Evidence is now emerging where the lion’s share of Trump tax cuts are going. Just as Bush and Obama business tax cuts throughout the post-2008 period, they’re flowing again into: US stock buybacks and EU-Japan stock markets–as well as now into corporate mergers & acquisitions.
Also discussed on the Alternative Visions show posted here: how foreign buyers of US Treasury debt is falling from 55% of total Treasury debt issued in 2008 to only 16% in the last few months as the Fed ramps up its bond issues in order to finance the annual $trillion deficits now coming due to Trump tax cuts and defense spending hikes. That means the Fed will have to raise interest rates even more than projected in coming months in order to finance the US projected $1.2 trillion budget deficit next year. As I have argued, that will precipitate a recession in 2019 and a major stock market contraction, when the key benchmark federal funds rate exceeds 2.5% from its current 1.75%.
To Listen GO TO:
http://prn.fm/alternative-visions-key-economic-reports-evidence-trumps-5t-tax-cuts-going-05-04-18/
Or GO TO:
http://alternativevisions.podbean.com
SHOW ANNOUNCEMENT:
Jack Rasmus comments on today’s Jobs Report, explaining why little wage growth is occurring, and on the Federal Reserve Bank’s plans for interest rate hikes in 2018-19. The Fed is raising rates not because of a 2% inflation target, but to finance $1 trillion annual budget deficits for the next decade and a total Federal debt of more than $33 trillion by 2027 due largely to Trump’s $5t tax cuts. Early evidence of where the tax windfall for business and investors is going is discussed: stock buybacks-dividend payouts now exceeding last year’s $1 total by as much as 50% for 2018. Apple’s record $100 billion buyback plan. Also, tax windfall funneling into Mergers & Acquisitions activity, now running at $1.7 trillion and double the pace of 2016-17. Third, US investors’ tax windfall being diverted to Japan and Europe stock markets, projected at $1.2 trillion now compared to $350 billion a year earlier. Another report discussed is Deutsche Bank’s warning that US government debt levels have doubled the probability of a US debt crisis. And a final report that foreign investors are slowing new purchases of their US Treasury $6.3 trillion debt significantly: Foreign held US debt has fallen from 55% in 2008 to 43% in 2017, and foreign buyers of current accelerating Fed auctions of Treasuries now constitute only 16% to the total.
Dr. Jack Rasmus @drjackrasmus
Jack Rasmus 
EQUITABLE TAX RECONFIGURATION-PLUS
Would create >4% GDP growth and 4-6 million jobs per year:
Congress and the Administration are contemplating tax changes. Sadly, it appears that both may be led by ignorance, bias, and axes to grind which is a losing formula for We, the People.
There should be a discussion regarding the concepts of evolutionary versus revolutionary changes. There is substantially greater risk of problematic and unintended consequences
when employing revolutionary changes.
It is being promoted by “talking heads” and politicians that a reduction of the corporate tax rate from 35% to 20% would create jobs. The jobs created would be insignificant, thus that promotion is nonsense, at best. Yes, it would offer greater profits for corporations, which would benefit stockholders. That would reflect very limited economic benefits, which would be further reduced by the hit to our national debt.
The main catalyst to enable businesses to increase sales and profits is energized consumers.
What effect upon consumers would a permanent income tax credit equal to 100% of the Social Security taxes paid on the first $40,000 of income? The maximum credit would be $2,480 per year ($206.67 per month).
The effect upon consumers would be substantial, thus benefiting business sales and profits, i.e., the old “two birds with one stone”.
The funding of this tax credit would come from the elimination of the “ceiling” upon which Social Security taxes are levied and by making all other types of income subject to SS tax, without limitations.
An additional “adjustment” to Social Security should be a ten percent increase to SS recipients.
Since our economics would be greatly stimulated, a different method of controlling the pace of the economy would be initiated. A separate withholding would be established and would be controlled by the Federal Reserve Board. The Fed, on a monthly basis, would publish a factor (a % of gross pay) which would cause a reduction or increase in net pay, thus affecting the strength of our economics, immediately.
Interest rates would be market based, i.e., the Fed would not control rates via Discount and Federal Funds rates.
PLUS:
1. Eliminate the anti-trust exemption for unions – http://writerbeat.com/articles/7399-TRADE-AND-SERVICE-UNIONS
2. Reverse all minimum wage laws – http://writerbeat.com/articles/11328-THE-CONCEPT-OF-ldquo-MINIMUM-WAGE-rdquo-IS-A-CANCER-TO-OUR-NATION-S-ECONOMICS-SINCE-IT-TENDS-TO-CREATE-A-PERMANENT-UNDERCLASS-AND-
3. Unauthorized visitors – http://writerbeat.com/articles/15953-UNAUTHORIZED-VISITORS
mz
mikiesmoky@aol.com
04/21/17
Revised Jan. 10, 2018