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Show Me The Money October 9, 2019

Posted by Dr. Robert Owens in Politics, Politiocal Philosophy, Uncategorized.
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The Laffer Curve is a theory developed by supply-side economist Arthur Laffer to show the relationship between tax rates and the amount of tax revenue collected by governments. The curve is used to illustrate Laffer’s argument that sometimes cutting tax rates can increase total tax revenue.  The Laffer Curve is alive and well in the Renaissance America of President Donald J. Trump.  As a matter of fact the policies of the Trump Administration have demonstrated that the Laffer Curve isn’t constrained by international borders.

You see Trump’s 2017 tax reform is delivering on its promise to bring money back to the US from overseas by making America more competitive.

Before this monumental tax reform the US had one of the highest corporate tax rates in the world.  And on top of that we had a worldwide tax system that compared unfavorably with the territorial systems in 28 of the other 36 countries who are members of the Organization for Economic Co-operation and Development (OECD).  The OECD is an intergovernmental economic organization founded in 1961 to stimulate economic progress and world trade.

This worldwide tax system taxed the foreign earnings of US corporations once their overseas profits were brought home.  This provided a massive incentive for our corporations to park their earnings from foreign subsidiaries offshore.  In the year before Trump’s tax reform US corporations had more than $2 trillion stashed overseas.

Besides this massive reduction in available capital in the US these incentive draining tax policies led many US firms to implement what came to be called “Inversion Transactions.”  This means they gave up their status as American corporations and reincorporated in foreign countries often through acquisitions and mergers.

The 2017 tax reform bill President Trump proposed and shepherded through Congress has radically changed all this.  This history making law lowered the corporate tax rate from 35% to 21% and it also allowed US companies to bring money home from their foreign subsidiaries at the much reduced US tax rate.  On top of that the bill also made changes to laws which address the ownership and profitability of intellectual property.  Under the previous laws there were economic incentives to locate the ownership of intellectual property in low-tax foreign countries.  That has now been reversed and American is once again the best place on earth to innovate.

The new Trump inspired program has erased the lure of corporate inversions and fostered an economic environment where the US is once again an attractive and competitive place to host international businesses.  And there is even proof in a two real world multi-billion dollar examples: The AbbVie acquisition of Allergan and the new Pfizer-Mylan combination.

According to Fox Business News, “Allergan was previously a U.S. company, but in 2015, it became an Irish company through a merger with Actavis.  Mylan also was previously a U.S. company, but in 2015, it became a Dutch company. The adverse U.S. tax rules, coupled with low foreign tax rates and territorial tax systems, made it advantageous for the companies to shield non-U.S. income from the reach of the U.S. tax system by becoming incorporated and headquartered overseas.

AbbVie itself tried to invert in 2014, but the Treasury Department blocked its effort. A recent Bloomberg story noted, ‘A few years ago, this deal would likely have gone differently – Allergan would be the one buying AbbVie.’

The 2017 tax reform changed that. Representative Kevin Brady (R-TX), who led the congressional battle for tax reform as Chairman of the House Ways and Means Committee, said following the announcement of the AbbVie-Allergan transaction that, as a result of 2017 tax reform, ‘companies can domicile here and stay competitive throughout the world.’”

And as Robert Willens, an independent tax consultant told Bloomberg, “Unlike an inversion where U.S. income is transformed into foreign income, in the instant case, the polar opposite may well occur since, here, foreign income might be transformed into U.S. income.”

So how is this working today?  According to Investor’s Business Daily, “They said it wouldn’t happen, but it did: The money companies stashed overseas to protect them from high U.S. corporate tax rates is flooding back in, boosting growth, jobs and confidence in the economy. Thank the Trump tax cuts.

All told, the Bureau of Economic Analysis (BEA) reported, some $305.6 billion returned to the U.S. from overseas accounts. That’s a $1.2 trillion annual rate, and far more than the $35 billion one year before.”

By changing incentive-killing tax laws which appeared to be more like confiscation and the punishment of success President Trump is making America more competitive which is how he planned all along to Make America Great Again.

Dr. Owens teaches History, Political Science, Global Studies, and Religion.  He is the Historian of the Future @ http://drrobertowens.com  © 2019 Contact Dr. Owens drrobertowens@hotmail.com   Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens or visit Dr. Owens Amazon Page / Edited by Dr. Rosalie Owens

 

 

 

 

 

Serving Those Who Served US September 11, 2019

Posted by Dr. Robert Owens in Politics, Politiocal Philosophy, Uncategorized.
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After the rollout of President Trump’s Maintaining Systems and Strengthening Integrated Outside Networks Act (MISSION Act) Veterans Affairs Secretary Robert Wilkie responded to the previously predicted problems on Military.com.  “One story said to ‘expect glitches.’ Another said it was ‘confusing.’ Some lawmakers who supported the bipartisan bill suddenly warned about the possibility of ‘overreach’ by the Trump Administration, while others warned of a ‘ tech nightmare.’  But thanks to thousands of dedicated VA workers around the country and President Donald J. Trump’s support for this historic reform, elements of the MISSION Act took effect on June 6, and veterans immediately began benefitting from the largest transformation in veterans’ health care since the end of World War II.”

Secretary Robert Wilkie went on to clarify what this fundamental change in the services we offer to those who answered the call and fought for our freedom and our interests around the world is.  “At its core, the MISSION Act reflects the President’s vision that veterans need to be at the center of their health care decisions. If it’s too long a drive to the VA, if wait times are too long, if we can’t offer the services a veteran needs, or if it’s simply in the best medical interest of a veteran to use non-VA services, they can now seek care in their community.

That change was a long time coming for our rural veterans, many of whom live nowhere close to a VA hospital or clinic. And it’s much more than just an extension of the Choice program enacted under President Obama. That program was temporary, narrow and incomplete, while the MISSION Act is permanent and will put a much broader group of veterans in the driver’s seat when it comes to their health.

The response from those who wore the uniform to defend this great Nation was immediate and sustained. A tool we developed to decide whether veterans are eligible for community care is being used tens of thousands of times each day.

The MISSION Act also created an urgent care benefit that finally gives veterans what others have in their neighborhood; access to nearby care to treat ailments that need immediate attention, like the flu or a sprained ankle. One veteran in Texas said this change is a ‘godsend’ because under the old system, getting a sore throat treated meant a 45-minute ride each way to the VA.

And he’s not alone. Thousands of urgent care visits have been scheduled for veterans under the MISSION Act. By mid-July, we were starting to exceed 500 visits each day, and that number has been growing each week as veterans learn more about this important new benefit.

In the end, the MISSION Act simply gives the VA what all other major healthcare systems have — a way of referring patients to outside care when needed. Community care is one piece of that, as is the new urgent care benefit. We have nearly 5,000 urgent care providers in our network so far, and that number is expanding as we continue to provide veterans with more options to get care when and where they need it.”

After years of neglect a broken system is getting fixed.  During his historic campaign in 2016, then candidate Trump called out the VA for its failure to meet the needs of America’s heroes.  It was a broken system that no president had been able to cure.  Now after two years in office we’re finally on the road to serving those who served US thanks to the vision and leadership of America’s blue-collar billionaire, President Donald J. Trump.

Dr. Owens teaches History, Political Science, Global Studies, and Religion.  He is the Historian of the Future @ http://drrobertowens.com  © 2019 Contact Dr. Owens drrobertowens@hotmail.com   Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens or visit Dr. Owens Amazon Page / Edited by Dr. Rosalie Owens

 

 

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