Trump is Right to Blow Up the Fed

[Cuddles]

I don't care what the article states. Corporations or any other business do not pay taxes, ever. If a company pays a tax bill, that is funded by the money they made from charging their customers for whatever goods or services they provided. If a company pays no tax bill it just means they have better tax attorneys and profits will be better as a result, same as if they reduced their labor force, or rent, or healthcare benefits, or the friggin light bill. All of these costs of doing business are built into the price they charge. Subtract all these costs of business which are all built into the overhead, including taxes, and the rest is profit.

got it, you don't care about facts.

 

[CaptainObvious]

got it, you don't care about facts.

Hypothetical. I have a car for sale that I own outright. Bought it for 7500. I want 10,000 for the car. Sales tax on that car sale is 7%. If I want the whole 10K I will ask 10,700. Who actually paid the 7% to the state? If we negotiate a lower price to 10K, I might be the one sending the money to the state, but you still paid it. All I did was decide to reduce my profit. Doesn't matter what I charged you, you still paid the tax and the rest was my profit or loss to deal with. The only way I would pay the tax would be if I sold you the car for, say, 7500, and then told the state I sold it for 10K. Wouldn't be in the car selling business for long if I did that.

 

[CaptainObvious]

got it, you don't care about facts.

Let me take the other side of the argument. Republicans are just as full of shit when they whine about the corporate tax rate for being too high. As stated, corporations pay no taxes so it really doesn't matter what the tax rate is for them.
If the government wants to raise tax revenue, then what really needs to happen is more "individuals" need to pay more taxes. Now you can raise the rate on individuals, and/or you can raise the number of individuals paying, or best of all, you can raise the income and number of individuals paying. How to do that?
One great way is to limit the number of individuals allowed into the country who are willing to work for slave wages. Something Trump is trying to do and being stonewalled by both party establishments for all the endlessly argued reasons we have here. That would not be the end to our economic problems, but it would be a good start. Another way would be to raise wages, but that's dicey because corporations will then raise their prices to offset that cost increase to them. The question then being, is it possible to shame these greedy fucks into paying a living wage without increasing their prices? Seems the answer is no, they want their hundreds of millions per year ensuring that no one in their family has to work for the next 100 fucking generations.
So who would be the best presidential candidate to argue this? Wait for it. Elizabeth Warren. She is eminently more qualified on the subjects of finance, markets, the economy, etc., than all the other numbskulls combined. I would happily support her if she would knock off the silly pandering to the idiot base of the far left. While her Injun issue is somewhat problematic and amusing to give a poke or two, I care no more about that than I do about Trumps philandering. Bigger fish to fry. If the Lizzy of 15 years ago would reappear, count me in. I won't hold my breath as too much has changed in our world and stupidity reigns supreme. It's a race to the bottom. All aboard.
Final word. Corporations don't pay taxes.

 

[Tsing Tao]

Is your problem with the fed’s mandate?

Sure, lets go there. Yes, I have a problem with the mandate. Tell me, please. How many other central banks in the world have a dual mandate? Also, please tell me how the Federal Reserve directly influences the unemployment rate. Lastly, could you tell me how the unspoken third mandate of inflating asset prices comes into consideration?

Also, the fed balance sheet is not at a record, currently. They began offloading it 2 years ago. They need to continue to offload it.

LOL. This is hilarious. So because they began shrinking it (one second, let me find a chart to see the progress on shrinking)

Oh yeah! Big progress! You're hiding behind semantics with your "it's not a record anymore!" bullshit.

As a CFO, you’re trying to tell me you truly believe interest rates should be determined by an algorithm? This is not jibing. Maybe it will benefit you but in the real world the fed needs to be flexible not rigid. And who gets to determine the algorithm, you, Herman Cain?

The inputs and formula could be handled by a computer. Yes. And that idea, by the way, comes from minds much greater than my own. I think Jim Grant has brought it up multiple times. What, you think there is some mysticism employed at the Fed that allows the hilariously inept governors there to conjure the magic equation to allow the economy to go on? Because evidence is really, really against that.

My interpretation of what you are saying is that you have major issues with the Fed’s policy in reaction to the Great Recession. Perhaps you think a depression is what the country needed. But if you think a depression is what was needed then you have no right complain about Fed Governors being academics because I assure you a depression has very real world consequences and only an academic would say a depression is just what the country needed.

The depression is coming no matter what, because of not in spite of, the Fed's actions. You simply cannot solve a debt problem with more debt, just like you can't solve a heroin problem with more heroin.

As a self proclaimed liberal, you should be all over the Fed for its role in exacerbating the inequality in our society. The Fed is beholden to its bank masters and makes the rich richer. By the way, I get richer from the Fed's actions, so I'm not saying all of this because the Fed hasn't been good to me. But I recognize it isn't good for the long term health of the economy.

 

[Tsing Tao]

Of course its ridiculous. Just as ridiculous as if the gold fish in my pond was expected to fix anything. My gold fish has exactly the same amount of knowledge about the U.S. economy as Trump does. Trump is totally dependent on others , the professionals in important government agencies, to block or ameliorate the effects of his incredibly stupid actions. The huge problem for the rest of us is that he has fired or driven away competent people and replaced them with less competent criminals like himself. His main criterion being loyalty, i.e., loyalty to the family. He's enriching himself not so much at our financial expense -- his stealing is a drop in the bucket compared to the federal budget -- but at the expense of decency and ethical behavior standards. He's a total disaster for the country in that sense. And the fianacial harm he is doing to some is not zero. Much of the real harm won't show up until he's gone. It may be that a future administration will be able to undo some of the damage he's done. Let's hope so.

In the meantime don't be concerned that the Fed Balance sheet in 2019 is greater than it was in 1919.

Sorry, once you deviated from actually discussing the problem and went off on another "Orange Man Bad" rant, I tuned out. Let me know if you want to add any content to the conversation. I'll happily give it another try with you.

 

[Tsing Tao]

Hypothetical. I have a car for sale that I own outright. Bought it for 7500. I want 10,000 for the car. Sales tax on that car sale is 7%. If I want the whole 10K I will ask 10,700. Who actually paid the 7% to the state? If we negotiate a lower price to 10K, I might be the one sending the money to the state, but you still paid it. All I did was decide to reduce my profit. Doesn't matter what I charged you, you still paid the tax and the rest was my profit or loss to deal with. The only way I would pay the tax would be if I sold you the car for, say, 7500, and then told the state I sold it for 10K. Wouldn't be in the car selling business for long if I did that.

Sorry, Captain. This is a very simplistic view of how companies pass on costs to consumers. You are ignoring margin compression because of price sensitivity. In your car example, and please forgive my explanation being simplistic and succinct, the car dealer selling the car may not be able to raise its price to cover a tax increase because the guy across the street selling the exact same car isn't raising his. Why isn't he raising his? He has the same tax increase, right? Maybe he is more efficient in cost management. Maybe his building lease is lower. Or he pays his employees less. Sometimes costs aren't passed on because passing them on means lower sales and lost market share.

I disagree with your premise that "corporations don't pay taxes". They certainly do. Many costs are passed on, and some are not. Some can't be.

 

[CaptainObvious]

Sorry, Captain. This is a very simplistic view of how companies pass on costs to consumers. You are ignoring margin compression because of price sensitivity. In your car example, and please forgive my explanation being simplistic and succinct, the car dealer selling the car may not be able to raise its price to cover a tax increase because the guy across the street selling the exact same car isn't raising his. Why isn't he raising his? He has the same tax increase, right? Maybe he is more efficient in cost management. Maybe his building lease is lower. Or he pays his employees less. Sometimes costs aren't passed on because passing them on means lower sales and lost market share.

I disagree with your premise that "corporations don't pay taxes". They certainly do. Many costs are passed on, and some are not. Some can't be.

I remain unconvinced, but will admit my opinion may be jaded by my complete contempt for corporate America. They, like congress, have violated the public trust. Consequently they deserve regulation and lots of it, but I still maintain that taxes are overhead and overhead is built into the price they charge their customers.
Of course having congress provide this oversight is like having one criminal cartel regulating another. While they may have a few competing interests, at the end of the day their symbiotic relationship will prevail.

 

[Wallet]

You're equating sales tax to Corporate tax. Apples and oranges.

 

[Tsing Tao]

I remain unconvinced, but will admit my opinion may be jaded by my complete contempt for corporate America. They, like congress, have violated the public trust. Consequently they deserve regulation and lots of it, but I still maintain that taxes are overhead and overhead is built into the price they charge their customers.
Of course having congress provide this oversight is like having one criminal cartel regulating another. While they may have a few competing interests, at the end of the day their symbiotic relationship will prevail.

If tax policy stays the same, it can be passed on much more easily over the years. It is when it rises that we see a difference between companies and their ability to pass on price increases.

All I'm saying is that it isn't as easy as passing on costs as one would thing. Many factors impact the ability to demand more in price.

 

[UsualName]

Sure, lets go there. Yes, I have a problem with the mandate. Tell me, please. How many other central banks in the world have a dual mandate? Also, please tell me how the Federal Reserve directly influences the unemployment rate. Lastly, could you tell me how the unspoken third mandate of inflating asset prices comes into consideration?



LOL. This is hilarious. So because they began shrinking it (one second, let me find a chart to see the progress on shrinking)

Oh yeah! Big progress! You're hiding behind semantics with your "it's not a record anymore!" bullshit.



The inputs and formula could be handled by a computer. Yes. And that idea, by the way, comes from minds much greater than my own. I think Jim Grant has brought it up multiple times. What, you think there is some mysticism employed at the Fed that allows the hilariously inept governors there to conjure the magic equation to allow the economy to go on? Because evidence is really, really against that.



The depression is coming no matter what, because of not in spite of, the Fed's actions. You simply cannot solve a debt problem with more debt, just like you can't solve a heroin problem with more heroin.

As a self proclaimed liberal, you should be all over the Fed for its role in exacerbating the inequality in our society. The Fed is beholden to its bank masters and makes the rich richer. By the way, I get richer from the Fed's actions, so I'm not saying all of this because the Fed hasn't been good to me. But I recognize it isn't good for the long term health of the economy.

I’m not going to defend the mandate, you got the wrong guy for that. At the same time I’m not going to ignore the parameters in which the fed is mandated to operate then blame it - baselessly - on Fed chairs that have acted in good faith within those parameters.

Whatever. This is your grievance and I’m sure it makes sense to you. I will tell you this you’re energy is going in the wrong direction by blaming most Fed chairs for acting within their mandates.