Tax Reductions for the Rich?

[Bruce1]

https://www.peoplespunditdaily.com/...e-bonuses-hirings-donations-after-tax-reform/

https://www.marketwatch.com/story/w...nus-of-up-to-1000-for-20-year-vets-2018-01-11

https://www.cnbc.com/2017/12/20/this-is-just-the-start-of-companies-increasing-spending.html

Hopefully it is the start of a significant movement. I would like to see McDonalds follow too.

 

[Marvin the Martian]

I am glad that first one mentioned AT&T, because right after they announced the bonuses they announced layoffs.

 

[Bruce1]

I am glad that first one mentioned AT&T, because right after they announced the bonuses they announced layoffs.

Do you think the layoffs are related to the tax cuts? Phone companies have a lot of people linked to their obsolete land line businesses. I doubt their work locations sets align with wireless, etc.

https://www.statista.com/statistics/220683/number-of-atundt-employees-since-2007/

 

[Marvin the Martian]

I don't know, for AT&T it may not be the tax cuts but the rights to charge us consumers more to stream they received and not the tax cuts.

What's good for AT&T is good for America.

 

[zeke4ahs]

I've seen multiple companies that have out the $1,000 bonus and immediately had lay offs. Seems as if the Carrier people from Indy are feeling conned by Don about now.

 

[Marvin the Martian]

I've seen multiple companies that have out the $1,000 bonus and immediately had lay offs. Seems as if the Carrier people from Indy are feeling conned by Don about now.

For me, I do not think we know the complete truth yet. Did some of these companies already have plans to hand out bonuses? Tying it to the tax bill is a great publicity move, does not make it real.

By the end of 2018 we will have an idea how the tax plan worked. Apple and Microsoft were the giant two with money overseas. I haven't seen that the money has come back.

 

[Fro]

I've seen multiple companies that have out the $1,000 bonus and immediately had lay offs. Seems as if the Carrier people from Indy are feeling conned by Don about now.

Sam's Club is closing a bunch of stores (supposedly 260ish) nationally after Wal-Mart announced they were increasing their min wage.

I think it's going to be a wash on the corporate end.

 

[UncleMark]

I don't know, for AT&T it may not be the tax cuts but the rights to charge us consumers more to stream they received and not the tax cuts.

What's good for AT&T is good for America.

The big names passing out the bonuses are all subject to Federal regulation, oversight, or merger scrutiny -- airlines, banks, telecom. Coincidence? I think not.

 

[Marvin the Martian]

The big names passing out the bonuses are all subject to Federal regulation, oversight, or merger scrutiny -- airlines, banks, telecom. Coincidence? I think not.

Yep. In addition the tax cuts are for 2018, the bonuses were handed out before companies got the money. Does that make sense?

 

[Aloha Hoosier]

Yep. In addition the tax cuts are for 2018, the bonuses were handed out before companies got the money. Does that make sense?

Why wouldn’t it?

 

[Marvin the Martian]

A company does not know how it is going to end 2018. I might think I am going to have a great 2018, but I am not buying the Bughatti until I do.

These companies had tons of money to hand out bonuses while under the old tax law. So how did the old law hurt them?

 

[Aloha Hoosier]

A company does not know how it is going to end 2018. I might think I am going to have a great 2018, but I am not buying the Bughatti until I do.

These companies had tons of money to hand out bonuses while under the old tax law. So how did the old law hurt them?

Companies do forecasting and spend based on those forecasts. What are you implying? Sounds like you’re working on some sort of conspiracy theory.

 

[Sope Creek]

https://www.peoplespunditdaily.com/...e-bonuses-hirings-donations-after-tax-reform/

https://www.marketwatch.com/story/w...nus-of-up-to-1000-for-20-year-vets-2018-01-11

https://www.cnbc.com/2017/12/20/this-is-just-the-start-of-companies-increasing-spending.html

Hopefully it is the start of a significant movement. I would like to see McDonalds follow too.

Tax cuts for the rich? Is that what the genesis of the bonuses is?

And here I thought it might be a tightening labor market . . .

. . . and I also thought that the cut in the corporate tax rates leading to a repatriation of overseas cash might be a basis for corporations to put some of their money into employees hands . . .

. . . but by your subject line, my understanding is that you contend that the personal tax cuts for the upper brackets is why the bonuses are happening. This is the problem with Republicans attempting to govern . . . they confuse one thing with another and pretty soon everything gets f*(%ed up. In this instance the GOP said that corporate tax reform had to happen because there was a whole bunch of money parked overseas to avoid high corporate tax rates . . . but then Congress and the administration cooked up a tax plan by which major GOP donors - and the president - made out like bandits with the personal tax cuts. And now you're here touting the personal tax cuts as the reason for bonuses on the business side . . .

. . . well, I was born in the morning, but it weren't yesterday morning. Prove your case, Bruce, that these bonuses are because rich people got tax cuts.

Go ahead, I dare you.

 

[Marvin the Martian]

Companies do forecasting and spend based on those forecasts. What are you implying? Sounds like you’re working on some sort of conspiracy theory.

Nope, I am saying they already had the money. They chose to convert that money for some free advertising. They probably knew Trump would mention them giving even more free advertising.

 

[UncleMark]

Companies do forecasting and spend based on those forecasts. What are you implying? Sounds like you’re working on some sort of conspiracy theory.

Companies spend money today based on previous forecasts (and outcomes). They don't spend money today based on forecasts of future earnings.

 

[Sope Creek]

Nope, I am saying they already had the money. They chose to convert that money for some free advertising. They probably knew Trump would mention them giving even more free advertising.

With corporate tax rates lowered significantly, they sure could afford to bring back the cash parked overseas allegedly because of high US tax rates, and they could do so immediately.

 

[Sope Creek]

Companies spend money today based on previous forecasts (and outcomes). They don't spend money today based on forecasts of future earnings.

Well, depends, doesn't it, on the business. I know a helluva lot of businesses in growth mode - particularly early stage companies - that spend today on the basis of significant growth in future earnings.

 

[twenty02]

These bonuses are great and all....But a $1k raise would have been a lot more serious long-term commitment than bonuses.

Wal-Mart is the only company I've seen commit to any types of raises whatsoever.

 

[Marvin the Martian]

With corporate tax rates lowered significantly, they sure could afford to bring back the cash parked overseas allegedly because of high US tax rates, and they could do so immediately.

I do not think AT&T had lots of overseas money. Some large percentage of all overseas money is made up of Microsoft, Apple, and Alphabet (Google). This link shows the biggest, no AT&T.

Maybe it is conspiracy, I think net neutrality was as important for AT&T.

 

[Aloha Hoosier]

Companies spend money today based on previous forecasts (and outcomes). They don't spend money today based on forecasts of future earnings.

Of course they do. Not a business major or in business?

 

[UncleMark]

Well, depends, doesn't it, on the business. I know a helluva lot of businesses in growth mode - particularly early stage companies - that spend today on the basis of significant growth in future earnings.

Okay, but I was mostly referring to the outfits giving out the bonuses, like the airlines, big banks, the telecoms, etc. I ain't buyin' that they're giving out bonuses today based on projections of increased future earnings.

 

[twenty02]

Of course they do. Not a business major or in business?

They spend money looking forward....but not on comp. Comp is almost always increased based upon prior year performances.

 

[UncleMark]

Of course they do. Not a business major or in business?

I've been in business my whole life. The only entity I know that makes projections of future income and then spends it today is the government. What was your background again?

 

[Sope Creek]

They spend money looking forward....but not on comp. Comp is almost always increased based upon prior year performances.

Or a need to retain a workforce in the face of rising wages . . . and bonuses are a way to do so without there being a permanent wage increase to replicate year after year.

 

[UncleMark]

These bonuses are great and all....But a $1k raise would have been a lot more serious long-term commitment than bonuses.

Wal-Mart is the only company I've seen commit to any types of raises whatsoever.

I'm with Marvin in that the bonuses from the big corps being touted are a PR stunt and/or a sop to the Trump administration for future considerations.

The Wal*Mart raises look like a response to the tightening labor market, as Sope points out.

 

[twenty02]

Or a need to retain a workforce in the face of rising wages . . . and bonuses are a way to do so without there being a permanent wage increase to replicate year after year.

Possibly, but let's not pretend that this has anything to do with that. You don't give blanket $1k bonuses to your entire workforce of tens of thousands for that reason.


The bonuses are really nothing more than political statements. Or in some cases, from firms that have a lot of regulatory decisions in front of them.

My wife works for a Dow 30 firm, and is getting one of these this week, as well. So I'm certainly not complaining.

 

[Marvin the Martian]

Possibly, but let's not pretend that this has anything to do with that. You don't give blanket $1k bonuses to your entire workforce of tens of thousands for that reason.


The bonuses are really nothing more than political statements. Or in some cases, from firms that have a lot of regulatory decisions in front of them.

My wife works for a Dow 30 firm, and is getting one of these this week, as well. So I'm certainly not complaining.

I guess it could be every single employee grades out as excellent and at risk for poaching. But i would think in the numbers provided there had to be some average employees.

 

[Bruce1]

Companies spend money today based on previous forecasts (and outcomes). They don't spend money today based on forecasts of future earnings.

Uh No. it take time for companies to implement new products programs, etc. they invest based upon their future projections, yes.

 

[Bruce1]

Sam's Club is closing a bunch of stores (supposedly 260ish) nationally after Wal-Mart announced they were increasing their min wage.

I think it's going to be a wash on the corporate end.

Tax cuts for the rich? Is that what the genesis of the bonuses is?

And here I thought it might be a tightening labor market . . .

. . . and I also thought that the cut in the corporate tax rates leading to a repatriation of overseas cash might be a basis for corporations to put some of their money into employees hands . . .

. . . but by your subject line, my understanding is that you contend that the personal tax cuts for the upper brackets is why the bonuses are happening. This is the problem with Republicans attempting to govern . . . they confuse one thing with another and pretty soon everything gets f*(%ed up. In this instance the GOP said that corporate tax reform had to happen because there was a whole bunch of money parked overseas to avoid high corporate tax rates . . . but then Congress and the administration cooked up a tax plan by which major GOP donors - and the president - made out like bandits with the personal tax cuts. And now you're here touting the personal tax cuts as the reason for bonuses on the business side . . .

. . . well, I was born in the morning, but it weren't yesterday morning. Prove your case, Bruce, that these bonuses are because rich people got tax cuts.

Go ahead, I dare you.

Nice post: My point is this. During the negotiations opponents of the plan said that there would not be any benefits for average people. Of course everyone knew that was not the case but that was the rhetoric. Now there are some examples of pay increases and bonuses. Any entry level accountant can look at an income statement and determine the impact of the tax reduction on prior year's performance....and it is significant. Are some of the bonuses politically motivated ? Yes! Does that matter to the people getting the bonuses? No! Read their posts here. Was the basis for doing the tax reductions to repatriate offshore money? Repatriation was ONE of the expected outcomes. The bottom line is that businesses are getting huge tax cuts and have no excuse not to respond. Is the labor market tightening and pushing up demand for labor? Absolutely! It’s good to see the beginning of it. Even the most liberal news people are reporting they anticipate a huge impact:

https://www.cnbc.com/2017/12/20/this-is-just-the-start-of-companies-increasing-spending.html

So...are,most people going to see some benefit? Yes, and it is just beginning and that is my point.

Thanks for letting me know that only the GOP rich will get tax breaks. I didn’t realize there were no rich Dems but Oh! I bet Nancy and George are laughing all the way to the bank with their tax cuts while blaming the Reps for catering to the rich.

 

[Lucy01]

I bet Nancy doesn’t vacation in Haiti

 

[Marvin the Martian]

Nice post: My point is this. During the negotiations opponents of the plan said that there would not be any benefits for average people. Of course everyone knew that was not the case but that was the rhetoric. Now there are some examples of pay increases and bonuses. Any entry level accountant can look at an income statement and determine the impact of the tax reduction on prior year's performance....and it is significant. Are some of the bonuses politically motivated ? Yes! Does that matter to the people getting the bonuses? No! Read their posts here. Was the basis for doing the tax reductions to repatriate offshore money? Repatriation was ONE of the expected outcomes. The bottom line is that businesses are getting huge tax cuts and have no excuse not to respond. Is the labor market tightening and pushing up demand for labor? Absolutely! It’s good to see the beginning of it. Even the most liberal news people are reporting they anticipate a huge impact:

https://www.cnbc.com/2017/12/20/this-is-just-the-start-of-companies-increasing-spending.html

So...are,most people going to see some benefit? Yes, and it is just beginning and that is my point.

Thanks for letting me know that only the GOP rich will get tax breaks. I didn’t realize there were no rich Dems but Oh! I bet Nancy and George are laughing all the way to the bank with their tax cuts while blaming the Reps for catering to the rich.

The labor market is tightening, and that is good if wages increase. I am not sure how a one time $1000 bonus is in response to a labor market. If the bonus went out Dec 31, an employee would be fine to leave for a better job Jan 1. Wal-Mart's response sounds like the response to a tightening market.

There are about 127 million fulltime jobs in the US. The number you have listed in the articles barely scratches the surface of that number. Let's wait before determining the cut a failure or success. Your links are a positive, but can you prove none of that would have occurred under the old system or are year end bonuses a new Trump invention. At the end of 2018 we will have a better idea.

 

[UncleMark]

Uh No. it take time for companies to implement new products programs, etc. they invest based upon their future projections, yes.

As twenty pointed out, we're talking about compensation, not investment.

 

[Sope Creek]

Nice post: My point is this. During the negotiations opponents of the plan said that there would not be any benefits for average people. Of course everyone knew that was not the case but that was the rhetoric. Now there are some examples of pay increases and bonuses. Any entry level accountant can look at an income statement and determine the impact of the tax reduction on prior year's performance....and it is significant. Are some of the bonuses politically motivated ? Yes! Does that matter to the people getting the bonuses? No! Read their posts here. Was the basis for doing the tax reductions to repatriate offshore money? Repatriation was ONE of the expected outcomes. The bottom line is that businesses are getting huge tax cuts and have no excuse not to respond. Is the labor market tightening and pushing up demand for labor? Absolutely! It’s good to see the beginning of it. Even the most liberal news people are reporting they anticipate a huge impact:

https://www.cnbc.com/2017/12/20/this-is-just-the-start-of-companies-increasing-spending.html

So...are,most people going to see some benefit? Yes, and it is just beginning and that is my point.

Thanks for letting me know that only the GOP rich will get tax breaks. I didn’t realize there were no rich Dems but Oh! I bet Nancy and George are laughing all the way to the bank with their tax cuts while blaming the Reps for catering to the rich.

Your argument is essentially "everyone knows" and "any entry level accountant can see" that reductions in the top tax rates are the cause of bonuses?

 

[NPT]

I am glad that first one mentioned AT&T, because right after they announced the bonuses they announced layoffs.

I would bet the layoffs are to keep from cutting the dividends to stockholders. I was one until today and I sold it at a small profit after reading something last night that said they pay out 84% of their profits in dividends and that the dividends were in danger of being cut.

 

[NPT]

Companies spend money today based on previous forecasts (and outcomes). They don't spend money today based on forecasts of future earnings.

That's not been my experience. I worked for a pharmaceutical company and money would always get tight when they had a patent expiring in a few years and spending would pick up when they released a new drug and it started to gain traction.

 

[Bruce1]

Your argument is essentially "everyone knows" and "any entry level accountant can see" that reductions in the top tax rates are the cause of bonuses?

Wow, not what i said at all. I said any entry level accountant could look at an income statement as in Business/Corp Income Statement and see that there will be a huge positive impact on their profitibility as a result of the tax changes. Companies are making out big time so they can and should share the wealth with regular employees. It is only January 12th and there are signs already that companies are sharing the wealth. But of course you know that. All you are trying to do is ridicule and make noise. Have a nice day.

 

[Aloha Hoosier]

I've been in business my whole life. The only entity I know that makes projections of future income and then spends it today is the government. What was your background again?

Farm business
Lawn mowing business
Restaurant business
Construction business
Farm business
Automobile parts sales and repair business
Restaurant business
Navy business
Defense business

I also have a business degree from IU (before it was Kelley) and postgraduate degrees - and I'm still right. Businesses do what they think is in their best financial interests, including giving out wage increases and bonuses when it makes sense based on current and projected future earnings.

 

[twenty02]

Wow, not what i said at all. I said any entry level accountant could look at an income statement as in Business/Corp Income Statement and see that there will be a huge positive impact on their profitibility as a result of the tax changes. Companies are making out big time so they can and should share the wealth with regular employees. It is only January 12th and there are signs already that companies are sharing the wealth. But of course you know that. All you are trying to do is ridicule and make noise. Have a nice day.

The changes in the tax law are incredibly complex....particularly for large multinationals (Which are what these bonus news releases are coming from). Anyone that claims a Jr level accountant could tell you the impact right away is totally full of shit.....And clearly not someone who has ever worked in accounting for a large org.

Changing from a worldwide to a territorial tax regime is very complicated. Then you have things like the limits on deducting interest expenses.

http://fortune.com/2017/12/16/gop-tax-bill-winners-and-losers/

You shouldn't really make simplistic, blanket statements on issues as complicated as this. Overall is the bill a positive for large corps? Definitely....but it's impact is not nearly as obvious as you make it seem. Many firms already paid less than 21% under current law...some much less...and will now be losing industry specific credits/deductions.

As I mentioned....companies that were supremely confident would have given raises....rather than one-off PR related bonuses.

 

[Sope Creek]

Wow, not what i said at all. I said any entry level accountant could look at an income statement as in Business/Corp Income Statement and see that there will be a huge positive impact on their profitibility as a result of the tax changes. Companies are making out big time so they can and should share the wealth with regular employees. It is only January 12th and there are signs already that companies are sharing the wealth. But of course you know that. All you are trying to do is ridicule and make noise. Have a nice day.

What you said is that tax cuts for the rich - which are only on the personal income tax side - are the reason for the bonuses you're touting. I challenged you to prove it, and you didn't; instead you cited "everybody knows" and "an entry level accountant", which is pure and utter bullshit.

You don't know what you're talking about, Bruce, and I'm here to establish that as an unassailable fact.

So I'll reiterate the challenge; prove that the bonuses result form the cuts in higher income brackets, i.e., the personal taxes of the rich.

You can't, so you don't.

 

[UncleMark]

Farm business
Lawn mowing business
Restaurant business
Construction business
Farm business
Automobile parts sales and repair business
Restaurant business
Navy business
Defense business

I also have a business degree from IU (before it was Kelley) and postgraduate degrees - and I'm still right. Businesses do what they think is in their best financial interests, including giving out wage increases and bonuses when it makes sense based on current and projected future earnings.

LOL. Okay, your button is bigger than mine. You win.