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Obama Administration proposes corporate tax overhaulFollow

#1 Feb 22 2012 at 11:03 AM Rating: Excellent
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Reuters wrote:
Feb 22 (Reuters) - The Obama administration on Wednesday proposed overhauling the U.S. corporate tax code by slashing the top rate to 28 percent from 35 percent while eliminating popular deductions that many businesses now use to reduce their taxes.


Even if this is not the final plan that gets put into play, which it certainly will not be, it's a good starting point for the discussion.

Edit: Quote fail...

Edited, Feb 22nd 2012 12:04pm by catwho
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#2 Feb 22 2012 at 11:05 AM Rating: Excellent
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What discussion? Side A will hail it as the Second Coming, and Side B will hail it as the coming of the Anti-Christ, while nothing actually gets done.
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#3 Feb 22 2012 at 11:09 AM Rating: Excellent
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lolgaxe wrote:
What discussion? Side A will hail it as the Second Coming, and Side B will hail it as the coming of the Anti-Christ, while nothing actually gets done.
Almost as good as watching monkeys throw feces at one another.
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#4 Feb 22 2012 at 11:12 AM Rating: Excellent
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In theory, the GOP should support this. Even if they have to save face with the usual "It doesn't go far enough and it was my idea anyway", they should at least be behind the premise.

Edit: The timing on this was no doubt decided to step on the toes of Romney's upcoming tax policy speech.

Edited, Feb 22nd 2012 11:15am by Jophiel
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#5 Feb 22 2012 at 11:17 AM Rating: Excellent
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Honestly, it will make for great tv as the GOP tells us why reducing taxes is bad for America.
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#6 Feb 22 2012 at 11:21 AM Rating: Excellent
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In before 'net tax increase' and 'poison pill.'

Smiley: rolleyes
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#7 Feb 22 2012 at 11:27 AM Rating: Excellent
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I'll raise you a "Small business tax increase", and a "Job killer".
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#8 Feb 22 2012 at 12:34 PM Rating: Decent
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I can't wait for Gbaji to come in and tell us why its bad to reduce taxes on Americans, and close loopholes for tax evasion.

Edited, Feb 22nd 2012 1:34pm by rdmcandie
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#9 Feb 22 2012 at 12:38 PM Rating: Decent
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I love all the preemptive knee-jerk gbaji/GOP hating going on in here. It's so cute to watch you all work yourselves into a tizzy over... nothing. Smiley: laugh
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#10 Feb 22 2012 at 12:45 PM Rating: Good
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Timelordwho wrote:
I'll raise you a "Small business tax increase", and a "Job killer".


My money is on "Job killer" or the dark horse "hurts job creators".

#11 Feb 22 2012 at 12:45 PM Rating: Decent
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Demea wrote:
I love all the preemptive knee-jerk gbaji/GOP hating going on in here. It's so cute to watch you all work yourselves into a tizzy over... nothing. Smiley: laugh


I love how Naive you are when it comes to how the mentality of the politic stage works.

A. The GOP say this is a great idea and put support behind the incumbent president, leaving the future GOP candidate treading water.

B. The GOP oppose the idea, thus taking a stance that reducing taxes on americans is a bad thing, or admitting support for loopholes that allow businesses and investors the ability to avoid paying the tax they should be is a good thing.

Pretty cut and dry, option A is out the window as the GOP won't put support behind a democrat president in an election year, as for Gbaji, we all know how much he likes to parrot party talking points.


All in all, pretty fail proof political barrage by Obama, GOP is damned if they do damned if they don't.
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#12 Feb 22 2012 at 12:48 PM Rating: Excellent
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Demea wrote:
I love all the preemptive knee-jerk gbaji/GOP hating going on in here. It's so cute to watch you all work yourselves into a tizzy over... nothing. Smiley: laugh


With Varus gone, one must create their own drama. Smiley: lol

Edited, Feb 22nd 2012 1:48pm by Dozer
#13 Feb 22 2012 at 1:13 PM Rating: Excellent
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Demea wrote:
I love all the preemptive knee-jerk gbaji/GOP hating going on in here. It's so cute to watch you all work yourselves into a tizzy over... nothing. Smiley: laugh


Okay, well when Romney releases his plan I predict much "raising the burden on suffering middle-class families" "trickle-down never works" and perhaps a little "gutting life-saving medical care for seniors."
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#14 Feb 22 2012 at 1:23 PM Rating: Excellent
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Demea wrote:
I love all the preemptive knee-jerk gbaji/GOP hating going on in here.

Now everyone can hate on them post-emptively!
The Hill wrote:
But while the White House said it hopes the framework will be, in effect, a way to jumpstart the conversation on tax reform, the administration’s proposals were quickly panned by some industry groups — and Republicans on Capitol Hill.

"Genuine tax reform is necessary, and should be about creating a fairer, flatter code," a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement. "Republicans are focused on proposals that would create a better overall environment for job and economic growth, but we hope the administration and Senate Democrats will work with us on behalf of the American people rather than insisting on a political approach that guarantees failure."
The Hill wrote:
The plan would cut corporate tax rates to 25 percent, down from the current 35 percent, one of the highest rates in the world. Obama's newly-released proposal calls for a 28 percent rate.

Romney attacked Obama's plan in his speech.

"He's raising taxes by hundreds of billions of dollars," he said. "Raising taxes will kill jobs. my plan will create jobs, that's the difference between the two of us… I don't think he understands the power of free people and free enterprises, following their own course in life. I do."


Edited, Feb 22nd 2012 1:23pm by Jophiel
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#15 Feb 22 2012 at 1:33 PM Rating: Good
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Demea wrote:
I love all the preemptive knee-jerk gbaji/GOP hating going on in here. It's so cute to watch you all work yourselves into a tizzy over... nothing. Smiley: laugh

If it keeps gbaji from having to actually post fifty thousand chars about nothing, then it's worthwhile. But, like the Juggernaut, there really isn't any stopping it.
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#16 Feb 22 2012 at 2:07 PM Rating: Default
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Debalic wrote:
Demea wrote:
I love all the preemptive knee-jerk gbaji/GOP hating going on in here. It's so cute to watch you all work yourselves into a tizzy over... nothing. Smiley: laugh

If it keeps gbaji from having to actually post fifty thousand chars about nothing, then it's worthwhile. But, like the Juggernaut, there really isn't any stopping it.

At least gbaji centralizes the right-wing partisan blather in one place. With the peanut gallery of bleeding hearts around here, it's death by a thousand papercuts and pony gifs.
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#17 Feb 22 2012 at 3:01 PM Rating: Excellent
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#18 Feb 22 2012 at 3:34 PM Rating: Excellent
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Jophiel wrote:
The Hill wrote:
The plan would cut corporate tax rates to 25 percent, down from the current 35 percent, one of the highest rates in the world. Obama's newly-released proposal calls for a 28 percent rate.

Romney attacked Obama's plan in his speech.

"He's raising taxes by hundreds of billions of dollars," he said. "Raising taxes will kill jobs. my plan will create jobs, that's the difference between the two of us… I don't think he understands the power of free people and free enterprises, following their own course in life. I do."


Edited, Feb 22nd 2012 1:23pm by Jophiel


I love how republicans continue to espouse the whole "closing tax evasion loopholes means raising taxes!" bullsh*t. It's only raising taxes if you were unfairly using said loopholes in the first place, in which case, @#%^ you, I have no pity for you.

Edited, Feb 22nd 2012 3:34pm by BrownDuck
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You guys keep tossing facts out there like they mean something.


#19 Feb 22 2012 at 3:35 PM Rating: Excellent
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#20 Feb 22 2012 at 3:46 PM Rating: Excellent
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Me too.
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#21 Feb 22 2012 at 3:54 PM Rating: Decent
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BrownDuck wrote:
I love how republicans continue to espouse the whole "closing tax evasion loopholes means raising taxes!" bullsh*t. It's only raising taxes if you were unfairly using said loopholes in the first place, in which case, @#%^ you, I have no pity for you.

Methinks you don't understand the word "loophole" in this context (scare quotes seem appropriate here).

The law states that companies do not have to pay taxes on various types of expenses. The law also states that the accounting record of these expenses at publicly traded firms must be reviewed for completeness, accuracy, and material misstatement by independent financial auditors.

Now, some expense classifications definitely favor some industries/firms over others in terms of their tax burden, but taking advantage of these various accounting classifications to reduce your tax burden is not tax evasion (which is illegal). If that were so, the SEC and the IRS would be having a field day collecting settlements from these firms.

Edit: In case you still don't get it, Obama saying that he wants to "close tax loopholes" is an overly-politicized way of saying he wants to eliminate the very legal tax-exempt treatment of certain types of expenses.

Edited, Feb 22nd 2012 3:57pm by Demea
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#22 Feb 22 2012 at 4:20 PM Rating: Excellent
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Demea wrote:
Now, some expense classifications definitely favor some industries/firms over others in terms of their tax burden, but taking advantage of these various accounting classifications to reduce your tax burden is not tax evasion (which is illegal). If that were so, the SEC and the IRS would be having a field day collecting settlements from these firms.

Edit: In case you still don't get it, Obama saying that he "wants to close tax loopholes" is an overly-politicized way of saying he wants to eliminate the very legal tax-exempt treatment of certain types of expenses.


OK, yeah, evasion is a bad word here. However.

Tax preferences also lead to very different effective marginal tax rates across assets. For example, because of accelerated depreciation and other features of the tax code, in 2005 income from a typical investment in structures for oil and gas faced an effective total marginal tax rate (including corporate and investor level taxes) of about 9 percent as compared to a 32 percent rate for manufacturing buildings.


The disparity here is undeniable and unwarranted.

Quote:
For example, the effective corporate marginal tax rate on new equity-financed investment in equipment is 37 percent in the United States. At the same time, the effective marginal tax rate on the same investment made with debt financing is minus 60 percent—a gap of 97 percentage points. This compares to an average difference of about 51 percentage points for other G-7 countries (see Table 3).

This tax preference for debt financing has important macroeconomic consequences. First and foremost, outsized reliance on debt financing can increase the risk of financial distress and thus raise the likelihood of bankruptcy. Unlike equity financing, which can flexibly absorb corporate losses, debt and the associated contractual covenants require ongoing payments of interest and principal and allow creditors to force a firm into bankruptcy. A solvent firm with limited liquidity that is struggling to make its debt payments may experience losses of customers, suppliers, and employees. It may engage in destructive asset “fire sales” and forgo economically profitable investments. And, in an attempt to
avoid bankruptcy, levered firms faced with financial distress may resort to high‐risk negative economic value investments. In the broader context, a large bias towards debt financing in the corporate tax code may lead to greater aggregate leverage and the associated firm‐level and macroeconomic costs of debt financing.


So it's cheaper, tax wise, to fund your business investments with debt than equity, by a tax margin of 97% in some cases. Smiley: facepalm

The proposed tax changes include (cherry picked for making a point):

* Eliminate oil and gas tax preferences.
* Improve transparency and reduce accounting gimmicks.
* Reducing the bias toward debt financing.

Items 1 and 2 are a given.

Item 3 is just plain mind boggling. A corporation might pay less taxes (or in some cases, none at all) simply by taking on debt for new investments, rather than paying for these investments through existing equity. This encourages a culture of borrowing and over leveraging that puts many businesses at risk for total failure, simply to reduce short-term tax exposure.






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#23 Feb 22 2012 at 4:40 PM Rating: Default
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Timelordwho wrote:
Honestly, it will make for great tv as the GOP tells us why reducing taxes is bad for America.


rdmcandie wrote:
I can't wait for Gbaji to come in and tell us why its bad to reduce taxes on Americans, and close loopholes for tax evasion.


Yeah. That's pretty obviously the point of the proposal in the first place. But then, you knew that:


rdmcandie wrote:

I love how Naive you are when it comes to how the mentality of the politic stage works.

A. The GOP say this is a great idea and put support behind the incumbent president, leaving the future GOP candidate treading water.

B. The GOP oppose the idea, thus taking a stance that reducing taxes on americans is a bad thing, or admitting support for loopholes that allow businesses and investors the ability to avoid paying the tax they should be is a good thing.


You left out option C: The GOP praises the idea of lowering taxes, but point out that Obama is not eliminating deductions fairly, but in a way that targets industries he dislikes while favoring those he does. They up the ante by suggesting that we reduce the rate further and flatten deductions across the board instead of selective.

And result is Obama looks like the guy using the tax code to play favorites, which plays right into the "crony capitalism" argument the GOP has been making for a year or so now. All they need to is point to GE to make this point, then ask where the eliminations of the tax loopholes they used to pay zero taxes (which is less than 9% last I checked) are.

Quote:
Pretty cut and dry, option A is out the window as the GOP won't put support behind a democrat president in an election year, as for Gbaji, we all know how much he likes to parrot party talking points.


I have no clue what "the party" is going to say. This is the first I've heard of this. But without looking at the actual proposal itself, I can't assess it directly. Based just on the linked article though, it sure looks like Obama is stacking the proposal with so much stuff that he knows the GOP wont accept that it's clear this isn't a serious tax reform plan, but just a campaign year game. And yeah, you can insert "poison pill" in there if you want. But that's exactly what it is, right?

If I were running things in the GOP, I'd say "great idea Obama!", then have my House members write up a version of Obama's plan which includes all the things the GOP wants. Then make a big deal out of Obama opposing his own plan and use that to highlight the fact that he didn't really want to lower taxes in the first place.

Or, if you want a less cynical approach, you actually put a "real" tax reform bill on the table. One that cuts taxes across the board, and eliminates deductions across the board. Then watch the liberals howl about how completely equal taxes on all businesses are somehow "unfair". That would be fun to watch!


Quote:
All in all, pretty fail proof political barrage by Obama, GOP is damned if they do damned if they don't.



It's a decent barrage, and I'm sure the media will eat it up. I wouldn't call it fail proof though. It's really no different than what he did with his speech about his propsed deficit reduction compromise. That didn't exactly go over well either, did it? At the end of the day, his own party rejected his own proposal. Kinda hard to blame Republicans when the Dems can't even support their own ideas.

Edited, Feb 22nd 2012 2:51pm by gbaji
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#24 Feb 22 2012 at 4:50 PM Rating: Decent
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BrownDuck wrote:
Item 3 is just plain mind boggling. A corporation might pay less taxes (or in some cases, none at all) simply by taking on debt for new investments, rather than paying for these investments through existing equity. This encourages a culture of borrowing and over leveraging that puts many businesses at risk for total failure, simply to reduce short-term tax exposure.


It also encourages more investment and economic growth. Obviously, there's a risk. But the reality is that most business expansion or creation starts with the borrowing of money. Not a lot of people have the cash on hand to start up their own businesses. The same deduction helps them a hell of a lot by reducing the burden of that debt. While it could be abused by large corporations to hide profits for tax purposes, getting rid of it would have a "baby with the bathwater" effect on everyone else who uses it. It's not like that potential small business owner has a choice to borrow or not borrow money to start that business in most cases. They're still going to borrow that money. But now, they'll have to not only pay the interest on the money they borrowed but *also* pay taxes on the money they use to pay that interest.

At the end of the day, fair or not, good tax policy or not, the net effect of eliminating that deduction will be slower growth of new businesses, and consequently new jobs. How much slower? No clue. But everything else staying the same, it will slow that growth. There has to be some number of businesses or individuals for whom that deduction is the difference between choosing to borrow money to create/expand a business or not.
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#25 Feb 22 2012 at 5:37 PM Rating: Excellent
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gbaji wrote:
Based just on the linked article though, it sure looks like Obama is stacking the proposal with so much stuff that he knows the GOP wont accept that it's clear this isn't a serious tax reform plan, but just a campaign year game. And yeah, you can insert "poison pill" in there if you want. But that's exactly what it is, right?


My gut is that he's inserted just enough things to make it sound reasonable at first glance to moderate voters but unpalatable to those further right, in hope of highlighting the differences between them in an election year. But yeah, I suspect any budgeting to play second fiddle to scoring political points from here to the election.

Of course my cynical side would say that's always the case anyway... Smiley: rolleyes
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#26 Feb 22 2012 at 6:14 PM Rating: Decent
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BrownDuck wrote:
So it's cheaper, tax wise, to fund your business investments with debt than equity, by a tax margin of 97% in some cases. Smiley: facepalm

And it's all the fault of those CEOs and lying corporate fat cats who found the most efficient and cost-effective way to finance new spending! Certainly the government that passed the laws governing those tax treatments are completely blameless for this outcome!

Smiley: rolleyes

Edit: Also, I don't think gbaji fully pointed out the flaws in this part.

Quote:
Item 3 is just plain mind boggling. A corporation might pay less taxes (or in some cases, none at all) simply by taking on debt for new investments, rather than paying for these investments through existing equity. This encourages a culture of borrowing and over leveraging that puts many businesses at risk for total failure, simply to reduce short-term tax exposure.
By "existing equity", I'm assuming that you're talking about retained earnings, because otherwise the above paragraph would be silly. However, even if that's the case, a growing business couldn't possibly fund required asset investment on retained earnings alone, not to mention the fact that their stock holders would suffer collective apoplexy.

Which says nothing regarding the tax treatment of said investment funding, just that there's a reason debt financing is essential to economic growth, and more widely used than "existing equity" financing.

Edited, Feb 22nd 2012 6:24pm by Demea
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#27 Feb 22 2012 at 6:18 PM Rating: Excellent
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There's a zero-point-zero percent chance that any significant change to the tax code will occur during an election cycle for numerous reasons both political and practical. But everyone else is going to flash their tax proposals around as an election tactic so there's no reason why Obama should be exempt.
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#28 Feb 22 2012 at 6:56 PM Rating: Good
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There's a zero-point-zero percent chance that any significant change to the tax code will occur during an election cycle for numerous reasons both political and practical. But everyone else is going to flash their tax proposals around as an election tactic so there's no reason why Obama should be exempt.


I see what you did there
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#29 Feb 23 2012 at 11:42 PM Rating: Good
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gbaji wrote:
BrownDuck wrote:
Item 3 is just plain mind boggling. A corporation might pay less taxes (or in some cases, none at all) simply by taking on debt for new investments, rather than paying for these investments through existing equity. This encourages a culture of borrowing and over leveraging that puts many businesses at risk for total failure, simply to reduce short-term tax exposure.


It also encourages more investment and economic growth. Obviously, there's a risk. But the reality is that most business expansion or creation starts with the borrowing of money. Not a lot of people have the cash on hand to start up their own businesses. The same deduction helps them a hell of a lot by reducing the burden of that debt. While it could be abused by large corporations to hide profits for tax purposes, getting rid of it would have a "baby with the bathwater" effect on everyone else who uses it. It's not like that potential small business owner has a choice to borrow or not borrow money to start that business in most cases. They're still going to borrow that money. But now, they'll have to not only pay the interest on the money they borrowed but *also* pay taxes on the money they use to pay that interest.

At the end of the day, fair or not, good tax policy or not, the net effect of eliminating that deduction will be slower growth of new businesses, and consequently new jobs. How much slower? No clue. But everything else staying the same, it will slow that growth. There has to be some number of businesses or individuals for whom that deduction is the difference between choosing to borrow money to create/expand a business or not.


Well, it puts more investments in that hazy region where risk/reward borderlines are shaky. Which is exceedingly good for banking firms, as they float their rates based on that risk. Biz plans that are safe or solidly in the positive reward/risk end of the spectrum will be unaffected, or actually benefit from the tax rework as their finance dept will need to do less 'creative' things.

On the other hand, if Obama takes out all of the loopholes, a few friends will have to shift into less lucrative careers. I doubt this will be the case.
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#30 Feb 25 2012 at 5:58 PM Rating: Excellent
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I have no clue what "the party" is going to say.
Smiley: lol

Since you move in lock step with them anyways, I'm sure you can make a stab in the dark here.
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#31 Feb 25 2012 at 7:11 PM Rating: Good
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gbaji wrote:
I have no clue what "the party" is going to say.
Smiley: lol

Since you move in lock step with them anyways, I'm sure you can make a stab in the dark here.


The talking point brochure hasn't arrived in the mail yet.
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#32 Feb 26 2012 at 2:12 PM Rating: Excellent
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Dozer wrote:
Demea wrote:
I love all the preemptive knee-jerk gbaji/GOP hating going on in here. It's so cute to watch you all work yourselves into a tizzy over... nothing. Smiley: laugh


With Varus gone, one must create their own drama. Smiley: lol

Did he finally get banninated? What happened here?
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#33 Feb 26 2012 at 2:25 PM Rating: Excellent
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Yeah, he did. I'm not clear on the details.

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#34 Feb 26 2012 at 2:27 PM Rating: Decent
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Im disappointed we will never hear about him upgrading his 6 CD changer.
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#35 Feb 26 2012 at 4:08 PM Rating: Good
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Yeah, he did. I'm not clear on the details.



Used the n-word one too many times, I believe.

The quality of the boards improved slightly with his departure.

Edited, Feb 26th 2012 4:08pm by Belkira
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#36 Feb 27 2012 at 8:19 AM Rating: Good
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Well, this branch of the boards anyway. The rest of the proverbial tree is still infected.
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#37 Feb 27 2012 at 4:57 PM Rating: Decent
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Timelordwho wrote:
Well, it puts more investments in that hazy region where risk/reward borderlines are shaky. Which is exceedingly good for banking firms, as they float their rates based on that risk.


It puts more investments everywhere. All investments carry an element of risk. I think it's foolish to think that by making investment more expensive, it'll just ensure that people take fewer risks. It wont. At best, it'll just make all investment more expensive, which means that to gain similar returns, investments will have to focus to those things in which they can pass that higher cost on to the consumers. It may affect the types of investments, but probably not in the ways you expect or desire.

You'll get fewer of the "Let's open a mom'n'pop grocery store" type of investment and more "Let's invest in a racehorse and hope we win!" type. Why? Because the latter is faster, with a bigger return in a shorter period of time (if it works). If it fails, the investor writes it off, the bank makes up the loss by charging a bit more in other areas, and everyone (mostly) walks away clean. If it succeeds, the investor gets his investment back quickly, thus paying interest on the loan for a shorter period of time, thus being less impacted by a lack of a tax break on said loan.


I really think you're not considering the full implications of such a change.

Quote:
Biz plans that are safe or solidly in the positive reward/risk end of the spectrum will be unaffected, or actually benefit from the tax rework as their finance dept will need to do less 'creative' things.


Of course they'll be affected. Any interest on the money they borrowed to start up that business, no matter how "safe", will no longer be tax deductible. That will affect them. And as I pointed out earlier, it may just shift people into *more* risky investments, since now a loss is still deductible, but the interest on a longer slower "safer" plan isn't.

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On the other hand, if Obama takes out all of the loopholes, a few friends will have to shift into less lucrative careers. I doubt this will be the case.


Doubtful. First off, Obama isn't taking out "all the loopholes". He's doing the worst thing possible and targeting them based pretty much entirely on political perception and not on sound economic principles. What we'll end out with is a set of loopholes that are even less sensible than the set we have now.

If he were flattening taxes and eliminating *all* deductions/loopholes/whatever, that would be one thing. But he's not, is he? He's eliminating loopholes that his political "side" wants eliminated, while leaving in the ones they like. It's a terribly bad way to conduct economic policy, but he's more interested in getting the throngs of idiots who salivate when he says something like "eliminating subsidies for oil and gas companies" to support him than he is in actually coming up with a good sound economic plan.
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#38 Feb 27 2012 at 5:26 PM Rating: Decent
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Doubtful. First off, Obama isn't taking out "all the loopholes". He's doing the worst thing possible and targeting them based pretty much entirely on political perception and not on sound economic principles.


Because Corporate investors have been paying reasonable taxes for the money they make right? Lets just cut all the social programs that prop the country up that is the answer!.

Seriously dude, your corporate tax structure is pretty pathetic, the companies themselves pay one of the highest taxes in the world, and those who invest into those companies pay one of the smallest.

But the rich getting richer, sounds conservative enough to me.
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#39 Feb 27 2012 at 6:25 PM Rating: Decent
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Doubtful. First off, Obama isn't taking out "all the loopholes". He's doing the worst thing possible and targeting them based pretty much entirely on political perception and not on sound economic principles.


Because Corporate investors have been paying reasonable taxes for the money they make right? Lets just cut all the social programs that prop the country up that is the answer!.


First off, I'm not sure how that constitutes a valid response to the statement you quoted. I was talking about how Obama isn't eliminating all loopholes, but just selective ones that help him politically. Secondly, you're mixing two very different things. One is what a "reasonable" amount of taxes is, and the second is about social programs. An argument that we need more spending for social programs is different than one about how we structure our taxes and determine who bears the greatest burden of the taxes used to pay for those things.

Do you think that corporate investors don't pay reasonable tax rates? Why not focus on just one part? Connecting it directly to social spending is avoiding the question.

And on top of that, I happen to believe that social spending hardly props the country up. I think it tears the country down. We spend way too much on social programs already, and the argument for raising taxes isn't about "cutting" those programs, but about enabling our government to spend even more money on them. You're playing the reverse-direction game, where failing to raise taxes to allow for greater social spending becomes cutting social spending in favor of the rich. That's dishonest at the very least, and certainly deceptive.

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Seriously dude, your corporate tax structure is pretty pathetic, the companies themselves pay one of the highest taxes in the world, and those who invest into those companies pay one of the smallest.


And? You're stating a fact (a questionable one, but whatever). What does that mean though? What negatives do you think occur because of this? Just repeating a statement doesn't constitute an argument. Tell me why that condition is bad. Can you do that?

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But the rich getting richer, sounds conservative enough to me.


If the cost of making sure the rich can't get richer is that no one else can get rich in the first place, isn't the cost too high? You're allowing yourself to be focused on just one thing you view as negative, while failing to see the whole picture. Who cares if some rich guy gets richer? Don't most people care the most about their own chances of becoming wealthy and making their own lives better for themselves and their children? This is one of those meaningless things that liberals love to spout, but never seem to be able to take a step further. Why is that bad?


I don't care how much more money the CEO of the company I work for makes relative to me. I care about how much *I* make relative to the cost of living in the area I live in. You're working hard to make people care about something that doesn't affect them, while downplaying the more important economic facts of the issue. Most wage earners (people working for others, and not owning their own businesses, which is obviously "most people") will earn a higher salary working for someone "rich" then not. And in most cases, the richer the person they work for, the higher their salary. I doubt a whole lot of people, if given the choice between working for a small business with a middle class boss and a big business with a billionaire CEO at the helm would have a hard time choosing. Would they?

Edited, Feb 27th 2012 4:26pm by gbaji
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#40 Feb 27 2012 at 6:29 PM Rating: Default
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And? You're stating a fact (a questionable one, but whatever). What does that mean though? What negatives do you think occur because of this? Just repeating a statement doesn't constitute an argument. Tell me why that condition is bad. Can you do that?


Um your national debt is @#%^ing retarded and just cutting spending isn't enough. You sure are dumb when it comes to political economics for how much you blab about it.
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#41 Feb 27 2012 at 6:58 PM Rating: Decent
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rdmcandie wrote:
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And? You're stating a fact (a questionable one, but whatever). What does that mean though? What negatives do you think occur because of this? Just repeating a statement doesn't constitute an argument. Tell me why that condition is bad. Can you do that?


Um your national debt is @#%^ing retarded and just cutting spending isn't enough.


And? Again with no argument being made. What does a high national debt have to do with insisting that our corporate tax system is screwed up? You keep doing this. Do you even realize it? Why do you think those things are relevant to the position you're trying to support? You presumably support Obama's plan. Why not say *why*?


And for the record, we had the same exact tax rates during a time period when our debt% was shrinking. Clearly, our national debt being "retarded" today has nothing to do with changing tax rates. So why think that changing them will fix the problem?


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You sure are dumb when it comes to political economics for how much you blab about it.


Dumb like someone who thinks that even though tax rates were not lowered between the time period when our debt was managed and stable and today when it's neither the solution to our debt is to raise taxes? Dumb like someone who thinks that even though spending went through the roof during that same period of time, that "cutting spending" should not only not be part of our solution, but that we need to spend more money.

To me, that's a hell of a lot more dumb. Wouldn't you agree? Our tax rates didn't change between 2007 and 2010. Our spending did (massively). If you want to argue that we should be raising taxes instead of cutting spending in order to get out debt in control, you'll need to make one hell of a good argument for that position. But you haven't even made an argument, let alone a good one.

And that's ignoring that before you switched to talking about debt, you first argued for the need to raise taxes to pay for more social spending (well, you implied that failing to raise taxes meant less social spending, but close enough). You only changed to reducing the debt *after* I challenged your first statement. So which is it? We need to raise taxes so we can spend more on social programs? Or we need to raise taxes so that we can pay down our debt?


Silly me, I think that you wouldn't know a good reason for raising or lowering taxes if it walked up and hit you in the head. I think that you've bought into the "big government" argument, and accept any claim that you hear in support of that. You know that increased social spending is "good". You don't know why, and can't argue why, but you believe it without reservation. And you know that "raising taxes on the rich" is good as well. Again, you don't know why, and certainly can't argue why, but you believe it. And frankly, I don't think you care about the national debt, except to the point that it allows you to make broadly stated claims in support of those things you already think are "good".

If you really cared about the national debt, you'd have been right with us conservatives opposing the stimulus bill(s) when Obama proposed them. But you didn't (US citizen or not). You cheered them on, didn't you? So forgive me if I find your sudden switch to deficit hawk less then convincing.

Edited, Feb 27th 2012 5:01pm by gbaji
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#42 Feb 27 2012 at 7:40 PM Rating: Decent
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If you really cared about the national debt, you'd have been right with us conservatives opposing the stimulus bill(s) when Obama proposed them. But you didn't (US citizen or not). You cheered them on, didn't you? So forgive me if I find your sudden switch to deficit hawk less then convincing.


I actually didn't I opposed the stimulus bill because it had a Buy American pledge attached to it. It took my government several months to have this amended, even still it only applies to certain things. Stimulus cost my country a lot of jobs, because the US stopped buying Canadian products, and currently Canadaian made products using materials from non-US-Canadian markets.

But I am not daft enough to not see the stimulus is working as intended, anyone who believes in an overnight change to what happened is naive, and doesn't understand how economics works.

It had nothing to do with your deficit, the deficit means @#%^ all to me really. But from an economic standpoint, presently your deficit is highly disconcerting. Not because it exists, but because you have no practical means to reduce it.

You preach cutting programs, specifically social programs. But I think you do not realize what these programs allow. In fact I would say you don't, because your party doesn't talk about it.

Social programs allow for the middle to lower class the ability to provide healthcare, food and shelter to their families. Without things like medicare, welfare, food assistance many people would have to chose one or the other. The people who own the buildings they live in, the hospitals they attend, the food stores they shop at all rely on their income (assisted or not) to stay afloat, paying off mortgages (for rental properties), through medicare payments, and to sell goods.

If these funds were not there these people would then struggle to pay their debts, to banks, doctors, farms. Who in turn can not pay their debts etc etc etc.

Which brings us back to your corporate tax structure. Obama is proposing a reduction to corporate tax, meaning it costs companies less to operate, while at the same time wishing to target the inestors of these companies from avoiding loopholes that allow them to avoid paying realistic tax on the money they make (off the government in many cases).

Essentially you have government money going directly into the pockets of a few private citizens, who then invest that money to earn more government money.

You could cut spending, which would severely hurt the economy of the USA, or you can tax the people who are earning money in large part from government cash (welfare, medicare, food assistance).

The very programs you oppose, are the very ones that prop up your parties corrupt ideals.

There needs to be a combination of cuts to spending (which are occurring presently with your military) and taxes increased. Targeting those whose value is primarily made from government money is a logical source.

If I was a US citizen, I would want my money back too.
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#43 Feb 27 2012 at 9:58 PM Rating: Good
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It had nothing to do with your deficit, the deficit means @#%^ all to me really. But from an economic standpoint, presently your deficit is highly disconcerting. Not because it exists, but because you have no practical means to reduce it.


Ok. But that's backwards thinking. You brought up the debt when I asked what was wrong with our current corporate tax system. So, by implication, you're saying that our high debt is a result of the corporate tax system, and by extension, that by fixing said corporate tax system, we can fix the debt. I think it's very valid to point out both that the corporate tax system didn't cause our deficit, or the resulting debt, and thus it seems unfair to correct that problem by changing said taxes.

Also, your argument assumes that a greater total amount of taxes will be collected as a result of the corporate tax changes. Otherwise, why mention the high debt as a reason to change the taxes?

So you're not fixing it because of something broken about it (or at least your not making that point), but because there's some other problem, caused by something else, that you want to pay for by making corporations pay more taxes. Is that about it? So we can chuck the whole "fair and reasonable" parts of your posts out the window, right?

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You preach cutting programs, specifically social programs. But I think you do not realize what these programs allow. In fact I would say you don't, because your party doesn't talk about it.


I think our social programs have long since gone past the "help people in dire need who would starve to death otherwise" and have moved into the "not worth spending money on" and "mostly used to buy people's votes" category. I think that increasing that spending is a horrible idea. You're not saving anyone. You're just shifting money from those who earn it to those who don't, and hurting both groups in the process.

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Social programs allow for the middle to lower class the ability to provide healthcare, food and shelter to their families.


No, they don't. They provide health care, food, and shelter to their families. They don't actually give those people the "ability" to do anything. Not taxing the money for those programs from the productive parts of the economy in the first place, would actually increase the ability of those families to obtain those things themselves. The problem is that you can't see how many people are poor or struggling working class *because* of the cost of those programs.

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Without things like medicare, welfare, food assistance many people would have to chose one or the other. The people who own the buildings they live in, the hospitals they attend, the food stores they shop at all rely on their income (assisted or not) to stay afloat, paying off mortgages (for rental properties), through medicare payments, and to sell goods.


And without the drain on the economy those programs create, many people would earn enough not to have to rely on government assistance in the first place. See how that works?

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If these funds were not there these people would then struggle to pay their debts, to banks, doctors, farms. Who in turn can not pay their debts etc etc etc.


Nope. They would be more likely to be able to earn a living sufficient to buy those things themselves. Also, the absence of government "free money" spending in those industries would drive greater competition, meaning they'd be more affordable to more people even absent income increases. Why do you suppose that the costs of things in areas unsubsidized by government dollars continually goes down and the quality goes up, while those in those areas stay expensive (or become more so)?

I usually drop analogies about flat screen TVs, home computers, music players, etc when I make this point, but I recently heard someone make an even better point. Why is it that the cost to get a MRI has increased relatively speaking since the introduction of the technology, but the cost (and quality) of laser eye surgery has decreased over the same period of time (massively so in fact). One is covered by government funded health care (and all private health insurers who wish to participate), and the other is considered elective and is not.

Can you imagine how much less health care would cost if we got the government out of the business? I know it's a novel concept and a hard one for most people indoctrinated into the "we must provide these services for the poor", but try to stretch your mind a bit here. The pattern of cost is pretty clear.

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Which brings us back to your corporate tax structure. Obama is proposing a reduction to corporate tax, meaning it costs companies less to operate, while at the same time wishing to target the inestors of these companies from avoiding loopholes that allow them to avoid paying realistic tax on the money they make (off the government in many cases).


That's not really true though. He's targeting a whole set of loopholes, some of which are investment related, but many of which (most of which) are corporate tax related. What he's doing is attempting to buy his discriminatory tax loophole policy, designed to benefit businesses and industries his supporters like, while penalizing those they don't like, by hiding it within a "but I'm lowering rates across the board" burrito.

Put another way. Company A is in an industry which Obama doesn't like. Company B is in one he does. Both companies take advantage of tax deductions which affect their respective industries. Obama proposes lowering the tax rate on both companies, but eliminates the loopholes which apply to company A's industry, while keeping those for company B intact. What has he just done? He's taken money from company A and given it to company B.


That's all this is about. If it were truly about tax reform, he'd propose a much lower tax (like 15%) and eliminate *all* corporate deductions and loopholes. But that's not what he's doing. He's selectively targeting just the industries he and his political supporters don't like. So let's stop pretending this is some sort of altruistic plan, much less even a valid economic plan. It's political favoritism. He knows it. And he knows the GOP knows it. So he knows that they'll oppose it. Nothing shocking here at all.

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You could cut spending, which would severely hurt the economy of the USA, or you can tax the people who are earning money in large part from government cash (welfare, medicare, food assistance).


OMG that is completely backwards. Cutting spending will not hurt the economy of the US at all. What it will do is hurt the special interests who rely on that funding and who (mostly) support the Democrats. Taxing the people will hurt the US economy. So if the choice is between cutting spending and raising taxes, we need to cut spending.


And again, you miss the bigger point here. Our tax rates have no changed since before our deficit went out of control. Thus, tax rate changes didn't create the deficit. Raising the taxes in order to pay for the deficit is the wrong answer. You're hiding the real action here. What's happening is that the Dems want to increase spending and then raise taxes to pay for it. But they know people will oppose that plan, so they instead increase spending (by using a crisis as an excuse), and then when deficits skyrocket and our debt goes out of control, they use the need to eliminate that problem as an excuse to raise taxes.

It's dishonest to disconnect the cause of the increased debt from the action you propose to solve it. The debt isn't a separate problem. It's the result of too much spending. The solution then is to decrease spending to levels before we had this problem.

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The very programs you oppose, are the very ones that prop up your parties corrupt ideals.


Uh... No. That's cute little projection, but completely false.

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There needs to be a combination of cuts to spending (which are occurring presently with your military) and taxes increased. Targeting those whose value is primarily made from government money is a logical source.


Wait? So you want to target taxes at welfare recipients? You do get that failing to tax people as much isn't the same as giving them money, right? I know that liberals love to play this whole "Big business gets the most benefit from government spending game", but that's simply not the truth. If the government were to tomorrow eliminate every single dollar of domestic spending *and* eliminate all tax deductions, you know who would benefit the most? The rich and big businesses. They are paying massively more than what they gain from the government.

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If I was a US citizen, I would want my money back too.


So you understand why the rich might be a bit peeved that they pay so much in taxes, and it's spent handing benefits out to people who didn't earn it? Nah, that's too much to expect.
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#44 Feb 27 2012 at 10:16 PM Rating: Good
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#46 Feb 27 2012 at 10:30 PM Rating: Default
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ya you type to much giberish Gbaji, I can handle one or two paragraphs of you using personal opinion as fact, but ill be honest I didn't read anything you just wrote.
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#47 Feb 28 2012 at 7:17 AM Rating: Excellent
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Like day-old tapioca, baby.

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#48 Feb 28 2012 at 8:09 AM Rating: Excellent
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Why is it that the cost to get a MRI has increased relatively speaking since the introduction of the technology, but the cost (and quality) of laser eye surgery has decreased over the same period of time (massively so in fact). One is covered by government funded health care (and all private health insurers who wish to participate), and the other is considered elective and is not.

Sure, got real evidence that this is the primary reason or is this one of your "It's just OBVIOUS" things where correlation certain equals causation when it fits your argument things?

A few minutes of casual searching tells me that the primary reason why MRI costs are going up is because the technology keeps increasing. Medical facilities drop $2,000,000 on an imaging machine (and it's 800k annually to maintain it) and need to recoup their costs before its effectively obsolete and they need to buy a newer (and generally more expensive if only for inflation) model. This is also the root of the criticism that doctors keep recommending imaging tests that aren't really necessary. You can complain that insurance is paying for those but, if they had to recoup their costs from 1/5th the number of people, what do you think the costs would be? If anything, and I'm not saying the way it's happening is a 'good' thing, access to insurance and government funding keeps MRI prices down on a per person basis.

What's the cost of the laser eye surgery components? How long do they last? What's the usual turn-over on them? How many eye clinics employ the latest technology versus technology from a couple years ago? How do all these factors compare with medical imaging?

Oh my! It's starting to sound harder than just waving your arms around and hooting "Government!!"

Edited, Feb 28th 2012 8:21am by Jophiel
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#49 Feb 28 2012 at 8:25 AM Rating: Good
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However, even if that's the case, a growing business couldn't possibly fund required asset investment on retained earnings alone, not to mention the fact that their stock holders would suffer collective apoplexy.

Which says nothing regarding the tax treatment of said investment funding, just that there's a reason debt financing is essential to economic growth, and more widely used than "existing equity" financing.

In Germany almost the entire business-world funds asset investment (and R&D) on retained earnings alone. In the 1980's, 90's and early 2000's German businesses had international banks continuously offering them financing loans, which they knocked back time and time again. During this period "conservative" German business practices became the laughingstock of the financial world, even though German businesses were not merely solvent, they were in general wildly successful, in many cases making 10s to 100s of millions of profit a year.

Then the GFC happened, and so many European nations became insolvent. Germany HAS the funds to bail them all out, (and indeed the GFC has not much affected German business profitability) but individual Germans are bitterly resentful that their careful and clever money making practices are being asked to fund several nations that have collapsed under the burden of collective debt. They want iron-clad guarantees that if they bail-out places like Greece, that their money WILL be repaid back to them. For Greece and other insolvent European nations to engineer successful repayments, even long term, from the starting point of where they are, public spending has to halve, throwing millions out of work, halving the pay-checks of the rest, and reducing pensioners, students and the unemployed to such depths of poverty they will all have to move if paying rent, and stop buying anything but food. Hence rioting in Greece, and continual government turn-over and bail-out delay, as the Greek citizenry refuse the needed austerity measures to get them solvent.

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#50 Feb 28 2012 at 8:47 AM Rating: Good
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You'll get fewer of the "Let's open a mom'n'pop grocery store" type of investment and more "Let's invest in a racehorse and hope we win!" type. Why? Because the latter is faster, with a bigger return in a shorter period of time (if it works). If it fails, the investor writes it off, the bank makes up the loss by charging a bit more in other areas, and everyone (mostly) walks away clean. If it succeeds, the investor gets his investment back quickly, thus paying interest on the loan for a shorter period of time, thus being less impacted by a lack of a tax break on said loan.


What the @#%^? No, making it riskier to bet on a racehorse over a store doesn't make it easier for a bank or investor to soak the losses. I can't even begin to see how you wound up at this conclusion.
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#51 Feb 28 2012 at 9:10 AM Rating: Excellent
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More to it, you have control over a store as the owner or an investor. Betting on a horse (for example) puts it out of your hands aside from guessing at the odds.

Two completely different things.
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