        The point is that Apple, Microsoft, Netflix, Facebook, Google, and every other company at every level will use this tax cut for one purpose only – and that is to increase profits. No individual or corporation in their right economic mind would just hoard the cash – if they do keep it in reserve, it is for a specific purpose aimed toward growth, expansion, and additional profit.

        For some, like Amazon, it will be direct – it will be hiring and job creation, if the hiring and job creation are the most direct route towards increased profitability. For others, like Apple and Microsoft, it will be research and development for new innovative products that they believe will increase their market share next year or the year after, or in five years or ten years – which will then create jobs. For still others, like AliBaba, it will be expansion and acquisition – but in any case, it will result in a dramatic increase in economic activity of all sorts, which will either directly or indirectly result in jobs this year or at some point in the future.

        Spending money results in economic activity. Economic activity means buying, selling, supply, demand, import, export, warehousing, development, design, manufacture, service – in short, employment

        When the government takes money out of our pockets, we are not free to spend it. It means I don’t go out to dinner once a week and a waiter doesn’t get a tip; it means my lawyer brother-in-law doesn’t go on vacation or buy a new car or boat, which means that everyone that supports those activities don’t make money – it means that the big FANG stocks (Facebook,Amazon,Netflix, Google) have less to buy with, less to expand with, less to warehouse with, less to deliver, less to pay commission on, less to purchase wholesale, less to develop, less to design with – and all that money goes to the black-hole of government and entitlements.

        On the other side of this, when these companies are profitable, it means higher stock prices and dividends – which are NOT mostly paid to the Wall Street “fatcats”, but to rank-and-file pensioniers like you and me who hope and pray that our 401-K’s are robust enough to offset Social Security and Medicare when we retire so that we can continue to be self-sufficient, or at least less dependent on the government. I would suggest you look at the prospectuses of not only your own investment account, but those of public-service unions (police, teachers, etc), and of private companies as well.

        Profits for companies are GOOD. We all benefit – increased employment, lower taxes, lower prices, and better retirement account performance.

        Critics are very quick to excoriate this tax plan for its future negative possibilities – I heard commentators on the news tonight decrying the middle class tax cut because it will expire in 10 – 12 years. Proponents of the tax reform claimed that Congress will take steps over the next 10 years to prevent this expiration, or to preserve this benefit. Which sounds more reasonable? Does anyone really believe that a Representative or Senator will, if these cuts are successful, risk his reelection by letting them expire?

        It’s the same critics that decry the permanence of benefits for the middle class who complain about the lack of direct and immediate hiring increases as a result of the tax cuts. I will not grant them the benefit of calling them “short-sighted” or even “ignorant”. These people understand economics, but prefer to put politics ahead of that understanding. They know that if Apple or Netflix plow the increased profits into R&D and even show a short-term reduction in employment, they are doing this for a long-term benefit that will explode on the economic front in 2, 3, or 5 years. Their problem is that they just can’t afford for that to happen – because in 2 years there will be a presidential election campaign, in 3 there will be the election itself, and in 5 there will be midterms again.

        It’s one thing to fight for what you believe in, but quite another to set that aside and lie about what you know and understand for anticipated political power and gain.

        • Michael LaBossiere said, on December 20, 2017 at 12:35 pm

          I saw the comment had been put in stir because of the number of links and released it.

          • dh said, on December 20, 2017 at 2:55 pm

            Thanks. You can delete the one without the comments if you want …

            • dh said, on December 20, 2017 at 2:55 pm

              (meant to say “links”, not comments …)

  3. CoffeeTime said, on December 16, 2017 at 6:48 am

    It is a matter of faith (or talking point) for most Republicans that tax cuts will increase employment.

    While Hasty Generalisation is the one that makes the lists, simple over-generalisation is the most common logical fallacy I see.

    It is clear that some tax cuts, under certain conditions, can increase employment. It is also clear that some tax cuts, under certain conditions, will not increase employment, at least not significantly. And that raises the quantitative questions – under given economic conditions, how much employment will a specific tax cut make, in what sectors, in what geographical and demographic areas? – which are not addressed at all in standard political rhetoric. I would like to see politicians pressed on such forecasts.

    Economists, unlike most politicians, can consider nuanced plans.
    This may be a little unfair. I’m sure many politicians can consider nuanced plans, at least to weigh the claims of economists, but the public typically won’t watch or read the nuances, so it is usually more politically beneficial for them to ignore the complexity and trumpet simple slogans.

    From a rational standpoint, the most sensible approach would be to find what the majority of qualified experts in the field believe about the matter
    I am not at all sure about this. While it might make a point to form a Bayesian prior probability, there is a huge gap between our ability to explain and our ability to predict in many fields that deal with complex systems, economics being one of them. I consider appeals to consensus as an admission that we are clueless. I recall reading an article comparing the economic forecasts of a dozen or so economists for a year with the economic forecasts of a dozen or so psychics and astrologers. The two sets were about equally accurate. A man posted a decade-long bet to Al Gore at the time of the movie, suggesting Gore choose any IPCC model projection, against his prediction of no change in temperature in the averages of 120 months. When Gore declined, the man continued, choosing the IPCC’s central trend estimate as Gore’s assumed position. This article reminded me of that. I see the bet is in its last month, and unless the oceans start boiling by Christmas, the IPCC’s consensus would have lost the bet on Gore’s behalf. History is full of confident consensus proclamations that were shown to be wrong.

    • Michael LaBossiere said, on December 19, 2017 at 7:25 pm

      But if we are not experts in a field, then we are close to clueless and thus need a rational way to decide. The majority opinion of qualified experts is the rational way: those who are experts tend to be right more than those who are not and the majority is more likely to have it right. Obviously, there are cases in which the majority was wrong.

      It is, of course, a reasonable point to contend that economists do not qualify as legitimate experts because their field has no real predictive power, etc. This is consisting with accepting the stock argument from authority while applying its standards.

      • dh said, on December 19, 2017 at 10:27 pm

        I agree. I am no expert. Nor do I have a clue about who to believe. I do my “due diligence”, as I have indicated in other posts – I read the WSJ and the NYT, I listen to NPR and conservative talk radio, and try to draw my own conclusions – but it is tough. I’m an artist and an educator, not an economist or politician.

        So I pulled out my last years’ tax return. Our household income puts us in the top 10% of earners. Lucky me. (Doesn’t feel like it, with all the college debt I racked up for my kids, my mortgage, my car payments, groceries, and the NY State Income Tax … but whatever).

        So despite the fact that I live in one of the highest taxed states in the union (NY, CA, NJ), what does this tax reform do for me?

        My standard deduction is doubled – meaning I don’t have to go through the painful process of itemizing the computers and software I buy to support my profession; I don’t have to measure the square-footage of the walk-in-closet I use to do my research and grading; I don’t have to try to figure out if my car payments are enough to justify working out the depreciation spreadsheet to eke out another $800 in deductions – I just get it.

        What does this cost? Well, the biggest objection these days is the high state tax rates. OMG – I can’t deduct my state taxes from my return! Well, at my top 10% income, I paid a little over $3,000 to the state of New York. The cap is $10,000. I make out like a bandit. Anyone with an income less than mine makes out even better. And I’m in the top 10%.

        You have to be making a TON of money to hit that $10,000 cap – and yet the pressure is on on the State of New York to address their usury State Income Taxes that go to one of the most corrupt State Capitals in the country. I cannot help but see this as a good thing.

        So who is not getting the benefit here? I’m in the top 10% and it ain’t me – maybe the top 5%? Hardly. Do the math. It is a direct, measurable, and substantial benefit for the upper middle, middle, and lower middle classes.

        Back to my own 1040. I get a great deduction for my mortgage. It doesn’t go away. When does it fall away? “New mortgages of $750,000 and up”. Who borrows this level of money? The $50,000/year average middle class? In what world?

        I was concerned about the change in deduction for home-equity loans and lines of credit. Those who oppose this tax reform complain that cheap home-equity credit is a last resort for people who have high credit card debt, or who have no other recourse … but really? Do these people remember the recent housing crisis?

        I sure do. I had a home in NJ where the value just kept going up and up and up. Banks were THROWING money at me. A simple phone call inquiring about interest rates would result in an immediate approval and an invitation to just come in and sign. After all, why wouldn’t you take a $20,000 HELOC on a property whose value is at $300,000 and only going up, at a tax-deductible 6%, to pay off credit cards at 18%?

        So we did. (It didn’t help that my childhood best friend was in the business). In the end, the market crashed, our home value bottomed out, we were under water with our mortgage, and when we had to move to take advantage of a career opportunity, we had no choice but to foreclose. How many thousands of Americans were in this same situation, only with different details?

        Democrats cried out for reform. Cried out for “regulation”. Cried out for “protection for the great unwashed”. So I ask – WTF is this? Take away the tax deduction, reduce the incentive for using your house as an ATM, and substantially curtail the problem. And take a sales pitch away from the banks and mortgage companies.

        We don’t need to rely on the “experts” to tell us what is good and what is bad. All we need to do is look at our own lives, our own tax returns, our own income, our own obligations, and we can make our own decisions.

        Some of this I will take on faith, as I have indicated on other posts. When the FANG stocks (Facebook, Amazon, Netflx, Google) enjoy a big tax break, I don’t worry about how much their CEO’s make, I look at the reduced burden on Welfare, Unemployment, Social Security, and Medicare. (I’ve already posted the information on the tens of thousands of annual job increases these companies are responsible for). I trust that they won’t just hire more people out of charity, but will increase their profits to increase wealth across the board, which will result in more jobs and higher wages because the business model not only justifies, but demands it.

        I look at lower prices, free shipping, bundled buying incentives and more UPS and FedEx trucks cruising my neighborhood. I look at the rising graph of my 401-K, and think about retiring a year or two earlier, or heading to Belize for a week in February (remember, I’m in Rochester!). Despite my glee at the profitability of these big companies, I am very locally focused – and I cannot tell you how warm I feel when I go to my local ACE hardware franchise store and see a half-dozen new faces sporting the “Meyer Hardware” polo shirt, zig-zagging up and down the aisles asking “can I help you?” Where does this COME from? (HInt: “Corporate Tax Cuts).

        No one needs to know if I’m a Republican or Democrat, a Conservative or LIberal, a Muslim, a Jew, or a Christian. The numbers don’t lie, and they will say unequivocally that my family and I will have a direct and immediate benefit from this tax reform – right in black-and-white on our 1040. They also say that we will pay less for goods and services locally – because competition is real and fierce – so our cost of living will go down. I’ve run the numbers where I can, and I’m pretty happy.

        Will the Wall Street Brokers say the same? What about the coal miners of Pittsburgh? What about the car dealers, the runners at Amazon, the “Geniuses” at the Apple Stores? Some yes, some no – and hopefully, this will come out with the elections in 2018 and 2020. If people are doing better, those who helped to foster that improvement will get re-elected. Unless, of course, the election is based on other factors – which it so absolutely could. (“I don’t care if I am saving $2500 in my tax liability – she said he groped her, and that’s enough for me!”)

        Forget the prognosticators. They’re always wrong anyway. We live in a Representative Republic, and (hopefully) people will vote based on their own situations and their critical analysis of same, and not on what some pundit tells them they should be concerned (or envious) about.

        • Michael LaBossiere said, on December 20, 2017 at 12:42 pm

          You do raise an interesting point about the state income taxes. Initially, the coverage tended to leave out the $10,000 cap and it sounded like an awful idea. After all, it sounded like no one could deduct their state taxes. Florida doesn’t have a state income tax, but when I lived in Maine I do recall the triple tax whammy of state, local and federal. But, as you say, that $10,000 cap seems to cover most people so the hit is not nearly as bad as it sounds.

          I do have my doubts that the tax cuts will pay for themselves. It reminds me a bit of someone who claims that the calories they expend going to get donuts will offset the calories of the donuts they eat. The few remaining deficit hawks seem worried as well. But, each party seems to have the “principle” that the deficit is bad when the other party is in charge, otherwise it is fine.

          • dh said, on December 20, 2017 at 4:44 pm

            The cap (which I have yet to hear any Democrat to mention – they all talk as though it doesn’t exist …) seems to cover those for whom it is intended – i.e., the middle class. Those who exceed that cap and have to pay taxes on the overage have, by definition, very high incomes or very high mortgages, and are exactly the ones (“the rich”) that the left wants to tax. I think that casting this as being damaging to the middle class is disingenuous and politically motivated. I listen to the Democratic members of Congress talk about this with phrases like “This will destroy the middle class”, but the only specifics they mention are the 10-year expiration of the cut and the (implied complete) disappearance of the SALT.

            I agree – that to leave out the cap does seem like an awful idea, but even if it had been left out, when it’s paired with the doubling of the standard deduction, I suspect it would be a wash for most people – or at least those who live in high-tax states like NY or NJ. Unless, of course, you are a high-income individual or family.

            While I, too, am skeptical of the whole “pay for themselves” idea, I think your example may be a little extreme. The idea is based on the law of large numbers – if lower taxes allow for more people to work and pay those taxes, you’ll get more gross revenue than you will with fewer people paying higher taxes – and less burden from entitlements like food stamps, unemployment benefits, welfare, etc. No doubt some Democrat will trot out all sorts of graphs and spreadsheets next year to show how expensive this reform is – and some Republican will use a different, but equally viable metric to show the opposite.

      • CoffeeTime said, on December 20, 2017 at 10:40 am

        It is, of course, a reasonable point to contend that economists do not qualify as legitimate experts because their field has no real predictive power
        That is closer to my position. I would not be so sweeping as to say that “economists do not qualify as legitimate experts” in general.

        Let’s take an example more in line with common experience. If I am arranging a weekend event, and I want part of it to be outdoors, should I arrange that part for Saturday or Sunday? If the event is to be held this weekend, a meteorologist will likely give me a somewhat reliable estimate of which day is less likely to have rain. I can even look up the recorded accuracy of 5-day forecasts in my area to quantify this likelihood. If the event is a month away, a meteorologist’s opinion will have exactly the same value as a coin-flip. I do not say that meteorologists are not experts, just that it is not rational to value their advice in this instance above a coin-flip.

        Economics as it is practiced today has very little predictive power. We know this for certain because there are no massively rich economists. Therefore, it is not rational to give much weight to any simple predictions made by a small set of economists. Economists can usually outline a sequence of things that will happen following an action, and that can be very useful information. However, many things will happen that are not captured in their model or that they didn’t imagine, and they are extremely likely to be wrong quantitatively. Like: “this will boost exports of X by 30%”, and it does boost exports, but only by 8%, which leads to a further deviation from prediction in manufacturing, which leads to … the complete failure of the prediction.

        And therefore it may wll be rational to consult economists, and they will give useful insights in some cases, and it may be rational to consider the group opinion of a large number of economists who have studied the issue due consideration as a starting guess, but no more than that.

        • CoffeeTime said, on December 20, 2017 at 11:56 am

          Afterthought – my position is better stated:

          Anyone proposing that a specific gathering of expert opinions in any field where prediction is known to be unreliable has the onus of justifying why this specific sample is more reliable than random chance in this specific prediction, and quantifying the degree of confidence we should put in the conclusion of this sample.

          • Michael LaBossiere said, on December 20, 2017 at 12:55 pm

            True, if the majority gets it right 50% of the time, you might as well defer to the authority of a coin toss.

        • Michael LaBossiere said, on December 20, 2017 at 12:52 pm

          The reasoning that the lack of incredibly rich economists shows that economics lacks predictive power is an interesting point. But, it does assume that economists are trying to become massively wealthy. To use an analogy, it could be a bit like saying that coaches are not very good because so few of them have gotten gold medals or been pros in the sport they coach.

          • CoffeeTime said, on December 20, 2017 at 1:24 pm

            Clearly, many economists would like to become massively wealthy. In fact, there are very few humans of any kind who would refuse a billion dollars if it were offered. I had an economist friend years ago. My standard line to him was “Why would I believe an economist who has to work for a living?”

            Economists know that they cannot predict. In general, they regard this as a feature, not a bug, and that’s a long conversation.

            The point about coaches is somewhat different, though, and reminds me of the Peter Principle. A good teacher may make a terrible principal. Even though that is the promotion path, the jobs are very different, and there is no reason to believe that a good principal needs to be a good teacher. Similarly, we don’t require hospital administrators to be physicians. The qualities needed to be a good coach do not require exceptional ability in the sport – and a former world-class athlete could make a terrible coach.

          • dh said, on December 20, 2017 at 4:49 pm

            More like those guys who hold weekend seminars telling people how to get rich in sales or real estate, who make all their money from the seminars – or stockbrokers whose wealth is all based on hefty commissions, not investing.

            Actually, I do know one guy who used to write a column on horseracing; he was very popular and knowledgeable on the subject. He did in fact make a ton of money at the track – but he only bet on one or two races a year. What does that tell you?

        • WTP said, on December 20, 2017 at 7:05 pm

          This discussion is really very amusing when you consider that Mike wouldn’t know an economics expert if one walked right up to him and tried to explain the negative impact of minimum wage laws, what is wrong about the labor theory of value, or what wealth is and/or where it comes from. Yet he would consider Marx and Engles as such knid of experts.

  4. WTP said, on December 16, 2017 at 2:45 pm

    Economists, unlike most politicians, can consider nuanced plans.
    This may be a little unfair.

    I wouldn’t say it is so much “unfair” as being an absurdity in itself. Nuance is not something for a highly complex (as you elaborate a bit later on) system like economics. Any economist who makes claims or such about nuanced positions and such (see “real socialism has never been tried” as just one example) is not really an economist but a frustrated politician.

    From a rational standpoint, the most sensible approach would be to find what the majority of qualified experts in the field believe about the matter
    I am not at all sure about this.

    I am quite sure about it. Sure about it being ignorant of knowing the limits of what we really know and even can know. “Qualified experts” in a complex subject that is, in it’s details, beyond human comprehension, where the incentives to politicize “evidence” are so extreme that many “qualified experts” can say things like, again, “real socialism has never been tried” and expect to be taken seriously.

    In regard to complex systems and “experts” and such:

    A man posted a decade-long bet to Al Gore at the time of the movie, suggesting Gore choose any IPCC model projection, against his prediction of no change in temperature in the averages of 120 months. When Gore declined, the man continued, choosing the IPCC’s central trend estimate as Gore’s assumed position.

    This. This most definitely. People want to take concrete actions limiting the freedoms of others in the name of “saving the planet” or “humanity” or what have you, can be counted on to dodge skeptics who seek objective proof. Back in the early 80’s there was another such wager made by a skeptic. Perhaps you are familiar:
    https://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager

    Running out of time here. One thing I would get a great deal of intellectual knowledge and value from would be a discussion on these very economic matters with yourself, DH, and possibly TJ if interested, without the distractions of Mike’s flat-earth, zero-sum-game (non-)understanding of the subject. Not some quickie thing but a longer detailed discussion over a few weeks or months. Would y’all be interested in such?

  5. TJB said, on December 16, 2017 at 9:18 pm

    I just wish the GOP had the cojones to tackle excessive entitlement spending. Deficits are going to skyrocket.

    • WTP said, on December 16, 2017 at 11:03 pm

      Define “entitlement”.

      • TJB said, on December 17, 2017 at 11:22 am

        Medicare and social security, mainly.

        • WTP said, on December 17, 2017 at 9:28 pm

          So…if I pay you a given sum of money over many decades with the expectation that you will pay me that money back (and perhaps some interest), kinda like an annuity, how does that show up on your books? Isn’t that a “liabilty” or perhaps a debt that you owe?

          Also, what is the word used most often these days to describe the attitude of those who feel they are owed something, like an education or a job or such, regardless of the effort, or even lack thereof, that they put forth?

          • dh said, on December 18, 2017 at 6:39 pm

            “So…if I pay you a given sum of money over many decades with the expectation that you will pay me that money back (and perhaps some interest), kinda like an annuity…” Are you talking about Social Security here? There is no expectation of “payback” or “interest”. The money you pay into the system is a tax, and it would show up on your books as a liability. and it is supposed to go directly to help retirees. The expectation that you might have is that lawmakers would respect this, and keep the system solvent so that when you retire, your children’s generation would support you.

            If you own an annuity and it is in the “accumulation” phase, it does not show up as a debt or a liability because it is a unilateral contract – meaning that if you stop paying into it it just goes away. There is no effect on your credit rating or business standing, there is no legal ramification (unless you are providing the annuity for employees, which is something entirely different). When you annuitize and begin taking your contributions out with interest, then it becomes taxable income.

            On the other hand, annuity companies are required by law to maintain reserves, subject to audit, along with re-insurance policies to guarantee solvency so they can meet their current obligations in both the accumulation phase (paying guaranteed interest rates on any guaranteed interest parts of the contract) and the distribution phase, paying monthly income for life, or whatever the contract states.

            There are similar rules for employers holding annuities in retirement benefit packages on behalf of their employees.

            Not so with Social Security – it’s like “free money” to elected officials to spend however they can get away with in order to secure votes from their districts. The funds are only “guaranteed” by the taxing authority of the US Government.

            “Also, what is the word used most often these days to describe the attitude of those who feel they are owed something, like an education or a job or such, regardless of the effort, or even lack thereof, that they put forth?”

            “American”

            • WTP said, on December 19, 2017 at 4:33 pm

              Are you talking about Social Security here?
              Ah…obviously? Or no? I was making an analogy to something similar to SS. My point was that if any other entity, other than the government, is taking money from someone with the mutual understanding that so long as that person is alive or certain limited beneficiaries of that person is/are alive, that future payout would need to be accounted for on that entity’s books. That FDR gave that money away to the elderly back in the 1930’s does not excuse the fact that there is a payment owed to those who paid that money in. Perhaps a whole life policy would be more appropriate. Though one where the insurance company gave away your payments to what it saw as a “charitable” cause or on hookers and beer. Either way, that money is still owed to someone. If you owe someone money, that is a liability or a debt. To use the term “entitlement” especially in the context in which it is currently being used when referring to people who feel entitled to things such as an education, etc. is as disingenuous as calling a government monopoly on health care “single payer”. There is no reason to use the term “entitlement” here when SS is what is meant. For decades SS fund has been in trouble but at least people were honest about the terminology. There is no need to obfuscate this term. And it is exceptionally dishonest to use it in such a way and then pretend that those over whose heads it goes lack sophistication. That is the game being played here. Orwell wrote about controlling the language decades ago. Again, he was not writing an instruction manual, he was trying to warn people. Lot of good that did…

              As for “American”, not any Americans that I was raised by nor respected. Perhaps you meant to say “Snowflake”.

        • dh said, on December 18, 2017 at 6:25 pm

          I have a good friend whose husband is a named partner in a large law firm. I would be surprised if his income were less than $500 – $600K per year. She has worked for ten years or more as a receptionist in an animal hospital, for reasons other than income.

          Anyway, when she reached 62, she sadly announced to me that she “had to quit her job” because if she didn’t, her earned income would mean a reduction in Social Security benefits. I tried to explain to her that this reduction was there precisely because she is able to work, meaning that more money would be available in the system to help offset the needs of those who had to retire, had no jobs, couldn’t work, or truly needed the help from the government. Despite her strong liberal leanings about government assistance for the needy, the rich having too much (the “rich” meaning those with more than her), and the sanctity of the Social Security system, she grew very angry with me when I characterized her attitude as “abuse”.

          This issue is fraught with loopholes that people of all stripe are all too willing to take – and feel very entitled to take. Her actions are not illegal, they are not fraud, they seem very justified … but people who do this (and I’m sure they are all over) are taking the food out of the mouths of those who truly need it.

          Which is not to say that the abuse doesn’t exist at every economic level. I think I have told the story about the family I saw last year who parked their brand-new, white Lexus SUV (with gold trim) in the handicapped spot at the local Wal-Mart, and who proceeded to pay for their groceries with an EBT card. I used to see this kind of thing all the time at the local food market, which shared a parking lot with the liquor store. On payday, the people would cash their checks at the liquor store and buy arms-length lottery tickets along with their pint-bottles of Jack, then go use the EBT cards to buy groceries.

          There’s something wrong with this system. I have a lot of sympathy for the folks in the latter group – they seem disenfranchised and alienated, and are desperate for a way out – but for my friend and the Lexus driver, they are only gaming the system as part of an overall comprehensive financial plan; they feel perfectly justified in their actions and part of their ethical underpinnings include “If I didn’t do this, someone else would”, and “It’s my money – I paid into the system”, or “I am owed this”.

          • WTP said, on December 19, 2017 at 4:43 pm

            I tried to explain to her that this reduction was there precisely because she is able to work, meaning that more money would be available in the system to help offset the needs of those who had to retire, had no jobs, couldn’t work, or truly needed the help from the government

            You seem to view SS as a form of welfare. Regardless of the woman’s politics, she is perfectly entitled to that money. She earned it. If the SS “contract” is not as expected, if it is supposed to be simply a welfare payment to the poor, then we are putting way too much money into it. She is not “gaming the system”. SS is not an EBT card. To conflate the two is simply wrong and I don’t blame her one bit for being angry at your insinuation. SS is a respected aspect of retirement planning. SS was never meant to support people in their old age, it was meant as a supplement to retirement. Which perhaps is where you may be confused. There is something called SSI (Supplemental Security Income) which is, as copied from the web page:

            Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes):

            * It is designed to help aged, blind, and disabled people, who have little or no income; and
            * It provides cash to meet basic needs for food, clothing, and shelter.

            https://www.ssa.gov/ssi/

            • dh said, on December 20, 2017 at 3:02 pm

              I suppose you are right – I am responding mostly to the outcry (voiced also by my friend), whenever anyone tries to privatize Social Security, or a portion of it. “IT’S A SAFETY NET FOR PEOPLE WHO HAVE NO OTHER INCOME!!” Whenever there is a system wherein someone says, “I can’t work, because I’ll lose my government benefits if I do …” there’s something wrong.

            • WTP said, on December 20, 2017 at 3:57 pm

              Whenever there is a system wherein someone says, “I can’t work, because I’ll lose my government benefits if I do …” there’s something wrong.

              Agree. Part of the idea back when SS was conceived was that jobs were somehow a limited/fixed resource and that older people who continued to work were “taking jobs” from younger people. This was something that was pushed to sell the idea to younger workers who would be paying the tax to be transferred to the older folks who had never contributed to the system. A 1% (or whatevs it was) tax was an easy sell to people who figured the other 99% would come to them in income if the old folks got out of the way and the jobs they were filling opened up. An economic fallacy to anyone who understands economics. Unlike noted “expert” John Maynard Keynes. Older people who were still healthy and capable of work were pressured to “get out of the way”. My grandfather was forced to quit working in the 1940’s and according to my father, that is what sent him into a downward spiral of depression. Now there is something that was even more wrong.

  6. TJB said, on December 19, 2017 at 10:36 pm

    Curious what you guys think about this:

    https://eand.co/what-do-you-call-a-world-that-cant-learn-from-itself-58ae28cefd23

    • Michael LaBossiere said, on December 20, 2017 at 12:48 pm

      The author should visit some other American cities and towns. But, he is right about the infrastructure problems.

    • dh said, on December 20, 2017 at 3:07 pm

      Right below that article is a little bit of click-bait titled “How to Stop Others From Dictating Your Worth”.

    • TJB said, on December 20, 2017 at 7:03 pm

      As a scientist, I meet a lot of European scientists who have jobs in the U.S., either at universities or at national labs. Almost all of them express the desire that the U.S. should be more like Europe. The irony that the U.S. system produced a job for them and the European system did not never seems to register with any of them.

  7. WTP said, on December 21, 2017 at 9:23 am

    Waiting…waiting…hell, do I have to do everything around here?

    If companies are already enjoying high post-tax profits but are not investing or increasing wages, then there is no reason to think that a tax cut will suddenly spur them into action. To use an analogy, if I have piles of extra money but I am not using it to improve my house, then it would be rather odd to claim that if I was given a tax cut I would suddenly engage in home improvements. After all, I already have the money to make improvements and would do so if that was what I wanted to do.


    * #Boeing announces $300M employee-related and charitable investment as a result of #TaxReform legislation to support our heroes, our homes and our future.
    * AT&T is giving $1,000 bonuses to 200,000 employees after tax bill
    The telecom giant said it would give more than 200,000 U.S. union members a special bonus of $1,000.
    * Comcast chief executive Brian Roberts said the company would be giving out $1,000 bonuses to “eligible frontline and non-executive employees.” Comcast also said it would be investing “well in excess of $50 billion” over the next five years into its infrastructure, media businesses and theme parks, in light of the legislation and of the Federal Communications Commission’s recent decision to deregulate the broadband industry.
    * Fifth Third Bank headquarters in Cincinnati, Ohio. Fifth Third Bank to give bonuses, raise minimum wage after tax bill passage
    * Wells Fargo, meanwhile, also said it would be boosting its minimum wage for employees to $15 an hour, which was prompted by the tax plan. The San Francisco-based bank also said it would target $400 million in donations to community and nonprofit organizations next year.

    …Well I need not go on. You get the picture. So stick that in your hypofacto sillyjism and smoke it.

    • WTP said, on December 21, 2017 at 8:36 pm

      Ooh, look! FedEx and CVS as well!

      * Per FedEx, their plan is to the company will escalate hiring more employees in response to the tax bill. The chairman of FedEx, Frederick Smith stated, “We’re encouraged by the Tax Cuts and Jobs Act legislation advancing in Congress at this very moment. This legislation offers pro-growth, pro-business tax reform solutions that will power the economy.”
      * CVS Health, stated in October that if the corporate tax rate went down, they would generate 3,000 permanent new jobs. The CFO of CVS Health, David Denton said, “To the degree that we have [tax] relief, there’s a lot of investments that we think we can make within our business model that can more rapidly expand our business model across the country and deliver better care and higher quality and lower cost. So, we would look to take the benefit of that and invest it clearly.”

      No response from Mike though. Things are prolly mighty gloomy in the faculty lounge. Those not busy trying to spin this as bad for workers must be busy crying.

      • WTP said, on December 24, 2017 at 12:35 am

        Yep. No reason. None whatsoever.

      • Michael LaBossiere said, on December 26, 2017 at 6:29 pm

        If they follow through and do so because of the tax cuts (that is, they weren’t already planning on doing this), then great.

    • WTP said, on December 24, 2017 at 8:55 am

      CALLER: Yeah. I had a quick comment about Comcast. It’s not just bonuses that they’re giving out. I received $1.50 an hour raise yesterday as well as 10 other folks in my office. So if they’re saying it’s just bonuses, it’s not. I mean, this is fantastic.
      RUSH: Are you suspicious of it?

      CALLER: Am I suspicious?

      RUSH: Let me take you out of the equation. Let me just ask you this. Were there people in your office after the bonuses and raises were announced, were there people in your office who ran around saying, “This isn’t real. They’re just doing this to suck up to Trump. They’re just doing this for PR. They don’t really mean it.” Did you have anybody who reacted to it that way?

      CALLER: Not in my office.

      RUSH: Really? Really? Good, good. ‘Cause I would guess in your office, based on percentages, there’d be some leftist in there who would want to diminish this and try to cast it as something unreal. I mean, it’s real, but they want to tell you that Comcast really doesn’t mean it, they don’t really mean it, they’re just doing it to please Trump or whatever, you know, capitalize PR-wise.

      Let me share this with you. Speaking of conservative intellectuals. I’m not gonna mention a name. It’s not the point. But this is a well-known, previously thought of as dynamic leader of the intellectual conservative so-called movement. Here’s the tweet. “Isn’t there something creepy about corporations giving cash bonuses to employees explicitly because of the passage of certain legislation or because of specific regulatory actions? Doesn’t it have something of a road to corporatist serfdom feel about it?” Did you have any reaction like that? Are you suspicious of this? Do you feel this is creepy?

      CALLER: This isn’t creepy at all. It’s why we come to work.

      RUSH: Were you surprised by it?

      CALLER: Extremely. It was not announced. This is not the cost-of-living annual raise that we receive every year.

      RUSH: Let me ask you this. Was there any whispering that this might happen if the tax bill passed? Had Comcast management whispered around and let it be known to you employees that if the tax bill passed, there might be some raises or a bonus?

      CALLER: No.

      RUSH: None?

      CALLER: No whispering. There was nothing said. It was quite a shock yesterday.

      • Michael LaBossiere said, on December 26, 2017 at 6:26 pm

        I hope I am completely wrong about the tax cuts; if most companies use the cuts to hire more workers and boost salaries for lower-paid employees, then that would be great.

        When it comes to bettering the lot of Americans, I do not want Trump or the Republicans to fail. In fact, if they manage to spread the prosperity all the way down to the minimum wage workers and enable all Americans to have affordable health care, then I’ll switch parties.

        • WTP said, on December 27, 2017 at 10:02 am

          Well that is at least something. Grudgingly. And yet still saying nothing.
          I hope I am completely wrong about the tax cuts; if most companies use the cuts to hire more workers and boost salaries for lower-paid employees, then that would be great.

          You mocked the idea that companies would actually do such a thing, then they do that very thing and you pretend it is not happening. “If most companies”? People, front line employees, working for the companies that I reference above are getting more money in their paychecks. Without this tax bill, they would not be getting that money. News stories of this kind do not get any clearer in this regard than this one. Are you saying that unless ALL companies use the cuts in the manner you snidely inferred would not happen at all, that the money going to employees of these other companies does not justify the former ones getting such? Is this somehow “unfair”? You say “that would be great”…No, it IS great. Why can’t you admit that without tortured qualification?

          Also…In fact, if they manage to spread the prosperity all the way down to the minimum wage workers As I state above, THEY JUST DID THAT…and enable all Americans to have affordable health care…OK, now move the goal posts so that you can remain unsatisfied. But if you want to bring health care into this, and “affordable” no less, putting aside that you leave yourself a huge out by using this qualifier, what/how do you expect health care to ever be “affordable”? What level of care? Who pays what? Why is it even the government’s responsibility to make it “affordable”? From what I have seen, government interference in the health care market…in many, many more ways that I care to get into in this comment… is what has driven the prices higher. Last year I was paying nearly $1300/month for the wife and I, with $7000 deductibles on each of us for a possible total of $14,000. Starting next month that amount is going up by over $250/month to a total of over $1550/month. Yet if I were to make $20,000 less next year I would only have to pay $186/month. This is the Obamacare mess that you and your fellow travelers have forced upon us. We have no other option except to pay even more for a lower deductible.

  8. TJB said, on December 21, 2017 at 11:20 pm

    Question of the day: does the word “populism” actually mean something?

    • WTP said, on December 22, 2017 at 6:56 am

      No. The question of the day…well week, really…is can an educator admit that they were wrong about something? Because if someone cannot admit that they were wrong, how can they possibly learn anything? Philosophically, of course. Can someone who lacks the capacity to learn be an effective educator? Aside from doing so in a “bad example” way?

      So many questions. Populism isn’t the one that I see as most pressing.

    • Michael LaBossiere said, on December 26, 2017 at 6:28 pm

      Coincidentally, I just watched a documentary on Huey Long, master of populism. Trump seems to be sort of a discount Huey Long.

      • WTP said, on December 27, 2017 at 10:24 am

        “Populism” is a sour grapes term used by those who lose elections. In a democracy politician has to have some level of popular support to get elected. Those who trot out the term “populism” never do so when their preferred candidate is elected. Especially when voters cross party lines to elect someone other than the guy the leaders of their home party think they should vote for. So now it’s Huey Long. Well, that’s at least some improvement. Yet aside from the “populism” label, which many applied to Reagan as well, what specifically makes Trump a “discount” Huey Long? Aside from the fact that Long hailed from some crappy backwater LA parish and Trump was raised amongst the elite of NYC.

  9. CoffeeTime said, on December 22, 2017 at 11:27 am

    I’m inclined to think that no word ending in “ism” has a single, universally-agreed meaning.

    Except “prism”.

    • TJB said, on December 23, 2017 at 12:18 am

      I think “populism” only means “the hoi polloi didn’t vote the way we wanted them to.’

  10. WTP said, on January 5, 2018 at 9:08 pm

    Unquestionable, matter of faith, rational, etc., etc. etc…

    The number of companies offering employee bonuses, pay hikes, and increases in benefits in reaction to President Trump’s December tax reform victory is now over 100, with thousands of workers impacted and charities too.

    Less than a day after Americans for Tax Reform put out an initial list of 40, it jumped to 52 as more company plans poured in.

    http://www.washingtonexaminer.com/over-100-companies-giving-trump-bonuses-after-tax-victory-tsunami-building/article/2644944

  11. WTP said, on January 11, 2018 at 3:43 pm

    If companies are already enjoying high post-tax profits but are not investing or increasing wages, then there is no reason to think that a tax cut will suddenly spur them into action.

    The hits, they just keep on coming…

    Walmart, the world’s largest private employer, is boosting its starting salary for U.S. workers to $11 an hour, giving a one-time cash bonus of up to $1,000 to eligible employees and expanding its maternity and parental leave benefits.

    The retailer said Thursday that changes to its compensation and benefits policy will impact more than a million hourly workers in the U.S. The company employs 1.5 million people in the U.S.

    The wage increase, up from $9 per hour for new workers, comes into play next month.

    The company is also creating a new benefit to assist employees with adoption expenses.

    CEO Doug McMillon said in prepared statement that recently enacted tax legislation “gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.

    http://abcnews.go.com/Business/wireStory/walmart-raises-starting-wages-handing-1k-bonuses-52279082

    Still no reason, eh Bueller? Bueller? …Anyone?…Bueller?…Anyone?

  12. WTP said, on January 11, 2018 at 4:27 pm

    Heh…didn’t see this piece of economic ignorance until now…
    According to Senator Charles Grassley, there are people who invest and those who are “spending every darn penny they have, whether it’s on booze or women or movies.”

    While I don’t believe the government should be targeting where the economic power of a country is spent, this argument for spending on wine, women, and song over investing would get one laughed out of any financial planner’s office…unless the FP was some sort of scammer. To endorse such an “understanding” of ecnomics flies in the face of simple common sense, not to mention the understanding of most serious econonmists. The ignorance here is astounding. But Mike will never, ever cop to it. Why the rest of you let it pass is beyond me as well.

    But then Mike was even opposed to the the tax plan that provided more money for wine, women, and song amongst those in the Waste Management industry…

    A worker empties garbage from a Waste Management trash bin in Seattle.
    David Ryder | Bloomberg | Getty Images
    A worker empties garbage from a Waste Management trash bin in Seattle.
    Waste Management said Wednesday that it will give $2,000 in special bonuses to about 34,000 employees.

    The company said the cash bonuses will be given to its North American employees who are not on a bonus or sales incentive plan, including hourly and other employees.

    The news comes after other companies have made similar announcements, citing the passage of tax legislation that slashes the corporate tax rate to 21 percent from 35 percent.

    CEO Jim Fish said in a statement the company wanted to pass on the tax benefit to its employees.

    https://www.cnbc.com/2018/01/10/waste-management-to-give-some-workers-2000-in-bonuses-after-tax-bill.html

    A simple “No mas” will do…

  13. WTP said, on January 17, 2018 at 7:47 pm

    Ooh, looky looky…someone even did a video version. Workers of the world, unite! Throw off your marxist intellectual chains…

  14. WTP said, on January 18, 2018 at 5:17 pm

    Apple will invest $350 billion in the US economy over the next 5 years Apple will invest $350 billion in the US economy over the next 5 years
    4:04 PM ET Wed, 17 Jan 2018 | 00:46
    Apple on Wednesday made a slew of announcements about its investment in and contribution to the U.S. economy in part because of the new tax law.

    The headline from Apple is that it will make a $350 billion “contribution” to the U.S. economy over the next five years, although it’s unclear exactly how the company came to that number.

    The company also promised to create 20,000 new jobs and open a new campus.

    It said it expects to pay about $38 billion in taxes for the horde of cash it plans to bring back to the United States. This implies it will repatriate virtually all of its $250 billion in overseas cash.

    Apple also said it will spend over $30 billion in capital expenditures over the next five years. About $10 billion in capital expenditures will be investments in U.S. data centers, the company said.

    https://www.cnbc.com/2018/01/17/apple-announces-350-billion-investment-20k-jobs-over-5-years.html

    Yeah b*ches. Kickin’ it old school…

    UHH! Let me get down, do my thing
    I always bring, shit that always make your ass swing
    Holding down the fort while we keep shit tight
    Hit you with that bang shit that keep you live all night
    Makin moves strong while we keep rockin on
    Now the object is survival son so get your hustle on

  15. WTP said, on January 22, 2018 at 11:24 pm

    At last. If Mike won’t answer, the good leftists of the California legislature will…

    SACRAMENTO — California lawmakers are targeting the expected windfall that companies in the state would see under the federal tax overhaul with a bill that would require businesses to turn over half to the state.
    A proposed Assembly Constitutional Amendment by Assemblymen Kevin McCarty, D-Sacramento, and Phil Ting, D-San Francisco, would create a tax surcharge on California companies making more than $1 million so that half of their federal tax cut would instead go to programs that benefit low-income and middle-class families.
    “Trump’s tax reform plan was nothing more than a middle-class tax increase,” Ting said in a statement. “It is unconscionable to force working families to pay the price for tax breaks and loopholes benefiting corporations and wealthy individuals. This bill will help blunt the impact of the federal tax plan on everyday Californians by protecting funding for education, affordable health care, and other core priorities.”

    http://www.sfgate.com/bayarea/article/California-democrats-want-businesses-to-give-half-12508742.php


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