US firms 'misuse' tax break windfalls

[highplainsdem]

http://business.timesonline.co.uk/article/0,,16849-1828906,00.html


The Times October 17, 2005

US firms 'misuse' tax break windfalls
By Gabriel Rozenberg, Economics Reporter


A TAX break intended to create thousands of American jobs from billions of dollars made abroad by US companies could end up in shareholders’ pockets, leading economists say.

A year after the Jobs Creation Act was signed into law by President Bush, an estimated $206 billion (£116 billion) earned overseas by US multinationals has returned to America to take advantage of a one-off reduction in the rate of corporation tax.

<snip>

The aim of the Act was to encourage the firms to create jobs by investing their profits in the US.

But there is growing evidence that companies are instead funnelling the tax break into debt reductions and share buybacks, to the benefit of shareholders. The law does not require the companies to prove that they are using the money to raise investment levels above their original plans.

<snip>

[Metta]

1. The Republican honor system in action.

MOney talks you know.

[OKthatsIT]

5. AND money going OFFSHORE...CYA

[hedda_foil]

2. No shit, Sherlock!

Whoever woulda thunk it?

[prescole]

3. George Orwell lives!

Clean Air Act, Job Creation Act, Patriot Act.
Sounds like 1984 all over again. Oh yeah, war is peace, too.
And IGNORANCE IS BLISS, which gives us the hap-hap-happiest president in history.

[The Backlash Cometh]

4. boy, there's a euphemism for you.

"Misuse" implies that they were planning to use it for the reason it was intended to begin with.

[mcctatas]

7. Yeah, but ya can't just expect them to come out and say "steal"...

they're just trying to protect american jobs, they don't want to put their whole "Division of Euphamisms, Dirty Deeds, and Outright Lies" out of work by using plain old english!:rofl:

[Roland99]

6. What?! Trickle-clown economics doesn't work?

Sounds like some voodoo going on. ;)

[namvet73]

8. SURPRIZE! n/t

[TheFarseer]

9. It's not TIED to job creation?

Wow, could our tax policy be any stupider?

[stillcool]

10. Jobs Creation Act...

Their used of the English Language makes me:puke:

[cantstandbush]

11. Do you think the Limbaughniks can understand this?

Wait until the high interest rates kick their in debt asses. Capitalism is wonderful isn't it? Prices rise and kick the working consumer in the teeth and the Fed raises interest rates to kick them in the ass.

[TahitiNut]

12. They didn't 'misuse' shit. The did EXACTLY what was expected all along.

As the working class is impoverished by the insatiable greed of the 'ownership class,' they're in a weaker and weaker position to buy the products or services they create.

That leads to excess production capacity. Some of it can be liquidated, some shipped overseas. For sure, though, as long as they can use whips on their workers to work off the clock, they won't bother hiring anyone.

Why should they?

Federal income taxes on corporate profits are at a 70-year low. Hiring extra people just cuts into those profits. Instead, those companies can pump up the dividends - also at a 70-year low in Federal income tax.

[ninkasi]

13. I have been accused of wild exaggeration by claiming that such actions

are criminal, in the moral sense. When people are cheated of their wages, when corporate policy causes poverty and lack of access to health care, all while the taxpayers are subsidizing programs to encourage them to create jobs and living wages, I still stand by my characterization of criminality.

A country which has policies depriving dying people from easing their pain by medical use of marijuana, but which slashes tax cuts for the wealthy, and corporations which prey on the lower and middle classes, has no business claiming any moral high ground on any issue. Add to that the illegal and immoral war we are waging on Iraq, and it's easy to see why America is considered the #1 threat among people of the civilized world.

[TroubleMan]

15. Reminds me of one of my favorite hip hop songs:

"Now my dream and aspirations go from single to hoe
As I realize there's a million motherfuckers in the cold
No need to be told, cause when you got a million po' people
Gettin ganked, by a few that are rich and evil
But it's illegal, to wonder how they livin' fat
(One two three) everybody get a gat"

------

E-Roc from The Coup in the song "Not Yet Free"

[ninkasi]

17. They're telling it like it is...

The truth isn't pretty in Bush's America. Lots of things need to change. Part of the ugly truth is that being poor is considered almost criminal now by some. Let those idiots work for the pittance, grow old before their time, worry themselves sick about how to feed and provide medical care for their kids, and see what tune they sing then.I live with the awareness that the hardest working among us are also some of the most despised. I would like to explain to these people that the loathing is mutual.

[TroubleMan]

14. More "trickle down" economics at work

"Trickle down" economics is exactly what it sounds like: they're pissing on the poor.

[PurityOfEssence]

16. If money isn't tied to performance, things like this will always happen

They're just lying sacks of shit. If they want to give a tax rate break to the wealthy because it'll supposedly increase investment in the market, then the tax reduction should only be allowed for those who invest as claimed. If the repeal of the estate tax is just to save family farms and small businesses, then it should only be applicable in the mythical cases where it does. It's bullshit, and the excuses themselves are shockingly flimsy.

They make a wild supposition and then make sure there are no mechanisms to make sure that's what is done. I thought the eighties were bad, but the raging, gluttonous greed these days make them seem like an innocent time.

[The Roux Comes First]

18. Send in the Clowns

Oh what a surprise.

The idea that trickle-down phenomena observed by ecologists in terms of energy flow would somehow be replicated in the economy when the greed of corporations and individual humans is involved (and both are more and more unchecked and reinforced)is of course totally laughable to what's left of the reality-based world.

[tk2kewl]

19. Just because it was called "The Jobs Creation Act" doesn't mean

it was suppose to create jobs... hell, one look at "Heathy Forests" and "Clear Skies" should tell you that was an Orwellian name for this law and it accomplished exactly what was intended

[Mechatanketra]

20. This is where Newspeak gets us.

The effectiveness of the whole "creating jobs" rhetoric hinges on the degree to which you can smokescreen for people what the word "wealthy" means: that you already have a lot of money. Before discussing whether tax breaks for the wealthy will create jobs, one ought to ask why the wealthy -- who, by definition already have a lot of money -- didn't already create the jobs you want. The one answer that doesn't make sense is "because they lack sufficient funds to" -- they're the people who already have a lot of money.

The entire issue of taxation in this country is clouded by a collection of relatively simple realities like this which have been allowed, by both sides of the political band, to fall into the "Saddam planned 9/11!" box of widespread popular ignorance. E.g.
1) "The wealthy" are the people who have a lot of money. Hence, "the wealthy" don't ever need "relief": obviously, we're not taxing them into devastation -- they're wealthy.
2) You can only collect money from people who HAVE money. That's why the tax burden falls on the wealthy. (Remember: they have a lot of money).
3) Everyone pays the same taxes on the same dollars. (If I make a new tax bracket of 50% for millionaires, it doesn't mean I'm taking half their money, it means I'm taking half of what they make over a million.) Hence, progressive taxation in itself never creates a situation where one is "discouraged from earning more"; more money before taxes still means more money after taxes.
4) A recession is when people stop spending as much money, and a depression is a persisting recession. Hence, taxing expenses rather than income is nonoptimal (he said by understatement), and "encouraging people to save" is not an unqualified good no matter how old-timey practical it sounds.

This isn't PhD level economics stuff, but things that ought to be in everyone's conventional wisdom toolbox. Instead, they're essentially crowded entirely out of discussion, so that the public forum essentially holds its entire debate orthogonal to real facts rather than founded on top of them. (Again, one can compare this to the way America's status as an unprovoked invader has been pocket-censored from public discussion of the Iraq war.)

[texpatriot2004]

21. So Cornyn's millions of jobs these tax cuts created actually went

into the pockets of the corporations and the shareholders...hey, big surprise. NOT!

[ngGale]

22. I'm so shocked...

who the heck would have thunk it?:sarcasm:

[namvet73]

23. Republican "Change Lightbulb Act"

Replace all working lightbulbs with ones that are burned out.

This applies to "incentives" also.

[No Exit]

24. "The aim of the Act was"... what??

"The aim of the Act was to encourage the firms to create jobs by investing their profits in the US," says the Times, with a straight face.

Bullshit.

If GW Bush proposed an Act called the "Jobs Creation Act", you can be SURE that the act had absolutely nothing to do with jobs creation.

[0007]

25. 0h hum, don't we all know by now that corporate American is

just another way to say organized crime.

Shouldn't someone be looking out for the average American instead of shoveling everything to the wealthy?

More tax breaks for the rich and higher taxes for the poor is the way it has always been, nothing has changed in the last two thousand years, 'eh?

[Miss Chybil]

26. Imagine that. nt