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View Diary: Boehner just shot himself in the foot (170 comments)

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  •  Nailbanger - not because of the tax hike (1+ / 0-)
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    Because the dot com boom caused explosive economic growth and windfall taxes from realized capital gains. In all the data I have seen regarding government revenues and tax rates during the Clinton years none of them make the point that higher tax rates were a reason for the growth in GDP. They were certainly an important part of higher government revenues.

    I have performed every analysis regarding expansion and investment from being a junior analyst to a public company CFO and have never seen a case where higher tax rates made it more favorable to invest and expand. It's actually just the opposite. Investments are driven by expected after tax returns, so the higher the taxes the lower the returns, the fewer investments that are made. There are numerous software packages that help companies making expansion or investment decisions. In everyone of them tax rates are a variable and higher rates always are factored in as a negative.  

    "let's talk about that"

    by VClib on Sun Dec 02, 2012 at 02:55:17 PM PST

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    •  vclib - have you ever contemplated end of year tax (1+ / 0-)
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      management in your own business?

      i have operated small (very small by some standards) for perhaps 50 years, and have always looked at more investments in the business at end of year, especially when had good income year, to hold tax rates at the same as well as at the same time, improved the value/efficiency or other aspects of my enterprise.  perhaps i have been an ignoramus  unaware of some your esoteric accounting/analyst big business.


      •  yes, but vclib's posted over 22K comments. (1+ / 0-)
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        aren't you impressed by that?

        me neither.

      •  OzBill - I have never been an officer, (0+ / 0-)

        director, or significant owner of a Sub S or LLC corporation. All my experience with making investment or expansion decisions within a corporation have come in C corporations, some large, some small.

        I can understand how as a Sub S owner facing a personal tax payment based on corporate net income you might have a different view, particularly if you could purchase something in December that could lower your tax liability. For C corporations a December purchase would not typically impact your tax liability unless there were unusual items that had special tax credits or tax write-offs associated with them.

        "let's talk about that"

        by VClib on Sun Dec 02, 2012 at 07:14:05 PM PST

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    •  But This Analysis... (2+ / 0-)
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      Odysseus, Nailbanger
      Investments are driven by expected after tax returns, done at the micro-level (it's individual companies using those software packages, after all, not the US economy doing it) and doesn't capture the macro effects. The simple fact is that shifting the tax burden up the income ladder in this economy will increase overall demand in the economy and THAT will increase after-tax returns.  

      I'd also add that you are making the rather odd assumption that a lack of investment funds is a problem.  Seems to me that the popularity of near-0% treasuries and the couple trillion in corporate cash on the sidelines NOW are telling us that that we have a SURPLUS of investment funds right now...what's missing is the DEMAND to drive OPPORTUNITIES for investment.  

    •  It is not seen becuase no one wants to see it. (0+ / 0-)

      No business group is going to say give me more taxes, not industry funded think tank is going to say give more taxes, no consultant working in the fortune 1000 is going to suggest it, no business school looking for endowments is going to study it.
        I just cant believe low tax rates, making it cheaper to remove capital, encourages growth.  It encourages profit taking and cutting costs and speculation, not growth.

      These capitalists generally act harmoniously and in concert to fleece the people, and now that they have got into a quarrel with themselves, we are called upon to appropriate the people's money to settle the quarrel. Abraham Lincoln

      by Nailbanger on Sun Dec 02, 2012 at 09:46:06 PM PST

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