(THREAD) This important moment of honesty highlights the big problem with the Republican tax plan. It's designed as if the biggest problem in the US economy is that corporations and wealthy individuals don't have enough money, and therefore aren't investing. But that's not true.https://twitter.com/nataliewsj/status/930477112808628226 …
-
0:19Show this thread -
Corporate profits are high. The stock market is doing great. Corporate cash reserves are high. Borrowing costs are low. If businesses want to invest, they either have or can easily get the money to do so. 2/x
3 replies 23 retweets 26 likesShow this thread -
Replying to @NGrossman81
I don't think that quite gets at the argument. The idea is that cutting the corporate rate reduces the "cost of capital" and thus makes more investments pass a cost/benefit test. So any time a corporation weighs an investment, it's more likely to say yes with a lower corp tax.
1 reply 0 retweets 1 like -
Replying to @RAVerBruggen @NGrossman81
It doesn't matter how much money they have. They won't put it in capital if the investment doesn't hit the "required rate of return" to make that use of the money make sense.
1 reply 0 retweets 1 like -
Replying to @RAVerBruggen @NGrossman81
There are good reasons to doubt that narrative, which I went into a bit in this piece. But the argument makes some sense on its face, mathematically.http://www.nationalreview.com/article/453581/tax-cuts-bigger-deficit-pro-growth-combination …
1 reply 0 retweets 1 like -
Replying to @RAVerBruggen
Good article. I agree with most of it (especially in the conclusion) though I think you and some of the analysts you cite underestimate the degree to which these factors vary with macroeconomic conditions.
1 reply 0 retweets 0 likes
Also, though I didn't specify in this thread, the arguments for corporate tax cuts are much stronger than for upper income tax cuts and especially for estate tax repeal. The former will spur some investment, even under these macroeconomic conditions. But the latter will do little
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.