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Tax cuts everyone can like

Discussion in 'Political Discussion' started by PatsFanInVa, Jun 16, 2011.

  1. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    You have to pay for any and all tax cuts, if you're responsible. I have no problem letting one tax cut expire and trading it for another. So here's a thought:

    I hear often how important it is to let the poor beleaguered Corporations -- they with 2 trillion dollars on the balance sheets and nothing to invest in -- have more tax breaks.

    Here's one I'd like to give them: A hefty up-front tax credit when a new American worker is hired (applicable only as a net credit, so you can't just fire guys after a month and get the credit again.)

    Now, when that credit expires, you have the question of whether it's cheaper to do the job elsewhere. But you also have the sunk costs of any equipment, space, etc. you've devoted to your new American worker(s).

    These balances are not one-direction done deals; there still are jobs that you can do in the U.S.

    Instead of a blanket giveaway to a Corporation to "do business here" for free (or cheaper,) why not specify job creation as the cost of that tax giveaway? It doesn't help us much to attract RobotCorp to these shores, so they can have robots build other things.

    That doesn't mean that Corporations will suddenly use people to do what robots can do. It means you attract those businesses that need people in a greater proportion than those that need a tax haven for their robots.

    PFnV
  2. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Tax credits are different than tax cuts. Tax credits generally won't work because it doesn't affect the long term costs (benefits, payroll taxes and regulatory) associated with hiring the employee.
  3. IllegalContact

    IllegalContact Rookie

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    the only way out of the tax mess that exists is to convert everything to be taxed based on consumption.
  4. Real World

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    We're past the point of pouring more perfume on the pig. The genuine goal at this point has to be to create a more permanent environment where which businesses want to stay and do business in this country. Giving a business a tax credit for hiring someone is perfume. Would you really hire someone you don't need to gain a tax credit for a fraction of what that unneeded employee is going to cost you? I certainly wouldn't. I think we need long term, forward looking answers to our internal problems.
  5. PatsFanInVa

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    Don't be silly. There is some break point at which it makes sense to hire here, now. The more you're planning in start-up terms, by the way, the more you look at making it for a few years then reevaluating. But even for an established firm, if your employee would cost you $50K rather than $55K, all in, of course there will be a pool of employers affected for whom the math is better than outsourcing. Badda bing badda boom, you've created a job for 5K instead of the quarter million bucks per job in some other efforts. Sounds like a bargain to me.

    PFnV
    Last edited: Jun 16, 2011
  6. Real World

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    As someone who employs people I don't see how giving a $5,000 tax credit would implore me to hire people I don't need. I'm guessing you don't employ people.
  7. chicowalker

    chicowalker Rookie

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    It would cause some additional jobs to be created. There would be employers on the fence about hiring who would pull the trigger, but it would only be those companies who were at the edge, so decreasing the cost slightly gives them the impetus to do it.

    How many jobs is that? No idea. And the cost would be increased by the credits going to employers who were going to hire in the absence of any credits. Again, though, I won't pretend to know how much of an increase that would represent.

    I like the general direction of the idea, though.
  8. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Have you ever had to make a payroll like RW?
  9. chicowalker

    chicowalker Rookie

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    Have you? .
  10. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    No, but I am not telling people how easy it is to add jobs in the current environment either.
  11. chicowalker

    chicowalker Rookie

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    No, you're calling him out on something that you have just as little experience in as he (presumably) does.

    And where did he say it was "easy"?
    Last edited: Jun 16, 2011
  12. PatsFanInVa

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    And I'm guessing you don't have an overview of all employment scenarios.

    Here's the beauty of a cerebral cortex, RW: you can take into account those experiences you have merely witnessed and remembered, or modeled in the abstract, because of language, math, and abstract reasoning capability, and actually understand how things work without having done each of those things.

    You claim to understand how all cases of employment work across society, and beyond that, to claim to understand how all cases of employment work across multiple societies, by your appeal to first-hand experience rather than arguing the idea on its merits.

    But let's tease out your argument:

    You don't think that tax advantages can incentivize the wealthy to create or retain jobs in the U.S. business climate?

    Does that mean that it's a red herring to claim that we can create jobs by cutting taxes, every time I see the GOP and their tea party wing screaming that?

    Is it in fact unimportant to offer tax incentives to prospective employers?

    Forget the $5K figure. Talk to me about $X, with $X being the amount of money an employer receives in a variety of tax gifts at present.

    Now, if you respond with a torrent of complaints about how hard it is to do business in the U.S., I do understand that you are more than likely a small business, rather than a large corporation with good tax lawyers.

    Therefore, you do not, in fact, have systemic knowledge of the category "employment" based on the fact that you have one or more employees.

    Oh, and to answer your question: I currently have no employees for whom I balance the books, because I'm in the public sector.

    In the private sector, I always bought the service rather than the employee, because I did not want to become encumbered by the latter. Can I imagine the case where even at that micro-level, it is worth it to hire the person?

    Oh yeah. Let's say you can take that break once. Let's say you're on that margin of whether it's worth it to keep a guy for a year and let's say you're a micro-business. Let's further speculate you're trying to justify a $25/K per year hire.

    Welp, that's a dead loss of $20K.

    Unless, of course, the value to you/your business of having that employee is in excess of $20K and less than $25K. That's a year to reevaluate - a year during which you funnel that 5K through to a guy who'd otherwise be collecting that and more in unemployment from the gubmit. And it's cost the government nothing, if you make it a revenue-neutral tradeoff with other tax cuts that have been given to corporations which do not create jobs.

    I also quite frankly owned/operated my own biz quite some time ago, and viewed it as self-employment rather than a growing concern. I may do it again, if I get fed up enough w/being the guy that gets beat up for doing public service.

    I'll say this about working for yourself: it's cheaper to do it now than it was then, in terms of the tax burden.

    I'll also say this: the tax burden didn't mean crap. What did mean crap was that there was a functioning economy so you didn't have to scrape the bottom of every barrel looking for crap jobs you wouldn't do on a bet during a boom time.

    Lean times are a bigger problem than the big bad gubmit, and you and I both know that. And if you're on the verge of extinction because the money's just not there do do biz, you're not hiring anybody.

    But if on the other hand you're on the margin of "business is okay and picking up a bit," and "Meh, I'll park this money and play it safe," you on the micro level would also be incentivized to hire that guy.

    The main question is what the hell we're doing trying to incentivize every area of corporate activity with tax giveaways and calls for less and less targeted taxation, when our problem is we want and need domestic jobs -- not a vague "climate" that's supposed to be produced by general tax giveaways to any sufficiently wealthy going concern.

    Again, this has to do w/tax cuts to corporations: Why would they be "good" in general, but naive if they specifically apply to the activity we want (i.e., hiring o Americans,) rather than applying tax cuts to activity we don't want (i.e., giving money to them to hire people elsewhere)?

    PFnV
    Last edited: Jun 17, 2011
  13. PatriotsReign

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    What was your point again?:bricks:


  14. PatriotsReign

    PatriotsReign Rookie

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    In businesses like yours (construction), this would never work. For large corporations, it might provide "some" help. But how many companies would get a credit when they were planning on hiring all along.

    There would be no way to gauge how many jobs such a credit actually created because companies that planned to hire regardless would still get a credit.
  15. BSR

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    I think the main problem with your plan is that I suspect a large portion of the tax breaks will be given out to companies that were going to hire the workers anyway. So you are giving away money to corporations where there is no additional job creation. The worst part about it is that there is no way to tell how much job creation the program really created although the overall numbers will look impressive and create great soundbites. That is probably the worst combination.

    In essence this is done a bit more creatively and efficiently when feds/states give individualized tax credits/funding to corporations to build plants/keep workers in country. These are done on an individualized case by case basis but are unfortunately often demonized as "corporate welfare". However more and more these days, politicians will back those policies that create the best soundbite with less risk for egg on their face and are easy to explain.
  16. patsfan13

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    Good point that is what we saw with the credits with cash for clunkers and the home buyer credits both of which didn't work in the long run and wasted a lot of $$$$
  17. Real World

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    Man you love to type. You know, typing alot doesn't make a person seem any more, or less intelligent. Making a point in as few words as possible sometimes does though.

    I stopped at the bolded. I just don't have the time to waste to read the rest.

    You don't think that tax advantages can incentivize the wealthy to create or retain jobs in the U.S. business climate?

    No where did I say that, and this isn't about the "wealthy". It's about keeping jobs inside the country. Maybe if you read a little more closely, and wrote a little less, you'd have noticed that. My point was specific to the idea that $5k in the form of a tax credit would somehow drive businesses to hire people and keep jobs in the country. It won't. Businesses consider real costs when hiring or making expenditures. If I need another employee or two (nevermind 200), I have to consider the total cost associated with hiring someone. That means wages, matching payroll taxes, compensation insurance, benefits like health & retirement, training, equipment, etc. Giving me a $5k tax credit, even for a couple of years, isn't going to push me to hire someone I don't need, or permanently implant myself in an environment that will cost me more than it would elsewhere. Fidelity leaving Massachusetts is a good example of that. We need structural, more permanent, long term policies put in place if we're looking to keep & attract business to stay inside our borders. Gimmicks are bandaids and perfume. Gimmicks = RomneyCare.
  18. patsfan13

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    Well said.
  19. Real World

    Real World Rookie

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    So it's not just me who felt that way.

    I'm in real estate as well. Last month we had a foreign company come take a look at one of our commerical properties. Big, big company from England. They loved the space, but problematic to them was the high property taxes in this city, and the fact that they, because of what they produce, use tens of thousands of gallons of water per day and we're an MWRA based city. For those of you outside of this region, our water bills are usually 4-5 times higher than everyone else. The water bills are outrageous. We apparently pay for the harbor clean up, among other things. So while my 1 family, 2 bedroom house (MWRA) pays $100-120 in water each month, my buddy in one of the neighboring towns a few miles from me pays $70 on his 2-family every 3 months (non-MWRA). Now while this is more micro compared to a state, or country's business environment, the base point remains. A business will look at the long term ramifications of doing business in a specific region, and even if they like the area in question, they will go elsewhere if the environment is not friendly.

    I think in terms of outsourced jobs, a little more protectionalism is needed. What that "protectionalism" entails is up for discussion. It could be a combination of tax breaks, or tariffs of some kind. It might include a not so free trade agreement with the plethora of countries we've allowed manufacturing jobs to export to. Slashing corporate taxes might help. I think it's an open discussion on what would work, or what should be done. The one thing I'm sure of is that there isn't a silver bullet that will solve our problems. I think anything done will have to be comprehensive, which is clearly stating the obvious.
  20. PATSNUTme

    PATSNUTme Paranoid Homer Moderator Staff Member PatsFans.com Supporter

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    #75 Jersey

    The term "pay for tax cuts" drives me up a wall.

    It's about revenues. Tax cuts can generate revenues. Tax increase can decrease revenues. You don't have to tax someone else to cut taxes. Kennedy proved it, Reagan proved it, and even W proved it (his admin allow too much spending).

    We get enough revenues and everyone who pays taxes are taxed enough. It's the spending that's the problem. Grandma is not going to be thrown off a cliff,the cliff will collapse into the sea if we don't cut spending. There will be no cliff to throw grandma off.
  21. PatriotsReign

    PatriotsReign Rookie

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    You mean....:confused:

    We have a SPENDING problem and NOT a revenue problem?

    Man, I wish I said that!;)
  22. PatsFanInVa

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    No, we don't get enough revenues. We are collecting 14.5% of GDP in revenue, and that's with a GDP just recovering after a monumental tanking.

    No, Reagan didn't "prove it," and W didn't "prove it." They proved that you can spend money you don't have and run the economy into lala land in the bargain with a deregulated financial system, in the bush regime.

    Now the combo pack is, don't collect revenue, don't have anything to spend on jobs, demand they just appear, and give away more to the wealthy, despite tax revenues and rates both at an historic low.

    Guess you guys really like the gipper, unless someone proposes that we return to Reagan-era tax rates.

    Don't tell me, he's a redistributionist european socialist, right?

    This board is just idiotic on taxes in general. The fact is they're very low. You can't run around asking people who know the numbers to take you seriously when you say taxes are just fine where they are. Borrow and spend republicans make me puke.

    PFnV
  23. PatriotsReign

    PatriotsReign Rookie

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    Taxes upon the middle class aren't low and the middle class typically pays the vast majority of federal taxes.

    And since we do not have European-style government benefits, we don't need European tax levels. And BTW...even the Euro-tax rates weren't enough to fund their benefits. So what does that tell you?
    Last edited: Jun 19, 2011
  24. chicowalker

    chicowalker Rookie

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    That our defense spending is too high? :)
  25. PATSNUTme

    PATSNUTme Paranoid Homer Moderator Staff Member PatsFans.com Supporter

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    #75 Jersey

    Government always spends money more wisely than individual people, is that what you are saying?

    Take out the waste, fraud, and corruption and we take in more than enough revenues. Have you ever had a small business and did the payroll?

    Besides the Fed withholding and maybe State withholding, you have SS X2, Medicare X2, unemployment tax. Then you either pay corporate tax or take the profit and pay individual tax on any profit. Then there is gas tax, tax on cell phones plans, and many many other taxes.

    I say we pay more than enough taxes collectively. But those who do think so, get out the old check book and write the check to the US Treasury. I'm sure that they will accept it.
    Last edited: Jun 19, 2011
  26. BSR

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    So why are you then proposing this tax cut?
  27. PatsFanInVa

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    No.

    Read again, and guess again. If you get it right, I'll bother with you. If you want to fight with a strawman knock yourself out.

    PFnV
  28. PatsFanInVa

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    The pertinent question, innit?

    Thanks BSR. I mean, that's getting to the point.

    The point is that you direct tax cuts, if you're in a tax-cutting mood, to do something everybody benefits from.

    I would propose reducing other tax cuts to the wealthy and to corporations so that any tax cut predicated on creating and retaining American jobs is revenue-neutral.

    I'd prefer a tax cut based on creation of jobs to a tax cut based on just giving money to corporations, who then hire abroad. Weigh them against each other, and tell me which you'd prefer. After all, you still incentivize corporations to stay in the U.S., but this way you get the multiplier in actual jobs rather than a few jobs in a tax-free corporate headquarters building from which you move around pieces on the global board.

    Job creation is the buy-in to get the cut. That simple. Figure out a way to use American labor, what you can use it for, and do that. Then you get the tax break, when you hire.

    PFnV
  29. PATSNUTme

    PATSNUTme Paranoid Homer Moderator Staff Member PatsFans.com Supporter

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    #75 Jersey

    Well,aren't we touchy and smug on this . Sorry I hurt your feelings. Actually, you don't have to bother with me at all.

    Your original post is a typical big government attitude on taxes. If you jump though this hoop you get a tax break, and if you don't jump though that hoop you'll be taxed more. The entire tax code and most government regulations are a series of hoops for people to jump through like trained dogs.

    I'd like to see one rate for all and a tax form that you can fill out on a single sheelt of paper. No hopps to jump through and a deduction/expemption of the first $35,000 or so of income.

    But that is too fair and simple for those who want to control and engineer peoples lives, into the image that they have, by using the tax code. And BTW, when you leave people alone, cut the red tape,they are the ones who will go out and take risks and create jobs.
    Last edited: Jun 20, 2011
  30. Harry Boy

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    Harry Doesn't Like This

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