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View Diary: Political Jujitsu and the "half don't pay any taxes" lie (97 comments)

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  •  Corporations are sitting on trillions in cash (7+ / 0-)

    because of less demand.  
    They could boost the economy, creating more jobs, by increasing wages.
    Republicans call that "socialism" - and doesn't fit their "cheap labor" goals.

    Republicans have the 1% vote locked up.

    by MartyM on Fri Apr 27, 2012 at 05:41:48 AM PDT

    •  It's partly because of less demand, but also (5+ / 0-)

      partly because they don't want to pay the 35% tax on repatriation.  We know that because offshore cash continued to build even when the economy wasn't in recession.

      Note: that cash is the corporate profit, meaning that it is what's left after deductible expenses.  So even if the effective rate is some low number, the effective rate on dividending profit back to the US parent corp will be 35%.  (people that don't know how tax works get confused about when effective rates and when marginal rates are applicable.  When we talk about the marginal tax cost of dividending offshore profits back to the mothership, the relevant rate is the marginal one)

      •  Much of that money is already here... (3+ / 0-)

        Corporations have huge amounts of cash reserves from US operations as well as foreign operations. Most of those reserves don't require repatriation, and whatever tax was owed has been paid. They don't have the demand for their products needed to put that money into expansion. Plus a lot of money has been put into unproductive stock buybacks that raise the stock price but don't produce growth. If the demand existed, much of that money could be put into expansion as well.

        -7.25, -6.26

        We are men of action; lies do not become us.

        by ER Doc on Fri Apr 27, 2012 at 08:09:59 AM PDT

        [ Parent ]

      •  I have also read (0+ / 0-)

        that it is because corporations don't want to find themselves without operating capital in the face of another possible credit crunch. (Recency bias after banking crisis...)

        Though this might be a distraction from the repatriation issue by corporate apologists.

        It is hard to tell what is true these days...

        The important and difficult job is never to find the right answers, it is to find the right question. For there are few things as useless–if not dangerous–as the right answer to the wrong question. -- P. Drucker

        by The Angry Architect on Fri Apr 27, 2012 at 06:04:00 PM PDT

        [ Parent ]

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