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It's unsurprising mortgage volume is down given economic uncertainty and the spiking interest rates. As such, layoffs at mortgage originators seem inevitable.
by jmyeet 4y ago
It's unsurprising mortgage volume is down given economic uncertainty and the spiking interest rates. As such, layoffs at mortgage originators seem inevitable.
But here's the lesson I want people to take from this: both Demorats and Republicans are cut from the same neoliberal cloth in that they both serve corporate interests. What do I mean by this? Neither pushes back on the idea that interest rates are the only way to tackle inflation.
This is false.
As we say in the GFC and the pandemic, wha tdo companies do with this money? They pay bonuses, do layoffs anyway (to cut costs) and give money to shareholders, primarily in the form of buybacks.
But what you see is corporate profits are skyrocketing. Inflation is being as an argument to raise prices, which in turns puts pressure on inflation, and all that money goes to the shareholders.
Higher interest rates increase housing costs and put upward pressure on rents (as landlords seek to recoup costs).
The other method by which this can be tackled is with taxation. Some countries have enacted windfall taxes. Taxation incentivizes investment in the business.
Yet there is no serious political will anywhere to be found for this in the US.
- hmmmmmm111 4y agoWhat is the common sense reason that windfall taxes would reduce the price of gas and food?
- jgust 4y ago1) additional profit from raising prices won't go towards the bottom line, so the incentive to raise price is not as attractive 2) if a company is hell bent on raising prices to capture profit, there is still an incentive to reduce tax liability by re-investing those profits into the company (increasing headcount would benefit the non-ruling class)
- blacksqr 4y agoA corporate tax increase was just passed in August.
- Supermancho 4y ago> The Inflation Reduction Act imposes a corporate alternative minimum tax equal to the excess of 15% of a corporation's adjusted financial statement income (AFSI) over its corporate alternative minimum tax foreign tax credit. This is not an impactful tax for any of the affected corporations. They will simply choose the method under which they pay the least and continue their tax avoidance through declared max depreciation et al, as normal. This is the USA and billionaires aren't to be inconvenienced by public policy.
- jmyeet 4y agoThe IRA was a fairly tepid bill (eg the cheaper medicines were very limited in scope and don't come into effect for several years) but the 15% minimum corporate tax rate was one of the less talked about but more impactful measures. How do I know this? Because of all the resistance that particular measure got from many lawmakers. So why is that impactful with the corporate tax being lowered to 21% in the Trump administration? 15% is less than 21% so it shouldn't matter right? But it does because the 2017 tax cuts effectively (in a complicated fashion) mostly gave a permanent amnesty on offshored profits. Previously, any repatriated profits were subject to the (then) 35% corporate tax rate. That bill ended that treatment. The replacement was more complicated and a much lower effeective tax rate. So the 15% minimum actually hits companies who are currently paying less than that on foreign income. It's a good measure. My comment however was referring to far stronger and likely temporarly measures, such as a windfall corporate tax of, say, 60% (or even higher).