Republicans Don't Really Care About The Deficit

Discussion in 'Too Hot for Swamp Gas' started by fastsix, Jul 13, 2014.

  1. OklahomaGator
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    OklahomaGator Moderator VIP Member

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    Another benefit with the bonus depreciation would be a company may be needs 4 front end loaders at $250,000 a piece. If the bonus depreciation had gone away he might be able to afford to buy only 3 instead of 4 for cash flow purposes. So the heavy equipment industry in this example loses sales.
  2. philobeddoe
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    philobeddoe Well-Known Member

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    Nope, nope, nope ... if the bonus depreciation deduction is eliminated ... you have an effective tax increase. Then, at a later date .... if it another depreciation acceleration mechanism is enacted ... you would have a tax law change that would result in a reduction of taxes. If the law is unchanged from year-to-year ...... there is neither a tax increase or decrease due to a change in a tax law change.

    I posted earlier that obama signed an extension of the deduction that expanded its application to some depreciable real property that was previously not qualified. That would be a change resulting in a decrease in taxes.
  3. philobeddoe
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    philobeddoe Well-Known Member

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    Doh .... don't post that .... you'll make the lefties' heads implode!!!!!!
  4. persegator
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    persegator Member

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    My overspending? Last I checked I'm not a Congressman. Republicans have their causes, Democrats have theirs. I've never known either side to do anything but overspend.

    I think you just need to do some readings on basic finance and get a better understanding of the concept of the time value of money. What is happening will be much clearer once you do.
  5. Bushmaster
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    Bushmaster Well-Known Member

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    Yeah, I think I will do that before I teach another CPE class to a bunch of CPAs.

    I am sure my State Board of Examiners will be interested to know that some internet finance guy thinks one of their peer reviewers doesn't understand the time value of money.
  6. persegator
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    Like I said, it's all perspective. If nothing is done, effective taxes will increase and deficits will decrease. Republicans would like to pass a law that prevents that from happening.

    Whether you want to label any component of that a tax cut, a tax hike, or neither it doesn't really matter. All that matters is the actual effect of action/inaction. There's an argument to be made that the additional deficit is worth the economic stimulus provided by bonus depreciation. There's arguments the other way as well.

    That's what people should be focused on. Not labels or trying to score points with labels.
  7. persegator
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    If this thread is any indication, I am concerned if that's truly the case.
  8. Bushmaster
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    Bushmaster Well-Known Member

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    I appreciate your concern.

    Give me more money or my bottom line won't increase is the gist of your position.

    But only for year 1.

    For someone who has been here a month, you should read more and post less.
  9. persegator
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    The 'gist' of my position is that money now is worth more than money later. Unless you're paying interest on top of principal, accepting the same payment later is a losing proposition.

    Most of the people on this board (on both sides) are so insanely partisan that they will willfully delude themselves if it means their side 'wins.' If anything, its the 'veterans' around here who need to listen more and speak less.
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  10. squigator
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    And taxes on the revenue produced by your employment of the equipment in your business enterprise.
  11. squigator
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    squigator Premium Member

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    Only one relatively soft spoken, anti-accelerated depreciation post from Fastsix? Wait till he finds out that he helped subsidize his tile guy's pick-up truck purchase:

    http://www.section179.org/section_179_vehicle_deductions.html

    Limits for SUVs or Crossover Vehicles with GVWR above 6,000lbs (i.e Toyota 4-Runner; Jeep Grand Cheroke........)
    Certain vehicles (with a gross vehicle weight rating above 6,000 lbs but no more than 14,000 lbs) qualify for expensing up to $25,000 (in the first year of ownership) if the vehicle is financed and placed in service prior to December 31 and meet other conditions.

    This sweet little deduction is probably acceptable to liberals as it helps their beloved UAW.
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  12. philobeddoe
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    philobeddoe Well-Known Member

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    If a law sunsets and tax accounting changes ... there is likely a tax increase or a tax decrease ... and the deficit may increase decrease depending upon countless factors that play into the calculation. What we do know is ... if the tax accounting (eg bonus depreciation) is unchanged ..... there is no impact on the deficit. That's pretty simple logic.
  13. philobeddoe
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    philobeddoe Well-Known Member

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    Only if you assume there's no incremental return on the deferral of $x in tax receipts in year one into years 2 through 5. By promoting capital investment through the bonus depreciation deduction of $X1 in year 1 .... there is a good chance you'll receive ~93 to 97% of X1 over years X2 to X5 plus the value of the tax revenues on the incremental taxable income generated via the capital investment in X1.
  14. Bushmaster
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    Damn. Talk about a shot below the belt!!! :)
  15. persegator
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    That's exactly the Keynesian argument. When you are in recessionary times, the government cuts taxes and increases spending to stimulate demand. In other words, it shoulders a short term deficit in order to promote long term economic growth. Present deficits are paid for down the road by higher tax revenues. When the economy is back on its feet, spending and taxes return to 'normal' levels.

    The problem is, only the first part of the theory is actually followed. Purportedly stimulative tax cuts and spending increases become the new baseline as no one wants to pay higher taxes or see their favored allocation have its funding cut. The end result is that the deficit never actually decreases and the total debt-to-GDP ratio continues to grow year after year.
  16. vertigo0923
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    vertigo0923 night owl mod VIP Member

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    that's a lovely load of crap, 'taxes are used to bribe' politicians. any bribing done comes from lobbyists. and even if you were right, you're saying 'taxes are used to bribe fatcat politicians', then you follow that up with 'liberalism' as if conservatives aren't part of that situation. that's blind partisanship, and pretty much not worth replying to, but you quoted me, so i felt i had to.
    and 'fatcat' business owners are happy to sell their merchandise here, as we're still the most powerful consumers market in the world, but they take the jobs away and send them to countries like china and india, where there are no compunctions to having safe workplace environment, and pay even lower wages.
  17. vertigo0923
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    we're talking about 'republicans don't care about the deficit' which is a pretty wide umbrella as far as a discussion goes. and furthermore, i was explaining what another poster said, because one of you complained about it. or rather, didn't understand.
    just clearing up that confusion regarding the term.
  18. philobeddoe
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    philobeddoe Well-Known Member

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    Aren't tax revenues growing? Seems I read the White reported that individual and corporate income taxes had increased some $0.5 trillion over the last 3 or so years ... an increase of 35%. And, I believe the WH says that these taxes will increase another $430 billion over between now and the 2016 elections, another 25%. Nice try @ gaslighting on this matter.

    And I must remind you .... the matter discussed is not a tax cut .. but simply keeping an existing tax law unchanged.
  19. philobeddoe
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    philobeddoe Well-Known Member

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    LOL!!
  20. vertigo0923
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    i don't want to hear any complaints about my supposed 'hijacking' a thread.
    :D
    this is hijacking extraordinaire!

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