If you put long hours and hard work into a job, would you be upset with a boss who paid you with a handful of nickels, especially if hundred-dollar bills spilled out of your boss' pockets while he dug around for the coins?
As taxpayers, Americans expect to get what they pay for -- safe infrastructure, prompt emergency response, good schools and a strong social safety net. As shareholders in profitable companies, investors expect to get what they pay for -- dividends. And as job seekers in a troubled economy, America's unemployed are trying to find work wherever they can; but corporate greed is depriving taxpayers, shareholders and job seekers of what they need and deserve.
With $2 trillion at home and $1.4 trillion abroad, corporations are sitting on record-high piles of cash. For example, Apple holds $76 billion by itself, more than the U.S. Treasury. Yet, these hoards of cash remain untaxed. A 35 percent tax on corporate America's cash reserves in the United States alone would generate $700 billion in revenue. That amount would reverse every budget cut in every state, rejuvenating America's schools and infrastructure by recreating 400,000 public sector jobs lost since the recession.
If corporations simply invested their American stash of cash reserves in creating good jobs for America's unemployed, they could put 3.5 million new people to work in the private sector each year for five years, at an annual salary of $40,000. If corporations just used their cash reserves to pay dividends to their shareholders, investors like the Mississippi Public Employees Retirement System wouldn't have to cut benefits for their retirees.
Corporate executives blame the "uncertainty" of the economy as an excuse to sit on piles of cash, yet the economic boost of 17.5 million jobs created in five years would dramatically lower the unemployment rate and increase GDP, bolstering local economies by creating a surge of new demand for struggling small business owners. Using cash reserves to pay dividends to shareholders would restore confidence in the market and strengthen the investments millions are counting on for their retirement.
It is both greedy and irresponsible for American corporations to allow untaxed cash to pile up on their balance sheets while American infrastructure crumbles, public education suffers, the unemployed struggle to survive and shareholders lose their investments. It's time for America's "job creators" to do their job.
Follow Carl Gibson on Twitter: www.twitter.com/usuncut
Companies will not start investing until this uncertainty reduces. The government through bad policy are not helping the situation.
Kai
Nothing is certain.....certainly not in the business world...wall street, cnbc and the rest have all used this one word to blame, excuse and ignore, any and all situations they aren't happy about.....
Like most marketing slogans it is devoid of any real meaning.
Oh, sure, it's often bandied about as referring to small business owners and farmers, but that's not who the politicians are really interested in helping or protecting. It's just a nice sounding politically useful term for why big corporations and hedge funds need more subsidies, tax breaks, bailouts, legal immunities and regulatory exemptions, or anything else the Legislature can give away to them. It fools tons and tons of ordinary people into thinking that the politicians are looking out for them, when in fact the politicians are just lining their own pockets and those of their mega-wealthy friends. And it wins elections. It's... "Winning!" LOL
Dazzle us all by explaining how raising the top marginal tax rate won't actually cause me to hire someone due to the dynamics I explained a few posts down. How I just *think* I'd hire someone if the alternative was paying the money in taxes but I wouldn't really.
Please.
I really want to see what contortions you go through trying to discount the obvious. I've got popcorn ready and everything.
You will not raise prices because you are at the best point in the supply/demand cost curve as far as you can tell and a profit tax won't effect that.
You will not lay off people because the only reason you hired them was that they brought in more money then the cost to hire so firing them means that not only is your profit being taxed more, there is less profit to tax.
You will not "work a lot less" because you don't "have less mouths to feed". However many dependents and children you had before you will still have. Your employees are not "mouths to feed". They are investments that are making you profit.
You WILL put the company name on your new fishing boat that you are counting as a business expense. And GREAT! Buying that fishing boat to dodge taxes is *economic activity* just like my assistant. It helps heal the economy.
its precisely what we wanted you to do.
Thanks.
I could hire an assistant. I can afford it. There would be things about it I would like. But I don't *need* an assistant. I just *want* one. And the 40K a year I'd end up paying one ( including health insurance cause I'm a big believer in that ) can be better used for other things. Like investing.
Now lets pretend, just for a moment, that the top marginal tax rate was jacked up to say ... 75%.
After taxes, that 40K is now only 10K since its over the threshold for the top bracket. =(
BUT! Hiring is tax deductible ...
The money you spend on employee benefits, payroll, and payroll taxes don't count towards business income. Which means I'm only *losing* 10K to hire an assistant under that system. The other 30K is gone no matter how you shake it. Either I give it to Uncle Sam or I give it ... to my new Assistant.
I'd rather it go to someone who is doing all the parts of my work that I'm sick of dealing with personally. Least that way I get something for it, ya know?
The high top marginal tax brackets of yesteryear gave something politicians of all stripes are admitting we need desperately now. Certainty. The complete certainty that if you don't do something with the excess cash IT WILL GO AWAY.
Reagan lived in an era of high marginal tax rates. 70% in fact. All around him he saw people investing and hiring and he made a very simple mistake. He didn't realize that they were hiring and expanding etc *because of* the high marginal tax rates. He thought they were doing it *despite* the high marginal tax rates.
Big Mistake.
Say you were wealthy when Reagan came into office and had a Butler and Maid on staff for an annual salary of 30K each, 60K total. Well thats pretax. So if you didn't hire them you'd only keep 60K * 30% = 18K. You are getting a butler and a maid for 18K a year out of pocket even though you are paying them 60K because if you hadn't hired them the 42K difference would have gone to Uncle Sam.
Then Reagan slashes the top bracket to 50%. So even though they aren't getting paid a penny more, they are now *costing* you 30K a year out of pocket instead of 18K. It's as if they both came into your office and demanded a 66% pay raise ( even though from their perspective nothing has changed ).
My My... do you really need a butler *and* a maid? Getting quite costly.
They are luxury jobs I'll grant. The employer doesn't turn a profit on the workers. But they are jobs - good ones to boot - and lowering the top marginal tax rate destroyed
He's also wrong because the very *threat* of taking the money does much of the work all on its own.
According to CBS News, Beacon Power, a “green energy storage company,” received $43 million from the government. Standard and Poor’s had given the project a rating of “CCC-plus.”
Direct job creation is working much much better.