U.S. Debt discussion

[Flames Fan, Ph.D.]

Originally Posted by Azure

The only way the US could cut taxes to help job growth is to lower the overall corporate rate. Small businesses that can't afford the money to exploit loopholes are suffering because of the high rate. Creating a level playing field for everyone would drive job growth.

So you're a small business owner and there is very low demand due to the economy. The government gives you a tax cut. You're going to hire employees with your extra money?

[Azure]

Originally Posted by Flames Fan, Ph.D.

So you're a small business owner and there is very low demand due to the economy. The government gives you a tax cut. You're going to hire employees with your extra money?

Obviously if there is no demand for your product you won't hire anyone.

But I'm talking long-term here. Small businesses in the US pay a higher overall corporate tax rate than even businesses in Canada paid back when our rate was at its highest point.

Apparently closing the loopholes and lowering the overall rate will generate additional revenue. So if the government is letting smaller businesses keep more of their money, obviously they will spend it to grow their business. Assuming that there is demand. And at some point one would think the economy should rebound.

[Tinordi]

I think CP is the only place on the planet where at this time these supply-side economics arguments have ANY traction whatsoever.

[Flames Fan, Ph.D.]

Originally Posted by Azure

Obviously if there is no demand for your product you won't hire anyone.

But I'm talking long-term here. Small businesses in the US pay a higher overall corporate tax rate than even businesses in Canada paid back when our rate was at its highest point.

Apparently closing the loopholes and lowering the overall rate will generate additional revenue. So if the government is letting smaller businesses keep more of their money, obviously they will spend it to grow their business. Assuming that there is demand. And at some point one would think the economy should rebound.

Ok well, when demand is up, jobs are back and we get good traction on the economy, we can put tax cuts for small businesses on the list.

Until then...

[Azure]

Originally Posted by Tinordi

I think CP is the only place on the planet where at this time these supply-side economics arguments have ANY traction whatsoever.

Yes, because no other country in the world has made any effort to lower their overall corporate tax rate in an effort to remain competitive with the rest of the world.

[Rockin' Flames]

Originally Posted by Azure

The only way the US could cut taxes to help job growth is to lower the overall corporate rate. Small businesses that can't afford the money to exploit loopholes are suffering because of the high rate. Creating a level playing field for everyone would drive job growth.

Tax cuts for the rich are pointless, and should only be considered if you have a very low debt/deficit. Instead, if you WANT to cut taxes, you do it in the form of cuts specifically aimed at the middle/lower classes. The US already has a very low personal tax rate, so cutting taxes for the wealthy is short-sighted unless you actually cut spending too.

This is a bit more of a simple approach that works in Canada, however, in the US it's a bit more complex. Without going into too much detail small buisness owners have two common ways to have a business the is formed as a corporation. A C-corporation or an S-corporation.

A C-corporation is the same type of corporation that exists in Canada and the corporation itself is taxed. I do agree that you may want to lower the tax rates on these types of corporations.

However, a significant number of small business owners utilize the S-Corporation. This is a corporation that is essentially a flow through and is not itself taxed but all the profits of the corporation is taxed in the individuals hands. Therefore by saying that the rich tax cuts offer no benefits isn't entirely correct. (I'm using the definition of rich that it seems most on this board thinks is rich of $250,000 yearly earnings) Therefore, giving tax breaks to C-corps but not individuals won't necessarily have the desired results. One big factor of this is also that all the big corporations are more likely than not C-Corporations due to the restrictions on forming an S-corporation.

[Azure]

Originally Posted by Flames Fan, Ph.D.

Ok well, when demand is up, jobs are back and we get good traction on the economy, we can put tax cuts for small businesses on the list.

Until then...

Well if you want to add additional revenue you need to look at closing the loopholes immediately. With time you make an effort to bring down the overall rate.

Canada didn't go from 28% to 15% overnight. It took what? 15 years?

[Tinordi]

Originally Posted by Azure

Yes, because no other country in the world has made any effort to lower their overall corporate tax rate in an effort to remain competitive with the rest of the world.

In response to the U.S. downturn, no one's talking about corporate tax rates as the problem or solution and rightfully so. This is a problem of structural production shifts and slackened demand. Tax rates have nothing to do with it.

Infact, go look at aggressive tax cutting regimes like Ireland and tell me how they're doing?

[Tinordi]

Originally Posted by Azure

Well if you want to add additional revenue you need to look at closing the loopholes immediately. With time you make an effort to bring down the overall rate.

Canada didn't go from 28% to 15% overnight. It took what? 15 years?

Do you really think Canada's ahead because of low taxes? The only sectors worth a damn in this country are in commodities which have been successful independently of the tax system. Otherwise, even with lowered taxes our manufacturing base has been hollowed out.

[Flames Fan, Ph.D.]

Originally Posted by Azure

Yes, because no other country in the world has made any effort to lower their overall corporate tax rate in an effort to remain competitive with the rest of the world.

Unfortunately, the whole "cutting taxes to remain competitive" thing is generally a canard; if you cut now, another desperate country will cut more. So once again, you're not "competitive."

Since the currencies and cost-of-living between countries is not at parity, simply cutting taxes without putting thought into the social repercussions is just short-sighted.

China doesn't care about the repercussions, but those of us in North America should.

[Flash Walken]

Blah blah blah, cut more taxes, blah blah blah.

Sounds like the 1920s.

[Tinordi]

Originally Posted by Flash Walken

Blah blah blah, cut more taxes, blah blah blah.

Sounds like the 1920s.

It's the durned environmental regulations! /facepalm

[seattleflamer]

Originally Posted by afc wimbledon

My mortgage in essense says if I don't make the payments then the bank gets my house, ultimately I, as a home owner have only 2 obligations, pay the mortgage or vacate the house.
The Bank assumes my house's value will cover the mortgage, but I have no obligation to ensure that.

Your obligation is actually to either continue to pay terms of your note or do a pay off of the loan amount. Obviously, the banks want their loan amount back plus interest and not the house. The house is simply collateral.

If you don't fulfill the agreement and the house forecloses for less than the loan amount, you are on the hook for the remainder of the loan. There are "walk away" (non-recourse) states for purchase money loans and WA state is one but that is based on a lot of IFs.

If you refinance or if you take out a second mortgage or if have other assets to make it worthwhile for the bank to come after you with a defiency judgement, they will even if you are in a "walk away" state.

Short of it: once you've signed the contract, there are real consequences. It may be less problematic for those who had nothing to begin with but for most buyers, it just isn't that simple.

Also, there are examples of people who were put in jail for mortgage fraud for "lying" on their loan application despite the Sandy Weils and Angelo Mozilos being the most culpable for enabling the fraud to exist and profit off the state we are in. Did those people commit fraud? Yes and with probably millions of other knowingly or unknowingly who aren't in prison.

Should they be absolved because everyone else is doing it and not in prison? Of course not. Is it fair that those at the top who are getting away with the real crime are enjoying a comfortable retirement? Of course not.

Ultimately, buyers, no matter how qualified or unqualified, partnered with the bank in this bubble. And nothing is free.

So from From Trew's link to NPR's Subprime victim, Clarence Nathan, do you really believe the only consequences were he lost his house and has no credit? What landlord will offer him shelter based on his credit?


"Clarence Nathan: Nobody came and told me a lie: just close your eyes and the problem will go away. That's wasn’t the situation. I needed the money.
I'm not trying to absolve myself of anything. I thought I could do this and get out of it within 6 to 9 months. The 6 to 9 month plan didn’t work so I’m stuck.
If somebody had told me I couldn’t borrow the money I probably would’ve
had to do something else more drastic and dramatic and not be in this
situation now. The bank made an imprudent loan. I made an imprudent loan. We're partners in this.

[trew]

I don't know much about Dylan Ratigan, appearantly he has a show on MSNBC.

What I do know is that he just uncorked an epic rant about the state of affairs in US politics, trade, and finance.

http://www.msnbc.msn.com/id/21134540...79837#44079837

Nice to see someone in the media calling out the real elephant in the room.

[Weiser Wonder]

Came here to post that. Ratigan's my favorite on cable news. It's plain to everyone US needs election reform more than anything, hopefully this will give it some steam but I doubt it. Very hard to get through to the American people.

[Caged Great]

Originally Posted by trew

I don't know much about Dylan Ratigan, appearantly he has a show on MSNBC.

What I do know is that he just uncorked an epic rant about the state of affairs in US politics, trade, and finance.

http://www.msnbc.msn.com/id/21134540...79837#44079837

Nice to see someone in the media calling out the real elephant in the room.

Countdown till he's fired and never heard from again.

Wouldn't want the truth getting out there.

[macker]

Originally Posted by Weiser Wonder

Came here to post that. Ratigan's my favorite on cable news. It's plain to everyone US needs election reform more than anything, hopefully this will give it some steam but I doubt it. Very hard to get through to the American people.

Really? He was terrible on Fast Money and dragged the show when he was on it. Glad when he left the show.....Jeff Macke left around the same time and was the one that should have stuck around.....

[Morozee]

Originally Posted by trew

I don't know much about Dylan Ratigan, appearantly he has a show on MSNBC.

What I do know is that he just uncorked an epic rant about the state of affairs in US politics, trade, and finance.

http://www.msnbc.msn.com/id/21134540...79837#44079837

Nice to see someone in the media calling out the real elephant in the room.

That was refreshing to say the least! That's the first time I've heard someone call out the real root of the problem on a major news network. The Fed is bankrupting the US and the politicians are all either too chicken s*** to broach the subject or have been put in place to further the agenda's of whatever corporations they are working for. I'm ashamed to be a part of a society whose number one priority on this Earth is to MAXIMIZE PROFITS at any cost. Pathetic.

[Tinordi]

Originally Posted by trew

I don't know much about Dylan Ratigan, appearantly he has a show on MSNBC.

What I do know is that he just uncorked an epic rant about the state of affairs in US politics, trade, and finance.

http://www.msnbc.msn.com/id/21134540...79837#44079837

Nice to see someone in the media calling out the real elephant in the room.

What a load of crap.

"The U.S. is being extracted through banking, trade and tax."

WTF does that mean? Nothing.

It's someone on their bullypulpit just parroting charged political-economic slogans with absolutely not backing or understanding. Epic Rant? Epic Fail.

[Weiser Wonder]

Originally Posted by macker

Really? He was terrible on Fast Money and dragged the show when he was on it. Glad when he left the show.....Jeff Macke left around the same time and was the one that should have stuck around.....

Anyone who sabotaged Fast Money is good in my book.