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Last time we had an amnesty, all the money that flooded back in to the USA wasn't reinvested the companies or used to grow the economy, it just want straight in

Last time we had an amnesty, all the money that flooded back in to the USA wasn't reinvested the companies or used to grow the economy, it just want straight into bonuses and dividends.

gwright 15y ago
I'm not sure I follow. Distributing profits to employees (bonuses) or to investors (dividends) is bad? The employees and investors now have more money to buy things or to re-invest. I'm not an economist, but I think that when money flows from A to B, the economy does grow. It doesn't matter if that flow is to employees as bonuses, investors as dividends, or to vendors as business expesnses.
- dpark 15y ago
  > I'm not an economist, but I think that when money flows from A to B, the economy does grow. Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy. When you consider that under normal circumstances 30% of that money would flow into the federal government to fund programs, it's pretty clear that less money flows into the economy in cases of tax amnesty.
  - firemanx 15y ago
    Money going to the government to "fund programs" doesn't go into the economy either. There's a possibility it will go to salaries and things, but that's hardly a guarantee. The government doesn't create the economy, private sector growth does. When money goes to "private accounts of executives", and those accounts are in banks and investment funds, that money is going to be used to capitalize new growth (unless they're hoarding that money in Swiss accounts somewhere).
    - dpark 15y ago
      > Money going to the government to "fund programs" doesn't go into the economy either. It most certainly does. The government doesn't hold any significant amount of money in reserve. Every dollar they receive (and a lot they don't) gets invested in the economy in some way (salary, materials purchases, R&D, etc.) > When money goes to "private accounts of executives", and those accounts are in banks and investment funds, that money is going to be used to capitalize new growth (unless they're hoarding that money in Swiss accounts somewhere). This is a lovely dream with little evidence to support it. The idea that rich people getting richer helps the economy is not founded on fact. There's been a tax holiday before. It didn't grow the economy. Tax cuts for the wealthy did not grow the economy. Even if wealthy people invest more when they get wealthier, the real issue is whether that is more valuable to the economy than more dollars flowing through the hands of most people, more dollars flowing into infrastructure investments, etc.
      - econgeeker 15y ago
        "Every dollar they receive (and a lot they don't) gets invested in the economy in some way (salary, materials purchases, R&D, etc.)" Two problems with that statement. First, you're only looking at one side of the equation. You're ignoring the cost and damage to the economy that government spending does. I don't just mean by crowding out other, more efficient solutions, but the literal taxation and inflation that government uses to get the money in the first place inhibits economic growth. Both actions reduce the "bottom line" for consumers and companies and thus reduce the funds they have available when deciding to make capital purchases- whether it is a house or a car or sending kids to college or building a plant to create more jobs. All of the money government takes prevents those things from happening. The second is that you're ignoring that much of that "investment" is actually spent on activities that are themselves net-harmful to the economy. Such as the overzealous regulators that shut businesses down, the agencies that spend their time inhibiting efficient running of businesses, or even make it impossible to operate your plant safely because government regulations don't allow the use of the latest safety equipment (only what was on the market at the time the regulation was created) or FDA examiners that drive costs thru the roof, and prevent access to drugs for dying people because the drugs are "experimental" and might kill them in 20 years (though their disease will get them a lot sooner) etc. Much of the money government spends is on programs that make people less safe and more on topic, undermine economic growth with no real benefit other than providing good political jobs to hand out. "This is a lovely dream with little evidence to support it." The entire history of the USA supports it. "The idea that rich people getting richer helps the economy is not founded on fact." The error you're making here is that you think that letting people keep their money only helps the rich. IF you take all of the incomes of the bottom %50 of the populace and you compare it to the incomes of the tope %50 of the populace, there are a lot more people in the lower half and they make a lot more money. Not squandering that money benefits them a whole lot more than it does the rich. Frankly, the economics are not really up for debate. They don't support your side. The slogans about "rich people getting rich" are just rationalizations for theft. That theft, actually, hurts poor people more than it does rich people. Rich people are insulated, the poor are not. Bush's original Tax cut proposed reducing taxes for poor people by %50, IIRC, and the reduction for the richest was around %2. After the democrats managed to "compromise" it, what got passed reduced taxes for the poorest by %20. Why weren't the democrats in favor of the large tax cut for the poor? And even still, even though every way you measure it-- dollar terms or percentage terms-- these tax cuts helped the poor more than the rich, ever since they've been passed, democrats have been calling them "tax cuts for the rich". Frankly, from an economics perspective, lower regulation, lower taxes, lower inflation, no matter how unevenly applied, helps the poor. It always does, it always will, and in fact it has to-- the primary way you get rich is by improving the lives of the poor. I don't understand why democrats constantly support policies that hurt the poor, are constantly trying to raise their taxes (While always, of course, claiming to only want to tax the rich) but they do. I'm not a republican, so, put down that assumption I've just studied economics. What the politicians tell you about economics is designed to serve their interests, not yours.
  - econgeeker 15y ago
    "private accounts of executives" is an interesting phrase when you cold have said "checking accounts of employees". It conjures up the image of Scrooge McDuck sitting on a pile of gold. But that money is in the economy. If these "Executives" put it into stocks, then it funds company growth. If they put it into municipal bonds then it funds cities. If they put it into a checking account, then it funds home loans. IF they were to turn it into cash and put it under their mattress-- then it still funds government spending (via inflation.) The only possible way I can think of to take that money out of the economy-- and granted this is even if your assertion that "all the money" goes to these fat cat "executives" were true, and I'm not buying it--- the only way they can take the money out of the economy would be to buy actual physical gold bullion coins and put it in a basement. So, if these guys really were like Scrooge McDuck and literally had a basement full of gold coins then it would be out of the economy. But that is pretty much nobody.
    - dpark 15y ago
      You're ignoring the part where we were discussing a tax holiday. When executives hoard money overseas for a decade and then bring it back tax-free, they are basically depriving the government of the tax revenue that money transfer should have brought in. Beyond that, there's not a lot of evidence for the notion that execs making more money is a net gain for the economy. It seems intuitive that more money in the hands of the wealthy would result in more investments and growth, but to the best of my knowledge there's not much evidence for that. The real question is not whether handing the wealthy extra money is bad, but whether it's as good as doing something else. Sure, giving a wealthy man another million might get him investing more. Giving that million to the economy at large might do more, though. After all, those same investments you say the wealthy will make could be made by average joes.
      - hugh3 15y ago
        depriving the government of the tax revenue that money transfer should have brought in. I'm not sure about the "should have" part here. That money was earned in another country. It has already had tax paid on it, in another country. It's silly for the US to try to double-tax companies, it just puts US-based companies at a competitive disadvantage against local companies when competing for foreign business. For instance, suppose US Sprocket International sells a million sprockets at a $10 profit each, in Germany. Meanwhile, Deutsche Sprocket Gmbh is also selling a million sprockets at $10 profit each in Germany. Both US Sprocket and Deutsche Sprocket have to pay, say, $3 million in taxes to the German government for doing business in their country, and that's fine. But while Deutsche Sprocket is done with their tax obligations, US Sprocket then goes and finds that the US Government also wants a cut out of their profit. This makes doing business in Germany significantly less worthwhile for US-based companies. Besides, let's not forget that company profits are already double taxed anyway. Tax is paid when the company makes a profit, and then again when by the shareholders when they receive their dividends. So we're really talking triple taxation here.
  - jz 15y ago
    > Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy. Can you give an example of how this would hurt the economy? EDIT - those that down voted, mind giving a reason?
    - dpark 15y ago
      First, "not help" is not a synonym for "hurt". Second, if we assume that a dollar in one place does not always provide the same value to the economy as a dollar in another place (which everyone seems to agree on; they just don't agree on which places provide the most value), then we must conclude that over the long term sending as much money as possible to a sub-optimal place is worse for the economy than sending it somewhere more optimal.
      - jz 15y ago
        You down voted my question but still did not provide a concrete example.
        dpark 15y ago
        I didn't downvote your question. I don't believe HN lets you downvote someone who replies to you, and I don't have the karma to downvote anyway. I don't think you would accept a concrete answer. Do you believe that every dollar in every place (federal tax revenue, corp coffers, billionaire's money market account, average joe's mortgage, food stamp, etc.) has the same value to the economy? If not, then you must agree that some of these are better places to send a dollar than others. Whether choosing a suboptimal flow "hurts" the economy is semantics. If you think that putting another dollar in a wealthy man's account is the best use of the dollar, then I would say that history disagrees with you, as there's little evidence that "trickle down" economics work. Something like 80% of economists say it doesn't work.
      - fauigerzigerk 15y ago
        But what is optimal? I think it's pretty obvious that taking money away from the rich giving it to the poor, maybe even in the form of food stamps, has a very direct and immediate effect on GDP. So it is clearly optimal in the short run in terms of GDP and also for helping those who really need it in times like these. But in the longer run, some of the money needs to go into investment or society will stagnate. Some of that investment can be done by governments, but central planning isn't very good at exploring new ideas. Transparent, democratic governments can be pretty efficient in doing things that are already well known and institutionalized. For instance, European health care systems are hugely more efficient than the US one. On the other hand, the Googles and Apples of this world are difficult to imagine as creatures of some government.
  - bad_user 15y ago
    You're wrong. As long as those money are flowing, it helps the economy. The only instance where it wouldn't is if it disappeared from the market. This is even more obvious in Europe where a large chunk of all taxes payed comes from VAT; which are like sales taxes in the U.S. except everybody pays them.
    - dpark 15y ago
      > As long as those money are flowing, it helps the economy. The only instance where it wouldn't is if it disappeared from the market. This is naive. In what sense does it help the economy if I take $1000 from my account and give it to my friend who puts it into his account? There's no extra money in circulation, no projects funded, no growth, nothing. Money moved and it did nothing. > This is even more obvious in Europe where a large chunk of all taxes payed comes from VAT; which are like sales taxes in the U.S. except everybody pays them. I'm not clear how that proves that money flowing always helps the economy. What the VAT indicates is that the EU believes in taxing at all points along the chain of production.
      - bad_user 15y ago
        if I take $1000 from my account and give it to my friend who puts it into his account? I am not really familiar with the U.S. but here's what happens in Europe, regardless of the legality of that transfer (in my country you cannot give 1000 USD as a gift and not pay taxes, unless you're using some kind of offshore account or other means of tax-evasion): As soon as your friend spends it, in my country 240 USD will go to VAT. Out of the remaining sum, the company receiving the payment may have to pay salaries. Not even Google can get away with not paying taxes on salaries and taxes on salaries are somewhere north of 40%. So lets say something like 450 USD (out of that 1000 USD) will end up in the pocket of some employee. Then that employee spends it on something -- another 100 USD will go to VAT, and ~ 340 USD going to the company receiving the payment. Some part of that 340 USD will go to salaries, which are taxed and then employees are buying stuff, so they get taxed again. Companies also pay taxes on investments or sunken costs, not only salaries. So if Apple brings home some of those billions, but acquires some U.S. company, than a lot of money will still go as taxes. It really goes round and round. Also, here's an anecdote -- I live in Romania. We are not like Greece, we are not currently in danger of defaulting. Do you know the main reason for that? It's not because we pay our taxes -- in fact, I think we do more tax evasion than Greece is. The reason has to do with money getting in. We've got more than 4 million people with foreign jobs and residences that are sending money home to their families. Those money are not getting taxed, but it has been enough for our economy to not completely go downhill, and I know this little fact from good sources.
- orijing 15y ago
  GDP = Gross Domestic Product. In order to grow GDP, you must increase the production of goods and services domestically. Sure, more money for investors/employees is not bad. But an amnesty is no different than the government directly giving money to them. It's never bad to give employees a tax credit, but when we're in such dire straits there are more urgent uses for the money. It's never about "Is giving money to X wasteful?" but more about "Is that the best I can do?"
- Bud 15y ago
  Distributing profits via bonuses and dividends in the US without US taxes being collected on that money is bad, yes. It's not like corporations pay a very high tax rate, even on the rare occasions that they do actually pay their full tax obligation, after all. And the other point, of course, is that money that goes directly into the savings accounts of the already-rich does not tend to stimulate the economy very well. This is a rather well-demonstrated fact: if the money doesn't get spent, there's no economic impact there.
  - jdminhbg 15y ago
    > Distributing profits via bonuses and dividends in the US without US taxes being collected on that money is bad, yes. Since when are bonuses and dividends not taxed?
    - jamesaguilar 15y ago
      It doesn't count unless it's taxed at least three times.
    - onemoreact 15y ago
      There are plenty of ways to set things up so that dividends are not taxed in the US, the most obvious being stocks owned by charitable organizations or resident of another country. As to bonuses the AMT was specifically created because of people paying zero taxes despite significant income. However, you can have situations where a bonus results in minimal, zero, or even negative additional taxes for a given year. EX: Putting the full value of a bonus into a 401k while over the SS cap.
ry0ohki 15y ago
Those bonuses and dividends are all still taxed, in some cases at a higher rate then the corporate tax?
mahyarm 15y ago
And those don't get income taxed at around the higher income brackets of over 30%? Wont a corporation just be able to write off bonuses as employee compensation expenses anyway?

Last time we had an amnesty, all the money that flooded back in to the USA wasn't reinvested the companies or used to grow the economy, it just want straight into bonuses and dividends.

gwright 15y ago

I'm not sure I follow. Distributing profits to employees (bonuses) or to investors (dividends) is bad? The employees and investors now have more money to buy things or to re-invest. I'm not an economist, but I think that when money flows from A to B, the economy does grow. It doesn't matter if that flow is to employees as bonuses, investors as dividends, or to vendors as business expesnses.

dpark 15y ago
> I'm not an economist, but I think that when money flows from A to B, the economy does grow. Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy. When you consider that under normal circumstances 30% of that money would flow into the federal government to fund programs, it's pretty clear that less money flows into the economy in cases of tax amnesty.
- firemanx 15y ago
  Money going to the government to "fund programs" doesn't go into the economy either. There's a possibility it will go to salaries and things, but that's hardly a guarantee. The government doesn't create the economy, private sector growth does. When money goes to "private accounts of executives", and those accounts are in banks and investment funds, that money is going to be used to capitalize new growth (unless they're hoarding that money in Swiss accounts somewhere).
  - dpark 15y ago
    > Money going to the government to "fund programs" doesn't go into the economy either. It most certainly does. The government doesn't hold any significant amount of money in reserve. Every dollar they receive (and a lot they don't) gets invested in the economy in some way (salary, materials purchases, R&D, etc.) > When money goes to "private accounts of executives", and those accounts are in banks and investment funds, that money is going to be used to capitalize new growth (unless they're hoarding that money in Swiss accounts somewhere). This is a lovely dream with little evidence to support it. The idea that rich people getting richer helps the economy is not founded on fact. There's been a tax holiday before. It didn't grow the economy. Tax cuts for the wealthy did not grow the economy. Even if wealthy people invest more when they get wealthier, the real issue is whether that is more valuable to the economy than more dollars flowing through the hands of most people, more dollars flowing into infrastructure investments, etc.
    - econgeeker 15y ago
      "Every dollar they receive (and a lot they don't) gets invested in the economy in some way (salary, materials purchases, R&D, etc.)" Two problems with that statement. First, you're only looking at one side of the equation. You're ignoring the cost and damage to the economy that government spending does. I don't just mean by crowding out other, more efficient solutions, but the literal taxation and inflation that government uses to get the money in the first place inhibits economic growth. Both actions reduce the "bottom line" for consumers and companies and thus reduce the funds they have available when deciding to make capital purchases- whether it is a house or a car or sending kids to college or building a plant to create more jobs. All of the money government takes prevents those things from happening. The second is that you're ignoring that much of that "investment" is actually spent on activities that are themselves net-harmful to the economy. Such as the overzealous regulators that shut businesses down, the agencies that spend their time inhibiting efficient running of businesses, or even make it impossible to operate your plant safely because government regulations don't allow the use of the latest safety equipment (only what was on the market at the time the regulation was created) or FDA examiners that drive costs thru the roof, and prevent access to drugs for dying people because the drugs are "experimental" and might kill them in 20 years (though their disease will get them a lot sooner) etc. Much of the money government spends is on programs that make people less safe and more on topic, undermine economic growth with no real benefit other than providing good political jobs to hand out. "This is a lovely dream with little evidence to support it." The entire history of the USA supports it. "The idea that rich people getting richer helps the economy is not founded on fact." The error you're making here is that you think that letting people keep their money only helps the rich. IF you take all of the incomes of the bottom %50 of the populace and you compare it to the incomes of the tope %50 of the populace, there are a lot more people in the lower half and they make a lot more money. Not squandering that money benefits them a whole lot more than it does the rich. Frankly, the economics are not really up for debate. They don't support your side. The slogans about "rich people getting rich" are just rationalizations for theft. That theft, actually, hurts poor people more than it does rich people. Rich people are insulated, the poor are not. Bush's original Tax cut proposed reducing taxes for poor people by %50, IIRC, and the reduction for the richest was around %2. After the democrats managed to "compromise" it, what got passed reduced taxes for the poorest by %20. Why weren't the democrats in favor of the large tax cut for the poor? And even still, even though every way you measure it-- dollar terms or percentage terms-- these tax cuts helped the poor more than the rich, ever since they've been passed, democrats have been calling them "tax cuts for the rich". Frankly, from an economics perspective, lower regulation, lower taxes, lower inflation, no matter how unevenly applied, helps the poor. It always does, it always will, and in fact it has to-- the primary way you get rich is by improving the lives of the poor. I don't understand why democrats constantly support policies that hurt the poor, are constantly trying to raise their taxes (While always, of course, claiming to only want to tax the rich) but they do. I'm not a republican, so, put down that assumption I've just studied economics. What the politicians tell you about economics is designed to serve their interests, not yours.
- econgeeker 15y ago
  "private accounts of executives" is an interesting phrase when you cold have said "checking accounts of employees". It conjures up the image of Scrooge McDuck sitting on a pile of gold. But that money is in the economy. If these "Executives" put it into stocks, then it funds company growth. If they put it into municipal bonds then it funds cities. If they put it into a checking account, then it funds home loans. IF they were to turn it into cash and put it under their mattress-- then it still funds government spending (via inflation.) The only possible way I can think of to take that money out of the economy-- and granted this is even if your assertion that "all the money" goes to these fat cat "executives" were true, and I'm not buying it--- the only way they can take the money out of the economy would be to buy actual physical gold bullion coins and put it in a basement. So, if these guys really were like Scrooge McDuck and literally had a basement full of gold coins then it would be out of the economy. But that is pretty much nobody.
  - dpark 15y ago
    You're ignoring the part where we were discussing a tax holiday. When executives hoard money overseas for a decade and then bring it back tax-free, they are basically depriving the government of the tax revenue that money transfer should have brought in. Beyond that, there's not a lot of evidence for the notion that execs making more money is a net gain for the economy. It seems intuitive that more money in the hands of the wealthy would result in more investments and growth, but to the best of my knowledge there's not much evidence for that. The real question is not whether handing the wealthy extra money is bad, but whether it's as good as doing something else. Sure, giving a wealthy man another million might get him investing more. Giving that million to the economy at large might do more, though. After all, those same investments you say the wealthy will make could be made by average joes.
    - hugh3 15y ago
      depriving the government of the tax revenue that money transfer should have brought in. I'm not sure about the "should have" part here. That money was earned in another country. It has already had tax paid on it, in another country. It's silly for the US to try to double-tax companies, it just puts US-based companies at a competitive disadvantage against local companies when competing for foreign business. For instance, suppose US Sprocket International sells a million sprockets at a $10 profit each, in Germany. Meanwhile, Deutsche Sprocket Gmbh is also selling a million sprockets at $10 profit each in Germany. Both US Sprocket and Deutsche Sprocket have to pay, say, $3 million in taxes to the German government for doing business in their country, and that's fine. But while Deutsche Sprocket is done with their tax obligations, US Sprocket then goes and finds that the US Government also wants a cut out of their profit. This makes doing business in Germany significantly less worthwhile for US-based companies. Besides, let's not forget that company profits are already double taxed anyway. Tax is paid when the company makes a profit, and then again when by the shareholders when they receive their dividends. So we're really talking triple taxation here.
- jz 15y ago
  > Money moving from one place to another does not always help the economy. When money flows from the corporate coffers directly into the private accounts of its executives, generally little of that money actually flows into the greater economy. Can you give an example of how this would hurt the economy? EDIT - those that down voted, mind giving a reason?
  - dpark 15y ago
    First, "not help" is not a synonym for "hurt". Second, if we assume that a dollar in one place does not always provide the same value to the economy as a dollar in another place (which everyone seems to agree on; they just don't agree on which places provide the most value), then we must conclude that over the long term sending as much money as possible to a sub-optimal place is worse for the economy than sending it somewhere more optimal.
    - jz 15y ago
      You down voted my question but still did not provide a concrete example.
      - dpark 15y ago
        I didn't downvote your question. I don't believe HN lets you downvote someone who replies to you, and I don't have the karma to downvote anyway. I don't think you would accept a concrete answer. Do you believe that every dollar in every place (federal tax revenue, corp coffers, billionaire's money market account, average joe's mortgage, food stamp, etc.) has the same value to the economy? If not, then you must agree that some of these are better places to send a dollar than others. Whether choosing a suboptimal flow "hurts" the economy is semantics. If you think that putting another dollar in a wealthy man's account is the best use of the dollar, then I would say that history disagrees with you, as there's little evidence that "trickle down" economics work. Something like 80% of economists say it doesn't work.
    - fauigerzigerk 15y ago
      But what is optimal? I think it's pretty obvious that taking money away from the rich giving it to the poor, maybe even in the form of food stamps, has a very direct and immediate effect on GDP. So it is clearly optimal in the short run in terms of GDP and also for helping those who really need it in times like these. But in the longer run, some of the money needs to go into investment or society will stagnate. Some of that investment can be done by governments, but central planning isn't very good at exploring new ideas. Transparent, democratic governments can be pretty efficient in doing things that are already well known and institutionalized. For instance, European health care systems are hugely more efficient than the US one. On the other hand, the Googles and Apples of this world are difficult to imagine as creatures of some government.
- bad_user 15y ago
  You're wrong. As long as those money are flowing, it helps the economy. The only instance where it wouldn't is if it disappeared from the market. This is even more obvious in Europe where a large chunk of all taxes payed comes from VAT; which are like sales taxes in the U.S. except everybody pays them.
  - dpark 15y ago
    > As long as those money are flowing, it helps the economy. The only instance where it wouldn't is if it disappeared from the market. This is naive. In what sense does it help the economy if I take $1000 from my account and give it to my friend who puts it into his account? There's no extra money in circulation, no projects funded, no growth, nothing. Money moved and it did nothing. > This is even more obvious in Europe where a large chunk of all taxes payed comes from VAT; which are like sales taxes in the U.S. except everybody pays them. I'm not clear how that proves that money flowing always helps the economy. What the VAT indicates is that the EU believes in taxing at all points along the chain of production.
    - bad_user 15y ago
      if I take $1000 from my account and give it to my friend who puts it into his account? I am not really familiar with the U.S. but here's what happens in Europe, regardless of the legality of that transfer (in my country you cannot give 1000 USD as a gift and not pay taxes, unless you're using some kind of offshore account or other means of tax-evasion): As soon as your friend spends it, in my country 240 USD will go to VAT. Out of the remaining sum, the company receiving the payment may have to pay salaries. Not even Google can get away with not paying taxes on salaries and taxes on salaries are somewhere north of 40%. So lets say something like 450 USD (out of that 1000 USD) will end up in the pocket of some employee. Then that employee spends it on something -- another 100 USD will go to VAT, and ~ 340 USD going to the company receiving the payment. Some part of that 340 USD will go to salaries, which are taxed and then employees are buying stuff, so they get taxed again. Companies also pay taxes on investments or sunken costs, not only salaries. So if Apple brings home some of those billions, but acquires some U.S. company, than a lot of money will still go as taxes. It really goes round and round. Also, here's an anecdote -- I live in Romania. We are not like Greece, we are not currently in danger of defaulting. Do you know the main reason for that? It's not because we pay our taxes -- in fact, I think we do more tax evasion than Greece is. The reason has to do with money getting in. We've got more than 4 million people with foreign jobs and residences that are sending money home to their families. Those money are not getting taxed, but it has been enough for our economy to not completely go downhill, and I know this little fact from good sources.
orijing 15y ago
GDP = Gross Domestic Product. In order to grow GDP, you must increase the production of goods and services domestically. Sure, more money for investors/employees is not bad. But an amnesty is no different than the government directly giving money to them. It's never bad to give employees a tax credit, but when we're in such dire straits there are more urgent uses for the money. It's never about "Is giving money to X wasteful?" but more about "Is that the best I can do?"
Bud 15y ago
Distributing profits via bonuses and dividends in the US without US taxes being collected on that money is bad, yes. It's not like corporations pay a very high tax rate, even on the rare occasions that they do actually pay their full tax obligation, after all. And the other point, of course, is that money that goes directly into the savings accounts of the already-rich does not tend to stimulate the economy very well. This is a rather well-demonstrated fact: if the money doesn't get spent, there's no economic impact there.
- jdminhbg 15y ago
  > Distributing profits via bonuses and dividends in the US without US taxes being collected on that money is bad, yes. Since when are bonuses and dividends not taxed?
  - jamesaguilar 15y ago
    It doesn't count unless it's taxed at least three times.
  - onemoreact 15y ago
    There are plenty of ways to set things up so that dividends are not taxed in the US, the most obvious being stocks owned by charitable organizations or resident of another country. As to bonuses the AMT was specifically created because of people paying zero taxes despite significant income. However, you can have situations where a bonus results in minimal, zero, or even negative additional taxes for a given year. EX: Putting the full value of a bonus into a 401k while over the SS cap.

ry0ohki 15y ago

Those bonuses and dividends are all still taxed, in some cases at a higher rate then the corporate tax?

mahyarm 15y ago

And those don't get income taxed at around the higher income brackets of over 30%? Wont a corporation just be able to write off bonuses as employee compensation expenses anyway?