The random political thoughts thread (Part Deux)

[innerSpaceman]

Ok, I'm confused. The tax decrease had an expiration date. One which Congress decided to change, but it still had an expiration date when it was passed. Are you now saying, scaeagles, that it's an exception to your 3-posts-earlier statement that an expiration date included with the initial tax change was the deciding factor for you?

Huh?

[Ghoulish Delight]

Originally Posted by innerSpaceman

Ok, I'm confused. The tax decrease had an expiration date. One which Congress decided to change, but it still had an expiration date when it was passed. Are you now saying, scaeagles, that it's an exception to your 3-posts-earlier statement that an expiration date included with the initial tax change was the deciding factor for you?

Huh?

I know this wasn't addressed to me, but obviously Leo and I are arguing similar things (hell, frozen)

Originally Posted by Ghoulish Delight

...if there's a built in expiration date and it's a matter of renewing it or not, then no, I would not necessarily label it a tax raise.

Sweet, left myself an out!

This one's borderline for me and does get into the area where duration and expectation of permanence (or structural permanence, in the case where letting them expire is politically undoable and thus any expiration date's approach is purely perfunctory, waiting for the inevitable extension) begin to matter. Since we're talking semantics and splitting of verbal hairs, there's bound to be some gray hairs.

Really, the only way it even matters whether it's called a "tax increase" or not is in the fantasy world the Republicans like to try to create where "tax increase" is automatically a bad thing. So I couldn't really care less whether it's technically a tax increase or not.

[scaeagles]

Originally Posted by innerSpaceman

Ok, I'm confused. The tax decrease had an expiration date. One which Congress decided to change, but it still had an expiration date when it was passed. Are you now saying, scaeagles, that it's an exception to your 3-posts-earlier statement that an expiration date included with the initial tax change was the deciding factor for you?

Huh?

I think it is a semantic issue.

The only reason I would regard it as a tax increase is because it is an actual increase in the tax rate. In my attempt to answer what Alex asked, I tried to explain that while yes, it is a tax increase, I wouldn't regard it the same as a new tax. It would, and does, have a different....feel?...to it because it is the elimination of a temporary reduction. I can't blame the existing congress or Obama should it expire - I can only blame those that originally passed and signed it to be temporary.

It is completely different than , say, creating a VAT or increasing the gas tax or raising rates beyond what they were in 2001.

Hope that clears up my reasoning a bit.

[CoasterMatt]

So if jobs create revenue (about 8% payroll tax per dollar paid), would that explain why there's no REAL jobs debate going on? Pledge to NO tax increases, right?

[scaeagles]

IK'm not really sure what you are getting at Matt, but the jobs issue is not really that complex, if you ask me.

Regulation of business has been increasing almost exponentially. This article has numbers on the new regulations being put onto businesses. A couple snippets -

Last year, however, the number and cost of new regulations imposed by federal agencies reached unprecedented levels. Based upon reports from the Government Accountability Office, in fiscal year 2010 alone some 43 major new rules increasing regulatory burdens were issued by federal agencies.

Overall, the latest Unified Agenda released by OMB shows that regulatory agencies have 183 more regulations in the pipeline now than they did last year, 40 of which are “economically significant”—an increase of 20 percent.

This runs directly into the second point, which is that businesses are hoarding cash and not investing or expanding their buisiness because of fear of more costly regulation.

I know there will be those on here who think I am against all regulation. This is not what I'm saying. I am saying that regulation is increasing at alarming rates, and this scares businesses. Is it the only issue? Certainly not. But it s a huge one.

[innerSpaceman]

Fear of costly regulation? You can say that with a straight face? You say fear of regulation is causing people to not hire other people without regurgitation?


How about because companies figured out how to make the same amount of profit with less employees?

How about because nearly every company operating in the U.S. that doesn't absolutely need employees to be in the U.S. (and even some that do) can now hire people outside the U.S. at a fraction of the expense?

How about because in a vicious cycle where no one has a job, there's no customers or consumer economy to support businesses who might hire new workers?

How about because whereas once "job creators" like Ford figured out his workers should be able to purchase their company's own products if that company were going to sell enough product, today's corporate overlords feel a U.S. consumer economy is unnecessary to their profitability?



Oh yeah, fear of cumbersome regulation. That's way up there on the reason there's no jobs.

[scaeagles]

Uh, yeah. I can say it with a straight face.

Why else is cash on hand for corporations at such a record level? Why are they not reinvesting in their business to make more money?

From the International Business Times -

According to the Federal Reserve, U.S. corporations held a record $1.93 trillion in cash on their balance sheets in 2010. But they are not investing to expand their companies, grow the real economy or create good middle-class jobs, the report says.

I think Steve Wynn might know a thing or two about business.....from a recent rant of his -

And I'm saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems, that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration.And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America.

Straight face? Certainly. I am amazed that you can dismiss it with one.

[Strangler Lewis]

Yes, before Obama, Americans would hit on a 16. Now, not so much.

Right or wrong, I think it's funny to see Steve Wynn quoted as an icon of financial stewardship.

[Alex]

I'm amazed that anybody would ascribe so complex a thing as the national increase in corporate cash holding to one single dominating factor.

Other important factors: deleveraging to reduce short-term paper costs, poor economic conditions for repatriating cash in foreign markets, and simple uncertainty about the long term future for improving consumer demand all play huge factors. While fear of uncertain new regulation has impacts, that would perhaps explain why they are slow to hire, but not so much why they are leaving the money in cash.

Frankly, when someone who knows better reduces a complex situation to a simple one, I assume it is a negotiating maneuver. Blame all the bad stuff on over-regulation to get your way, then next year blame all the same bad stuff on whatever the next thing you want to change is.


(Not to mention that the increase in cash holdings by U.S. corporations has been a multi-decadal trend that has only seen an increase in recent years not a fundamental change. How scared were the companies by Reagan that they started doing this in the '80s.)

[scaeagles]

True, Alex, I did relate holding cash with a fear of regulation, and that wasn't really very applicable to the original jobs issue that was being discussed. I apologize.

It (regualtion) is related to hiring though.