Signs of the Times - and a question

[whell]

Originally Posted by d-ray657

A couple of things. If we tax capital gains as any other income, those retirees would probably be paying a rate lower than the current capital gains rate.

Depends on their tax bracket of course. But a married couple filing jointly pays 15% in regular federal income tax between roughly $18000 and $70000 in income. At $71K and above that couple would pay 25%. The rates would be roughly the same for short term capital gains taxes, but 10% or 20% respectively for long term gains.

Originally Posted by d-ray657

Second, the example you have been giving of vacant buildings and for lease signs - if you are talking about economically depressed areas where there is a need for a subsidy to attract investment - I think we have been in agreement that a subsidy is probably warranted. That does not, however, justify an across the board tax cut for the purpose for the purpose of stimulating investment where there is considerable evidence that such investment is not taking place despite significant cash reserves.

Regards,

D-Ray

OK. I guess this is where the rubber hits the road. Where evidence are you using to draw your conclusions? Are you looking back at the reports from a year or two ago about businesses not investing cash? With the pending increase in capital gains taxes that will occur in 2013, what is the incentive to invest if the value of that investment will be diminished by future tax law?

The more I speak to business owners - and these are small and medium sized businesses - they are very risk averse right now. Between the changes in health care law and the impending changes in tax law, they are very much playing a "wait and see" game right now.

Between the mushrooming "for sale / for lease" signs, and the feedback that I hear and see frequently, it would seem that these folks would be encouraged by a more favorable / predictable business climate.

[ebacon]

When a business decides where to go it takes much more into consideration than taxes. In fact taxes are probably the least concern. That's not to say that taxes can't make a difference. They certainly can when all other things are practically equal.

Other factors that businesses consider are:
Market
Utility costs
Shipping costs for supplies and finished goods
Real estate costs
Political climate for issues such as zoning, easements, and environmental issues
Local employee pool
Quality of living to attract employees
Airports
Traffic
Crime
Construction/reconstruction costs
etc.

Where we see tax incentives come into play is when a business has narrowed down to two or three final locations. At that stage of the process we see local and/or state governments start to bid incentives.

[whell]

Originally Posted by ebacon

When a business decides where to go it takes much more into consideration than taxes. In fact taxes are probably the least concern. That's not to say that taxes can't make a difference. They certainly can when all other things are practically equal.

Other factors that businesses consider are:
Market
Utility costs
Shipping costs for supplies and finished goods
Real estate costs
Political climate for issues such as zoning, easements, and environmental issues
Local employee pool
Quality of living to attract employees
Airports
Traffic
Crime
Construction/reconstruction costs
etc.

Where we see tax incentives come into play is when a business has narrowed down to two or three final locations. At that stage of the process we see local and/or state governments start to bid incentives.

I don't disagree with your points when it comes to starting a business or site selection for a new location. However, expansion of a current business (sometimes called organic growth) can be just as stimulative to the economy. It's that kind of growth, as an example, that I'm hearing frequently from owners that is difficult to justify given the current business climate.

[ebacon]

Originally Posted by whell

I don't disagree with your points when it comes to starting a business or site selection for a new location. However, expansion of a current business (sometimes called organic growth) can be just as stimulative to the economy. It's that kind of growth, as an example, that I'm hearing frequently from owners that is difficult to justify given the current business climate.

Good deal. At least we are close to the same page.

Cheap imports are one of the challenges to organic growth. The marketplace is saturated with things that people need from day to day.

[finnbow]

Originally Posted by whell

I don't disagree with your points when it comes to starting a business or site selection for a new location. However, expansion of a current business (sometimes called organic growth) can be just as stimulative to the economy. It's that kind of growth, as an example, that I'm hearing frequently from owners that is difficult to justify given the current business climate.

As phucked up as our tax code is, it's not tax policy holding back business expansion. It's lack of demand, plain and simple. Folks' net worth evaporated with the collapse of the housing and stock markets. Folks can't spend what they don't have.

You do realize that the Republican answer to any and all economic conditions is to cut taxes, don't ya? If we have a surplus, cut taxes. Same goes for a deficit. Need to fund a trillion dollar war in the Mideast or pay for Medicare Part D? Cut taxes.

[HatchetJack]

Reducing taxes on the wealthy would only see a very slight improvement
if at all. Raising taxes in this economy would only make things worse.
If we completely stripped the top 50% of all wealth and divided it out
equally among the lower 50% the economy would boom for about 6 months
to a year and then all the money would be right back in the same hands
for the most part minus about 75% of it which would find it's way to
China mostly, which brings us to the real problem.
No amount of tax or regulation, high or low, changes the fact that we
have little demand for any products or service that would require anyone
to hire anyone.
Fixing the economy starts at the bottom with jobs, a demand for products.
We the people, have to declare war on China, it's the only answer.

[bobabode]

Originally Posted by HatchetJack

Reducing taxes on the wealthy would only see a very slight improvement
if at all. Raising taxes in this economy would only make things worse.
If we completely stripped the top 50% of all wealth and divided it out
equally among the lower 50% the economy would boom for about 6 months
to a year and then all the money would be right back in the same hands
for the most part minus about 75% of it which would find it's way to
China mostly, which brings us to the real problem.
No amount of tax or regulation, high or low, changes the fact that we
have little demand for any products or service that would require anyone
to hire anyone.
Fixing the economy starts at the bottom with jobs, a demand for products.
We the people, have to declare war on China, it's the only answer.

But tariffs are an anathema to the free trade acolytes of Ayn Rand like Ryan Jack. Voting those corrupted sumbitches out of congress is the only answer that I can see that will move our economy back to looking out for the American working stiff from who all business and spending flows.
Being pro-union is a good move, bro. The unions are the only folk that have the workers best interests at heart. The dipshit followers of the Tea Party would have us sell out to the lowest bidder for a suitcase full of campaign contributions. Get rid of the corrupted and reinstate campaign finance reform is the only way to turn it around.

[BlueStreak]

Ahhhhh, but how do we do that when made in China has become so ubiquitous?

I agree, Jack, but I think the problem has gotten to the point that the only way is to convince the producers to begin producing here, again. Simply refusing to buy Chinese made goods won't work, in all too many cases "Made in China" is the only choice you have left.

You're absolutely right, fixing the economy does start at the bottom, with jobs. And, I would add; Jobs that actually pay well enough for people to afford to consume durable goods...........cars, homes, appliances, furniture, etc., etc..........

Now, try to tell that to the folks who refuse to hire unless they see that rise in demand first and bitch that the minimum wage is too much.

Good luck with that.

Dave

[whell]

Originally Posted by finnbow

As phucked up as our tax code is, it's not tax policy holding back business expansion. It's lack of demand, plain and simple. Folks' net worth evaporated with the collapse of the housing and stock markets. Folks can't spend what they don't have.

You do realize that the Republican answer to any and all economic conditions is to cut taxes, don't ya? If we have a surplus, cut taxes. Same goes for a deficit. Need to fund a trillion dollar war in the Mideast or pay for Medicare Part D? Cut taxes.

To your first point, I agree in large part. But there is one sure way to get money back in folks hands - job creation. Lack of demand and 8% unemployment go hand in hand.

To your second point, I was really trying to keep this thread from devolving along party lines and keep it in the realm of economics. Therefore, I'll leave that comment alone. This time!

[HatchetJack]

Unions and "well paying" jobs are a blessing to those few who still, for
whatever reason, manage to hold one down. For everyone else they are
a curse and a plague on the economy. Higher salaries mean less
quality and jobs with little chance to compete against imports and their slave
labor. And don't give that crap about 10-12 year old Fords and GM
being great cars. They are a pile of shit compared to Toyota and Honda
of the same year.
Not Ford or GM's fault BTW.