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Economic/Political question.
So businesses attempt to reach an equilibrium where their supply of their product matches the demand for that product, right? If they produce more than demand, then they're basically making stuff that isn't gonna be bought because the consumers don't exist. Even if the company suddenly finds itself with a lot of extra money, so long as demand remains the same then they have no reason to expand operations and increase supply; in fact, doing this would just waste the extra money they got. Well, a massive tax cut would cause this situation: the company in question has a bunch of extra money, but supply remains the same. So basically my theory is that if a business has enough employees in order to efficiently produce enough supply to meet their current demand, and they get a large tax cut that the extra money they get to keep from paying less taxes will not motivate them to expand operations, i.e. they will not hire more employees. Instead they are more likely to award the extra money to executives, or invest it in upgrading their facilities ( perhaps even investing in automation which immediately removes jobs ).
That's the first theory, here's the second. Government services, such as food stamps for one example, that provide goods to people in need, will increase supply. The food provided by food stamps doesn't come from the government, it comes from businesses that produce food. Each person that you add to the food stamps program is now effectively a paying customer who is increasing the demand of that good. Add enough of these food stamp recipients and you have increased the demand for that good enough that businesses may need to increase supply in order to capitalize on the increased demand. In other words, increasing government services which involve providing goods to those in need can increase supply and therefore motivated companies to expand their operations, i.e. hire more employees. The neat part of this theory is that because companies are hiring more employees, some of those people using these government services may find it easier to find employment.
There's my two theories/questions.
tl;dr - will a big tax cut for corporations, and gutting government services actually create more jobs? or is the opposite true?
That's the first theory, here's the second. Government services, such as food stamps for one example, that provide goods to people in need, will increase supply. The food provided by food stamps doesn't come from the government, it comes from businesses that produce food. Each person that you add to the food stamps program is now effectively a paying customer who is increasing the demand of that good. Add enough of these food stamp recipients and you have increased the demand for that good enough that businesses may need to increase supply in order to capitalize on the increased demand. In other words, increasing government services which involve providing goods to those in need can increase supply and therefore motivated companies to expand their operations, i.e. hire more employees. The neat part of this theory is that because companies are hiring more employees, some of those people using these government services may find it easier to find employment.
There's my two theories/questions.
tl;dr - will a big tax cut for corporations, and gutting government services actually create more jobs? or is the opposite true?
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Also, the people running the businesses have no obligation in using such a tax relief to focus on expanding their workforces and create new jobs / positions. It just invites the higher-ups in the businesses to treat themselves to bigger bonuses.
Also apparently budget experts are estimating that the US corporate tax cut could cost the country 2.4 trillion dollars within the next decade and swell national debt: https://washingtonpost.com/business/economy/trump-seeks-15-percent-corporate-tax-rate-even-if-it-swells-the-national-debt/2017/04/24/0c78a35c-2923-11e7-be51-b3fc6ff7faee_story.html?utm_term=.fe5f17a4ae4c
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Suppose it costs me $1 to produce widgets. If I sell widgets for $10 each I can only sell 100 units (total profit: $900). If I sell widgets for $5 each I can sell 300 units (total profit: $1,200). If I sell widgets for $2 I can sell 1,000 units (total profit: $1,000). Of those options, it's clear that the second is best: $1,200 > $1,000. If a change in regulations means I can now produce widgets for $0.50, my 300 units now make me $1,350, while my 1,000 units make me $1,500, so I'll increase production.
Real world situations are rarely that simple.
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My super cool CC build and how to use it.
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Block timing explained
My super cool CC build and how to use it.
Epic Stronghold
Block timing explained
My super cool CC build and how to use it.
Epic Stronghold
Block timing explained
My super cool CC build and how to use it.
My super cool CC build and how to use it.
Theorize all evening long if it pleases you; the empirical data are readily available. Cutting corporate taxes does not produce an economic stimulus.
- David Brin, "Those Eyes"
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It was tried not only in the 80's and 00's but the 20's, interestingly prior to the great depression.
It was never anything but mysticism that provided a pseudointellectual cover for ulterior and nefarious motives - businesses that wanted a desperate and easily exploitable work force plus
white southernerssocial conservatives who morally objected to theblackpeople they imagined made up welfare.And playing by myself since Aug 2009
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