Tag Archives: Republicans

Lower tax rate should stimulate economic activity and generate more revenue to the government than higher tax rate

The U.S Senate was positive to President Donald Trump`s tax reform and passed the tax reform bill in the early hours of Saturday morning. The U.S tax cuts are a move to a simpler tax system. Mr Trump said the Americans will love the new system.

It is the largest tax cut in the U.S in history, and it is the biggest package in terms of tax cuts ever. Mr Trump said something beautiful will come out of that picture. The tax cuts will be tremendous and that`s what this country need, he said.

(Picture: United States Debt to GDP)

 

This is a bold decision for Mr Trump. He is trying to do what no other president in the U.S has done since Ronald Reagan in the 80`s; rewriting the tax code. The congress agreed on a tax reform package 31 years ago, and now they are doing the same.

Senate Republicans passed a bill overhauling the federal tax code, and 51 senators voted for the «Tax cuts and jobs act,» with just 1 Republican voting against.

No Democrats supported the legislation.

A significant individual tax cut was proposed by President John F. Kennedy and signed into law by President Lyndon B. Johnson with the belief that cutting tax rates would stimulate investment and spending, with overall beneficial effects (including replenishment of some lost tax revenues).

President Ronald Reagan signed tax cuts into law, which some belive stimulated a doubling in total tax revenues (from 500 Billion to 1 Trillion dollars) during the period from 1980 to 1990.

On the other side; the deficit and national debt more than tripled (from $908 Billion in 1980 to $ 2 Trillion in 1990) because government spending rose even faster than increases in tax revenue.

As a result, income tax receipts as a percent of GDP fell from 11,3% to 9,3% in 1984 and did not to revert to original levels until the late 1990`s, even though overall revenue skyrocketed in terms of real dollars.

(Picture: United States Government debt)

 

President George W. Bush signed two major tax cuts into law: one in 2001 and one in 2003. These are often collectively referred to as the «Bush Tax Cuts». Some people claimed the Bush tax cuts have led to the rich shouldering more of the income tax burden and the poor shouldering less.

Washington Times credit the Reagan tax cuts with the eventual surplus of the late 1990`s. Others doubt this claim however, and instead belive the surpluses were a result of a combination of a decrease in government spending, the passing of the Omnibus Budget Reconciliation Act of 1993 (which dictated several tax increases), and the use of the PAYGO system.

Others claims the Bush tax cuts have conferred the «largest benefits, by far on the highest income households. At the state level, former Democratic Governor Bill Richardson in recent years has supported tax cuts to spur economic growth.

A tax cut is a reduction in the rate of tax charged by the U.S government. The immediate effects of a tax cut are a decrease in the real income of the government and an increase in the real income of those tax rates have been lowered.

Due to the perceived benefit in growing real incomes among tax payers, politicians have sought to claim their proposed tax credits as tax cuts.

In the longer terms, however, the macroeconomic effects of a tax cut are generally not predictable because they depend on how the taxpayers use their additional income and how the government adjusts to its reduced income.

Depending on the original tax rate, tax cuts may provide individuals and corporations with an incentive investments which stimulate economic activity. Some politically conservative opinion-makers, such as Art Laffer (better known for the Laffer curve), have theorized that this could generate so much additional taxable income that a lower tax can generate more revenue than was collected at the higher rate.

(Picture: Laffer Curve: t* represents the rate of taxation at which maximal revenue is generated. The grey curve is as drown by Laffer, however, the curve might not have only a single peak, nor must it peak symmetrically at 50%)

 

However, basic math states that cutting tax rates in half would require an economy twice the size to generate the same amount of tax revenue.

High tax rates doesn`t necessarily mean large revenue to the government. Lower tax rates can increase the government’s revenue. It seems difficult for some people to understand that.

100% tax rate means theoretically zero revenue because taxpayers lose their incentive to work. The economic effect of a 100% tax rate is to decrease the tax base to zero. If this is the case then somewhere between 0% and 100% lies a tax rate that will maximize revenue.

The tax cut shouldn`t be a bearish sign for the investors. Lower tax for the corporations means reduced unemployment and an incentive for investors to invest in new stocks and that will create more new jobs.

A corporate tax cut from 35% to 20% will boost the stock market, and the Senates $1,4 trillion tax bill will also boost the corporate earnings and thats positive for the stocks and the stock market.

The economy is a complicated system. Inflation, political uncertainty and the Fed`s monetary policy can add volatility. It remains to see.

I have said so many times and need to say it once again; this is the most unloved bull market in history.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Outsider Trump vs. Insider Clinton

Super Tuesday was a great day for both Hillary Clinton and Donald Trump. Democrat Clinton and Republican Trump win most states on Super Tuesday, so it was a Super Duper Day for them both in the race for the presidential nomination.

They both each won at least seven of eleven state races. Clinton won in Arkansas, Tennessee, Virginia, Georgia, Alabama, Massachusetts and the most important of them all: Texas. Trump won in Vermont, Tennessee, Virginia, Georgia, Arkansas and Massachusetts.

DonaldTrump

Republicans need 1,237 delegates who will vote for them at the parties national conventions in July 2016. Now, they have 595 delegates.

Democrats have one-third of the 2,383 delegates they need, which is 865 delegates. So, as you can see there is still a long way to go.

We know from history that the Republican candidate who wins most of the states on Super Tuesday wins the nomination, and the billionaire businessman Donald Trump is on the way to become the Republican party`s candidate for the U.S presidential election.

Trump`s success is spectacular and a big surprice for many, and he seems to be unstoppable despite programs like Last Week Tonight with John Oliver: Donald Trump (HBO). The odds for seeing Trump at the White House are rising every day, and Hillary Clinton with a history of many scandals must fight against an entertainer and a businessman who speak against well established politicians.

Hillary Clinton have been a part of the political system in many years. Her husband is former president Bill Clinton and they both know the “game”. Donald Trump is coming from another “camp,” and that`s the biggest difference between them I think.

Trump is a businessman, property mogul, celebrity TV personality and a political outsider. Clinton has been a part of the “system” in many years and are a political insider. So, if voters have to choose between Trump and Clinton, they are not choosing between a Democrat and a Republican.

It is the Insider against the Outsider.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

 

 

 

 

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Super Tuesday is the biggest day of the 2016 primary season

Who will be the next U.S President? It`s up to the American people to vote and Tuesday is the biggest day of the 2016 primary season with 13 states and one territory participating. The day is called ”Super Tuesday” because the largest number of states hold their nominating contests.

The U.S President is important not only for the Americans but for the rest of the world. With so much tension, the next U.S President is more important than ever.

Poll shows that Hillary Clinton leads in most states on the Democratic side, and she is up by double digits in Texas, Virginia, Georgia, Arkansas and Alabama. For Republicans, Donald Trump seems to be a leader in Vermont, Virginia, Oklahoma and Georgia.

 

whitehouse

(Picture: George Washington at the White House)

 

Super Tuesday is important because it will be difficult for Sanders to beat Clinton if she wins a large delegate lead over him.  If not, the Democrats primary will continue. Candidates on both sides have spent a lot of time and resources in Texas, which is vital with 155 Republican delegates and 252 total Democratic delegates at stake.

Super Tuesday was important in 2008. Barack Obama and Hillary Clinton each declared victory after a close and chaotic finish, and no other day than Super Tuesday gives a single candidate as much of a chance to declare a sense of certainty about his or her position.

Donald Trumps slogan is ”Make America great again”, while Hillary Clintons slogan is ”Hillary for America.”

The unemployment rate in the U.S dropped to 4,9% in January 2016, so why is Trump saying he want to make America great again? President Ronald Reagan promised to make America great again in the 80`s. At that time, the unemployment rate was 11% with a recession on top of that.

Mr Trump claims in a campaign video that the U.S ifrastructure has made the country a global laughingstock. He said: ”Our airports, bridges, and roadways is falling apart. It`s a terrible thing to see.”

Everyday Americans need a Champion, and I want to be that Champion, Hillary Clinton says in her campaign video. Right in line with her slogan ”Hillary for America.” It remains to see whats most important for the people. That`s whats really counts.

The next primaries after Super Tuesday is on Saturday, March 5. Democrats and Republicans vote in the Kansas caucuses and Louisiana primaries. Republicans will also vote in Kentucky and Maine, while Democrats will vote in Nebraska. On Sunday, Democrats go the polls in Maine.

By the way, Voter turnout in America is among the lowest in the developed world. Only 42% of Americans voted in the 2014 midterm elections, and that`s the lowest since 1978. The rise of the donor class and the influx of corporate cash have caused many voters to lose faith in politics.

Americans will elect the 45th President of the United States on November 8, 2016, and the winner of the 2016 presidential election will be sworn into office on January 20, 2017.

God Luck!

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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