Thus, when the US Senate voted three days ago for the Tax Extenders which resulted in massive one-year accounting earnings increases of large US Corporations, it only makes sense that the US stock market would go up dramatically. R&D tax credits alone resulted in $7.6 bil of additional accounting earnings. And large US Multinational Corporations also received another $5.1 bil of additional accounting earnings from the exception under subpart F for active financing income. And there were a total of nine Energy Tax Extenders which increased accounting earnings of larger US Corporations by a total of $9.4 bil. And there were so many additional accounting earnings increases in the Tax Extenders.
But also there were economic earnings increases resulting from the Tax Extenders which were very substantial and not included in the accounting earnings increases. For just one of the many large ones, large US Corporations were granted first-year 50% bonus tax depreciation in just the year 2014 which was by my best guess more than $300 bil higher than the tax depreciation deduction if the Tax Extenders did not pass. The lower US Federal Income tax for larger US Corporations in 2014 would be 35% tax rate times this $300 bil, or $105 bil.
But how did CBO score the US taxpayer cost of this first-year 50% bonus tax depreciation? Only $1.5 bil. Ask the US Big Corps the real economic earnings they received from this 50% first-year bonus tax depreciation? They were fighting much more intensely for this 50% first-year bonus tax depreciation than for anything else in the Tax Extender package.
The way you get to the real economic earnings increase to US large Corporations from 50% first-year bonus tax depreciation is to compare the Present Value of the tax benefits with the 50% first-year bonus tax depreciation with the Present Value of the tax benefits without the 50% first-year bonus tax depreciation. My hunch is that this excess Present Value is more than $100 bil.
And you would make the same computation for the huge Tax Extender which reduces the tax depreciation lives dramatically from 40 years to only 15 years for leasehold improvements made by retailers and restaurants. This excess Present Value and economic earnings increase to large US Corporations also would be huge. What was CBO's US taxpayer cost score on this? Just a bit north of only $1 bil. I think this is just incredible lack of financial transparency to concerned US citizens by the US Government.
Everyone is totally surprised by the 700 point increase in the Dow Index in the most recent two days. I'd be surprised if it didn't end up being more than 300 points higher or a 1,000 point Dow Index increase by the end of 2014. The windfall accounting and economic earnings increases to large US Corps due to the US Senate voting for the Tax Extenders alone should result in a stock market price increase of more than 700 points on the Dow Index. Just saying.
So, just who were the 16 US Senators who took the High Road and voted against their substantial personal wealth enhancement by Voting No on the insidious Tax Loophole Extender Bill just before the 700 Point Spike Up in the Dow Index in the most recent two days?
Provincial wisdom probably thinks that these 16 Votes Against Massive Income Inequality Expansion has to be all Democrats.
Well, think again.....it's half Republicans and half Democrats, Here are the 16 US Senators US citizens should be very proud of on this key Income Inequality Vote:
Republicans (8)
- Dan Coats, Indiana
- Tom Coburn, Oklahoma
- Mike Crapo, Idaho
- Jim Risch, Idaho
- Pat Toomey, Pennsylvania
- Tim Scott, South Carolina
- Rob Portman, Ohio
- Jeff Flake, Arizona
Democrats (8)
- Pat Leahy, Vermont
- Joe Manchin, West Virginia
- Ron Wyden, Oregon
- Jeff Merkley, Oregon
- Elizabeth Warren, Massachusetts
- Sherrod Brown, Ohio
- Michael Bennet, Colorado
- Sheldon Whitehouse, Rhode Island
All US Senators voting for the Massive Income Inequality Expanding Tax Loophole Extenders have no chance getting elected US President. Many of them will now have trouble getting reelected US Senator.
One thing most US voters don't like is someone who votes for Massive Income Inequality Expansion in a key vote.
But they despise much more a US Senator spouting loudly and incessantly that he or she is for Narrowing Income Inequality and then actually votes for Massive Income Inequality Expansion in a key vote. What a hypocrite.
And they despise even much more a US Senator spouting loudly and incessantly that he or she is for Narrowing Income Inequality and then actually votes for Massive Income Inequality Expansion in a key vote which results in this US Senator's personal wealth appreciating dramatically along with that of the well-heeled and well-connected (Tom Coburn's perceptive verbage) making huge cash campaign contributions to this US Senator. The only thing worse than a hypocrite is an excessively greedy one.
