Tax Bill

[PleaseBlitz]

Some economics analysis to put the MASSIVE EMPLOYEE BONUSES in context.

 

https://www.washingtonpost.com/opinions/dont-let-pay-increases-coming-out-of-tax-reform-fool-you/2018/02/06/1271905a-06a6-11e8-94e8-e8b8600ade23_story.html?hpid=hp_no-name_opinion-card-f%3Ahomepage%2Fstory&utm_term=.2919c1997c75

 

Quote

Egged on by the White House, corporate America has spent the past few weeks touting how it is sharing its big Trump tax cut with employees in the form of bonuses and pay increases — an apparent validation of the trickle-down approach to economics espoused by the president and his Republican allies.

 

But when we look at the numbers, we see the opposite: The nation’s workers are getting woefully little, at least relatively speaking. Peeking beyond the PR, our analysis finds that major corporations are planning to spend more than 30 times what they are putting in the wallets of employees on buying back their own stock — a practice solely meant to lift the fortunes of shareholders.

 

To get a sense of how the pie is being divided, we collaborated with Emre Gomez of the Academic-Industry Research Network to tally the sums of commitments from the 44 companies in the S&P 500 stock index that, according to Americans for Tax Reform, are giving their employees a bonus or a raise because of the new law. When you add it all up, you get about $5.2 billion — $3.7 billion in one-time bonuses and an estimated $1.5 billion in annual wage increases.

 

But that total pales in comparison with the $157.6 billion in stock buybacks announced by 34 S&P 500 companies since early December, when the tax bill passed the Senate. Companies typically purchase their own shares in a bid to bump up the price — a move that tends to please Wall Street and swells the compensation of chief executives, who are paid largely in stock.  [PB did the math:  $157.6 billion is way more than $5.2 billion].

 

Admittedly, our calculations aren’t perfect. Not every company has spelled out how many employees will see wages rise or by exactly how much. In such cases, we’ve assumed that the increase is at the most generous end of the spectrum and will affect the most employees. In other words, if we’ve erred, we’ve erred on the side of inflating the amount being given to workers.

 

To be clear, most of the companies that have said they’ll be distributing some of their tax savings to their employees have not also announced a new stock buyback. But a few have. For example, Bank of America will provide a $1,000 bonus to its 145,000 employees “in the spirit of shared success.” That will cost the company $145 million. In December, the bank also added $5 billion to its buyback plans, bringing its projected total to $17 billion by June 2018.  [More math:  $145,000,000 < $17,000,000,000].

.....

Don’t get us wrong. We applaud those companies that are making sure their employees get a piece of the Trump pie. But context is crucial. In the scheme of things, the American worker is still being handed crumbs.

 

Enjoy your crumbs. 

[HOF44]

Whats astonishing is for 8 years we've been hearing deficit, deficit, deficit in response to doing anything.  Now we have a tax plan that explodes the deficit and the rank and file are like yep MAGA it's great stuff.  What happened to all the deficit talk??? What in the world are people thinking watching this and going yep that's who we need running our ****???

[LadySkinsFan]

Don't forget all the firings and closings too. Less payout in wages and salaries, more profit for companies!

 

Yay! Companies win, workers lose, again.

[Larry]

38 minutes ago, PleaseBlitz said:

Some economics analysis to put the MASSIVE EMPLOYEE BONUSES in context.

 

https://www.washingtonpost.com/opinions/dont-let-pay-increases-coming-out-of-tax-reform-fool-you/2018/02/06/1271905a-06a6-11e8-94e8-e8b8600ade23_story.html?hpid=hp_no-name_opinion-card-f%3Ahomepage%2Fstory&utm_term=.2919c1997c75

 

 

Enjoy your crumbs. 

 

Actually, what I suspect is the biggest deception of the folks loudly announcing that businesses are paying bonuses because of Trump's tax cuts, is that they're paying the bonuses in December, specifically to avoid the bonuses happening under Trump's new taxes.  

 

Because the old taxes (let's call them "Obama's taxes") encourage businesses to pay their employees more than Trump's taxes do.  

 

Businesses get taxed on their profit.  Take the money that a business takes in, subtract how much they spend (for a business, almost everything they spend is a tax deduction), and pay a tax on what they didn't spend.  

 

One way of looking at that is that, every time a business spends money (on something that's deductible), then the government "pays them" a percentage of whatever they spent. 

 

The phrase "the government pays them" is kinda shady.  It's more accurate to say that "their taxes go down by" that amount.  But the dollars are the same.  Spend $1000, and your tax bill at the end of the year is $350 smaller.  The company's bank account is only $650 less than it would have been, if they hadn't "spent $1000".)  

 

To make up a hypothetical:  Let's just assume that an employer was paying the 35% nominal corporate tax rate, and Trump cuts that rate to 21%.  

 

Under Obama's Taxes, when the business pays an employee $100, their taxes go down by $35.  The employee gets a $100 check (and pays taxes on it).  But the employer is only $65 poorer.  

 

If the same company gives the same employee the same $100 bonus under Trump's taxes, their tax bill only gets $21 smaller.  Now, it costs the company $79 to give the employee the same bonus that used to only cost them $65.  That $100 bonus costs the company $14 more under Trump than it cost them under Obama.  

 

So, I guess you can say that these employers are handing out these bonuses "because of Trump's tax cuts".  

 

They're handing them out before Trump raises the price for doing so.  

 

Edited February 6, 2018 by Larry

[PleaseBlitz]

@larry, I agree.  I will also add that companies pay year-end bonus EVERY YEAR.  Many industries (like mine) almost mandate year-end bonuses.  So they were getting paid out no matter what, but companies decided to credit Trump as a thank you for cutting the corporate rate. 

Edited February 6, 2018 by PleaseBlitz

[visionary]

 

[skinfan2k]

I got about $200 extra because of the new tax plan!

[spjunkies]

My pay was + $85.

[LadySkinsFan]

Contrast your amounts to the thousands/millions the wealthy and corporations are getting. 

 

Poor people are getting hosed.

[twa]

Just now, LadySkinsFan said:

 

 

Poor people are getting hosed.

 

Less than they were before though.

[spjunkies]

3 minutes ago, LadySkinsFan said:

Contrast your amounts to the thousands/millions the wealthy and corporations are getting. 

 

Poor people are getting hosed.

 

Trust me, I'm not ecstatic about it at all. I'm just interested in how it varies from person to person. I know the businesses are cleaning up thanks to the crooked Congress/Chief Executive.

[nonniey]

5 minutes ago, spjunkies said:

 

Trust me, I'm not ecstatic about it at all. I'm just interested in how it varies from person to person. I know the businesses are cleaning up thanks to the crooked Congress/Chief Executive.

You'll have to take LSF's posts on this subject with a grain of SALT she fell hook line and sinker for everything negative anyone said (anyone at all) about the Tax Bill. Fact is the vast majority of people did get a substantial tax cut.  It was a mistake for the Dems to convince so many to believe their taxes were not going to go down or even worse were going to go up when it would so easily be disproved once the bill took effect - really bad tactic imo. 

[Hersh]

1 minute ago, nonniey said:

You'll have to take LSF's posts on this subject with a grain of SALT she fell hook line and sinker for everything negative anyone said (anyone at all) about the Tax Bill. Fact is the vast majority of people did get a substantial tax cut.  It was a mistake for the Dems to convince so many to believe their taxes were not going to go down or even worse were going to go up when it would so easily be disproved once the bill took effect - really bad tactic imo. 

 

Um, how many people have paid their federal income taxes under the new law? There is a difference between take home pay and filing tax returns. Not to mention what happens to interest rates as a result of the economic stimulus and how that ends up ****ing people.

[Hersh]

33 minutes ago, twa said:

 

Less than they were before though.

 

That’s a great line and complete garbage. 

[TradeTheBeal!]

Raising the gas tax on the heels of the tax bill would be a really effective way of applying “the deepstroke” to the lower classes.

Edited February 12, 2018 by TryTheBeal!

[twa]

37 minutes ago, Hersh said:

 

That’s a great line and complete garbage. 

 

Thanks, I put a lot of effort into it.

 

 

33 minutes ago, TryTheBeal! said:

Raising the gas tax on the heels of the tax bill would be a really effective way of applying “the deepstroke” to the lower classes.

 

I hear Cali is wanting something like that.

[nonniey]

2 hours ago, Hersh said:

 

Um, how many people have paid their federal income taxes under the new law? There is a difference between take home pay and filing tax returns. Not to mention what happens to interest rates as a result of the economic stimulus and how that ends up ****ing people.

Why are you still holding on to the idea that taxes haven't gone down for the vast majority of people? That was a stupid tactic that has in fact backfired on the Dems they should have limited the attack to potential deficits due to the cut or some other aspects. But by convincing many (most even) that they were getting hit with higher taxes it undermined their entire position in relation to the Tax Bill.

 

( Withholding reflects the projected taxes. The IRS didn't artificially decrease the amount they collect to then suddenly ramp it back up at next years filing).  

Edited February 12, 2018 by nonniey

[twa]

tis just crumbs though,crumbs I say.

[nonniey]

2 hours ago, TryTheBeal! said:

Raising the gas tax on the heels of the tax bill would be a really effective way of applying “the deepstroke” to the lower classes.

I think the only states that are considering this are the three west coast states.

[LadySkinsFan]

How do you know about that? They have to pay down the debt somehow, and filing occurs after the 2018 elections. 

 

I don't think people are seeing a huge windfall in their paychecks. Especially the poor and lower middle class, they are seeing peanuts. The only people seeing anything approaching substantial are upper middle class and above. 

 

And who's going to end up paying for the huge deficit generated by the transfer of wealth of $1.5 trillion?

 

We know, those least able to afford it.

[nonniey]

2 minutes ago, LadySkinsFan said:

How do you know about that? They have to pay down the debt somehow, and filing occurs after the 2018 elections. 

 

I don't think people are seeing a huge windfall in their paychecks. Especially the poor and lower middle class, they are seeing peanuts. The only people seeing anything approaching substantial are upper middle class and above. 

 

And who's going to end up paying for the huge deficit generated by the transfer of wealth of $1.5 trillion?

 

We know, those least able to afford it.

So you think the Republicans are going to raise taxes - or in this case retro-actively raise taxes after the 2018 elections?  Is that what you think?

[Hersh]

1 hour ago, nonniey said:

Why are you still holding on to the idea that taxes haven't gone down for the vast majority of people? That was a stupid tactic that has in fact backfired on the Dems they should have limited the attack to potential deficits due to the cut or some other aspects. But by convincing many (most even) that they were getting hit with higher taxes it undermined their entire position in relation to the Tax Bill.

 

( Withholding reflects the projected taxes. The IRS didn't artificially decrease the amount they collect to then suddenly ramp it back up at next years filing).  

 

Quote where I said the vast majority of people aren’t getting a tax cut. Ya see, this is similar to the crap the GOP pulled down here in NC. They cut income taxes (yay) then raised taxes on various services that negatively impacted the poor and middle class. 

 

What we have here is a similar situation. Let’s cut income taxes the negative consequences be damned. Ya know, like higher interest rates to keep inflation under control. Those both screw the poor and middle classes. Oh, how about nowhere near enough money for infrastructure but let’s implement Trumps plan of state and private partnerships. Can’t imagine what states will have to do to get that money. How about watching where Trump proposes cutting federal spending to pay for a portion of infrastructure. Can’t imagine who is gonna feel that pain. (Plan is coming out Monday)

 

You are talking about tax cuts in a vacuum. We’ll see the true impact over the next couple years.

 

 

Edited February 12, 2018 by Hersh

[88Comrade2000]

1 hour ago, Hersh said:

 

Quote where I said the vast majority of people aren’t getting a tax cut. Ya see, this is similar to the crap the GOP pulled down here in NC. They cut income taxes (yay) then raised taxes on various services that negatively impacted the poor and middle class. 

 

What we have here is a similar situation. Let’s cut income taxes the negative consequences be damned. Ya know, like higher interest rates to keep inflation under control. Those both screw the poor and middle classes. Oh, how about nowhere near enough money for infrastructure but let’s implement Trumps plan of state and private partnerships. Can’t imagine what states will have to do to get that money. How about watching where Trump proposes cutting federal spending to pay for a portion of infrastructure. Can’t imagine who is gonna feel that pain. (Plan is coming out Monday)

 

You are talking about tax cuts in a vacuum. We’ll see the true impact over the next couple years.

 

 

Trump and his ilk got their tax cuts, that's all that matters.  Screw the rest of us.

[LadySkinsFan]

10 hours ago, nonniey said:

So you think the Republicans are going to raise taxes - or in this case retro-actively raise taxes after the 2018 elections?  Is that what you think?

 

You are so naive.

[MartinC]

14 hours ago, twa said:

 

Less than they were before though.

 

That rather depends what happens to inflation. 

 

A combination of large tax cuts and increased public spending in an already hot economy with a very tight labor market (unemployment now at 4%) is, to say the least, not a conventional approach!

 

If inflation kicks in and prices start to rise those relatively small tax gains for lower and middle earners will soon get eaten up.