A $300 billion business tax break meant to raise wages is instead helping companies replace workers with machines

[ZiprHead]

https://www.washingtonpost.com/us-policy/2019/02/13/billion-business-tax-break-meant-raise-wages-is-instead-helping-companies-replace-workers-with-machines-study-says/

A $300 billion business tax break pitched as a way to boost hiring and wages had a modest effect on employment, no effect on wages and probably has accelerated the rate at which companies are able to replace workers with machines, according to a new working paper by researchers at Duke University and Grinnell College.

The tax break in question, known as bonus depreciation, allows businesses to take larger upfront write-offs on the depreciation, or expected wear and tear, of newly purchased equipment. It was introduced as part of the Job Creation and Worker Assistance Act of 2002, according to the Congressional Research Service, and was recently expanded as part of the Tax Cuts and Jobs Act of 2017.

Because the Tax Cuts and Jobs Act expands the bonus depreciation tax break to 100 percent until 2023, Marr said these findings underscore how that bill “was heavily, heavily loaded toward providing tax cuts for shareholders and very wealthy people,” rather than toward “working-class people who struggle.”

 

[Harry Bosch]

https://www.washingtonpost.com/us-policy/2019/02/13/billion-business-tax-break-meant-raise-wages-is-instead-helping-companies-replace-workers-with-machines-study-says/

A $300 billion business tax break pitched as a way to boost hiring and wages had a modest effect on employment, no effect on wages and probably has accelerated the rate at which companies are able to replace workers with machines, according to a new working paper by researchers at Duke University and Grinnell College.

The tax break in question, known as bonus depreciation, allows businesses to take larger upfront write-offs on the depreciation, or expected wear and tear, of newly purchased equipment. It was introduced as part of the Job Creation and Worker Assistance Act of 2002, according to the Congressional Research Service, and was recently expanded as part of the Tax Cuts and Jobs Act of 2017.

Because the Tax Cuts and Jobs Act expands the bonus depreciation tax break to 100 percent until 2023, Marr said these findings underscore how that bill “was heavily, heavily loaded toward providing tax cuts for shareholders and very wealthy people,” rather than toward “working-class people who struggle.”

I wouldn't call bonus depreciation exactly as a "tax cut". Depreciation is a real expense. If I buy a $400,000 CNC machine, the $400,000 is real cash (whether I finance it or not). Bonus let's me recognize the full depreciation this year, rather than spread out the reduction over time. Having said that, I'm not a fan. It creates the incentive to invest in long term equipment to gain a short term reduction in taxes. But maybe the companies don't need the equipment. I see this all time. In the next downturn, there will be a lot of companies with excess equipment that they don't need anymore that they purchased only to reduce their short term taxes.

 

[Lumpenproletariat]

There's no need for a tax cut, or any other policy, aimed at creating jobs or boosting wages.

Unless you think wage-earners and job-seekers are crybabies who need to be pandered to, because otherwise they will take to the streets and raise hell.

Why can't we just let the companies/employers do their function of serving consumers, instead of making them also serve as babysitters? Is the purpose of your job to provide a babysitting slot for you to keep you out of mischief?

 

[ZiprHead]

Lumpen, you continually forget the fact that workers and consumers are the same people.

 

[Lumpenproletariat]

Lumpen, you continually forget the fact that workers and consumers are the same people.

You've used that metaphor many times. I asked you to explain the point of it, and instead you just keep repeating the metaphor.

Obviously nothing I'm saying denies that every worker is a consumer.

However, if "workers" means only wage-earners, as it usually does in these arguments, then it's not true that workers = consumers. Because many consumers are not wage-earners.

So you need to explain the meaning of your metaphor. Instead of just repeating it like a slogan.

 

[ZiprHead]

Lumpen, you continually forget the fact that workers and consumers are the same people.

You've used that metaphor many times. I asked you to explain the point of it, and instead you just keep repeating the metaphor.

Obviously nothing I'm saying denies that every worker is a consumer.

However, if "workers" means only wage-earners, as it usually does in these arguments, then it's not true that workers = consumers. Because many consumers are not wage-earners.

So you need to explain the meaning of your metaphor. Instead of just repeating it like a slogan.

Show me a consumer that doesn't have a wage earner supporting them.

 

[Keith&Co.]

Lumpen, you continually forget the fact that workers and consumers are the same people.

You've used that metaphor many times. I asked you to explain the point of it, and instead you just keep repeating the metaphor.

Obviously nothing I'm saying denies that every worker is a consumer.

However, if "workers" means only wage-earners, as it usually does in these arguments, then it's not true that workers = consumers. Because many consumers are not wage-earners.

So you need to explain the meaning of your metaphor. Instead of just repeating it like a slogan.

Show me a consumer that doesn't have a wage earner supporting them.

How the hell is that even supposed to be a metaphor?
Metaphor literally means "not a literal interpretation."

But the whole point of the economy is that work earns wages that we can spend on goods, services, and fake internet points.
Where is there a metaphor?!?!
Maybe Lumpy needs some metaphor?
Wage earners are like the part of lichen that performs photosynthesis, and consumers are the part that eats the rock beneath. Technically two life forms, but functionally we judt say lichen because there's no real purpose to separating them in discussion.

 

[Harry Bosch]

There's no need for a tax cut, or any other policy, aimed at creating jobs or boosting wages.

Unless you think wage-earners and job-seekers are crybabies who need to be pandered to, because otherwise they will take to the streets and raise hell.

Why can't we just let the companies/employers do their function of serving consumers, instead of making them also serve as babysitters? Is the purpose of your job to provide a babysitting slot for you to keep you out of mischief?

Yea, again it's not a tax cut. It's more like a tax cut acceleration. Expenses reduce net income, which reduces taxes due. Depreciation is an expense. In the past the government required that depreciation be recognized over time because the value of capital assets lasts longer. Bonus depreciation simply means that depreciation is recognized sooner. I don't like it because it's a distortion of the real market. Business owners fall into the trap of buying more capital assets than what they do to just reduce their short term taxes. So they end up with more equipment than what they need.

 

[Lumpenproletariat]

Show me a consumer that doesn't have a wage earner supporting them.

How the hell is that even supposed to be a metaphor?
Metaphor literally means "not a literal interpretation."

But the whole point of the economy is that work earns wages that we can spend on goods, services, and fake internet points.
Where is there a metaphor?!?!
Maybe Lumpy needs some metaphor?
Wage earners are like the part of lichen that performs photosynthesis, and consumers are the part that eats the rock beneath. Technically two life forms, but functionally we judt say lichen because there's no real purpose to separating them in discussion.

So every economics textbook should eliminate either "wage-earner" or "consumer" from its terminology, and use only one term.

Which of these terms would you censor and replace in the text with the other term? The book would still communicate just as well having only one, and not use these two separate words?

Or you think you could go through the textbook and interchange the two words, leaving every sentence the same but in each case replace "consumer" with "wage-earner" and replace "wage-earner" with "consumer" -- and the sentences would all say the same as they did before?

You think the dictionaries should all be rewritten to eliminate one of these two words? since they both mean the same?

What is your point that you need to play word games? You never use both these terms in your statements -- sometimes one and sometimes the other? Which of these two words have you eliminated from your vocabulary, so that you never use that one and always the other only?

 

[Lumpenproletariat]

Lumpen, you continually forget the fact that workers and consumers are the same people.

You've used that metaphor many times. I asked you to explain the point of it, and instead you just keep repeating the metaphor.

Obviously nothing I'm saying denies that every worker is a consumer.

However, if "workers" means only wage-earners, as it usually does in these arguments, then it's not true that workers = consumers. Because many consumers are not wage-earners.

So you need to explain the meaning of your metaphor. Instead of just repeating it like a slogan.

Show me a consumer that doesn't have a wage earner supporting them.

Show me a consumer that doesn't have a capitalist supporting them. What purpose is served by throwing platitudes back and forth?

 

[ZiprHead]

Show me a consumer that doesn't have a wage earner supporting them.

Show me a consumer that doesn't have a capitalist supporting them. What purpose is served by throwing platitudes back and forth?

You can't answer the questions to rebut the fact that your entire premise is so wrong so you dodge.

 

[Lumpenproletariat]

Show me a consumer that doesn't have a wage earner supporting them.

Show me a consumer that doesn't have a capitalist supporting them. What purpose is served by throwing platitudes back and forth?

You can't answer the questions to rebut the fact that your entire premise is so wrong so you dodge.

My premise is that it's good for producers/workers to serve consumers, i.e., to serve the consumer demand. And all the producers/workers should compete, because this improves their performance = more wealth produced = higher living standard = better for all consumers.

If my "premise" is wrong, then it means better production is not good and it's not good for consumers to be served.

 

[Jimmy Higgins]

Lumpen, you continually forget the fact that workers and consumers are the same people.

You've used that metaphor many times. I asked you to explain the point of it, and instead you just keep repeating the metaphor.

Obviously nothing I'm saying denies that every worker is a consumer.

However, if "workers" means only wage-earners, as it usually does in these arguments, then it's not true that workers = consumers. Because many consumers are not wage-earners.

So you need to explain the meaning of your metaphor. Instead of just repeating it like a slogan.

Show me a consumer that doesn't have a wage earner supporting them.

Donald Trump Jr?