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With Tax Bill passing, what are the net effects?

ticket2ride04

ticket2ride04

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This is mostly a cut for Businesses dressed up as a cut for all. In reality, a good portion of people will see their taxes go up.

Anyway, I’m not totally opposed to seeing the corporate rate go to 20%. But what happens now? Do we see:

- more jobs?
- companies invest in PPE?
- wage growth?
-repatriation of offshore monies?

What will your opinion be if none of the above happens and the money is concentrated in stock buy-backs and higher executive pay?
 
ticket2ride04 said:
This is mostly a cut for Businesses dressed up as a cut for all. In reality, a good portion of people will see their taxes go up.

Anyway, I’m not totally opposed to seeing the corporate rate go to 20%. But what happens now? Do we see:

- more jobs?
- companies invest in PPE?
- wage growth?
-repatriation of offshore monies?

What will your opinion be if none of the above happens and the money is concentrated in stock buy-backs and higher executive pay?
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We already have a tax bill thread Gary.
 
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ticket2ride04 said:
Time stamp is off IFYAM.

Anyway, this is a discussion about the effects, not the bill itself.
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I'm wondering where you have seen that a good portion of people will see their taxes go up. Everything that I've read has said that on average most people will see their taxes go down.

As for what will happen, it will be a little bit of everything you mentioned in your first post. I do think that the fear of stock buyback is a little overblown though due to current prices. A more likely scenario is that companies pay down some debt instead of doing a lot of buybacks.
 
ticket2ride04 said:
- companies invest in PPE?
- wage growth?
-repatriation of offshore monies?
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I do hope we see these 3 things happen.

ticket2ride04 said:
What will your opinion be if none of the above happens and the money is concentrated in stock buy-backs and higher executive pay?
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If all of the money flowed through as stock buy-backs I'd be fine with that. If most of it went to higher executive pay, I'd be disappointed.
 
Hark_The_Sound_2010 said:
I do hope we see these 3 things happen.



If all of the money flowed through as stock buy-backs I'd be fine with that. If most of it went to higher executive pay, I'd be disappointed.
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If it all flows to buy-backs, what then? Doesn't drive enough growth.

I'm pulling like hell for this bill to help the USA, but wages need to grow. I'm not sure we see much of a spike in employment as we are near capacity. If execs pocket pay and wages don't grow, it's really gonna suck when the tax cuts for people expire in 2024
 
tarheel0910 said:
I'm wondering where you have seen that a good portion of people will see their taxes go up. Everything that I've read has said that on average most people will see their taxes go down.

As for what will happen, it will be a little bit of everything you mentioned in your first post. I do think that the fear of stock buyback is a little overblown though due to current prices. A more likely scenario is that companies pay down some debt instead of doing a lot of buybacks.
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Start here.

Somewhere between 20-30% of people will see their taxes rise. It's too soon to know for certainty but we can make estimates. I'm not against this tax bill. It appears the pass-through issues were amended in a favorable way. I think the SALT changes could be a fiasco. Overhaul, it doesn't do enough for the middle class directly. Everyone is banking on corporations doing better and passing that on to the middle class.
 
ticket2ride04 said:
If it all flows to buy-backs, what then? Doesn't drive enough growth.
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Yes, that definitely wouldn't drive enough growth. It would at least return a lot of that value to shareholders though, which would benefit a lot of people.

ticket2ride04 said:
I'm pulling like hell for this bill to help the USA, but wages need to grow. I'm not sure we see much of a spike in employment as we are near capacity. If execs pocket pay and wages don't grow, it's really gonna suck when the tax cuts for people expire in 2024
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Agreed, it would be great to see wage growth pick up. And it would suck to see exec pay get boosted without that happening.
 
Hark_The_Sound_2010 said:
Yes, that definitely wouldn't drive enough growth. It would at least return a lot of that value to shareholders though, which would benefit a lot of people.



Agreed, it would be great to see wage growth pick up. And it would suck to see exec pay get boosted without that happening.
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I wonder what the fallout will be if wages stagnant, exec pay rises, and big business continues to sit on cash?
 
ticket2ride04 said:
it's really gonna suck when the tax cuts for people expire in 2024
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They won't expire. No way congress doesn't renew them when the time comes. It would make a politician radioactive if they didn't.

ticket2ride04 said:
Somewhere between 20-30% of people will see their taxes rise.
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I don't really consider that to be a good portion, but I guess it's subjective like most things. 70%-80% of the people getting a tax break sounds good to me.

ticket2ride04 said:
I think the SALT changes could be a fiasco.
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As you know I think all of those deductions should disappear, but this might make state legislatures revisit their own tax code. That would be a good thing.
 
tarheel0910 said:
They won't expire. No way congress doesn't renew them when the time comes. It would make a politician radioactive if they didn't.


I don't really consider that to be a good portion, but I guess it's subjective like most things. 70%-80% of the people getting a tax break sounds good to me.


As you know I think all of those deductions should disappear, but this might make state legislatures revisit their own tax code. That would be a good thing.
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The SALT thing pisses me off the most. It’s a political shot at the Blue states. But in reality, it could have really bad unintended consequences. It could drive home values down, put people upside down in their mortgages, and disrupt the housing construction market just as it’s getting back on its feet.
 
ticket2ride04 said:
The SALT thing pisses me off the most. It’s a political shot at the Blue states. But in reality, it could have really bad unintended consequences. It could drive home values down, put people upside down in their mortgages, and disrupt the housing construction market just as it’s getting back on its feet.
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People don't buy houses so they can get a tax deduction. It will have little to no impact on that stuff. It could have a positive impact if states are smart enough to rethink their tax strategies.
 
tarheel0910 said:
People don't buy houses so they can get a tax deduction. It will have little to no impact on that stuff. It could have a positive impact if states are smart enough to rethink their tax strategies.
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It could devalue homes. Less incentive to buy a more expensive home. Lots of people will have trouble selling homes.

Edit to add people do buy homes for the tax break. Luckily, very few first time home buyers will be affected.
 
ticket2ride04 said:
It could devalue homes. Less incentive to buy a more expensive home. Lots of people will have trouble selling homes.

Edit to add people do buy homes for the tax break. Luckily, very few first time home buyers will be affected.
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I've never met or did business with anyone who has said they want to go $100k+ in debt for the sole reason of saving a few thousand a year in taxes. I mean, there may be a few out there who are stupid like that, but not enough to make a dent.
 
tarheel0910 said:
I've never met or did business with anyone who has said they want to go $100k+ in debt for the sole reason of saving a few thousand a year in taxes. I mean, there may be a few out there who are stupid like that, but not enough to make a dent.
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First, you not addressing my point about the possibility that homes can be devalued under this plan.

Second, a major motivation for people to buy over rent is the tax savings. I’m not sure how you are even arguing this.
 
ticket2ride04 said:
First, you not addressing my point about the possibility that homes can be devalued under this plan.
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There's not much to address. If you make a list of things that could impact home pricing, I would put that at around 1,645.

ticket2ride04 said:
Second, a major motivation for people to buy over rent is the tax savings. I’m not sure how you are even arguing this.
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Because that's not a main motivation for buying. People buy houses because it's considered the "American dream" or because it's a good investment or they want a vacation home. People aren't going to say, well I was going to buy a house but since I can't get a $3,000 deduction on my tax bill I'm just going to rent.
 
tarheel0910 said:
There's not much to address. If you make a list of things that could impact home pricing, I would put that at around 1,645.


Because that's not a main motivation for buying. People buy houses because it's considered the "American dream" or because it's a good investment or they want a vacation home. People aren't going to say, well I was going to buy a house but since I can't get a $3,000 deduction on my tax bill I'm just going to rent.
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- i made a list. if you don't think adding volatility to the housing market is a bad idea, then I'm not sure what to say. Perhaps it will be nothing, but pricing movements could be a big deal.

- you are flat wrong. many young people factor in the tax deduction when thinking about buying. As a former banker, we pushed that angle quite a bit.

What type of work are you in? You mentioned you've never done business with anyone who has considered the tax deduct when buying. Have you even owned a home?
 
ticket2ride04 said:
- i made a list. if you don't think adding volatility to the housing market is a bad idea, then I'm not sure what to say. Perhaps it will be nothing, but pricing movements could be a big deal.
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My point is that I don't think it's going to add volatility to the housing market. At least not to the extent that it will be noticeable. If I pour a cup of water in a pool that's full I've technically added water, but you won't notice it.

ticket2ride04 said:
- you are flat wrong. many young people factor in the tax deduction when thinking about buying. As a former banker, we pushed that angle quite a bit.
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I'm saying that it's not a big factor and no one is going to not buy a house because they can't get a few thousand off of their taxes. It won't stop anyone. It's a perk.

ticket2ride04 said:
What type of work are you in?
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We've had this discussion before.
 
tarheel0910 said:
My point is that I don't think it's going to add volatility to the housing market. At least not to the extent that it will be noticeable. If I pour a cup of water in a pool that's full I've technically added water, but you won't notice it.


I'm saying that it's not a big factor and no one is going to not buy a house because they can't get a few thousand off of their taxes. It won't stop anyone. It's a perk.


We've had this discussion before.
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- again, you are probably right here. but my point is these major shake ups can have strange butterfly effects. let's hope we don't disrupt the housing market

- you are just wrong here. like gary in the basketball thread

- ah, it all makes sense now. i didn't recognize you when you changed the avatar.
 
Anyone who expects rising wages and employment is naive in the extreme. Corporate profits were already at record setting levels. Why weren't they already investing those profits in their employees?...
 
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tarheel0910 said:
Maybe, but it looks like Boeing is giving some money back as a result as well.
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It’s mostly reinvestment into facilities and employee training.

Look, I’m pulling for this bill. I’m going to save a ton next year with the last second pass through revisions (own a commercial architecture firm). But I still have my doubts this bill does much of what it’s supporters think it will.

Conversely, I don’t think it will usher in the end of times that it’s detractors claim it will.
 
I found that Christmas present that DoTard wants me to have . .



BenneC20171220_low.jpg
 
ticket2ride04 said:
A whole bunch of companies made similar announcements yesterday. 5th 3rd, Wells, etc. That’s great and all. But I want to see actual job and wage growth. I want to see investment into technology. I want to see repatriation of offshore monies
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As long as the motivation is altruistic right?
 
tarheel0910 said:
As long as the motivation is altruistic right?
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I just want to see growth. Meaningful growth. Obama didn’t do enough for big business and gave them an out for stashing their money. The excuse has always been fear of the unknown. Hard to invest/develop in an anti-business environment.

For all Trump’s flaws, he’s created a very pro-business environment. Let’s see if the big boys put their money where their mouth are. People need real raises. Wage growth coupled with tax cuts will spur the economy.
 
Any libs on here so pissed with Trump that you are refusing your tax savings can message me and I will give you my paypal account.
 
tarheel0910 said:
As long as the motivation is altruistic right?
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Just an update, but companies have announced(so far) $83B in stock buy backs on the heels of the tax plan. That’s not an entirely bad thing, but again, this is enriching the top shareholders of said companies. Who are usually the biggest shareholders?
 
ticket2ride04 said:
Just an update, but companies have announced(so far) $83B in stock buy backs on the heels of the tax plan. That’s not an entirely bad thing, but again, this is enriching the top shareholders of said companies. Who are usually the biggest shareholders?
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What's your point here? I've freely admitted that this could happen. And as @Hark_The_Sound_2010 has pointed out, it helps all shareholders not just the biggest shareholders.
 
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tarheel0910 said:
What's your point here? I've freely admitted that this could happen. And as @Hark_The_Sound_2010 has pointed out, it helps all shareholders not just the biggest shareholders.
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You know what my point is. The worry is that the top will disproportionately benefit over the middle class. I said buybacks, in a vacuum, aren’t a bad thing. But if this trend continues and wages stay flat, the bill we be an abject failure.

This is something that will take a few years to play out.
 
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