Take a different hostage Mr. President - Tax hoarded corporate cash until jobs are created w/the $$

[nashville_brook]

Before we cut a giant tax break for the richest people in the country, why not do something with the lazy money that's already flooded the country. You do know that lack of money is not our problem, don't you?

The Federal Reserve said on Friday that corporate cash hoards have increased nearly 40% since last year, and now companies are sitting nearly $2 trillion in cold, hard, lazy cash. And, instead of creating jobs, America's best companies are waiting to execute stock buybacks, mergers and acquisitions.

I've been through a couple of corporate mergers and acquisitions, and I can tell you that they don't create jobs. Mergers and acquisitions create massive layoffs, while making those sectors less competitive as they lurch toward monopoly.

Before we give away any more cash to be hoarded by the elite class, lets tax the cash that is now sitting around doing nothing, and make it more attractive to hire people and expand product lines and discourage mergers/acquisitions that would likely be the final nail in the coffin of the middle class.

Do you think Obama will float this idea at his upcoming CEO Summit this Wednesday? I guess we'll see.

If they liked extorting us for unemployment benefits, imagine how much they're going to love extorting us for Social Security

Less than two weeks ago President Obama's Deficit Commission delivered their apocalyptic report that stated in no uncertain terms that tremendous cuts are going to made to government expenditures or else the country will dry up and blow away. GOP apparatchiks filled their airwaves condemning the notion that the deficit is a can to be kicked down the road. Said President Obama's erstwhile pick for Secretary of Commerce, Republican Senator Judd Gregg,

The time for positioning is over. It's time to govern. You cannot have an interest cost closing in on a trillion dollars a year...not recognize that you're coming up on something that's really going to cause acute problems for us....t's like that old oil filter ad. You can pay me now, or you can pay me later. We can do it now and not have it be as painful and have it be orderly, or later in the middle of a crisis when it will be extraordinarily painful and very disorderly.

http://www.npr.org/2010/12/01/131733505/GOP-Sen-Gregg-Backs-Debt-Panel-Proposal

And so, with total/gross public outstanding debt standing at $13.56 trillion, and annual GDP standing at $14.4 trillion, people are understandably getting anxious. Our gross debt is 94% of our gross domestic product. It makes sense to do something about it.

While this might seem to be another mind-numbing discussion of the national debt, it gets exciting because the same leaders who just told us that we're circling the drain with our debt are telling that the very first thing we'll do to fix this is borrow another $900 billion dollars for tax cuts, $740 billion of which will be for tax cuts for people making more than $250,000.

Adding $900 billion to the debt brings the red portion of our balance sheet to $14.46 trillion, which is 100.4% of GDP. So, if the people they layoff wish to eat, and not freeze to death this winter, the rich are literally demanding EVERYTHING plus .4% this country has to give.

The ass-kicker is conservatives aided by the president are doing this in the name of "creating jobs" ...because they'd like us to believe corporate America and emerging entrepreneurs would be creating jobs by the millions if only they had the money to do so. And that's a lie. They have the money to create jobs. In fact, they have all the money the country has to give...and we're getting ready to literally give them more than that.

So let's recap
The debt necessitates our immediate slashing of government programs and Social Security in order for the country to remain solvent. But before we're going to do that we're going to add $900 billion to the debt, making us insolvent because that will create jobs, except for the fact that there's no shortage of lazy money, and what companies really want to do is buyout other companies resulting in massive layoffs and less competitive markets.

But wouldn't it be amazing if candidate Obama instead of President Obama holding a summit with CEOs this Wednesday. Maybe then we'd have a fighting chance.

[DirkGently]

1. Alright -- put the Voodoo economics to the test. -- use those ill-gotten gains or lose 'em.

[nashville_brook]

3. every 1% we tax that sleeping money is $2 billion in revenue...and the best part is

they don't have to pay if they create jobs.

[WhaTHellsgoingonhere]

2. K&R

[dkf]

4. OMG. Most of this does not go to the top 2%

It goes to the so called middle class and the jobless. Geez Louise. How many times must we point this out?

[nashville_brook]

5. can't you see how you're being played. you get a few bucks, so the bigs guys have a real payday

and you're paying for it. you're paying for it with cuts in education, healthcare and social security. you think the roads suck now? just wait until there's ZERO federal highway funds.

this is a bad deal for and we deserve better with our money.

[laughingliberal]

38. No matter how many times you point out a falsehood, it's still false. nt

[nashville_brook]

85. +1

[unapatriciated]

91. ummm I don't think so....

http://blog.reidreport.com/2010/08/who-benefits-from-the-bush-tax-cuts/
This can’t be said enough. The top 2 percent of income earners benefited overwhelmingly from the Bush tax cuts, which you should remind yourself every day, were WRITTEN BY REPUBLICANS, TO EXPIRE at the end of this year. Now that John Boehner has grabbed a full day’s headlines with a bait and switch call for President Obama to fire his economic team, which was really just a ruse to get oxygen for the resuscitated corpse that is the GOP tax cuts and corporate welfare economic plan, it might be a good time to review “the math,” as Karl Rove might say. The chart below was produced by the Center on Budget and Policy Priorities. It shows who benefited most from the Bush tax cuts of 2003 and 2004, in terms of the average benefit families in various income groups would receive next year if the tax cuts were to be extended:
As you can see, the Bush tax cuts were a pretty sweet deal for the richest Americans, but not so much for average families. An explanation, from the Joint Committee on Taxation:



yep "the so called middle class and the jobless" are just swimming in money. I would rather my $771 windfall go towards UI and paying down the debt, geez louise that isn't even a house payment.

edited to add: a big K&R

[dkf]

6. You know why that cash is sitting around?

Because they think Obama hates corporations and will screw with them. You are not helping to convince them this country is a good place to invest. Would you rather they take their cash and invest it elsewhere before your tax penalty begins?

[nashville_brook]

7. no, they're waiting for the casinos to pay big again -- they don't give a shit about obama

[laughingliberal]

9. Zactly! nt

[nashville_brook]

10. Lord, don't let Atlas shrug!

In that briar patch.

[dkf]

15. If a corporation had you as President of the US should they feel confident you

will keep things stable enough so they can make assumptions about returns and costs and tax rates? Or should they be nervous that you will raise their taxes, confiscate their cash, and make the US an unprofitable place to do business?

Well they are scared of Obama too.

[nashville_brook]

17. They have it within their ability to avoid all taxation, if they do the right thing for country

Create jobs with the money and no taxes are taken. If you don't want to pay the sin tax, don't sin - it's no different than any family has to deal with.

[dkf]

20. Or they can move somewhere else.

If they decide it makes sense to hire here they will. Or they will find a better place to put their money to work. We only have leverage when we are the largest consumers. As the world begins to prosper we lose our importance.

[laughingliberal]

22. I, for one, will be damned glad when they do move their greed mongering asses far away.

Yeah, it'll be tough but at least we can rebuild without their fucking hands in our pockets every minute.

[nashville_brook]

27. ha! i've working in global site selection, and now am in CRE...

with a global firm. your argument here is very 1990. first of all, even with a puny 1 or 2% tax on their sleeping money, most industries are getting much better deals, and have much better infrastructure here than in other countries. oh! and the cost of labor has fallen way below the rest of the developed world.

this line of argument you're trying to put forth is straight out of the Chamber of Commerce, and they're not reliable sources on this. don't get me wrong...you'll get big pats on the back for repeating this in front of the boss. but that doesn't make it true.

[laughingliberal]

37. +1000 nt

[fascisthunter]

73. Checkmate

[DirkGently]

79. Yes, these are business-insider talking points that have been well-debunked by reality.

[nashville_brook]

83. If the US was such a horrible place to do business, they would have left already...

But see, the Econ dev reasons for being here are enormous already. In this country we roll out the red carpet for anyone with a few billion in cash...are you kidding me? Just read your local biz journal for a taste of the sorts of incentives that arerergularly given on the state and local levels...not even taking into account deregulation, union busting, and tax holidays at the federal level. We basically pay oil companies to be here. Here in Orlando you wouldn't believe the incentives available for defense and Pharma.

[DirkGently]

86. It's a great country to be rich in. You ought to have to live where your factory / mine is, eh?

[nashville_brook]

87. you also ought to have to keep your money here and not in the Cayman Islands

if you want to do business here.

[DirkGently]

94. Absolutely.

[laughingliberal]

21. Yep. Back in the days before supply side economics became a religion here, companies and the...

rich avoided taxes just fine by investing and we saw the largest expansion of a middle class in recorded history.

Since we started down this road of Reaganomics, it's been a shrinking middle class and stagnating/declining wages.

How can people be so stupid as to keep falling for this crap?

[dkf]

28. Back in the day when you could defer as much taxes as you wanted

by putting unlimited amounts in your retirement account?

[nashville_brook]

29. back in the day your retirement didn't disappear overnight b/c of a global meltdown caused by

these very people and policies we're discussing here.

[laughingliberal]

36. Huh! I always found there was a limit on how much I could save tax deferred. nt

[dkf]

42. Now there is...

Reagan put it there. Before him there was a ridiculous marginal tax rate that nobody paid because they socked it away in their retirement account. Also they could deduct ALL interest paid even for credit cards. Loopholes galore.

[laughingliberal]

47. The deduction on interest for credit cards mostly benefited the middle class.

Getting rid of it was a tax hike on middle class people.

Many of the deductions the wealthy got in the days before Reagan were tied to investment.

The decline of the working and middle class can be directly traced back to when we started shifting the tax burden to workers and the middle class. The only period where workers and the middle class did a little better, since then, was under Clinton and he raised taxes on the wealthy.

[nashville_brook]

56. here's a very interesting take on that:

the whole post is worth reading b/c he's making a point about the "loopholes" Obama has promised to close. chilling.


http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9737393&mesg_id=9745975


Obama does signal months ahead of time what he's planning to sell out for. Now he's signalling about revising the tax code to "close loopholes". Well those loopholes won't be the ones the wealthy use via their estate planners; they will be for items the middle class rely upon, like interest deductions for mortgages and home equity loans, and probably sheltering income in IRAs until you retire and can withdraw your money and be taxed at a lower rate. Maybe he'll take away the already pitiful deductions for health insurance/long term care insurance. Those of you who are old enough can recall when Regan took away the deductions for most interest payments, and a huge chunk of medical deductions. My family had committed to years of car payments, and was carrying significant debt on credit cards because inflation was rampant and it was cheaper to buy now and stretch payments out, because prices were steadily climbing and it was cheaper to lock in a lower price and pay interest when the interest was a tax deduction. We did the math on it and it was the smart thing to do. Until Ronnie pulled the rug out from under us. There should have been a grandfather clause on interest assumed before Regan changed the law. THAT would have been fair.

[laughingliberal]

60. I remember well how it was when Reagan did that. And you're absolutely right about what 'loopholes'

Obama plans to close. It's all in the cat food commission report. All the ones you mention and the employer deduction for providing medical benefits. Everyone will be forced into the private market to pay huge premiums for 'bronze' policies or will be going without health insurance.

[nashville_brook]

62. that's terrifying b/c if it comes to pass that everyone goes to the private market

then we're truly screwed. on of the catfood commish's recommendations was for there to be more "cost sharing" -- we don't pay enough for healthcare, they say.

[nashville_brook]

52. so, you're saying Reagan did this to help the middle class?

[shraby]

12. Problem #1..they aren't investing it anyplace but in Wall

Street..the rest they are sitting on. They can't seem to see the forest for the trees. If people can make money to buy their products, their losses on Wall Street are going to start eating into their nest eggs. Even old curmudgeon Henry Ford knew enough to pay his workers enough to be able to eat, maintain a place to live, and buy a few things, including his cars.

[nashville_brook]

14. Don't forget the job killing mergers and acquisitions!

That's the most chilling part to me...I guess because I've been thru too many.

[dkf]

18. When the Emerging Markets start to consume they won't need to rely on the US

to do all the consumption. We have got to figure out how to produce things the world wants again.

Its a conundrum. We have been priveledged for so long we won't know what to do.

[nashville_brook]

19. Well, if this is what you think, then your prior statements are inconsistent

No one it producing stuff here. They are sitting on cash until they can find an easy bet to make with it. And you know why they are doing that? Because it's more profitable under our tax code to let money sleep and NOT create jobs.

[laughingliberal]

23. Supply siders do have a rather convoluted path to travel. Their policies are obvious failures...

and they have to keep shifting the blame around to hide that.

[dkf]

25. We need to convince them to invest here now while we have leverage

If we scare them away they may find the growth is all abroad.

In all honesty this is probably the future we face. But being punitive won't help.

[nashville_brook]

32. this is not punitive unless they choose to use up resources and not create jobs.

and right now they aren't doing themselves any favors by avoiding product development and deployment. what they are getting ready to do is embark on a massive campaign of mergers and acquisitions...i would rather they go do that in another country and leave our markets as diverse and lively as they can be without a serious anti-trust movement.

monopolies are not good for business. they're not good for labor. but that's exactly what's getting ready to happen and we don't need to encourage that by making it more profitable to operate dirty, than to do it the old fashioned way...by employing people and making stuff and selling it. otherwise, all you have is gangsterism -- one gang looking to wipe out the others before they are wiped out.

[laughingliberal]

41. +1000 nt

[laughingliberal]

40. They have already invested 10 years of tax cuts abroad & will continue...

to do so. The decline of wages and the middle class started with these types of policies and it will just get worse the longer we do this.

[nashville_brook]

58. if tax cuts created jobs we'd have 100% employment.

[DirkGently]

71. Tada. There's that "definition of insanity" again. How's giving them everything worked out so far?

If we're going to talk about austerity measures, it's self-evident we don't take from thosevwithbthe least to give. Or rather, it should be. Apparently everything must go before obscene corporate profits and salaries. Including Social Security.

[nashville_brook]

78. They're playing "winner takes all" while we're just fighting to stay alive.

[DirkGently]

82. Should be laughable, shouldn't it?

[DirkGently]

16. Ouch. The plot of Atlas Shrugged? Really? Isn't that type of thinking sort of the problem here?

There's no more rich-people ass to kiss at this point. They're not going to share. They're not going to help build roads and schools. They're going to solidify power and privilege until we live in workers' dorms at Wal-Merica, Inc., and are paid in gasoline and minimal healthcare. We don't have anything to lose by failing to please and comfort and accommodate the self-appointed Masters of the Universe at this point.

We need to do the opposite. We need to scare the living shit out of industry. We need them to worry about pushing their luck with a population that understands that this "Recession" we are undergoing was a wholesale transfer of wealth from the middle class to the rich, and that the tax cut extension is the dirty icing on the greedcake and that no one is going to put up with it anymore.

We don't need to court corporate love and trust. We need their fear and obedience, because that's what they're looking for from us.

[madokie]

26. so very true

[dkf]

30. The CEO of Cisco was asked what it would take to hire more people

"Do you need more demand?" he was asked. No, he says. "To be honest I just want some certainty on tax rates and the upcoming regulations. "

I just sighed at that one.

[nashville_brook]

33. and you believe him? really?

[dkf]

39. I think it's a reasonable request.

Financial decisions are made based on assumptions after all.

[laughingliberal]

44. Yes. These guys are well known for their imminent 'reasonableness.' Please. nt

[dkf]

46. You ever do a budget?

Do taxes and health care expenses figure into that decision?

[laughingliberal]

49. They can have all the certainty they want.

You say, "Here's your tax rate. Here's how much you can deduct by investing in America."

It's not certainty they want. It's a free ride.

[DirkGently]

69. Yep. "Sigh. Sure, we have *some* money, but if we only had*all* of it, we'd share."

At some point, you have to recognize you're being played. Corporations do business in America at our sufferance. They need to answer as to what they've done for US lately, not the other way around.

Let them leave. We'll make more.

[nashville_brook]

84. bookmark this -- BIG layoffs after the administration grants tax goodies for corps.

they'll come after mergers and acquisitions. once you've got two companies folded into one, there's a whole lot of "unnecessary" workers.

[nashville_brook]

45. currently their assumption is that this is a free-for-all.

and it is. they've enjoyed many years of extorting favors from our government in the form of of lower and lower and lower taxes and less and less and less regulation to the point where they're not satisfied until we open up our national treasury and just let them clean it out.

we have no more slack to give and if the only reason they're here is to extort slack...then...we're better off without them.

[laughingliberal]

51. Yes. The only thing they are still here for is to try and steal more. I think we'd fare better...

long term if they get the eff out now before we hand any more over to them.

[nashville_brook]

53. 100.4% of GDP -- that's our gross national debt

they've stolen everything. now they're playing to enslave us.

[laughingliberal]

55. Yep. They're hanging out a little longer cause there's still a little gravy left on the plate.

SS trust fund comes to mind. I imagine they'll have it within 2 years.

Then they've got a few years to collect those mandated insurance premiums before they've soaked the last of it out of everyone.

[nashville_brook]

57. with the SS trust fund, they're fighting to not have to pay back the money already stolen

i have a lot of catfood in my future...and i sock away money like crazy, but there's no way i'll ever be able to retire, and there's going to come a point, with my health, when i just can't work anymore. also...my line of work favors young folk. i'm really screwed. and i'm a "lucky" one. i have a job and have health insurance...for now.

[laughingliberal]

59. Good point. It really is as good as gone.

I'm in the nothing left to lose category now. We were socking it away pretty good and on track until the housing market took my husband's business down with it.

I know you get it. But most people have no idea how stunningly fast a life can go down. I hope we don't have to see total collapse before people wake up but I fear we will.

[nashville_brook]

61. even with it going on all around, people don't get it until it happens to them.

i've started over a few times. the worst was after my divorce. i lived out of 2 suitcases for a year, couch surfing for half of that.

[laughingliberal]

43. Yeah, right. We believe him. We've been doing this shit for 30 years but any day now, it'll work. nt

[Dr.Phool]

64. The CEO of Cisco is a double-talking asshole.

Certainty? I can't do anything because I may pay 3 or 4 points higher income tax. Gimme a break.

He's prefer stock buybacks and buying up his competitors. Which wind up costing jobs. Not creating them.

[nashville_brook]

66. he's not willing to pay his fair share, but he expects more *public sector* work: Forbes

looks like he expects the president to give him some candy at the big CEO Summit on wednesday.

so, government "mmm mmm good" when handing out money and contracts...but get that money from "someone else" why doncha.

http://uk.reuters.com/article/idUKN0926912520101210

Dec 9 (Reuters) - Cisco Systems Inc (CSCO.O) Chief Executive John Chambers said the network equipment maker would likely gain share in the overall market, including the public sector, where it suffered a fall in orders last quarter.

"I'd be surprised if, in the public sector and the market as a whole, our share as a total ... doesn't go up," he told a conference hosted by Sanford Bernstein on Thursday.

[nashville_brook]

67. Cisco is sitting $40 BILLION of cash reserve, yet, they want more cash to hire?

They're going to use that money to buy out another tech company or two or three or four...and all those people in the bought out firms are going to play musical chairs for a few months until most of them have their jobs while Cisco outsources their work, hires temps, etc etc.

then, they're going to take that leverage in the market and make damn sure that the products and services they sell have no competition...making those products and services more expensive.

[Kalyke]

76. Total fail!

Cisco is positioned to make MONEY on the upcoming regulations! Those regs include compliance in the payment card industry, health care, the financial and insurance worlds and education. Cisco produces security hardware and software to help companies MEET those compliance requirements.

That, right there, tells me the dude is lying his ass off.

[nashville_brook]

80. This is a really important point, and I hope this post gets lots of eyes.

Cisco is not playing the game they want you to think they are. It's the old briar patch thing.

[nashville_brook]

54. "the tax cut extension is the dirty icing on the greedcake" -- that is so beautiful

thank you for this...it made my night -- :)

[nashville_brook]

63. According to recent events, one concludes government exists to further monied interests at the

Expense of us, the people. Bernie sanders made an eight hour attempt to get us to see this. Grayson spent two years revealing this truth. Of course, we
Already knew this, that's why we all got behind the candidate who promised to change that. What we're experiencing now is the "revolt" the "revulsion" of those us who feel the betrayal.

[DirkGently]

75. ... and I worry Obama accepts this logic as inevitable. Captured by the beltway narrative?

[nashville_brook]

77. We should worry when leaders become isolated...because they're never isolated with us

They become ensconced with yes men and sycophants whose only concern is their own self interest.

[rucky]

72. haha. sucker!

you really believe this?

[nashville_brook]

74. This whole exchange has been very instructive for me because I never thought dems bought this

BS. When Cisco, for instance, is sitting on $40 billion in reserve cash, the argument that they're afraid of taxes really goes out the window. That's enough cash to but Symantec outright, and they're trying today they can't afford to hire people and expand? Give us a break!

[DirkGently]

81. There is a world in which Cisco's argument would apply, but we don't live in it.

[nashville_brook]

88. it's above our pay level -- :)

[nashville_brook]

90. Atlas Shrugged - one hour later...

[DirkGently]

96. "Nobody remembered to bring an inexhaustible labor force of ROBOTS??"

:spray:

[laughingliberal]

8. K & R nt

[scarletwoman]

11. K&R - great post!

The 2% have no intention of investing in actual production of tangible goods, they make WAY more profit by simply selling and re-selling financial "products" among themselves.

[nashville_brook]

13. They've said that they want to use the cash for non-productive ends...we best trust that.

[slipslidingaway]

24. Bingo ...

"The 2% have no intention of investing in actual production of tangible goods, they make WAY more profit by simply selling and re-selling financial "products" among themselves."

[nashville_brook]

68. +1000

[Catherina]

31. Enthusiastically recommended. n/t

[Skittles]

34. American companies ARE creating jobs - they just are NOT in America

[nashville_brook]

48. true that.

[True_Blue]

35. K&R

:kick:

[leftstreet]

50. K&R

[Dr.Phool]

65. Kick and Rec!

[Poboy]

70. recommend.

[nashville_brook]

89. The Trickle-Down Theory of Stimulus

http://firedoglake.com/2010/12/12/the-trickle-down-theory-of-stimulus/


With the Great Bipartisan Tax Cut Compromise, President Obama has officially adopted the world view of Republicans.

1. No matter what the problem is, tax cuts are the solution.
2. Government cannot solve people’s problems.

Our current problem is massive unemployment, so the President and his team of bank-loving economic officials preach that tax cuts are stimulus. No matter that tax cuts for the rich have a poor payoff in stimulus. No matter that we are adding massive national debt. No matter that we are endangering Social Security. Tax cuts are the answer.

Stimulus that has real bang for the buck comes from direct government spending. Paul Krugman estimated that direct spending might have a three to one increase in GDP per dollar of added debt. And when we spend it on infrastructure projects, we have something of long-term value to show for it. The lowest bang for the buck comes from tax cuts. Obama ignores this fact in his explanations for his Great Bipartisan Tax Cut Compromise, and argues against all logic that this tax cut is necessary to prevent a double dip recession.

Let’s hope it does, because it comes at a very high cost. Obama is admitting that government cannot do anything useful to solve people’s problems, so it outsources the entire stimulus to individuals and corporations. It’s trickle-down stimulus: give the average family a couple of thousand dollars, give rich people massive tax cuts, and hope they’ll spend it on stuff and maybe that will encourage businesses to hire people, and maybe people will go back to work. I didn’t understand trickle-down economics when it meant that giving hundreds of billions of dollars in tax cuts to the top 2% of Americans, and I don’t understand it when it means giving small amounts of money to lots of people on top of hundreds of billions to rich people.


more at link
http://firedoglake.com/2010/12/12/the-trickle-down-theory-of-stimulus/

[Laelth]

92. Strong OP and excellent thread. Thanks. k&r n/t

-Laelth

[nashville_brook]

93. You're welcome!

:)

[katandmoon]

95. Obama will no more suggest taxing corporate $$ hoards than he would sprout wings and fly to the moon