They put the money in overseas tax havens and reduce their staff or move them overseas for even bigger savings. Or, the Kochs park the money there then use it to buy more puppets to remove all labor and environmental regulations.

There is no benefit and only downside to making investments in infrastructure or in increasing salary when the demand for goods and services don't increase. It's just bad business. That's why supply side economics is doomed to failure.

In another thread i posited that if a company pays higher salaries (assuming for a moment, across the board) the short term margins fall. This impacts cash flow and increases the need for RLOC money. The interest on this further dissipates profitability and the analysts on Wall Street negatively impact stock value.

If they invest in expansion, but there is no extra takeaway, the money is ill spent. It would have been more useful a dead cash causing a reduction in RLOC demand.

This isn't about greedy oligarchs. It's just bad business, whether it's major corporation or the corner barber shop.

Even the junior accountants would recognize this.

I take this more as many people in that room saying the tax cuts won't do what people like Cohn claim they'll do. They know it doesn't really work and they were honest enough to point out that the "higher middle class" thing is an empty sales pitch.

Nothing. Absolutely nothing.

Last edited Wed Nov 15, 2017, 12:25 PM - Edit history (1)

He's explained a number of times why the tax cut won't increase investment.

Investment is based on growth opportunities, which don't change just because the business gets a bounty of free cash. Some of that cash may simply go to buying down debt, or stock buybacks, or bonus's.

If a ceo doesn't see an roi to investing, they won't do it, regardless of free cash. They can always borrow money to expand, and most do. They aren't going to invest just because they received a windfall.

It's far more likely they will just feather their own nests.

It absolutely won't be used to raise expenses wrt worker salaries or benefits. It will stay at the top.

A company will hire more people when it has to not because it can.

They will even frequently lay off the highest paid with the most seniority at the same time as they hire part time low wage unskilled replacements.

It's called cleaning the books, and companies these days have squeaky clean books.

If more people want your shit, you make more shit. What creates demand is more people having more money to demand more shit.

Cohn is the best they got to sell this sack of garbage and he's just spouting gibberish.

There are times to to cut taxes, but this is not one of them.

Our economy is almost at full employment. Yet pay is not going up for the rank and file.

Companies are simply awash in capital and if they wanted to use some of those trillions they're holding overseas (wink wink...nudge nudge) to invest they could do so. Money used to invest can be written off as investment and isn't taxed.

Profits are at record highs and most large corporations have been buying their own stock back at a furious rate to bump up their stock prices so that the executives (whose compensation is heavily weighted toward stock grants, option awards etc) hit the bonus goals in their pay plans. Or they are investing heavily in robotics, AI, and continue to offshore operations wherever possible to take advantage of vastly lower pay structures in countries like Mexico, Colombia, Costa Rica, Macedonia, Poland, India, China, Vietnam etc.

A tax cut without corresponding tax penalties for failing to expand operations, and/or raise rank and file, pay etc. is just a gift. But if you build in penalties the tax code will just accelerate the race to the bottom with companies seeking cheaper and cheaper payrolls and it will also accelerate the drive to automate.

This tax cut plan was supposed to be "reform", but like the ACA Repeal and Replace where "replace" was quickly jettisoned "reform" was quietly dropped and only the "cut" remains.

This plan is an outright gift to the highest marginal tax brackets (and there are members of the punditocracy that are whining because the top marginal bracket has not been eliminated) and to the largest corporations. This blatant giveaway is funded by raising the taxes of the lower, middle, and upper middle classes by eliminating or restricting the few tax deductions that still remain for the W2 and 1099 wage slaves.

That Cohn was stupid enough to get a lot of these CEOs in a room and poll them on their plans if this gift passes with journalists in the room is stunning. What an idiot!

Twitter, Facebook, everywhere on social media. THIS is the biggest story of the day.

That most would even understand the implications (what the article means) and two that they care...republicans have clearly and unambiguously stated that they would rather elect a pedocreep racist than a Democrat.

He's been CROWING for 2 years how tax cuts will lead to more investment - here is a group of CEOs who say NO it wont. It'll make a great ad.

But the fact that tax cuts do not, actually never, translate to investment and expanded economic opportunities for the middle and lower income classes, rarely actually matters.
Unless that person you trying to make understand has an interest in economics or a business degree, it’s nearly impossible for someone like me or you to explain why.

Their interest begins and ends with the belief they are better off because they think they are getting an extra couple hundred bucks in their pocket with no thought to the aggregated impact of that tax cut on the economy and their bank accounts specifically. (See Kansas & Louisiana)

The point of my first statement is that republicans do not have a reasonable or logical response, it is pure partisan ideology.

Any group that is willing to elect a pedocreep racist purely because of partisan ideology is never going to understand the nuances or economic theory.

in trickle down economics is completely beyond me. It has never worked, no place, ever. How do the republicans keep getting the sheep to believe in it when there is ZERO evidence it works?

They will vote on the tax bill after thanksgiving so constituents can call, protest, go to town halls, etc. in the meantime. Tell them the taxes favor the rich and make the poor and sick die. That IS their actual goal after all so they will probably say "thank you" for verifying the GOP plan.

your shit will just sit in a warehouse some where. The key is to make sure that people have the money to your shit.

Either way, it's bad business. As i said above, it doesn't matter if this is a corner liquor store, a barber shop of Apple. Nobody is going to invest more when there is no upside.