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Tax & spenders rejoicing across the land

Discussion in 'The Swarm Lounge' started by LibertyTurns, May 7, 2018.

  1. bwelbo

    bwelbo Helluva Engineer

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  2. MWBATL

    MWBATL Helluva Engineer

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    In a blow to Keynesian economists (who all often are awarded Noble Prizes) and Democrats (who claim supply side economics "never work"):

    A Greek Economic Revival
    Surprise: Tax cuts and deregulation boost Europe’s laggard.


    By
    The Editorial Board
    Jan. 29, 2020 7:13 pm EST

    You’ll never guess which European country recently earned a credit-rating upgrade: Greece. Yes, that Greece. The eurozone’s perennial laggard suddenly finds itself six months into a remarkable economic turnaround.

    Fitch on Friday upgraded Athens’ government debt one notch, to BB, and signaled more optimism about the economy and government finances. Athens remains two levels below investment grade in Fitch’s eyes, but investors are more bullish. The yield on Greek sovereign bonds fell to an all-time low of about 1.15% Monday, compared to 1.04% for Italy

    Investors also think Athens’s goal of 2.8% GDP growth this year and 3%-4% growth beyond that is obtainable. The stock market surged 49% in 2019, mostly in the second half of the year. Business confidence is higher than in the eurozone overall, and unemployment of 16.6% in October was the lowest since 2011.

    Credit Kyriakos Mitsotakis, the former McKinsey consultant whom fed-up voters elected prime minister in July after a decade of failed experiments with centrist technocracy and radical leftism. Mr. Mitsotakis, leader of the center-right New Democracy party, is trying something else: supply-side reforms.

    Mr. Mitsotakis has cut the top tax rate on corporate profits to 24% from 28%, and some individuals have seen their tax rate fall to 9% from 22% and their property taxes cut. He aims to introduce a flat tax of €100,000 for wealthy foreigners who move to Greece to invest. He’s also dusting off privatization plans shelved by left-wing predecessor Alexis Tsipras.

    Rapid growth offers Greece its best hope in a decade of alleviating a government debt burden of nearly 180% of GDP, and allowing banks to climb out from under a suffocating load of bad debt. A lot can still go wrong. Greece is exposed to the vicissitudes of global trade policy in the Donald Trump era and to the European Union’s wrangles with Britain over trade after Brexit. Voters willing to give Mr. Mitsotakis a chance last year will have to remain hopeful long enough to allow the full reform program to take effect, and Mr. Mitsotakis will have to keep his nerve.

    But Athens has already proven the Keynesian doubters wrong. Bailout after bailout after dreary bailout failed because EU leaders took slow growth for granted and focused instead on tax increases to salvage the fisc. Even now, the EU and International Monetary Fund think Mr. Mitsotakis’s growth forecasts are too optimistic. Greeks decided to give hope a chance instead, and so far they’re being rewarded.
     
  3. bwelbo

    bwelbo Helluva Engineer

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    It has been shown over and over and over again throughout history that Keynesian economic principles are dead. From Reagan's tax cuts, to Bush's, to Clinton's capital gain tax cut, to Trump's - every time you cut taxes, tax revenue increases to new records. When Trump was elected, everyone expected the economy to turn south. But in contrast to the predictions, its gone the other direction. Look at how people vote with their feet in the US - moving from high cost states to low ones.
     
  4. Sidewalking

    Sidewalking Banned

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    Trump deserves criticism for not leading more on deficit reduction. But if we really want the government to change and reign in spending we have to do it through Congress first and foremost. The last effort to do so, The Tea Party, died on the vine with some illegal IRS abuses pushed by Obama.

    We have to primary out big spenders and find replacements for them who are true conservatives. And we will likely need a super majority of them to be successful. The outlook is grim.
     
  5. MWBATL

    MWBATL Helluva Engineer

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    If there is one thing politicians of both parties like doing it is spending our money
     
    bwelbo and Sidewalking like this.
  6. TampaBuzz

    TampaBuzz Helluva Engineer

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  7. bwelbo

    bwelbo Helluva Engineer

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    Well indirectly it is. Because when the Fed is buying back our own bonds with printed money (which is what we're doing so the banks can swap short term instruments for cash), it serves to lower the interest rates. The lower the interest rates, the worst bonds look compared to stocks, as their rates of return get squashed. So more and more money rotates into stocks.
     
  8. LibertyTurns

    LibertyTurns Helluva Engineer

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    China doubles down and injects $175B. They have an enormous problems with all the bad loans and defaults over there. I think they’re only doing a partial reopening of their markets Monday after their week long lunar holiday closed period. I heard they won’t be fully open for another week due to coronavirus.

    http://news.trust.org//item/20200202133457-k9ptf/
     
  9. bwelbo

    bwelbo Helluva Engineer

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    They’re never fully transparent with economic numbers, but I wouldn’t be surprised if they have a 6 month long massive like -10%+ economic number. Airlines have canceled flights. Cruise ships have canceled. Apple closed all their stores. All the manufacturing/supply chains will be strained without being able to get all employees into work.

    I expect all those challenges to hurt us indirectly too.
     
  10. LibertyTurns

    LibertyTurns Helluva Engineer

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    They were already going to report sub 6% GDP growth. At some point someone has to occupy those building you built & billionaires are not going to want to lose their fortunes to prop up the ruling party. Xi is in deep kimchi.
     
  11. bwelbo

    bwelbo Helluva Engineer

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    Just completed my taxes, and once again the deduction limit resulted in my effective tax rate being quite a bit higher than it was prior to Trump's "tax cut".
     
  12. armeck

    armeck Ramblin' Wreck

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    Kimchi is Korean...
     
  13. LibertyTurns

    LibertyTurns Helluva Engineer

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    I’m well aware of that and Xi is deep in it.

    It’s actually pretty interesting watching the United States take on another major nation and seeing it crumble. I didn’t think we’d ever see a repeat of the USSR in my lifetime. Fascinating.
     
  14. armeck

    armeck Ramblin' Wreck

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    Funny how that works out, and yet:
    https://www.wsj.com/articles/does-a...axes-heres-the-complicated-answer-11560504602
    https://www.forbes.com/sites/stepha...-amazon-pays-no-corporate-taxes/#4c14ad2f54d5

    But Finally! Err... maybe?
    https://www.theverge.com/2020/2/4/21120123/amazon-federal-income-tax-bill-profits-sec-filing-2019
     
  15. Sidewalking

    Sidewalking Banned

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    Well North Korea is a drain on their national expenditures so it's still kinda relevant :)
     
  16. Sidewalking

    Sidewalking Banned

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    One thing I can agree with you on is that the tax code is a convoluted mess that should be shredded and replaced. Where we would likely disagree is what to replace it with. I prefer a national sales tax, specifically the Fair Tax proposal. But we both rely on idiots in DC to fix this garbage and the idiots on both sides of the aisle aren't very motivated to do more than tweak the mess we have with further layers of garbage.
     
    MWBATL and ramblinwreckguru like this.
  17. bwelbo

    bwelbo Helluva Engineer

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    Amazon hasn't paid any taxes because they had no tax liability. Its as simple as that. They're not cheating. The only started making a profit a few years ago, but businesses can carry forward losses something like 20 years. They were printing money from selling stock with their astronomical valuation, so they invested in the business for decades, losing money left and right. If the tax code wasn't set up to allow carry forward losses, they wouldn't have been able to make those investments for 20 years. And then profits that they are now seeing probably would only be a tiny fraction of what it is. IIWII.
     
  18. slugboy

    slugboy Moderator Staff Member

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    3,398
    They pay sales tax now, in states with a sales tax:

    https://en.m.wikipedia.org/wiki/Amazon_tax


    Sent from my iPhone using Tapatalk
     
  19. MountainBuzzMan

    MountainBuzzMan Helluva Engineer

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    I always find it amazing how the vast majority of the population don't understand even the basics of finance (Corporate or Personal). Loss Carryover is common for personal and corporations.
     
  20. armeck

    armeck Ramblin' Wreck

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    I think it is more correct to say that WE pay sales taxes now.
     
    awbuzz and ramblinwreckguru like this.

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