The Latest Outrage On Taxes
The Market Ticker - Commentary on The Capital Markets
2017-11-28 09:02 by Karl Denninger
in Federal Government , 309 references Ignore this thread
The Latest Outrage On Taxes
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Corker let the cat out of the bag....

The latest outrage in the so-called "tax cut" negotiation emerged yesterday, where the idea was floated of putting "triggers" in the bill so if the deficit blooms -- that is, if the alleged "growth" that would lead to higher revenues fails to materialize then taxes would go back up.

Of course the problem with this on whom will the taxes go back up?

And Corker, this morning, just told you live on Communist News Bull****:

ON YOU.

Let's make this crystal clear: The last time we dropped corporate taxes in a "holiday" to supposedly "bring all that money back and reinvest it" the re-investment didn't happen.  Instead what happened was mergers (monopoly creation and enhancement) and buybacks (which of course preferentially benefit corporate executives.)

But, since Corker is very concerned about "certainty" for corporations if they do this again it will be you that gets screwed with the tax increase even though you had nothing to do with the decision to buy back stock and create more monopolies that screw you blind.

Are you ready to sack every single Senator and Representative yet?

If not, given that Bob Corker just said he's going to **** you when corporations do exactly what they did last time, and which the "tax cut" bill makes no provision to prevent, may I politely ask "why not" given the tiny number of CEOs .vs. the utterly yuge number of ordinary Americans?

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User Info The Latest Outrage On Taxes in forum [Market-Ticker]
Redbrian
Posts: 31
Incept: 2010-06-25

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You can always count on Americans to do the right thing - after they've tried everything else. - Winston Churchill

Have we tried everything else yet?
Tdurden
Posts: 570
Incept: 2015-01-29

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I have thankfully been wrong about a couple of the most drastic political outcomes of the last election cycle, but the one I'm right about so far and will continue to be is regarding the individual mandate. That is never, ever going away. The only change that will ever happen to that will be to raise the fine so that it's higher than the cost of the useless "insurance." Congress sold you all into slavery and you will see congressmen and senators blow their brains out on live TeeVee before they would vote to free you.

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"I'd like to live just long enough to be there when they cut off your head and stick it on a pike as a warning to the next 10 generations that some favors come with too high of a price." -Vir Cotto Babylon 5
Aztrader
Posts: 7881
Incept: 2007-09-10

Scottsdale, AZ
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The won't do anything to risk their beloved paper markets. We are watching absolute corruption take over every aspect of our lives. I am seeing the retailers roll over again when the media claims record sales this past weekend.
Everything is fraud and the sheep don't see it.
The biggest tax today is called Obamacare and any rebuke on this piece of crap has blown away with the wind. They promised the people they would remove this insane burden and instead put their lobbyists ahead of the people.
This tax plan will do nothing for the people getting killed under Obamacare. In fact, under this plan they lose the medical cost write-offs which anyone with a large deducible are forced to pay adding another financial burden to the mix.
Everyone knows that a corporate tax holiday will only benefit the shareholders, the top executives and wall street doing the buyouts that will follow. This thing can die today and it won't be missed.
Themortgagedude
Posts: 10417
Incept: 2007-12-17

saint louis
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Why don't they just make dividends a tax deductible expense and increase the standard deduction and move on.

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I think its time we ask ourselves if we still know the freedoms that our founding fathers intended for us. Ronald Reagan 1964
Tickerguy
Posts: 150705
Incept: 2007-06-26
A True American Patriot!
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Because the entire point of this "yuge tax cut" is to give a monstrous boost to monopolist merger activity along with enriching those who run the 500 largest firms in the United States.

That you get ****ed is an "unfortunate" side effect, but it is exactly what you should expect when the people bitch about "free" birth control instead of telling Congress and the Executive to either enforce the ****ing law or the pitchforks and torches are going to come out.

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Winding it down.

Themortgagedude
Posts: 10417
Incept: 2007-12-17

saint louis
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zactly

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I think its time we ask ourselves if we still know the freedoms that our founding fathers intended for us. Ronald Reagan 1964
Jfms99
Posts: 224
Incept: 2009-10-06

Msumelle, Ar
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Karl I live in Arkansas and in the 1930s we had the dubious distinction of being the only state to default on our bonds during the Depression. The bonds were settled and paid off during W.W. II. But to make sure it never happened again the Arkansas Legislature passed The Revenue Stabilization Act of 1947.

By that law this state cannot go into debt, i.e. we cannot issue bonds except under special circumstances, 3/4 vote of Legislature and a vote by the people.

More importantly, we cannot spend more than we take in. If revenue falls short, and this is on monthly basis,If revenue say were to fall short by 10%, then all departments in state government, regardless, have to cut spending by that amount. This has kept this state on a even keel and out of debt.

I suggest to the Senate they adopt what we did, if revenue falls short then you cut spending, not have an automatic tax increase. Doesnt even sound Constitutional but that doesnt seem to be an obstacle anymore.

By the way when Clinton ran for President he liked to boast he had balanced every budget for his terms in office. Well he had no choice, it was state law. Another Damn Lie he told.
Smacktle
Posts: 1843
Incept: 2009-01-20

Texas
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I don't understand anybody having any optimism over what our government is going to do about taxes or anything. They don't care about us, because we don't care enough about what they do.

As long as the Kevin Bradys, John McStains and Mitch McConnells keep getting elected, nothing is going to change! HITF does McCain keep getting elected?! He had to get cancer for us to get rid of him!

I've never been more cynical about things than I am now. I used to be an optimist. Buying more ammo is the only solution I can see at this point.

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The faults of the burglar are the qualities of the financier.
- George Bernard Shaw
Rollformer
Posts: 90
Incept: 2013-02-13

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The Economist published a review of a book called "WTF" by a member of the British elite. Aghast at the Brexit (the equivalent of Trump being elected here), has asked "why?" rather than looking for Russians. Here is their summary of what he says:

"Mr Peston has no doubt that the Brexit vote was an economic mistake, which will make the country poorer, but he puts the blame for the mistake on liberal leadersthat is, people like himselfrather than on the benighted masses. The masses were no longer willing to tolerate the country that they loved being run against their values and economic interests by a self-renewing elite. The liberals in question adopted policies that benefited themselves far more than the mass of the population. Financial liberalisation poured money into the south-east but left the rest of the country bereft. The government never had enough money to help industrial companies when they were in trouble, but somehow found billions to bail out the banking industry. High immigration had a skewed impact. The rich got cheaper servants, while taking advantage of private health-care and schools for themselves and their children. The poor got more intense competition for jobs, but also more competition for public services. Mr Peston says that although the public fretted intensely that the sudden increase in immigration was overburdening public services and bringing rapid cultural change, his former employer, the BBC, imposed an almost total news blackout about it.

The very elites that have devoted so much energy to rigging the system for their own advantage did little to address Britains fundamental problems, and have frequently compounded them. A disproportionate share of Britains wealth goes into feeding the housing industry rather than into starting businesses. A third of British firms have seen no growth in productivity since 2000. The north-east and Wales are some of the poorest regions in northern Europe. No wonder 52% of the British population took the chance offered by the referendum to give the finger to their betters."

At least there is one of the elite who senses that pitchforks and torches may be coming and sees fit to consider the root cause. Maybe someone in this country will see fit to examine the reasons for the discontent here, before this nonsense continues and we all die in penury.
Tickerguy
Posts: 150705
Incept: 2007-06-26
A True American Patriot!
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Quote:
Maybe someone in this country will see fit to examine the reasons for the discontent here, before this nonsense continues and we all die in penury.

I suspect plenty of people will die of acute lead poisoning long before we all die in penury.

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Winding it down.
Rollformer
Posts: 90
Incept: 2013-02-13

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I was just watching NBC Evening News. Here I found out that the reduction of the mortgage deduction (which I think is actually only capped) and the SALT deductions could reduce house prices in blue states by 10% to 15%. I ran an analysis using Fairfield County, Connecticut, which has very high real estate prices. According to the internet, the most recent median sales price is around $380,000. Reducing that by 15% puts it at around $323,000. The median tax on a house in Fairfield County is $6,221. Assuming a 10% down payment and a conforming mortgage rate (not necessarily completely unreasonable), I calculate an interest savings of $39K over the life of the loan. Assuming a marginal tax rate of the borrower of 25%, the tax loss of the new rules is $9,759 in interest deductions, and $46,648. That is a net loss on a huge mortgage of $17,390 over 30 years. $580 per year, not discounting anything for anything.

To me it is like the trend of stock buybacks. As I was taught, the accounting equation is Assets + Liabilities. The same holds true for that market value of the assets: Market Value of Assets, or enterprise value = Market Value of Debt + Market Value of Equity. How does increasing debt at the expense of the equity increase the EV of the firm? The CAPM tells us that the cost of equity is the risk free rate + a risk premium. When a firm takes on debt to reduce its outstanding equity, it increases the risk to the shareholder because it puts more money in front of them in a bankruptcy.

Sometimes I wonder whether my 2.69 at Wharton was because I was dumb, or because I didn't believe the bull****.
Rollformer
Posts: 90
Incept: 2013-02-13

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Was going to change my equation, but can't: the point is Enterprise Value = Market Equity + Market Liabilities. Conclusions do not change.
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