If the tax cut gave corporations 20% profit why are prices going up?

The things you listed have very little to do with one another. Mortgage rates are basically driven by the federal funds rate set by the Fed. This policy is based on a number of factors, but managing inflation is supposed to be the main motivator. The stock market had a correction after a year-plus period of very high growth and largely went up after lower tax rates were passed. Gas prices are driven by the supply and demand of oil. Read an economics book. I’m not trying to be an ass, it will actually help you understand how these things work.

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moran

Not a tax guy wrote:

I’m not a finance guy but ever since the tax cut prices have been climbing like crazy. Mortgage rates are a percent higher, stock market is up and down, gas prices almost a dollar per gallon higher. Corporations get an instant 20% profit boost and the jack up prices on constumers. Wtf.

Because tax cuts lead to greater demand for products. In other words, people have more money to spend.

So, prices go up. Pretty simple concept here.

But, honestly even without the tax cuts prices would be going up. The economy is getting towards the overheating side of things. So prices are going to start rising faster. So will your wages. And it’ll all come crashing down again.

Not a tax guy wrote:

Corporations get an instant 20% profit boost and the jack up prices on consumers. Wtf.

Corporations have a primary mission. Maximize profits for shareholders. Corporations usually set the price of their goods & services at the optimum market price. Sometimes corporations engage in a practice referred to as dumping. Dumping is not considered ethical. Dumping is setting a price below market equilibrium to drive a competitor out of business. Besides dumping situations, don't count on below market prices from corporations.

But everything is going up except my wages.

I would also add this. A corporate income tax is a tax ON corporate profits. So all things being equal, if the tax rate is lowered it rewards corporations all the more for maximizing profits. Meaning among other things keeping wages as low as possible and pushing higher prices on to the consumer.

Or look at it another way. A corporate income tax devalues a tax deduction. If a corporation pays a manager $100,000 and they are paying the old 35 percent corporate tax, then they are really only paying $65,000. At 20 percent they are paying effectively paying $80,000 for that labor. Its more motivation to pass on the cost of profit to the consumer and give more money to the corporate shareholders.

Because the Fed has been printing the dollar into oblivion for 10 years

Not a tax guy wrote:

I’m not a finance guy but ever since the tax cut prices have been climbing like crazy. Mortgage rates are a percent higher, stock market is up and down, gas prices almost a dollar per gallon higher. Corporations get an instant 20% profit boost and the jack up prices on constumers. Wtf.

Here’s part of the answer:

Not a tax guy wrote:

But everything is going up except my wages.

FAKE NEWS . . . Trump gave you a couple of dollars per week.

Fjfsfdfgk wrote:

Because the Fed has been printing the dollar into oblivion for 10 years

LOL ... what are you, 10 years old? Reagan started massive deficit spending. Then Bush the Elder. Then Bush the Young. Then under Obama--but actually from spending madness by Congress which was controlled by Republicans. ... So, the spend-thrifts have mostly been Republicans.

the extra money doesn't go to you, the consumer, or the shareholder.

it goes straight to the CEO's pocket

at least that's what my chemistry teacher would say

prolly bs idk

Mortgage rates are going up because interest rates are climbing in anticipation of higher inflation.

Gas prices are going up because the market is assuming the US runs higher deficits, resulting in a depreciating dollar. (I need more dollars for my barrel of oil)

Yes, Republicans always argue that corporate income taxes are ultimately a tax on consumers. So a reduction in the tax rate should theoretically cause a decline in prices, all else held constant. However, all else is not held constant. My opinion is that most of the savings from the tax cut will go to shareholders via buybacks (tax rates lower the cost of capital - increasing multiples) and dividends. A smaller portion will go to employees (these bonus announcements are great PR). An even smaller portion will go to consumers.

epicTCK wrote:

the extra money doesn't go to you, the consumer, or the shareholder.

it goes straight to the CEO's pocket

at least that's what my chemistry teacher would say

prolly bs idk

Not too far off. Stock buy backs, special dividends are two more common responses.

Benefits to consumers or an ordinary worker are almost zero.