Skip to comments.Bush May Try to Cut Corporate Tax Rates [Warns China "not to start a trade war"]
Posted on 08/09/2007 7:15:44 AM PDT by indcons
President Bush said yesterday that he is considering a fresh plan to cut tax rates for U.S. corporations to make them more competitive around the world, an initiative that could further inflame a battle with the Democratic Congress over spending and taxes and help define the remainder of his tenure.
Advisers presented Bush with a series of ideas to restructure corporate taxes, possibly eliminating narrowly targeted breaks to pay for a broader, across-the-board rate cut. In an interview with a small group of journalists afterward, Bush said he was "inclined" to send a corporate tax package to Congress, although he expressed uncertainty about its political viability.
The president's comments came as he tried to calm volatile stock and mortgage markets and reassure the country that the economy is fundamentally strong. Despite mounting concern over the downturn in the housing market, he dismissed proposals advanced by prominent Democrats to grant government-chartered Fannie Mae and Freddie Mac more freedom to buy mortgages and mortgage-backed securities. And he ruled out any taxpayer bailout of lenders threatened by the subprime home-loan crisis.
In a 48-minute conversation on an array of economic issues, Bush also warned China not to start a trade war, blamed Congress for not doing more to shore up infrastructure such as the bridge that collapsed in Minneapolis last week, and pushed back against Democratic presidential candidates who are promising to renegotiate the North American Free Trade Agreement.
(Excerpt) Read more at washingtonpost.com ...
I’m just glad I wasn’t having a hedge moment.
That would have you checking EPI, Public Citizen, Common Dreams, or Media Matters for the info.
Down .8%, and that’s a plunge ?
And suffering hallucinations.
When I posted it was down over 16o points, which is over 1% and that is big for a one day move. The yield on the 10 year is down eight basis points.
That's what we hear in the drive-by media, but those guys have a bad habit of telling lies.
For all the bad press, GWBush has had a pretty darn good track record with his tax-cuts, likewise with national security issues. IIRC in the war against Bush, congress' biggest victories to date have just been Social Security, the Dubai ports deal, and the immigration bill.
If it’s good enough for corp’s, it’s good enough for everyone else.
Ahhhh...you’re taking a complex issue and reducing it to an overly simplistic, and inaccurate, approach...
Here, I’ll make it easier for you to understand with an example:
The corporate tax rate is 35%, which is different from a companies effective tax rate, but for simplicity sake we’ll leave it at 35%...
Your business is regulated by the government, let’s you are an oil and gas E&P, so...the barrels of oil one sells...or MCF of gas one sells is regulated by the market (exclusive of the US tax rate)...so...if you can follow me here...regardless of whether your tax rate goes up (or stays at 35%)...or down...it’s not going to affect the price at which you can sell Oil or Gas because that my friend is market regulated. U CANT PASS IT ON...What happens when the rate is increased, well companies still have to control cost...and “tax cost” is one of those costs...so...you either trim up the SG&A, which means lay off people, or become more efficient, because your shareholders still want their return regardless if your tax rate has gone up (THE BOTTOM LINE). Now, when tax rates go down...companies have more dollars to invest in capital improvements...etc, which is why, say it with me, TAX CUTS are good.
In manufacturing competitive pricing keeps one from increasing the cost of a good for an increase in the tax rate, and if there is a decrease in the tax rate companies...may or may not pass the savings on to the consumer, it just depends.
Now, service industries...could follow your example of passing tax costs on to their clients (Perhaps you’re thinking more of mah and pah grocery stores or something) but again...a price competitive market would probably keep them from doing so.
You understand a little better now? I could add a lot more detai, math, and nuances...but this above makes the general point.
market action has to do with the ECB liquidity action in response to the BNP Paribas problems.
Bush is a small target on the radar today.
And what did W have to say about that?
The corporate income tax is a subtrafuge. It is, in fact a VAT, that cascades throughout every part of the economy.
It can fall in one of three places or any combination of the three. It is either payed by those who who purchase the products in the price of the product, the people who actually produce the product in the form of reduced wages, or by the stockholders in the form of reduced returns. In all cases the ones who pay are individuals NOT the corporations themselves.
A huge BUMP to you.
I am amazed at the number of people who have absolutely no clue about this.
In a roundabout way, the stockholders pay for this too. Reducing taxes can increase profits which can increase the stock price.
Yours is probably the most succinct explanation of how this stuff works that I have seen. Thanks!
“....Corporations don’t pay taxes! The consumers of their products do.....”
Volatility seems to be the August mode. Down 300, up 250, down 100, etc etc.
I think we all need a vacation to cool down.
You’re right, he was wrong, but the ones who do pay the corporate tax are the shareholders.
Sure, it had nothing to do with 9/11, and the congress critters dragging their feet on revising the insurance industry's liability for terroristic acts which caused the construction industry to put large projects on hold.
HELLOOOOOOOOOOO.........! China started a trade war with us a long time ago. What do you call it when China insinuates itself into our economic infrastructure, produces huge percentages of our goods, and then sabotages our economy by producing said goods in a manner (i.e., using LEAD-BASED PAINT on toys and diethylene glycol in toothpaste) that is prohibited in the United States and that the Chinese KNOW will force its client to recall the product?
There is more than one way to fight a war, folks.
Silly W. Corporate Bigwigs pay those taxes, not consumers!!