Donald Trumps Tax Cuts

What do you think the effect of these tax cuts will be on the economy of not only USA but Australia?

As an aside when watching the Trump family on TV last night I was reminded of the Adams Family [TV show from many moons ago]

 

Its too hard to say, right now, IMHO. I say this in reference to both US and AU economies.

First lets see just how many tax cut, tax incentive, and business incentove programs he proposes, actually get through/passed.

He talks big game, Trump, but we wont know until it happens.

The fact that he pretty much said to the auto and manufacturing big wigs in the (currently economically desolate) rust belt states, something to the effect of "The second you fire your American staff and move your operations to cheaper-labour countries, I'll levy those goods so hard that consumers won't pay the premium cost for them and your business will be screwed", is interesting.

Not sure about reducing corporate tax to 15% will make it that more competitive, though. reason being: in the game of 'race to the bottom' economics, there is ALWAYS soem country (usually a small one with lower overheads/running costs) that will work for less. US offers corporations 15% tax, Bahamas offers 14%. Then Peru offers 12%, then Senegal 9%... and so it goes. 15% is a massive incentive though when costs for logisitics and shipping are considered (especially if the bulk of goods said company produces are mostly for North American consumption/sale only). In this sense, if I were China I'd be sweating a little bit.

Ripping up the TPP would be something more immediate/pressing for AU economic and trading interests, I'd wager.

 

Having a brunette moment @C-mac, I assume that the TPP is short for Trump's Pay Packet.

 

Lol @Scott No Mates it is the Trans Pacific Partnership. Something that this government has done very well to keep mostly out of the headlines whilst quietly ratifying/signing it.

The problem with the TPP for a small player like us is that the 'value exchange' just isnt even. Players like the US, Vietnam, and Mexico would see to gain a lot more than we would, out of us. In my opinion the TPP is NOT in the national interest and since it is (would have been??) so major, there should have been some kind of public consultation on a deal this big. But no, Abbott started it and it went quietly into ratification by Turnbull with not a lot of media coverage.

Good thing is, with trumo refusing to sign it, the TPP cannot gather the critical mass itll need, to go ahead without the US signing on. If trump is serious about ripping it up, the whole deal will fall apart for all countries (from memory about 16 or so countries).

 

@C-mac - IIRC the TPP was very favourable to the US with regards to our beef exports ie we were screwed. In return we got cheap Mustangs or sh!++y tv programs.

 

I believe many would prefer American entertainment over the issue of exports and farmers. I couldn't believe the number of channels they have when I was in US last year. it's mind boggling.

 

very good observation, and summary.

 

tax cuts will take a while to get approved. Its supposed to encourage big companies like Apple to bring home their millions in cash profits which would otherwise have been taxed at 30%+

The immediate danger to Aus is the interest rate hikes and how rapid they will be under Trump. Rising rates will adversely impact costs of borrowing for overleveraged mining/gas companies here. Banks will have to raise their rates as well no matter what the RBA does with their rates.

There is also the carry trade to worry about. Reversal of carry trade can happen very quickly and adversely impact currency / stocks / property.

 

For the USA; the plan (I assume) is to give incentive to Companies within the USA to stay and hopefully expand the business and employ more people?

Like Aus; they have seen a huge number of manufacturing businesses either shut down, or move their operation to other Countries with cheaper production costs, better tax incentives and less red tape....more unemployment as a result from that, and possibly little prospect for re-employment?

More welfare as well to support those out of a job, and less revenue coming back in from PAYE, Company taxes etc?

This then leads to less funds available for infrastructure and general spending?

 

I think this is the beginning of a very bullish market for US, share markets are soaring at the moment and US $ is strong. Tax cuts, infrastructure spending, creating more jobs, market sentiment is looking good because in the main people are feeling confident that there will be positive change and so far so good IMO, early days.

How it impacts on other countries no idea. I hope Australia gets to offload minerals/resources to US, but with have a lame duck government at the moment that seem to be doing nothing to promote Australia.

Don't listen to mainstream media its biased and rubbish, watch fox and find out more balanced reporting on what is actually happening and who he is selecting on his team moving forward. I am watching this everyday and gives me confidence as I am playing in the US market.

MTR

 

Not impossible but I believe the general feeling is the sharemarket is already pretty inflated from low rates. The US sharemarket has done really well, even better if you look at it in AUD terms.

Need to remember we have ridden a wave from high rates to low rates and now they are going to start going back up. Will depend on how quickly this happens.

So I'm not very confident of any bull run in the sharemarket. That doesnt mean I'm neccesarily negative either though.

 

Agree. I followed the whole thing very closely both on mainstream and internet, and it's amazing that he still won - and won by a fair margin in the end (not according the the Libs who now cry they want to use the popular votes rather than the historical Electoral College Vote system) - despite never getting one second of good rap from either the mainstream enemedia, all of Hollywood and most celebs, his own Party, or the Democrats.

 

I'm not sure where you got your info from but fox news is the absolute definition of mainstream media.

Owned by the same group that owns foxtel, Sunday times, the sun, wall Street journal, the Australian, new York post, etc etc.

It is high rating, widespread and in every single way part of the mainstream media.

Might want to check that

 

google Fox News, interesting what comes up, they say they are not mainstream... regardless I personally believe their reporting is balanced...my opinion others may disagree

 

No; I agree. Having watched the entire Campaign from start to finish very closely both on mainstream and internet based news; Fox has been virtually the only mainstream media organisation which has actually shown the whole Presidential Election campaign - from the Primaries right through to the Election itself - without being totally Left biased and anti- trump.

They have a mix of Left wing Democrat guests and "contributors" as well as Right Wing, but their diet of info has not been one of complete anti-trump sentiment, such as CNN, MSNBC, ABC etc have been.

Fox is quite entertaining; they often show sound bites and footage of the other news services reactions to various issues and incidents relating to the whole Campaign and aftermath, and when seen you can easily see just how biased the other stations have been/still are.

 

Whether it is balanced or not is a matter of opinion.

Fox being a part of the mainstream media isn't


There is no rational way that fox is not the mainstream media.

In recent times it has had higher ratings than number 2 and number 3 COMBINED in terms of cable news.

It is a higher rating cable channel than espn and nickelodeon .

It is part of the same group that controls over 60% of daily newspapers in australia and the only 2 WA statewide papers


You are denigrating mainstream media and recommending the most extreme example of MSM at the same time which is thoroughly confusing

 

CNN has had absolutely nothing good to say at all about Trump since the Primaries.

They still don't...if anything; they have "doubled down" on their anti-Trump rhetoric.

They also at the same time were almost completely silent on a number of (bad) issues relating to Hillary Clinton - whether true or otherwise.

Whether true or otherwise; the never held back when it came to anything detrimental of Trump.

I call that bias, and certainly lacking any sort of professional journalistic balance.

Fox, on the other hand - while definitely being more favourable towards Trump (perhaps the only news media on a tv screen in the Western world that is) and from my observation - has pointed out both good and bad for Trump, and vice versa for Clinton and others surrounding her.

 

For this discussion; balanced or biased refers to political/moral view?

If so; my view is that "balanced" (politically/morally) refers to the media in question reporting and giving equal weight to both the good and bad of each story/person/events...balanced and unbiased reporting.

A biased (politically/morally) media in question will tend to look more at the negatives of a story/person which does not suit their (political/moral) narrative, while disregarding anything negative of a story/people which they are (politically/morally) supportive of.

 

Hate him or love him? Seeing a shift here watching fox last night stating that Trumps ratings have gone up after the election.

This is interesting I thought, an extract, link attached (The Fix, Philip Bump)

Donald Trump’s favorability ticks up as perceptions of the election drop

After the election, he saw a big jump.





That's thanks to increases across the board, with people across the political spectrum willing to view him more positively.