Inflation "Reduction" Act

[Zeek 16,635]

This is neither new nor unique to one party but lord I hate how many different things get squeezed into one bill. Additionally, I hate how we seem to think endless spending is the solution to everything. Spending $437B isn't something that should be done so lightly. Looking at the bill it seems to think that it is going to end up as a net profit but that is based on a lot of assumptions.

So here are the problems I see with the revenue chart:

1. That is a massive assumption that the 15% corporate minimum tax is going to generate that revenue. They will either find a way around it -or- simply do business elsewhere. Would bet a lot of money they don't sniff an additional $222B from that source.
2. Prescription Drug Pricing Reform - great goal and I hope it works but there is absolutely zero guarantee that will work or result in additional money.
3. IRS Tax Enforcement - might be the most hilarious overcalculation of them all. The IRS is going to disproportionately impact lower to middle income earners regardless of how many resources they have; that has been the case every time. Also, they have one of the worst rates of actually collecting what they are owed.
4. Stock buybacks is over my head. Not really a stocks guy.
5. "Loss limitation extension" I have no idea what that is.

Then there is the investment chart:

1. $369B pissed away right there. That money is going to get suckled from every possible agency that can remotely get their hands on it. Knowing the way they write these things it'll be a borderline slush fund. 
2. ACA has murdered tax payers. It's so engrained now that it's impossible to replace almost. Just like they wanted.
3. $4B heading out west for their drought issues.

 

Just tired of the massive spending. This won't do f*** all to reduce inflation. 

[AUDub 11,136]

My general understanding is that instead of fixing the supply of goods, it decreases the supply of money in the economy overall through taxation, theoretically increasing buying power, which brings down prices by making the USD worth more. Theoretically. How it actually plays out remains to be seen.

And it wouldn't be fast, even theoretically.

Really this is a slimmed down "build back better" with a different name. Inflation is actually expected to improve a hair over in fall and whether the bill has any effect or not it's pretty smart to market it this way.

[Zeek 16,635]

27 minutes ago, AUDub said:

My general understanding is that instead of fixing the supply of goods, it decreases the supply of money in the economy overall through taxation, theoretically increasing buying power, which brings down prices by making the USD worth more. Theoretically. How it actually plays out remains to be seen.

And it wouldn't be fast, even theoretically.

Really this is a slimmed down "build back better" with a different name. Inflation is actually expected to improve a hair over in fall and whether the bill has any effect or not it's pretty smart to market it this way.

Hit the nail on the head. It's all marketed to seem like it's something it is not. 

[wdefromtx 3,159]

Yeah, I have been trying to figure out where this bill is supposed to help reduce inflation. LMAO

[Didba 5,256]

20 hours ago, AUDub said:

My general understanding is that instead of fixing the supply of goods, it decreases the supply of money in the economy overall through taxation, theoretically increasing buying power, which brings down prices by making the USD worth more. Theoretically. How it actually plays out remains to be seen.

And it wouldn't be fast, even theoretically.

Really this is a slimmed down "build back better" with a different name. Inflation is actually expected to improve a hair over in fall and whether the bill has any effect or not it's pretty smart to market it this way.j

Yeah, as someone who only took like two economics courses in undergrad I vaguely remember learning about something similar to this. Though I really didn’t like economics at all. 
 

Essentially, economists have to take theoretical models, apply them to the economy, and hope it works out like they’ve modeled it.
 

Problem is they can only account for so many variables and they like cannot account for bad faith actors. 
 

it will be interesting to see how it works. I hope it does. It's a bit above my head on economics theory so I struggle to understand the concepts. I’m a word man not a numbers man. Me write good, no count good, no math good. 

[Didba 5,256]

20 hours ago, wdefromtx said:

Yeah, I have been trying to figure out where this bill is supposed to help reduce inflation. LMAO

Well @AUDub summarized it fairly well in layman’s terms. 

[wdefromtx 3,159]

4 minutes ago, Didba said:

Well @AUDub summarized it fairly well in layman’s terms. 

Oh, I saw where he thinks inflation will come down on it's own and Biden will try to take credit for it. LOL

I am glad you were able to understand the bill and benefit from his layman's terms.

I read most of the bill and came away with the same thoughts as him, but I seriously doubt this tactic will work.

If taxing more does not help reduce inflation maybe the millions spent on coastal habitats will. Just sayin.........

[Didba 5,256]

13 minutes ago, wdefromtx said:

Oh, I saw where he thinks inflation will come down on it's own and Biden will try to take credit for it.

That’s not at all what he said in regards to what the bill is attempting to do nor did he say anything about Biden claiming credit for it. 
 

So much for this attempt at discussion. 

[wdefromtx 3,159]

4 minutes ago, Didba said:

That’s not at all what he said in regards to what the bill is attempting to do nor did he say anything about Biden claiming credit for it. 
 

So much for this attempt at discussion. 

 

21 hours ago, AUDub said:

Really this is a slimmed down "build back better" with a different name. Inflation is actually expected to improve a hair over in fall and whether the bill has any effect or not it's pretty smart to market it this way.

I added the Biden part, but for the other stuff….he sure did say it in regards to this bill. 
 

But yes, Biden will claim success if inflation comes down any regardless of the bill has anything to do with it. 
 

As Dub said “it’s pretty smart to market it this way.” 

[icanthearyou 4,462]

1 hour ago, Didba said:

Problem is they can only account for so many variables and they like cannot account for bad faith actors. 

One of my degrees is economics.  I remember the first day and the caveats of Ceteris Paribus (all things being equal), consumers will act rationally,,, and thinking, well there goes your "science".

[AuburnNTexas 7,133]

Corporations are in the business of making money. While I agree that every corporation that makes a Profit should pay Taxes and this will supposedly help with all the Tax write-offs both Parties have enacted by forcing them to pay at least 15% on profit.  The problem is they will raise price on goods to cover a lot of that 15%. So we the consumer will indirectly pay for their taxes. So they will pay 15%, but I would bet that this means their profit will be higher because of the price increase so they will still end up with close to same net income in dollars. 

[wdefromtx 3,159]

9 minutes ago, AuburnNTexas said:

Corporations are in the business of making money. While I agree that every corporation that makes a Profit should pay Taxes and this will supposedly help with all the Tax write-offs both Parties have enacted by forcing them to pay at least 15% on profit.  The problem is they will raise price on goods to cover a lot of that 15%. So we the consumer will indirectly pay for their taxes. So they will pay 15%, but I would bet that this means their profit will be higher because of the price increase so they will still end up with close to same net income in dollars. 

It is part of that trickle up effect........

[icanthearyou 4,462]

Biggest win is allowing Medicare to negotiate drug prices.

Biggest loss is not closing the carried interests loophole. 

[homersapien 11,357]

On 8/16/2022 at 1:51 PM, AuburnNTexas said:

Corporations are in the business of making money. While I agree that every corporation that makes a Profit should pay Taxes and this will supposedly help with all the Tax write-offs both Parties have enacted by forcing them to pay at least 15% on profit.  The problem is they will raise price on goods to cover a lot of that 15%. So we the consumer will indirectly pay for their taxes. So they will pay 15%, but I would bet that this means their profit will be higher because of the price increase so they will still end up with close to same net income in dollars. 

Well in a more perfect world, corporations would pay zero income tax. (They are not people and thus aren't citizens.)  Income tax on corporate profits would be reserved for when those profits are distributed to shareholders and employees (actual people/citizens).

But, thanks to the SCOTUS, corporations have been essentially designated as citizens, since their political contributions constitutes "free speech".

Edited August 18, 2022 by homersapien

[CoffeeTiger 5,084]

On 8/16/2022 at 12:51 PM, AuburnNTexas said:

Corporations are in the business of making money. While I agree that every corporation that makes a Profit should pay Taxes and this will supposedly help with all the Tax write-offs both Parties have enacted by forcing them to pay at least 15% on profit.  The problem is they will raise price on goods to cover a lot of that 15%. So we the consumer will indirectly pay for their taxes. So they will pay 15%, but I would bet that this means their profit will be higher because of the price increase so they will still end up with close to same net income in dollars. 

That's the magic excuse Conservatives trot out 100% of the time whenever wage raises, unions, or corporate tax increases are brought up. 

but it's not true. 

Companies will increase prices as time goes on regardless. 

You can keep min wage at $7.25/hr, outlaw labor unions, and make corporations exempt from all taxes and consumer prices would still trend upwards. Companies almost never pass tax, labor, or subsidy savings back to their consumers via lower prices, and they'll never not increase prices on products if they believe the consumers and markets will tolerate that increase. 

 

Let some companies increase their prices to coincide with their min tax rate. That's fine. Not all companies will and consumers will go to their competitors. 

 

 

The dreaded $10 hamburgers that Conservatives fearmongered about years ago in States that increased min wages to $15/hr never happened. Companies will always increase prices no matter what. 

 

 

 

[homersapien 11,357]

Marketing 101:  Set prices according to what the market will support.

Costs are important, but they don't determine price.

[autigeremt 6,588]

At the end of the day it’s a bomb that will explode down the road. 

[icanthearyou 4,462]

12 hours ago, autigeremt said:

At the end of the day it’s a bomb that will explode down the road. 

Please explain.  Thank you.

[Didba 5,256]

10 minutes ago, icanthearyou said:

Please explain.  Thank you.

He can’t. 

[icanthearyou 4,462]

13 minutes ago, Didba said:

He can’t. 

His rational/logical mind certainly can.  His emotional mind,,, probably not.

[icanthearyou 4,462]

https://www.yahoo.com/news/yellen-tells-irs-produce-80-222015214.html

[icanthearyou 4,462]

https://finance.yahoo.com/news/why-theres-a-high-bar-for-new-ev-tax-credits-according-to-a-biden-economic-advisor-131611401.html

[autigeremt 6,588]

On 8/18/2022 at 10:30 AM, icanthearyou said:

His rational/logical mind certainly can.  His emotional mind,,, probably not.

My emotional side doesn't give a damn what your illogical/irrational and elitist mind has to say about me. 

[autigeremt 6,588]

On 8/18/2022 at 10:15 AM, Didba said:

He can’t. 

Thank you, lawyer Diba. 🤣

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[homersapien 11,357]

On 8/16/2022 at 12:42 PM, wdefromtx said:

Oh, I saw where he thinks inflation will come down on it's own and Biden will try to take credit for it. LOL

 

According to the principles of free market economies,  it will.  So IMO he's correct. The only real question is time.

And as far as the POTUS (of whatever party) "trying to take credit for it" when it happens....... well, duuuuuuh! 

Edited August 24, 2022 by homersapien