Many key republican Oligarch minions have ties to Russian Oligarchs and/or mobsters. Its my opinion, that though most of those relationships are to facilitate money laundering, the support that the Russians provide these minions and republicans is to facilitate their intended destruction of America. At any rate, Americans should be more concerned about Americans trying to destroy America than whether Russian agents left a paper trail in assisting them, which since they could use their own money, is unlikely.
First, he's committed $1B to an investment fund as a purely political grandstanding measure he falsely claims is in anticipation of the corporate tax cuts. Lying fuckface controls $270B in cash, and tax cuts have no bearing whatsoever on this political grandstanding. He can make any investment he wants by borrowing against cash (/assets earning the same return as the loan) held overseas. If those investments fail, he will reap a larger tax offset if the rates are lower. Though this perfectly offsets the risk for paying taxes if the investment wins (and so the investment decision is completely unaffected by tax rate), if the investment pays off, its more cash for the hoarde regardless of tax rate.
Second, he's said "Why repatriate cash and pay 35% tax when we can pay 0%?" So then why pay 14%? Placing surtaxes on foreign subsidiary profits should shift more spending overseas to reduce overseas profits. With blue state surtaxes, R&D should be shifted overseas where it will reduce profit at higher tax credit, and where specific research credits are available. Arguably has a fiduciary duty to shareholders to do so.
An aside on the hamster wheel economy
The US QE money printing program was used, if as we are told, to save civilization from collapse. Though fundamentally similar to Zimbabwe monetary policy, the quid pro quo arrangement between the central bank and the banking system did successfully keep banks solvent, interest rates low, and asset prices high: Banks and rich bond investors were offered the sure trade/free money. of buying government bonds ahead of the Fed. That free cashflow and profits flowed down to other asset categories such as stocks and housing. This further helped banks trading portfolios and loan collateral value.
Its entirely fair to resent the extreme inequality in wealth increases that the "recovery" permitted, but the lack of job and income growth would have been much worse without the resulting bank solvency, and relatively broad trickle down of asset portfolios that sustained some modest spending levels throughout the economy.
While this tax plan is also an attempted stimulus for the rich, it will lead to another banking and asset crash, and in fact harms every economic sector that isn't a monopoly. The next banking/asset crash may be the last due to the high US debt/obligation burden. Another round of significant QE and US currency devaluation may avoid public debt restructuring/defaults, but its more likely to take shape as QE for banks and cannibalism rather than QE for people and UBI.
Tying collapse to the corporate tax cuts
The US banking system is ultra competitive, but also very simple. Loan rates are driven by Net Interest margin (NIM) targets (difference between saving or Fed rates and loan rates). At a 35% tax rate, a 2% pretax NIM results in a 1.3% after tax contribution. At a 20% tax rate, there's an illusion that the after tax contribution can rise to 1.6%, but if a top tier bank was happy targetting $10B profit for the year under the old tax rates, then it is happy to lower mortgage rates from 2% old pretax NIM to a 1.62% pretax NIM to make that same 1.3% after tax NIM under the new tax rate proposal. One bank cannot offer a 4.38% mortgage while its competitors offer them at 4% and keep business, so if any one bank targets the same profit shitload it was going to make under the old plan, all of its competitors must follow.
While lending is a bank's main business, its overall profits are significantly affected by trading and loan losses. Lower pretax NIMs significantly increase the risk that loan losses overwhelm expected loan profits. Higher tax rates reduce the risks of losses banks are particularly prone to from erasing its "trickle" loan income. The flawed tax treatment for business loans is going to reduce demand for commercial lending, and so pressure lending rates to be even more competitive.
On the personal tax side, several provisions reduce housing affordability, and so necessarily decrease housing prices: caps on property tax and mortgage deductions, and expected interest rate rises. Housing values everywhere in the world are a function of mortgage availability/affordability. The US banking system is too fragile to stop the hamster wheel economy of perpetually increasing asset (mainly homes) values.
The 19th and 20th century economy are by far the dominant employers in the US. For the most part are also highly competitive: Auto, Aerospace/airlines, mining/materials, retail, packaged food, transportation/logistics sectors. These sectors will also face the same gross margin compression pressures as banks while in an environment of high consumer debt levels, and disemployment related to a 23% cost competitiveness penalty for US expenses. For multinationals, a 23% relative competitiveness improvement to any foreign production costs will mean less domestic production competitiveness and associated jobs, or more likely, a near 23% reduction in US dollar strength, spurring a race to the bottom in global currency valuations.
20th century economy companies are not doing as well as monopolists and the tech sector. Lower gross margins, and lower value of accumulated tax credits in the old economy will risk bankruptcies and reduce the value of bailing them out of or persisting through the risk of bankruptcy and sustaining their labour force. For those profitable tech companies, any foreign profit surtax encourages bringing foreign profits to 0 potentially by moving all R&D overseas. The important jobs that determine long term international competitiveness should leave quickly if the intent of the ruling party to destroy America is understood. Whatever California based protest and opposition funding there is will be irrelevant so long as gerrymandered voter suppression is processed by unaccountable voting machines installed by the more corrupt party or their foreign agent hires.
The false simplicism that a corporate tax cut will boost non-monopolist stock prices is a narrative the financial market salesmenship industry portrays in order to pump stocks. Even in the case of monopolists, a $100/mo cable TV package or $1000/mo HIV medication doesn't do well in Somalia when few people can afford them. In fact, the only rational value of a corporate tax cut push is the glorious opportunity generated by a false stock pump, where oligarch management has insider information for the appropriate timing of the collapsing dump, and in the ensuing "drowning of the collapsing government in the bathtub", in the desperate reach for social funding, gratitude from the politicans that stimulated the collapse, will hand out new privatized monopolies of government services to the oligarchs that sponsored their power to do so. Collapse is in fact the only profitable rational intent of a corporate tax rate cut within the WTO-discretionary-profit-allocation. A world where the S&P 500 pumps to 3500 before collapsing to 1000 is gloriously preferable for those positioned with insider information to guess the top than a hamster wheel world that tediously inches forward sustainably. Oligarchs aside, small-proportion asset owners have a greedy impulse that prefers a collapsing unsustainable pump (followed by dump) relative to boring sustainability, as there is an overconfident tendency to anticipate the proper sell/dump timing. Banking and stock panics always follow business tax cuts because of the widespread greed-blinding stupidity on this issue.
Risk of global race to the bottom and collapse
While Americans are disproportionately stupid, the huge investment in packaging lies to sell to Americans can be repackaged cheaply to sell to other jurisdictions. Nations who've already invested in attracting meager HQ and international tax arbitrage jobs through low tax rates might be tempted to lower them more. In fact, for multinational oligarchs with monopolist power, lobbying global politicians to sweeten their tax arbitrage opportunities in response to US move will come naturally.
To avoid this race to the bottom, just one nation needs to adopt natural/cashflow taxation as described below.
Natural/cashflow taxation permits a race to the top
Natural taxation is:
- A flat business tax rate that applies to all cash inflows within the jurisdiction, and same flat tax deduction for all cash outflows including investments and dividends within the jurisdiction.
- All payments/receipts have a counterparty in the same jurisdiction, so each transaction is at worst tax neutral. No tax implications exist for transactions outside the jurisdiction.
- The same flat tax rate + small surtax (0%-3%) applies to personal income. A 10% surtax applies to personal investment profits.
- No payroll taxes.
- Basic income is funded from tax revenue surplus, thereby making the flat personal tax rate progressive on an effective tax basis.