2012 Presidential Race

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Originally Posted by Dave B

Indeed in times of recession it can be a good time for businesses and governments to invest for the future. Labour is in plentiful supply and therefore relatively cheap, property prices are depressed, and a sensible investment plan could pay dividends in later years. Cutting spending on its own isn't a wise plan.

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I think all of you are missing the real issue. There is plenty of corporate money (by all accounts) that is sitting on the sidelines and not being invested. Why do you think that is?

Now that you've asked, I'll tell you why. It is because no one in their right mind is going to invest significant amounts of money when there is a high expectation that the government is going to soon change the rules soon. It seems like every year Congress tweaks the tax (and other) regulations. There is NO continuity on which a business plan can be based. It's even worse now with the looming debt crisis. The very first order of business for Congress MUST be to decide what the new tax and spending landscape will be. Then lock it in with an assurance there will be no changes for, say, five years. I believe you will then see a lot of money entering the economy in a positive way. It almost makes little difference what the new landscape looks like, just so long as it's stable and not constantly changed.

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Originally Posted by Starter

Then lock it in with an assurance there will be no changes for, say, five years.

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5 year plan! Sounds familiar ;)

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Originally Posted by Starter

I think all of you are missing the real issue. There is plenty of corporate money (by all accounts) that is sitting on the sidelines and not being invested. Why do you think that is?

Now that you've asked, I'll tell you why. It is because no one in their right mind is going to invest significant amounts of money when there is a high expectation that the government is going to soon change the rules soon.

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Corporations are taxed mainly on income with allowances for R/D in most countries so they are not hoarding money because of concerns about future tax changes. In fact most tax regimes promote corporate spending as much of it can be written off against tax.

Its more due to lack of confidence in the recovery of the global economy in the near future and they are rebuilding cash piles that were blown in the first credit crunch 4 years ago. After all we're looking at a potential Euro crash, war in Iran threatening global oil supply and the credit bubble in China bursting. If any of them (or more) happens we're looking at yet another global recession. Thats what companies are preparing themselves for, not future tax changes.

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Originally Posted by Malbec

Corporations are taxed mainly on income with allowances for R/D in most countries so they are not hoarding money because of concerns about future tax changes. In fact most tax regimes promote corporate spending as much of it can be written off against tax.

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That is not correct in the US. Our tax code is completely corrupted with special exceptions, industry perks, "incentives", etc. Further, the unknown tax rates, or even what will be taxed, going forward is a big disincentive to invest. It has not been a case of make X amount of dollars and pay Y taxes for a very, very long time.

Sorry to change the subject, but if I could I would just like to interject this:

http://sphotos-b.xx.fbcdn.net/hphoto...73155004_n.jpg

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Originally Posted by Starter

I think all of you are missing the real issue. There is plenty of corporate money (by all accounts) that is sitting on the sidelines and not being invested. Why do you think that is?

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How much income did you make last year? I bet it was more than $732.

"Africans want to work, and its workers are willing to work for less than $2 per day. Such statistics make me worry for this country's future."
- Gina Rinehart, as quoted in the Sydney Morning Herald, Sep 6 2012.
Gina Rinehart's African miners' $2 a day comment panned | Hancock

Business if it could get away with it, wants to reduce costs where ever possible.

If you were GM, would you prefer to have a factory in Australia where the average earnings of a full-time worker are A$69,000 a year or in Argentina it's about 78,000 Pesos or about A$15,900 a year?
This is GM's answer:
GM to Invest $450 Million in Argentina

Taxes are mostly an irrelevant question; especially when 26 of the fortune 500 have paid no tax since 2008 and when all of them have a lower effective average tax rate than you. The argument that the tax code is somehow to blame is quite frankly bunk.

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Originally Posted by Rollo

(Point A)Taxes are mostly an irrelevant question; (Point B)especially when 26 of the fortune 500 have paid no tax since 2008 and when all of them have a lower effective average tax rate than you. The argument that the tax code is somehow to blame is quite frankly bunk.

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Go back and rethink what you said in "A" and then "B", particularly how they cancel each other out. . Taxes, or at least the hodge podge way they are applied and collected, are exactly the point.

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Originally Posted by Starter

Go back and rethink what you said in "A" and then "B", particularly how they cancel each other out. . Taxes, or at least the hodge podge way they are applied and collected, are exactly the point.

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I did rethink what I said in "A" and then "B" and the conclusion I draw is that I'm still correct.

When companies aren't actually paying tax in the first place, you can not very well claim that it is a hindrance to investment can you?
Income tax especially is calculated after the fact, at the end of the sausage machine; if you reduce the expenses going into the grinder in the first place, that has far more of a bearing on the overall position at the end.

Senator John McCain is a twirp.

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Originally Posted by race aficionado

Senator John McCain is a twirp.

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Ever since he took the lead in the 2008 primaries. Over the early favorite; what was his name?