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DanTex

(20,709 posts)
Mon Dec 18, 2017, 12:12 PM Dec 2017

The utter dishonesty of business interests supporting this tax bill.

People who work in business understand perfectly well that tax cuts for corporations do not stimulate investments or create jobs. They know this because they make investment decisions all the time, and they are not based on how much cash they have on hand.

They are based on two things: (1) whether an investment opportunity is profitable and (2) the interest rate. If there are investments that return more than the interest rate (i.e. the cost of borrowing), then businesses will borrow and make those investments, regardless of the cash they have on hand. If there aren't any, then business will not make new investments, instead letting the cash they have on hand earn interest, or perhaps giving the cash back to shareholders as dividends or share buy-backs.

This is not complicated or controversial. Everyone understands this. This is how business works. It's why there are capital markets. Sure, there may be some extreme cases, like a business that is on the brink of bankruptcy and nobody will lend them money, but in cases like that a tax cut isn't going to help either.

So the business interests are lying. Politicians like Paul Ryan might be too dumb and/or too blinded by Ayn Rand ideology to understand how things actually work, but the business interests backing him are not.

They don't want tax cuts to "stimulate investment". They want tax cuts because they want more money in their pockets.

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