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President Donald Trump touted the economic growth triggered by his tax cuts in a speech Thursday afternoon, pointing out the projected growth of gross domestic product (GDP) over the next 10 years had increased because of the plan.

But 80 percent of the economic growth generated by the Republican tax cuts will eventually go abroad and benefit foreigners, according to a new report by the nonpartisan Congressional Budget Office.

The report found significant differences between projected GDP, which measures the level of production in the U.S., and gross national product, which measures the income earned by all Americans. If the economic impact from GDP is higher than GNP,  the difference between the two is income generated in the United States but going to foreigners. According to the CBO, on average 34 percent of income from the economic activity driven by the tax cuts is flowing out of the country, and in 2028, when the full effects of the tax cuts are in place, that number will increase to 80 percent.

“We heard statement after statement about how this tax plan would be great for American workers but the analysis is clear,” Senator Chris Van Hollen told Newsweek. “When this thing kicks in, 80 cents of every dollar [gained from the tax plan] will go to foreigners and not American workers. That’s a stunning number.”

President Donald Trump speaks about tax cuts during an event with American workers in the Rose Garden of the White House on April 12. SAUL LOEB/AFP/Getty Images

Nearly one-third of the U.S. stock market is owned by foreign investors, which means they’re benefiting from the $238 billion increase in stock buyback authorizations since the tax law passed. An analysis of Fortune 500 companies found that corporations have spent 37 times more on stock buybacks than on American workers’ bonuses and wages. “Republicans had fair warning that a huge chunk of this economic boost would flow to foreigners,” said Van Hollen. “The bottom line is that foreigners own a large chunk of U.S. corporations and will get a big windfall.”

At the same time, U.S. deficits are projected to balloon because of the decrease in revenue being collected under the tax cuts. The CBO projects that federal spending will exceed revenues by $804 billion in fiscal year 2018, up from $665 billion in 2017. The national debt is now on track to be 100 percent of GDP by 2028. That means the U.S. will have to borrow money to make up for its shortfalls, and much of that money will come from abroad. The small gains to GDP will be offset by increased interest payments abroad.

“That’s the effect of the tax law, it provides some boost to GDP but that boost is financed by a lot of borrowing,” said Chad Stone, chief economist at the nonpartisan Center on Budget and Policy Priorities. “Each year’s borrowing produces more income for foreigners and by the time you get to 2028 there’s a fair amount of income for foreigners being generated.”

Republicans have “clearly abandoned any claims of fiscal responsibility,” said Van Hollen. “You’re borrowing close to $2 trillion from our kids and grandkids and then you’re giving it to corporations and others and at the end of the day 80 percent of the benefits of additional economic activity are going to foreigners.”

 http://www.newsweek.com/republ...ald-trump-cbo-884129

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Obama didn't pass any tax cuts. Why is it so hard for you? Are you so blinded by your hate for anything 'Democrat' or 'Liberal' that you can't see what's happening around  you? If 20 people tell you it's raining, and water is falling from the sky, it's probably raining, despite that one person that may tell you it's not. If the only "news" you see is a mirror of your opinions to keep you coming back, is it really news?

Last edited by Br’er Rabbit
Br’er Rabbit posted:

Obama didn't pass any tax cuts. Why is it so hard for you? Are you so blinded by your hate for anything 'Democrat' or 'Liberal' that you can't see what's happening around  you? If 20 people tell you it's raining, and water is falling from the sky, it's probably raining, despite that one person that may tell you it's not. If the only "news" you see is a mirror of your opinions to keep you coming back, is it really news?

Really stupid post, you make no sense, Baruikkui didn't pass
anything that would help the people, he hates America, only god
know what all the rain crap has to do with anything.
You must be looking for a rainbow flag.... huh 

Also:

It's easy to think that the stock market is the playground of hedge funds and day traders, but in reality most of the stock market is owned by the average joe.

In fact, the largest chunk is doing one thing: helping people retire.

In a white paper, Steven Rosenthal and Lydia Austin of the Tax Policy Center have broken out exactly which kind of investors own the stock market. They found that a majority of corporate stock is owned by different types of retirement plans, the largest being IRAs and defined-benefit plans.

Of the $22.8 trillion in stock outstanding (not including US ownership of foreign stock and stock owned by "pass-through entities" such as exchange-traded funds), retirement accounts owned roughly 37%, the most of any type of holder.

http://www.businessinsider.com...-stock-market-2016-5

from your own article, which was written from 2016 data, almost a year ago. I'm sure the Congressional Budget Office has a good grasp on the information they released just this week.

The other startling finding was the growth in foreign investment in the US stock market. What was once a small sliver of the makeup now accounts for a quarter of all stock ownership at $5.5 trillion. Part of this may be due to increasing wealth in foreign countries, but, as the researchers noted, it could also be influenced by corporate inversions, in which foreign-domiciled firms have large direct holdings of US-based stock.

Last edited by Br’er Rabbit
Br’er Rabbit posted:

from your own article, which was written from 2016 data, almost a year ago. I'm sure the Congressional Budget Office has a good grasp on the information they released just this week.

The other startling finding was the growth in foreign investment in the US stock market. What was once a small sliver of the makeup now accounts for a quarter of all stock ownership at $5.5 trillion. Part of this may be due to increasing wealth in foreign countries, but, as the researchers noted, it could also be influenced by corporate inversions, in which foreign-domiciled firms have large direct holdings of US-based stock.

I believe that those inversions were driven by our stupid tax system and that US ownership by people in this country didn't evaporate, so money goes to other countries first and then returns to the US stock owner. Also I should point out that many large US corporations own foreign units, so owning an American stock might mean an investor owns a piece of the world market. I might also note that in the article I posted, a good chunk of that money going to investors won't be immediately available for wastrels in Congress because a large chunk of those investments are in tax exempt accounts.

Rosenthal and Austin's main focus was the precipitous decline of taxable investment accounts. In 50 years, the amount of stock owned by individual investors and funds outside retirement and nontaxable accounts such as 529 college-savings plans has dropped off a cliff — to about 25% in 2015 from over 80% in 1965.

"After adjusting the data in several important respects, we estimated that taxable accounts held only 24.2 percent of C corporation equity in taxable accounts in 2015," the researchers said. "Our exercise revealed that the share of U.S. stocks held by taxable accounts declined sharply over the last 50 years, by more than two-thirds."

I would also note that the 80% number is a future projection by Van Hollen and I would put as much faith in my horoscope or a Ouija board as a CBO guess. The present number is 34% percent without an accounting of how much of that value is owned by US citizens. 

Correction: This story incorrectly characterized Senator Van Hollen's analysis as that of the CBO. In fact, the CBO agrees that the majority of GDP gains will benefit foreigners, but does not have a number for the exact percentage. 

http://www.newsweek.com/republ...ald-trump-cbo-884129

Last edited by Stanky

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