Trump's top economic advisor asks CEOs to raise hands if they're going to use tax cuts to invest, boggled by no one raising hands


#1

Originally published at: https://boingboing.net/2017/11/16/pissing-down-trickle-down.html


#2

How do economic “experts” not now how economics actually work???


#3

Is he surprised that they’re not going to invest, or surprised that they’re not going to raise their hands to further the justification for cutting cuts in the corporate tax rates.


#4

There’s a fundamental flaw in the notion that reducing corporate taxes will drive corporations to hire more people.

Corporate taxes are levied on profits. Profits are what remains after you have paid your workers. So, reducing taxes on profits means you can keep more of what you DON’T spend on labor, and spend it as you see fit - typically these days through share buy-backs, though historically dividends would have been the primary way of distributing profits.

The idea that companies will “invest” more if they have more left after being taxed on their profits would make sense if corporations used their cash to make investments, which they generally don’t. They borrow to invest.

I say this as someone who actually believes the corporate tax rate should be reduced to be more in line with prevailing international standards. I think it should be reduced, but I don’t think its constructive to keep lying about how corporate taxes work to make that happen.


#5

Given how shady most CEO’s are I would have thought they would just lie and put their hands up, I mean does anybody actually believe any C level person when they say customers or quality is job 1? Share holder value is job 1


#6

I’d imagine much like how the current crop of military experts in the Pentagon don’t seem to know how war works–willful ignorance, wishful thinking, and thinking that you can make your desired end results occur without actually examining the steps to get there.


#7

Obligatory:


#8

At some level, this is a disconnect between the current business environment, where money is readily available at low interest rates and the situation during “saint Reagan’s” administration, when interest rates were high. And the Republican party hasn’t had anybody as popular as Reagan was since. So those are the gold-tinted “glory days” that they are always trying to relive.


#9

Yeah, he’s surely not dumb enough to believe in trickle down, so presumably he was surprised how few people were willing to go along with the charade.

Isn’t it, though? Not the theoretical tax rate, but the actual rate that corporations actually end up paying.


#10

Oh this is funny, it’s been going on so long that the CEOs don’t even know they’re supposed to lie anymore!


#11

They know how it works, they just don’t care to tell you that it only works for them. If they had their way, we’d all be serfs on “their land.” If there’s anything the rich fear, it’s that non-rich people aren’t tied to the land or their vocation like people were in the past. It’s also why they’re accelerating their plans IMO. Capitalism basically goes back to feudalism.


#12

Additionally, corporations can spend revenue on R&D (typically a form of investment) that will also reduce their taxable base. Of course real R&D requires spending money paying people who create (as opposed to manage) and that’s not going to look as good on this quarter’s report as cutting payrolls. It’s much better to take a one-time cut in profits to buy another company that’s actually invented something, claim it as a type of R&D, and then cut the payrolls of the new acquisition for a boost next quarter.

I’m afraid that if the current oligarchical thinking isn’t removed from power soon, our country won’t be capable of responding until the jets carrying the CEOs and idle rich start the evacuations to their new flags of convenience.


#13

When will people learn, supply side economics simply do not work (well, they work great for the wealthy). They didn’t work under the experienced administrations of Reagan or Bush, and they certainly won’t work under Trump.


#14

The best salesman are those who actually BELIEVE their own BS. So it actually wouldn’t surprise me if he believed in trickle down despite its implausibility and all the evidence against it.


#15

Until the revolution, that is.


#16

There certainly are the naive dupes (e.g. the Kansas Republicans), but I guess he feels more like a cynical proponent of the policy…


#17

Baffled by his own bullshit. Awesome…


#18

Probably in much the same way as:


#19

And how many are planning to buy back their own shares after paying nearly zero in taxes like Apple?


#20

The chief voodoo economists have decided on a tax cut