The GOP Tax Cut and Rising Wages....or not.

Andrew77

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Let's not argue the semantics. Just because I say corporations were given money in the form of tax breaks does not disavow that the money being taxed was from their profits.

I'm being completely honest with you when I say that you're being dishonest with yourself by insinuating I'm being dishonest. I know that you know that I know that taxes are paid out of the taxpayers money, so please let's move on.

But that really has nothing to do with anything substantive since revenue always increases as an economy grows and the real issue is the growing budget deficit. I also added that since no one was ever debating whether revenues have increased or not, it's a strawman argument.

Well Andrew, the thing is that tax deductions and tax cuts are not the same thing.

With al due respect, since you're confusing tax cuts with tax deductions, your application of what you see as hypocrisy is going to be the product of taking things out of context.

Tax cuts do not address cuts in spending however, and I would add that Trump greatly increased the spending when he took away the sequester imposed during the Obama administration as a means to cut spending.

Well Andrew, the thing is that tax deductions and tax cuts are not the same thing.

Really? Are you sure about that?

If I get a tax deduction every single year, that reduces my tax by $1,000, that is not the same thing as having my tax reduced by $1,000? Because both have the exact same effect of me paying $1,000 less in tax.

Do tell the massive practical difference between the two.

Just because I say corporations were given money in the form of tax breaks does not disavow that the money being taxed was from their profits.

I see a huge difference between stealing money from one person, to give to another person, verses just reducing how much money you steal from someone.

Huge difference. No one "gave money" to corporations. A tax cut is not "giving money" to corporations or anyone. It is morally wrong to steal money, and give that stolen money to someone else.

Look, you can complain about this, and you can claim I'm being dishonest. You are wrong, and you are lying. As long as you keep saying we "gave corporations money" I'm going to keep contradicting you until you either admit you are wrong, or you quit saying it.

But that really has nothing to do with anything substantive since revenue always increases as an economy grows and the real issue is the growing budget deficit. I also added that since no one was ever debating whether revenues have increased or not, it's a strawman argument.


No, the strawman is arguing that the tax cuts caused a deficit when tax revenue drastically increased.

My argument remains the same. The problem is spending. We need to cut spending. Cutting taxes is a benefit to the entire economy, which is proven by the jump in tax revenue. The problem is exclusively spending. Cut the spending.

Tax cuts do not address cuts in spending however, and I would add that Trump greatly increased the spending when he took away the sequester imposed during the Obama administration as a means to cut spending

Yeah, I fully expected Trump to increase spending. Trump is no conservative, and if left to his own, would borrow and spend without a second thought.

However, I have come to the conclusion that some of the sequestration would have been repealed anyway, namely because of the military.

When you do mandatory cuts on the military, people end up dying. There is other way about it. Specifically the sequestration resulted in cuts to maintenance, and one thing you can't avoid is maintaining aircraft. Some Marine Companies had gotten so bad, that only 1 in 3 Aircraft were still flight ready.

You can't simply cut spending on military stuff in this manor. The results are devastating.

That said, I don't see the Democrats doing any better on spending cuts. Contrary to the implication, Obama didn't agree to sequestration by design. He agreed to it by force, namely that of the Republicans refusing to blindly increase the debt ceiling. I would happily bet good money, that if the Republicans had not pushed the debt limit fight, Obama would have continued over spending without questioning it.
 
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childeye 2

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Well Andrew, the thing is that tax deductions and tax cuts are not the same thing.

Really? Are you sure about that?

If I get a tax deduction every single year, that reduces my tax by $1,000, that is not the same thing as having my tax reduced by $1,000? Because both have the exact same effect of me paying $1,000 less in tax.

Do tell the massive practical difference between the two.
A deduction is an expense subtracted from gross income to determine what is the taxable income, while a tax cut is a change in the percentage of rate one is being taxed.

Just because I say corporations were given money in the form of tax breaks does not disavow that the money being taxed was from their profits.

I see a huge difference between stealing money from one person, to give to another person, verses just reducing how much money you steal from someone.

Huge difference. No one "gave money" to corporations. A tax cut is not "giving money" to corporations or anyone. It is morally wrong to steal money, and give that stolen money to someone else.

Look, you can complain about this, and you can claim I'm being dishonest. You are wrong, and you are lying. As long as you keep saying we "gave corporations money" I'm going to keep contradicting you until you either admit you are wrong, or you quit saying it.
No problem, let's just say that the government gave up revenue to allow corporations to keep more of their profits through tax breaks. It doesn't matter how it is said, the affect is still the same.
But that really has nothing to do with anything substantive since revenue always increases as an economy grows and the real issue is the growing budget deficit. I also added that since no one was ever debating whether revenues have increased or not, it's a strawman argument.

No, the strawman is arguing that the tax cuts caused a deficit when tax revenue drastically increased.
Respectfully, a deficit is caused by spending more than is taken in. The Trump tax cuts lowered corporate rates so that corporations now pay roughly 7% of total federal revenue down from 9%. That's just the facts.

My argument remains the same. The problem is spending. We need to cut spending. Cutting taxes is a benefit to the entire economy, which is proven by the jump in tax revenue. The problem is exclusively spending. Cut the spending.
I'm not arguing against that point. I agree that spending is a big problem. Just like everybody else, I would rather pay the least taxes reasonably necessary.
 
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KCfromNC

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Yeah, for real. I think we're seeing an example of black and white thinking running face-first into the real world :

"It is costing us a trillion+ dollars a year to have wages rise by a barely measurable amount"
"Success! Rising wages are good! Why don't you like rising wages?"

This is a pretty simplistic way to evaluate public policy decisions. Why not spend 2 trillion to raise wages by a dollar per year for one single person. After all, rising wages are good, right?
 
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Andrew77

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Yeah, for real. I think we're seeing an example of black and white thinking running face-first into the real world :

"It is costing us a trillion+ dollars a year to have wages rise by a barely measurable amount"
"Success! Rising wages are good! Why don't you like rising wages?"

This is a pretty simplistic way to evaluate public policy decisions. Why not spend 2 trillion to raise wages by a dollar per year for one single person. After all, rising wages are good, right?

It doesn't cost us anything, to allow people to have more of their own, rightfully earned, money.

What costs us trillions of dollars, is constantly demanding more government funded programs, government funded retirement, government funded food, housing, and health care.

It's funny how the left wing is constantly talking about raising wages until it means they don't get to steal the money. Then it's magically bad people get more wages.
 
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Andrew77

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A deduction is an expense subtracted from gross income to determine what is the taxable income, while a tax cut is a change in the percentage of rate one is being taxed.

No problem, let's just say that the government gave up revenue to allow corporations to keep more of their profits through tax breaks. It doesn't matter how it is said, the affect is still the same.
Respectfully, a deficit is caused by spending more than you take in. The Trump tax cuts lowered corporate rates so that corporations now pay roughly 7% of total federal revenue down from 9%. That's just the facts.

I'm not arguing against that point. I agree that spending is a big problem. Just like everybody else, I would rather pay the least taxes reasonably necessary.

In practical terms.... when I look at my pay stub... what is the difference between a tax deduction that saves me $1,000 a year, verses a tax rate reduction that saves me $1,000 a year?

Please explain.

Respectfully, a deficit is caused by spending more than you take in.

Agreed. And they should cut spending.

I agree that spending is a big problem.

And that is in my opinion the only problem. The problem isn't how much taxes we collect. We collect $3.3 Trillion dollars.

The government doesn't need more money. They need to spend less. That is the only issue.
 
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Tanj

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It doesn't cost us anything, to allow people to have more of their own, rightfully earned, money.

What costs us trillions of dollars, is constantly demanding more government funded programs, government funded retirement, government funded food, housing, and health care.

It's funny how the left wing is constantly talking about raising wages until it means they don't get to steal the money. Then it's magically bad people get more wages.

Most of your money goes on government funded military. Seriously, where do you get these fantasies from? Let me guess...the Federalist or American Thinker?

2018 United States federal budget - Wikipedia

There's a link to Trump's budget. 574 B on defense, 10x higher than any other category except veterans affairs.
 
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Brotherly Spirit

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Federal Receipt and Outlay Summary

It's not enough to judge by total numbers. Percentages of the economy for years 2016-17 and projected for years 2018-19 show decreased revenue by 1 point and an eventual increased expenditures by 0.20 point. During the years 2010-2015 when the deficit decreased each year, revenue as a percentage increased and expenditures decreased (except a slight increase at the end). Last the budget was balanced in the years 1998-2001 the percentage of revenue was higher and expenditures lower.

So if your concern is deficits and debt then you should support policies to increase revenue as a percentage of the economy and decrease spending as a percentage (overall higher taxes and lower spending). But the economy will grow slower having less money in circulation, but steady and sustainable growth. Short term less wasteful spending and long term when interests remain low plus taxes not increased and expenditures not decreased to address deficits and debt, more investments and consumption for future growth (save now and grow later).
 
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childeye 2

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In practical terms.... when I look at my pay stub... what is the difference between a tax deduction that saves me $1,000 a year, verses a tax rate reduction that saves me $1,000 a year?

Please explain.
A deduction doesn't save you any money since it was an expense incurred to make you money.


I agree that spending is a big problem.

And that is in my opinion the only problem. The problem isn't how much taxes we collect. We collect $3.3 Trillion dollars.
The government doesn't need more money. They need to spend less. That is the only issue.
That's not the only issue. There's the issue of what is a fair system of paying for the burden of government, and as per this thread, did the Trump tax cuts increase wages for everyone?
 
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iluvatar5150

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A deduction doesn't save you any money sense it was an expense incurred to make you money.



That's not the only issue. There's the issue of what is a fair system of paying for the burden of government, and as per this thread, did the Trump tax cuts increase wages for everyone?

@Andrew77 is right, to a degree. Deductions, cuts, rebates, and tax credits are all functionally equivalent to each other as far as the balance sheet is concerned. But so are outlays by the government.
 
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childeye 2

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@Andrew77 is right, to a degree. Deductions, cuts, rebates, and tax credits are all functionally equivalent to each other as far as the balance sheet is concerned. But so are outlays by the government.
I must respectfully disagree. Deductions are expenses a person paid to make money. Some people who are employees take the standard deduction allowed by the IRS. The IRS allows this deduction probably as a reasonable amount to cover expenses such as getting back and forth from work. I own my own business so I itemize every deduction and must show proof of payment. For example, the gasoline I consume as a part of doing business, it is deductible as an expense and therefore it is not a part of any taxable income. Tax cuts on the other hand are decreases in the percentage rate the taxable income is taxed.

You are probably unaware that the poster expressed that it would appear hypocritical to complain about tax cuts to corporations, so long as people are claiming deductions. That is why I am explaining the difference between expenses that were paid, and tax cuts which are not expenses paid.
 
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childeye 2

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Yeah, for real. I think we're seeing an example of black and white thinking running face-first into the real world :

"It is costing us a trillion+ dollars a year to have wages rise by a barely measurable amount"
"Success! Rising wages are good! Why don't you like rising wages?"

This is a pretty simplistic way to evaluate public policy decisions. Why not spend 2 trillion to raise wages by a dollar per year for one single person. After all, rising wages are good, right?
It's not just that. When inflation rises faster than wages do, then you're actually poorer despite the rise in wages. According to the department of labor, wages for the average civilian worker rose 2.8 %, and the current rate of inflation is also 2.8%. So there is no wage increase after adjusting for inflation. State and local government workers only had a 2.4 % increase, so they are able to buy less despite a rise in wages. U.S. wage growth is getting wiped out by inflation - Los Angeles Times
 
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iluvatar5150

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I must respectfully disagree. Deductions are expenses a person paid to make money. Some people who are employees take the standard deduction allowed by the IRS. The IRS allows this deduction probably as a reasonable amount to cover expenses such as getting back and forth from work. I own my own business so I itemize every deduction and must show proof of payment. For example, the gasoline I consume as a part of doing business, it is deductible as an expense and therefore it is not a part of any taxable income. Tax cuts on the other hand are decreases in the percentage rate the taxable income is taxed.

I'm talking about the way these things are treated on the Treasury balance sheet. Less money is less money whether it happens via tax cuts, tax deductions, tax credits, or increased expenditures.

Specific to taxes, deductions and credits are targeted versions tax cuts that are typically implemented to achieve some sort of policy goal or to improve the fairness of the tax code. Broadly, business expense deductions might make sense because there's no way to tax gross revenues without bankrupting everybody, but once you drill down past that, accelerated depreciation schedules are there to achieve a policy goal, as are deductions for low-emission vehicles, rehabbing buildings in low-income areas, and deductions for numerous other activities (Maryland, for example, would give me one for having an oyster bed).

When he pointed out that $1,000 from a deduction is the same as $1,000 from a lower tax rate, he's right. In fact, his argument is a variation on the one that I've been using about the ACA for years - that the coverage penalty is no different than the deduction for paying mortgage interest. In both cases, your tax bill is lower if you buy some <thing> and higher if you don't, with the only real difference being in how they were marketed.
 
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FenderTL5

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two points - one, 'everyone' did NOT get a tax cut. I didn't, my Federal Income Tax went UP $7.72 per week the first pay check in February.

secondly, the tax cut was designed, yes intended, to lower wages, or at least keep them from rising.
President Trump adviser Peter Navarro states that the Republican tax law will result in "downward pressure on wages."

How does a company pay an employee a wage, with money stolen by the government?
Stolen? Who's face and institutions are depicted on the currency (and where have I heard that before)?
The question you should be asking is, in which situation is a company more likely, or less likely, to increase wages, or create jobs:
1. When government is taking 33% of their profits.
2. When government is taking 20% of their profits.
In a vacuum; neither.
Jobs are created when the employer/company can no longer meet the demand on production, not because they have a little extra cash lying around.
from Forbes Nov 27, 2017
..Tax rates are only one factor businesses consider when deciding to expand.

The far more important question is whether consumers will buy whatever the new capacity produces.

Think about it this way: if you’re a CEO and you have difficulty selling your products profitably now, why would lower taxes make you produce more? Even a 0% tax rate is no help if you lack customers.

Former Brightcove CEO David Mendels explained how big companies view this in a November 10 LinkedIn post.

A tax cut for corporations will increase their profitability. Why we should believe that this increase in profitability will lead to wage increases when we have already seen that increases in profitability over the last 10 years did not, but rather went to stock buybacks and dividend increases that benefitted the investors?

As a CEO and member of the Board of Directors at a public company, I can tell you that if we had an increase in profitability, we would have been delighted, but it would not lead in and of itself to more hiring or an increase in wages. Again, we would hire more people if we saw growing demand for our products and services. We would raise salaries if that is what it took to hire and retain great people. But if we had a tax cut that led to higher profits absent those factors, we would ‘pocket it’ for our investors.”

By “pocket it,” Mendels means executive bonuses, share buybacks, or higher dividends. That’s what 10 years of Federal Reserve stimulus produced. A corporate tax cut would likely have a similar effect...
---------------
 
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childeye 2

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I'm talking about the way these things are treated on the Treasury balance sheet. Less money is less money whether it happens via tax cuts, tax deductions, tax credits, or increased expenditures.
If I may point out, this type of reasoning is founded upon conflating terms so as to obscure the meanings of terms invented to describe different things for the sake of clarity. I will assume you may have heard of sophistry? Well in sophistry it's a simple mind trick to change the connotation of words by switching perspectives and claiming the other side of the narrative so as to create the appearance of plausibility. Along with conflating terms that is also what is happening here.

And that is why I pointed out to you that this conversation began as an inference of hypocrisy towards me and my perspective as a taxpayer. Therefore it did not begin with the perspective of the treasury as you have posited. It began with my perspective as a taxpayer, and that is the proper narrative that should have been responded to in all honesty, rather than inventing a new narrative to argue against which was not my argument to begin with. As proof, here is the exchange from the record:

childeye 2 begins the narrative: When I'm complaining about tax cuts given to corporate heads, it is precisely because there were no matching cuts in government spending. It's simply not fair to those who will have to make up the difference.

Andrew 77 responds by changing the narrative through conflating terms so as to imply hypocrisy in my argument: So I assume you are against tax deductions for earned income, child care, education, and mortgages? After all, we shouldn't be 'giving tax cuts' to people. After all, it's not fair to those who will have to make up the difference.

childeye 2 responds against the inference of hypocrisy:
Well Andrew, the thing is that tax deductions and tax cuts are not the same thing.

So please notice that the record shows that Andrew 77 has errantly conflated the different meanings behind tax deductions and tax cuts in order to form a foundation of reasoning to support an inference of hypocrisy on my part, when in fact the record shows that I am not hypocritically complaining that corporations should not be able to claim a deduction for expenses as a cost of conducting business.

Question for you: Who would unfairly have to pay to make up the difference for my deductions for the supplies I buy, when in fact that money is already subject to taxation as part and parcel to the income of my supplier? This is the kind of contradictory reasoning that is exposed as deceptive when partaking in sophistry.
 
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iluvatar5150

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That is not due to allowing people to keep their own money. It comes from spending money. Stop spending money.


If your debts start piling up, is it because you replaced the water heater or because your boss cut your hours back? It's from both, right? Well...
 
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Andrew77

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two points - one, 'everyone' did NOT get a tax cut. I didn't, my Federal Income Tax went UP $7.72 per week the first pay check in February.

secondly, the tax cut was designed, yes intended, to lower wages, or at least keep them from rising.
President Trump adviser Peter Navarro states that the Republican tax law will result in "downward pressure on wages."


Stolen? Who's face and institutions are depicted on the currency (and where have I heard that before)?
In a vacuum; neither.
Jobs are created when the employer/company can no longer meet the demand on production, not because they have a little extra cash lying around.
from Forbes Nov 27, 2017
..Tax rates are only one factor businesses consider when deciding to expand.

The far more important question is whether consumers will buy whatever the new capacity produces.

Think about it this way: if you’re a CEO and you have difficulty selling your products profitably now, why would lower taxes make you produce more? Even a 0% tax rate is no help if you lack customers.

Former Brightcove CEO David Mendels explained how big companies view this in a November 10 LinkedIn post.

A tax cut for corporations will increase their profitability. Why we should believe that this increase in profitability will lead to wage increases when we have already seen that increases in profitability over the last 10 years did not, but rather went to stock buybacks and dividend increases that benefitted the investors?

As a CEO and member of the Board of Directors at a public company, I can tell you that if we had an increase in profitability, we would have been delighted, but it would not lead in and of itself to more hiring or an increase in wages. Again, we would hire more people if we saw growing demand for our products and services. We would raise salaries if that is what it took to hire and retain great people. But if we had a tax cut that led to higher profits absent those factors, we would ‘pocket it’ for our investors.”

By “pocket it,” Mendels means executive bonuses, share buybacks, or higher dividends. That’s what 10 years of Federal Reserve stimulus produced. A corporate tax cut would likely have a similar effect...
---------------

Stolen? Who's face and institutions are depicted on the currency (and where have I heard that before)?

Has nothing to do with the discussion at hand. That's talking about rebelling against the government. No one here is discussing refusing to pay taxes, only the morality of taxes. I know that taxes are theft. I still pay them. I'm not asking you if I should follow the law. We're discussing what the law should be. Keep your red herrings out of the argument. Thanks.

By the way... to answer that ignorant question.... it's the faces of the founders of this country which believed that government should be limited, and that income taxes were immoral. Read up on the found fathers, please.

In a vacuum; neither.
Jobs are created when the employer/company can no longer meet the demand on production, not because they have a little extra cash lying around.


The restaurant down the street, opened up a second location in another part of town. I've talked to the owner. He did that, because he had enough profits to try it. Not because the demand was so unbelievably high, that he had to have a second location.

Steve Jobs didn't invest $10 Million dollars into a startup company, because there was so much demand for it. He invested it because he believed the company could create demand for a product they sold.

There was zero demand for computer animated movies in 1986. It wasn't until 1995 when Toy Story came out from Pixar, that Steve Jobs investment became a national success.

That is how he created jobs, was Steve was willing to take the risk. A risk he couldn't have taken if his money has been taxed away by filthy thieves in government, and their supporters.

If the tax-and-spend left-wing had their way with Steve Jobs money, there would never have been a Pixar producing thousands of jobs.

Think about it this way: if you’re a CEO and you have difficulty selling your products profitably now, why would lower taxes make you produce more? Even a 0% tax rate is no help if you lack customers.

But you are missing an entire section of the discussion.

What is the number one thing you should do as a CEO if you are having a hard time selling your product profitably?

Number one thing you should do..... What is it? You invest money into Research and Design, to create a better product... or you invest R&D into improving your current product.

And where do you suppose the money comes from, to pay for R&D to make a new product, or improving an existing product? It comes from profits.

Even if you say for example, that a CEO might raise the money from investors.... how does the CEO convince investors to fund R&D? Through profits. Can you pay profits taxed away to government, to the investors? No, of course not.

Obviously the lower the taxes, the more an investor would be willing to front a troubled company with investment money.

Seriously this is very obvious. Why does Apple Computer have 8,000 people employed in Ireland? Why did Apple invest in Ireland instead of more investment into the US?

They openly said why. They get a bigger return on their investment, because Ireland taxes are lower. It's that simple!

Why do you think so many companies are leaving California?
https://chiefexecutive.net/business-exodus-california-troubling-sanctuary-policies/

What is true of state taxes driving companies to other states, is also true of countries.
 
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Andrew77

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If your debts start piling up, is it because you replaced the water heater or because your boss cut your hours back? It's from both, right? Well...

No, it's not both. Because I actually got laid off several years back, and not only did I not go into debt, but I paid off debt.

It's because smart people, save money for rainy days. This involves spending less than you make, when it's not raining.

Smart countries, spend less than they collect in taxes, no matter what they collect in taxes, and save some for Hurricane Katrina and such.

Ironically, my water heater actually blew up earlier this year, and right when I actually did have a cut in hours. I didn't go into debt. I paid for it in cash, and had it replaced. BTW, my annual income is $25K.
 
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