CEOs: “Reinvest those profits or we’ll tax your bonus!”

[Mugsy]

Via "Mugsy's Rap Sheet":

CEOs: “Reinvest those profits or we’ll tax your bonus!”

...every time I hear a pundit link "tax cuts" to "job growth", my ears perk up, because one has little-to-nothing to do with the other. "Taxes" are a simple buzzword for the ill-informed voter. Everyone pays taxes (yes Republicans, "everyone". They may not all pay "income" taxes, but there are "sales", "payroll", "energy", "sin" and "property" taxes), so it is easy for people to connect "taxes" to an economic issue like "the economy". By the Republicans' reasoning, if we didn't pay any taxes at all, the government would be awash in revenue.

The failure of Conservatism is this: High tax rates actually have a function. I've written extensively about Tax Policy as a tool to steer the economy, but the latest annual report by The Institute for Policy Studies shows in striking detail what happens when Corporate CEO's are given NO incentive to reinvest their profits back into the company... TAX-FREE. And if they don't need to hire more people, they can reinvest that money by giving everyone raises or benefits! If you cut their taxes, not only do they NOT use the savings to create jobs, they slash jobs and don't reinvest in new equipment/infrastructure (which create still more jobs) so they can instead reap the profits. If you would rather give yourself a huge multi-million dollar bonus rather than build up your company... fine! But expect to pay a heavy tax for your greed. According to that "Policy Studies" report, CEO's of the "top 50 corporations with the most layoffs" received nearly $600 Million dollars in bonuses. Meanwhile, they are sitting on $1.7Trillion in profits with NO incentive to reinvest that money back into the company because their taxes have been slashed to the bone.

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...If you oppose "free trade", you aren't a true Amer'cun. You probably support "unions" too! Those "good-old-days" that Republicans always seem to long for? Those would be the days of "a 70% top tax rate on millionaires" (there were no "billionaires") and "25% union membership". A one-income family could achieve "The American Dream" of raising a family in a nice house in the suburbs, nice new American car in the driveway, and still have enough money left over to send the kids to college. Republicans have controlled at least 50% of the Federal government for 26 of the last 29 years. Where's your "American Dream" now, pinko?

WE'VE SEEN what the Republican theory of taxation has had on the economy and jobs. Under George W. Bush, we had both the lowest tax rate for the super-rich AND the worst annual job creation record of ANY president, because corporations have LESS INCENTIVE now than ever before to re-invest their profits back into their corporations.

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Read the full article on "Mugsy's Rap Sheet".

[rurallib]

1. yes, yes and yes!

[Orrex]

2. K/R. And what I don't get...

What I don't get it when I got my annual pittance of a bonus, working for a financial services corporation, it was taxed at around double my normal tax rate, and my esteemed employers that that's how the law said it must be done.

So how do CEOs reap multi-million dollar bonuses tax free?

[Mugsy]

3. Understand

Actually, they didn't get a "tax free" bonus, but it was taxed at the "Bush Tax Rate", which is substantially beneath yours.

The REAL problem are the tax-free profits the corporations are making thanks to those tax cuts and loopholes.

[Kweli4Real]

4. Like the OP writer,

I don't get the taxation/job creation connection either.

If the "greatest trick ever played on mankind" was the devil convincing man that he doesn't exist; then, the wealthy's convincing the work class that low taxation of the wealthy will somehow benefit the working class, comes in a close second ... though I believe the source of both these points eminents from the same source.

[dixiegrrrrl]

5. Your figures need changing.

Oil is 73.46 a barrel.
I can only assume other figures are outdated also.

[Mugsy]

6. Which post

There is no reference to oil prices in this weeks Op/Ed, you must be looking at an older post.

[dixiegrrrrl]

7. I am looking at your sig line

Final Bush tally: 10,300+ DEAD
(3,000 on 9/11. 4,500 in Iraq, 1000 in Afg. 1,800 in Katrina.)
Debt: $11.3 Trillion
$4.00 gas; $147 oil.
Osama bin Laden still on the loose.
* MISSION ACCOMPLISHED *

[h8okra]

8. The middle class disappears as

the upper crust gets crispier. The transfer of wealth from me to them is socialism pure and simple. Taking money from one social structure (poor and middle income) and moving to the coffers of the wealthy is as much socialism as Taxing the rich to give to the poor.

Extension of tax cuts to the wealthy would continue this socialist direction. Of course if you require the funds be invested in replacing capitol machinery and expanding production in the US then that may be a conversation worth having.

If there is a CEO of a large company that feels they can not survive without a continuation of these tax cuts I bet there are thousands that would be willing to trade places and take a 100% pay cut.

[yurbud]

9. and more incentive to goose the short term profits, create a bubble for the company

give the major shareholders their cue,and they can short the company and profit from its destruction.