The official line from U.S.-based multinational corporations is that if they get a huge tax break, they’ll bring home the trillions of dollars in profits they’ve stashed overseas and use it to hire tons of Americans. (Nearly 3 million, says the U.S. Chamber of Commerce!)
But now that Donald Trump’s election means it might really happen, corporate executives are telling Wall Street analysts what they’ll actually use that money for: enriching their shareholders and buying other companies.
The Intercept’s examination of dozens of earnings calls and investor conference talks since Trump won the presidential election finds that many executives are telling analysts at large banks that they are eager to take the money to increase dividends and stock buybacks as well as snap up competitors. They demonstrate considerably less if any enthusiasm for going on a domestic hiring spree.
Many U.S. multinationals, especially in the technology and pharmaceutical industries, have long resisted bringing their overseas profits back to America — because if they did they’d have to pay taxes on them at the current corporate rate of 35 percent. Their accumulated untaxed foreign profits have now grown to a spectacular $2.5 trillion, an amount equal to about 70 percent of the federal government’s annual budget and 14 percent of the entire U.S. economy.
While running for president, Trump proudly proclaimed that he’d give those corporations a special 10 percent tax rate on that money — not, you understand, for an unpopular reason like making rich people richer, but because it would help regular Americans.
“The wealthy are going to create tremendous jobs. They’re going to expand their companies,” Trump asserted during the first presidential debate. “They’re going to bring $2.5 trillion back from overseas, … to be put to use on the inner cities and lots of other things, and it would be beautiful.” During the third debate he promised that “We’re going to start hiring people, we’re going to bring the $2.5 trillion that’s offshore back into the country. We are going to start the engine rolling again.”
What would companies do with all that money? Doug Holtz-Eakin, a prominent economist who advises multinationals, explained in 2013 that they’d “Invest, expand payrolls and create jobs. … A temporary tax holiday on foreign earnings could add up to $440 billion to the U.S. gross domestic product and create up to 3.5 million jobs.”
Cisco, the California-based IT giant, has $58 billion overseas and has long been one of the most outspoken corporate proponents of a tax holiday. Its previous CEO John Chambers claimed in 2010 that profit repatriation “could be used for creating jobs, investing in research, building plants, purchasing equipment, and other uses.”
But on a November 16 earnings call, Cisco’s CFO Kelly Kramer told securities analyst what the company would actually do with all that money. First it would make changes to its debt structure, and then “we would have a blend of actions we can certainly take with our dividend as well as our share buyback, as well as leading flexibility for us to be able to do M&A and strategic investments.”
Similarly, Hewlett Packard has $47 billion in foreign profits and is a member of the organization Lift America, which claims lightly-taxed profit repatriation will be fantastic for “job creation.” When asked in an earnings call whether HP would use a Trump repatriation tax cut “for a dividend, or to raise the buyback,” the company’s CFO answered “yes” and then extolled the company’s “aggressive” policy on share repurchases.
In an earnings call immediately after the election, Hubertus Muehlhaeuser, the CEO of the $2 billion Florida food service company Manitowoc, explained that “of course, we would like to use [it] for industry consolidation purposes” — i.e., buying other companies.
The next week Agilent, a $15 billion healthcare technology company holding $5 billion overseas, conducted its quarterly earnings call. Asked about a Trump tax holiday, Agilent CEO Mike McMullen explained they’d use the money “for U.S.-based M&A” — that is, mergers and acquisitions — and “situations where we’ve been using debt, such as our share repurchases.”
Experts made it clear they expect the same to happen at other companies. In a discussion at a New York conference hosted by Goldman Sachs about the “optimism” generated in the business world by Trump’s election, Mike Selfridge of First Republic Bank explained that the “almost $2.5 trillion of cash for corporations that have cash overseas, if that were to come back about 60 percent of that would go in the coffers of companies located within our urban coastal markets. … That would perhaps be positive for things like M&A, maybe some dividends or stock buybacks.” He did not mention anything about jobs with the possible exception of “wealth management opportunities.”
On several earnings calls, companies including Hewlett-Packard made nods to using some repatriated profits for “organic growth” or “making investments in the U.S.” Some executives, like Tech Data CEO Bob Dutkowsky, said he believed a tax holiday “would probably create jobs” in general. And the CEO of United Technologies, after describing the possibilities for mergers and dividends, did note that the company might “invest in jobs here in the U.S.” But what was missing from all of the post-election calls and conferences we examined was any sign that any executive feels their own corporation has a specific, pressing need to expand employment in the U.S. and can only do with their overseas money.
That shouldn’t be surprising. If multinationals saw strong job-creating investment opportunities, they could simply borrow money domestically, using their foreign funds as collateral. That’s essentially what Apple has recently done — although it was to pay out dividends to shareholders, not make investments.
But if corporations won’t ramp up hiring, would a Trump tax holiday at least goose the stock market? Possibly, but that does little for most Americans, since stock ownership is so highly concentrated at the top. The most probable outcome from profit repatriation is that the yawning chasm between the richest Americans and everyone else will just get wider.
Indeed, that’s exactly what happened the last time the U.S. had a corporate tax holiday in 2004, cutting the rate on repatriated profits to 5 percent. Companies lobbying for the so-called “Homeland Investment Act” claimed it would help them hire Americans and invest in research and development. Instead they used the money for stock buybacks and increased executive compensation, while the prime beneficiaries actually cut their U.S. payroll. (According to Bill Clinton, George W. Bush was “so mad that he signed the 5.75 percent repatriation bill [and] none of it was reinvested.”)
The spending spree, by the incoming administration, will squeeze funds that are needed by the middle class to start businesses. Costs of money will go up and big Corporations will create some jobs, but as the article states, they will use, their patrioted money, to buy other companies and stock buybacks to feather their nest. Larger dividends and M&A does not create many jobs. After acquisitions, most companies consolidate the work force to maximize the company’s profits. If this strategy had worked it the past, there would be plenty of jobs available today. The true definition of insanity.
Demand is the only thing that should make a company hire more workers. And if the demand is there, they will damn well find a way to hire more people – as noted, by borrowing if needed.
But if you give them free money with a light suggestion that they use it to hire, but don’t have the demand, they will simply put it in their pockets and not even say thanks.
Bring the money home. Rich guys will get richer and many 401k’s will get richer.
Taxes will paid, I hope. Better to let it happen, than to cry unfairness, and let the money languish.
Perhaps, Trump could follow 0Bamas lead on this one. Have the IRS target the recipients.
As was proven after Dubya’s repatriation window, a tax holiday only incentivizes more abuse of offshore shelters. But since then there had been some progress internationally toward outlawing the practice. The “Double-Irish” arrangement, for example, is set to be abolished in 2018. But, allowing yet another holiday certainly will not help future efforts to enforce developed nation tax policies. Not to mention, when considering that wealth translates to political influence, more pooling of that wealth in monied interests does no favors for democracy. If they follow through with plans to buy out smaller companies, then we could be looking at more anti-trust concerns. So, it is actually better to let it languish overseas– better for the economy and the nation in general.
Trump stating that the funds would be used to stimulate the inner cities and a lot of other things is just jaw jabbering non sense.
If you’re a business that’s able to afford tax dodging overseas, you have the ability to scale to meet demand without a tax holiday so what are the 2.5 million new jobs going to be doing without increased economic demand? To presume a business is just sitting on the sidelines when there is money to be made because they don’t want to pay taxes is laughable on a macro level. I am sure the GOP has an small-scale exception or two in their back pocket to spout about when questioned though.
The corporation’s have so corrupted the government as to use it as their political arm. The corporate banksters create the money supply and minimally support the real economy. The corporate media complete and reinforce the mind control started by the church and the school’s; Trumpstr is right about that. Capitalism as practiced is incompatible with life on the planet and (crisper) under corporate and military control may beat climate change or nuclear weapons in ending us. Hopefully the bacteria will be spared to start over.
I think it might be useful to track back to how serfdom was reintroduced to the Romans after slavery had been formally abolished by the Christians. I’m certainly no historical expert here, but as I understand it in the Crisis of the Third Century, the Roman economy collapsed and city dwellers were forced to sign humiliating deals with landowners to be allowed access to farm production. This is an example of how the quantitative differences in wealth lead to qualitative changes in human status, but not the only one!
There are already kids signing similar agreements to turn over a part of their income in exchange for college education, but the less dramatic and more important aspect is to be found with virtually ANYTHING technological you find at a market nowadays. You’re told that you can “buy” the product, but you don’t really _own_ it, you only own a _license_ to it, subject to _terms_. At the beginning these seemed relatively familiar, like people giving up their right to copy software they bought. But over time, it becomes deals not to look at it or research it or use it in a disparaging way or use it to express the wrong political sentiment or resell it to someone from a different country and so on.
Try to understand how this increased stratification is going to work. Suppose in ten years you want to go on a scenic drive to see what a certain “nice area” looks like. Well, first off, you probably don’t own a car, you have to hail an Uber robot, which probably has terms where you don’t drive in certain nice areas without an excuse. I mean, Barbara Streisand can’t have just anybody driving past her house – there’s terrorists! But even if you aren’t hailing one of theirs, a self-driving car obviously is going to have similar terms and conditions. And even if somehow you’ve evaded traffic tickets and paid the penalty to run your beloved old manual car, Trump has still sold off the public road to a maintenance company which imposes a fee that is “drive by mile”, ostensibly to keep electric cars off the scene but really so they can monitor and impose terms and conditions on where you go, including, naturally, some pretty hefty prices to go in a neighborhood like that if you haven’t subscribed to it. (Of course, you can still walk… say hello to the drones the company uses to monitor its property)
Now I’m thinking it’s not all bad news, because the Mexican cartels are the best run corporations of all and shouldn’t take long to assert their natural rights that come with that, causing such chaos that Chinese peacekeepers can step in and impose some kind of order, but in any case, it’s an object lesson in what happens when economic inequality gets to such a point that only a few people can make things and the rest aren’t given the chance to pay in cash (even if they had it) but only in freedom.
A little of something is better than a lot of nothing.
If tax rates are lowered to whatever level is necessary to provide incentive for some of the money to be repatriated, it will either be paid as income to US shareholders (and then taxed) or reinvested in the US, creating jobs and salaries (which are then taxed). The US government gets something either way.
You didn’t bother to read the article at all, did you?
If it made Bill Clinton’s economy look good then what’s the problen?
They should enact a Wall Street Sales Tax. Then use the money for social purposes like infrastructure bank, education, health and welfare. If Trump were smart, he would make a deal with house Republicans and Democrats in a quid pro quo. Lower corporate taxes in exchange for a Wall Street Sales Tax (WSST). There was actually a Republican lawmaker pushing for a WSST at one time.
Wall Street Sales Tax (WSST)
It does not matter what his ideology is. Trump needs money. If he wants his presidency to be successful, he has to push money out into hinterlands that have been cut off and depleted by Globalism and Austerity (Neoliberal policies). We will see if Trump can be rolled like Obama was or whether he will fight back against a venal and morally obdurate Congress.
Also, there will be a push on repealing the inheritance tax.
Inheritance tax, death tax or little rich kiddies tax as you prefer, prevents money from totally accumulating in the hands of dynasty families. Should be taxed as income above a couple million.
“We will see if Trump can be rolled like Obama was or whether he will fight back against a venal and morally obdurate Congress”.
Yes, WE will watch every move and keep careful count of who this administration serves. The last two were long on promise short on delivery and both were seditious. More of the same you are fired 2020.
Rebuild our InterCitys and our Heartland and restore constitutional law. Stopping gutting of ethics committee and calling out complex and somewhat redundant intel community right move. Eliminating taxes for the wealthy must benefit jobs, opportunity and infrastructure. We will be watch, the result not the stated intent.
If Trump gives away the store in his first few days as president, he won’t have any negotiating leverage left.
We’ll see if he is up to it.
I hope that you/we are making special efforts to ensure that the Trump transition team is receiving
and acting on your facts and explanations of these probable outcomes.
Hillary was going to do the same thing. She talked about charging them only 5%.
How do you “gorge” on a tax cut exactly? It was their money in the first place. The government is merely letting them keep a larger share of it. As for what they do with the money, you can be pretty sure it will be allocated more intelligently and productively than if the corrupt government decided where it went.
Taxation is on earned income, profit…a kind of rent paid to create and maintain the nation’s infrastructure; roads, bridges, utilities, water, sewer, energy, defense, police, fire, emergency, public institutions, schools,….
…corporations whose profit derives in part from the benefit of and use of the above.
suggesting corporations’ profits are theirs free and clear… is faulty accounting.
You’re putting the cart before the horse. All the money that pays for those services is made in the market. So no matter how you look at it, the market is paying for everything with its own money. Government merely confiscates the money and redistributes it. It’s also worth noting that all the services you care to name can and have been provided by the market without any government intermediation.
So businesses would screw us over less than the government would? Cold comfort.
There would be no money without government. I’m not sure how many chickens it would take to buy a car but it is more than you have. You would also have to build and maintain you own roads.
“There would be no money without government.”
This is demonstrably false. There are literally thousands of nongovernmental monies which have existed throughout human history. In fact, America’s monetary system was almost entirely privatized until thelate 1800’s. Even in current times, nongovernmental monies like Bitcoin are in use.
Hi-tech needs to be brought down a peg (or two…..or three) the Silicon Valley progress, the future, we are the future conflation has been going on for far too long. It’s really part of the p.r. offensive to boost share prices and produce nice fat exec bonuses. It has little to do with what is happening in the real world. Ask yourself one question, is there any reason a raving lunatic like Thiel deserves any accolades at all? How about Cook? Bezos? What they all need is a good kick up the backside. A bunch of whiny coddled prima donnas that have been over indulged for much too long.
You need only look north of the border. Corporate tax cuts were brought in by the Harper government to create jobs. Never happened. The additional revenue was used for things like stock buy backs to boost share price and produce very large corporate bonuses. In the U.S. it will be no different.
Rich people are the enemy of civilization. Always have been always will be…
Until we criminalize them. Then, finally will we put greed in it’s place.
Prison.
Politician’s who enable rich people are the enemy of civilization. Fixed it for ya.
The only problem I have with these tax breaks is that they’re like amnesties for illegal immigrants. If people know they can happen again, once it’s over they’re just going to start hoarding abroad until the next time. So the effective tax rate becomes the low one. Much better just to accept it and leave it there.
The thing is, if that money comes back, it will end up being invested somewhere. Even if the rich shareholders get big dividends, or their shares bought back off them, unless they literally stick the money under their mattresses, that money has got to be invested somewhere (and if they just put it in the bank, the bank is going to invest it).
Of course, that doesn’t PROVE that the money will end up creating jobs. But given that only people really add value in the long term, if you want a decent return on your money, investing it in people doing stuff is the most logical thing to do.
Some people have money. Other people have ideas. If the people with money get more money, hopefully they’ll be able to invest in more people with ideas.
That’s the theory anyway :)
The problem you don’t mention in your analysis is that people are being priced out of the labor market by automation.
Doesn’t do much good if that two point five trillion comes back and is invested in creating automated factories…
The main problem is that capitalism has broken itself by trying, at every opportunity,y to reduce or remove the price of human labor from the costs of production. The wealthy have done this without realizing, or caring, that if your target market has no money to buy, then who will the company sell it’s product to? No, capitalism has become solely about which group of wealthy people will control the raw materials of the planet.
This automation under pricing human labor has become an ever larger problem in the US’s economy since the development of the personal computer. Computers have multiplied human productivity… meaning that companies can hire fewer people to do the same amount of work.
The demand for human labor is decreasing at an ever more rapid rate. This is why labor unions have lost power. It’s why real wages have stayed flat or dropped over the last forty years.
The owners realize that they don’t have to increase wages, because there is a labor glut.
The real problem is that even though capitalism is obviously broken, the uber wealthy are determined to get every possible cent out before it completely falls apart.
Even if they have to take everyone else down to do it.
Which is why we need people with ideas, not just people with money.
As you say, technology will probably do away with most office drudge jobs, as it has done away with factory drudge jobs.
Maybe we are coming to the end of the “big company, give me a job” era. Maybe the future belongs to entrepreneurs who spot a niche, locally. Maybe our schools should adapt accordingly (more accent on problem solving and creativity, less on regurgitating and following rules)?
Who had heard of website designers or professional drone flyers when we were born? As a UN report said recently, one third of children entering school today will end up in professions that don’t even exist yet.
Factories make stuff much cheaper, so more people can buy them, with less money. And if people can’t buy them, then the factories will go bust, and someone will have to make them.
Except resources are not infinite.
There is only so much gold, or oil, or aluminum to be had.
So just because automation prices human labor out of the market does not mean that we solve the distribution problem that has plagued civilization since it’s very beginnings.
Who controls the actual stuff to make products with?
So, lets say you have a marvelous idea to make something incredible. You have unlimited labor in the form of automation that can build anything you can conceive. The problem? You and your machines need to use half of the world’s oil supply to complete your personal project.
How are you going to get the oil you need?
No, what experience is telling us is that capitalism doesn’t work in a world with limited natural resources where human labor has been priced out of the market by automation.
In other words, automation is limited by available resources… and to date those resources are limited to what we have here on planet Earth.
“The real problem is that even though capitalism is obviously broken, the uber wealthy are determined to get every possible cent out before it completely falls apart.” Yes they are knouting out the pillars that hold the roof over all our heads. They are creating conditions for a mass die-off that will impact all classes very badly.
We most move from a capitals consumption based economy to a conservation for profit economy, such market forces are beginning ignored at the peril of the planet and all life on it. Population control will be part of salvaging our situation. One example, is the ZeroHouse http://inhabitat.com/tag/net-zero-house/
Love to see what a modern Henry Ford could do with this concept. Low footprint, with greenhouse and 20 hr work week.
Nice pipedream, our rulers will deliver over consumption and global resource depletion with pollution and population control by the four horseman.
I think Jon is a bit confused by the rhetoric being used about the tax reductions and the offshore money. About $200,000,000,000 in taxes should be collected when these funds return to the US at the new lower rate and future earnings will be taxed at the full new rate.
Only an insane manager would take these tax savings or offshore funds and buy new jobs without new demand for their products or services.
The one thing that Trump has stressed about these tax deals is that they are part of his jobs promotion deal and businesses that have offshored jobs will be required to return them to the US where the demand for the products they build already exists. These tax savings are also the carrot to entice corporations to stay producing in the US and I’m certain that the Ford management took Trump’s promised tax reduction into account when they made their huge decision to stay producing in the US
Some of the saved tax money could be used to facilitate the moving of equipment or preparing new factories with the assurance of tax savings into the future. Even the distribution of some of this money to shareholders might stimulate some job creation in the yacht building industry.
Chris Hedges can come off as hyperbolic at times, but maybe he’s spot on in his predictions. He explains:
From here
This is the stage of late capitalism that Donald Trump represents.
It surely is. But back in the day, when Marx was alive, there were no social-oriented states, so he could not predit that public sector would be pillaged, also, his model did not include labour force could be exploited overseas. Or that wars present viable solution to crises. Or that banks would create derivatives and endless fiat-backed loans. What a fool he was to think of that, back in the 19th century.
Totally agree, Hedges sounds a bit unhinged at times, but it may be because he’s completely freaked out by what he is seeing. I know I am.
It is just tooth fairy stuff for anyone to believe that a tax break will be invested in hiring.
From a corporate standpoint dividends and consolidating to eliminate rivals (i.e., eliminate competition, thereby raising prices) is the logical use of windfall money.
People standing in the employment line, or working for minimum wage in the company, really aren’t part of deal.
This is the same old silly trickle down con game, proved wrong again and again, believed in again and again by people who live outside the realm of reality.
you mean we’re going to repatriate the tax-cuts and bailouts given to the elite capitalists and their enterprises over the last decade, thus accruing a larger deficit…swimmingly splendid.
Let’s think about letting them do the same with stashed wealth from tax evading and harboring (revealed by the International Consortium of Investigative Journalists) in the Cayman Islands, British Virgin Islands, Liechtenstein, Switzerland and Cyprus, with the help of willing private banks wanting the hidden money inflows (laundering), allowing not just money but business deals to be hid from scrutiny (personal and corporate accounts both).
…you wonder why your taxes and fees are going up, community revenues and services lacking?
Should we impose rules and regs and watch as they circumvent them time after time, again and again?
CHANGE the entire structure of economics. It should not be a playpen for elites…
…or just improve the playpen yet even more…cut Social Security, Medicare and work until age 70.
STAND TOGETHER
The Not-My-President-Elect Rule of Thumb #46528
If the United States’ new not-my-president-elect says something will be “beautiful”, like, say, the number of jobs that will be created by his corporate tax giveaway or his plans for health care or his Twitter account or…wotnot, it will most certainly not be. Believe me, believe me.
Trickle Down Economics 2.0……
How about Trickle Up …..Donnie… ?
Jon Schwarz – the last link to Bill Clinton only mentioned the result of the GWB repatriation; not that GW was pissed.
Can you include conditions and claw-backs to avoid what happened in 2004? Or is this done with the stroke of a pen?
It’s great to have these people on record. That way there can be no doubt to their intentions.
I feel terribly for the people relying on this master manipulator and con artist, to save them, as well as the rest of the country who think that this plan will fix their problems.
The article doesn’t have the quote but Clinton says it in the embedded video.
In 2004 there were conditions but no consequences for ignoring them, so corporations ignored them. This time there probably won’t even be conditions.
I didn’t watch the video.
Of course, when you leave it up to corporations to do the right thing, they tend to disappoint.
That is contrary to the notion I was reading about in The Penguin and the Leviathan – that people’s natural instinct is to be cooperative. I had to stop reading, with this nagging thought in my mind.
You are probably right.
Thank you.
Give Bill Gates an extra million and he will stash it away in some fund or in stocks, never to be seen again.
Take that million and give 10 000 each to 100 low income earners and they will put every cent back into the local economy – the grocer on the corner, the cafe, carpenters and roofers, etc, etc. The whole community is stimulated and comes to life again.
So Trump is doing the exact opposite of what he should do to create jobs.
This analysis is far too difficult for Trump voters to follow.
Thanks for trying anyway.
The right way to do this is to increase the Corporate tax rate, and give them credits for investing in infrastructure, equipment, education, training and hiring. That way, they only get a tax benefit if they actually follow through on the trickle down process. We all know how well trickle down worked under past Republican presidents and Congresses. And they just don’t have the vision to realize that improving the situation of the middle and lower classes will trickle up in the long run, and give them more money in their own pockets, for the long haul.
Actually tax breaks for infrastructure investment is exactly what trump had proposed. It is meant to go in form of privatization of future projects. If Bernie envisioned that can be done through the gov spending, well, he would have to go a long way. considering the mainstream’s attitude.
Only the communist Chinese do that, and what they do is unexplainable from the economics theory standpoint, but surely very immoral and dark!
Also, return on stocks purchases is near the bottom for everyone except the real top-dog companies, yet share buybacks and dividends have exceeded retained earnings recently (WPP. June, 2016). So that’s no sensation companies adressed in this article will do that, it’s a common practice. So I think crying that someone was scammed is unjustified, it would the same at least have the other candidate won; and premature, mentioning the optimism economists have expressed towards year 2017. Of course that doesn’t mean they are not full of something, but is all what the society has (non-ostracized).
This is great news! Now perhaps my salary wont get taxed into oblivion. By the time the feds, the state, the city and the property taxes get paid, over 50% of my salary is gone.
If that’s the case (and I don’t doubt it — I’ve been there), it means that you are in a very comfortable income bracket.
Taxes, in enlightened societies, are the price paid for civilization and the services and infrastructure serving and enjoyed by all.
Rather than clamoring to keep more for yourself, why not work to create governments where taxes are used for mutual benefit rather than to further enrich the already-wealthy and to fund a worldwide war-and-plunder machine?
Wow, what a radical thought. I wonder why we don’t do that now. But the big point is tax cuts for corporations do not mean more jobs it means more money for the already rich. Again. The working people who voted for Trump were out smarted by the con man – again.
Yup, but the same scheme was high on Hillary’s todo list, so they would have been outsmarted if their con-woman had won.
Wow, what a radical thought. I wonder why we don’t do that now. But the big point is tax cuts for corporations do not mean more jobs it means more money for the already rich. Again. The working people who voted for Trump were out smarted – again.
I am more than happy to use my tax dollars to help others…for legitimate cases. Before I had my present job, I was a teacher in Los Angeles Unified School District. At the school I taught, 100% of the kids got free lunch. On my first day ever as a teacher, when the lunch bell rang for the kids to go back to class (about 100), they all got up and left their trash on the table. One kid told me “someone else will clean it up”. So they got “free” food at the taxpayers expense, but felt no need to do their part. That is just one of many example I can go on and on about. Mutual benefit implies that the recipient is giving back in some way. That’s not happening in the majority of cases.
Your takeaway from the free lunch example demonstrates narrow-minded victim-blaming.
I have a similar example for you: someone close to me teaches at an elementary school in one of the richest communities in the very-rich-overall Marin County, California. The vast majority of kids there are from wealthy families. The cost of lunch is utterly trivial to these families and the very fact that there is a cost has never occurred to almost any of the kids.
Guess what these kids (who are getting lunches that, to them, are entirely “free”) do when they’re finished? Unless the teachers and aides stand guard and crack whips, they leave their messes for others to clean up.
You see, like your kids at LAUSD, they’re kids. It doesn’t occur to them to be grateful for what they have received without “earning” it, or to “give back” by cleaning up the mess.
They are kids.
What did you tell them so that they would know it would not be acceptable behavior on day two?
I gotta ask too, what did you do to teach those kids that lesson? Were you just expecting somebody else to do your job for you?
Just from your comment you can see its no surprise where those kids learn that attitude: from their teachers and parents. Why bother teaching kids how to behave when somebody else will do it?
It’s pathetic how you’re trying to play the victim when it comes to a child’s behavior. You’re an adult. Act like one.
I understand why you would object to that! Obviously, if high school cafeterias had to hire waiters, that would reduce the real unemployment rate.
The children need to be trained to understand that _everything_ is their job; they still have to pay, of course, but they don’t get labor for the money, just a ticket to have a small share of resources. For example, when they go to the supermarket they should expect to check out their own groceries, when they have a technical problem on the computer they should expect to get technical support from peer forums on their party sites. What they pay for, in an increasingly pure sense, is a ticket into the agribusiness that holds the right to farm a given patch of public land, or to a share of the coltan rightfully dominated by the warlord who cut off the most forearms during the war and the wise capitalists who paid to help him do it.
The problem with allowing companies to bring back funds at a lower tax rate is that fact they they are allowed to do this without any strings attached.
If in fact the goal of allowing the reduced tax rate is a trade of reduction of tax dollars for jobs, then the government should require to see the plan for which these companies will spend these funds for new job creation.
The problem with this plan is that it is exactly the reverse of many other tax credits whereby the taxpayer must first engage in a specified activity in order to earn the reduction of tax. Ex: Have a child to earn an exemption; Buy a home to earn a mortgage interest deduction, buy an electric car to earn the clean air deduction.
With this plan, they are getting the tax deduction with NO guarantee of the required taxpayer behavior.
A better way of doing this sort of plan is for the companies to actually do the hiring and expansion first or at least start it and then allow the funds to come in to cover the costs.
After the first child, additional births should result in substantial tax increases. Mother Earth can’t afford many more rich consumers.
That would be a first one.
Usually the Republicans are, only to well, known for making a big mess of their terms….
It should be mentioned that this exact tax holiday was Priority Number One for Hillary Clinton as well. Public interest and jobs was never part of the debate.
Thanks for providing the details needed to prove the corporate bandits are lying again. Even lacking them, the logic is clear:
“If multinationals saw strong job-creating investment opportunities, they could simply borrow money domestically, using their foreign funds as collateral.”
bingo.
Ultimately, these practices will backfire on the corporations as few will have the wherewithal to buy their products and/or services. No jobs = no spending power. If the global economy continues in the direction it’s been going, there will almost certainly be violent revolution as people protest starvation and deprivation.
Give them the tax breaks after they deliver the results they promise.
If “Voodoo Economics” really works they should be able to
shake the rattle, and bank on it.
If folks only knew the truth. “Who controls the issuance of money controls the government!” Nathan Meyer Rothschild
June 13, 2016 Which Corporations Control The World?
A surprisingly small number of corporations control massive global market shares. How many of the brands below do you use?
http://www.informationclearinghouse.info/article44864.htm
Since I turned off TWC, I proudly pay for none.
If Trader Joe’s and Whole Foods use these companies, they haven’t told their consumers.
Interesting list and quite small – thank you for the link. Trillions of dollars is quite an impressive number.
Will Trump’s tax cuts taste better or worse than Clinton’s would’ve? Better or worse than Obama’s?
did you read he end of the article above?
“… the last time the U.S. had a corporate tax holiday in 2004, cutting the rate on repatriated profits to 5 percent. Companies lobbying for the so-called “Homeland Investment Act” claimed it would help them hire Americans and invest in research and development. Instead they used the money for stock buybacks and increased executive compensation, while the prime beneficiaries actually cut their U.S. payroll. (According to Bill Clinton, George W. Bush was “so mad that he signed the 5.75 percent repatriation bill [and] none of it was reinvested.”)”
Yes, I read it. That passage doesn’t change the flavor of the tax cuts under Obama, nor what would’ve been the flavor of Wall Street Hillary’s tax cuts. You’ve scored no points.
Of course informed readers know that Obama’s stimulus was rich with corporate tax cuts:
“”Obama tax-cut proposals, if enacted, could pack more punch in two years than either of George W. Bush’s tax cuts did in their first two years.”
– Wall Street Journal
“”the sort of thing we could have bipartisan agreement on. Republicans, by and large, think tax relief is a great way to get money to people immediately.”
– Mitch McConnell on the stimulus
Schwartz needs to stop pretending. It’s business as usual in DC. Big companies like GE and Apple never really pay anything near the tax rate. Yet this article does circle around an important point. Corporations already have trillions on the sidelines they use for stock buybacks and dividends. A tax cut will only increase the hoard. Investment will not occur unless there is demand. For instance, even if GM had a quadrillion dollars they wouldn’t build a automotive plant unless people demanded more cars.
01-05-2017–structuring the Post-Reagan-Trump era!
It is enough to create industrial policy by cutting taxes for those who invest in certain underinvestment sectors. And get into the 3ª Industrial Revolution!
Every time I read a piece like this one I’m reminded of a story Michael Landon told on The Tonight Show. He was talking to Johnny about his big rambling house in Malibu, his several offspring living with them, and their friends, and their large pack of adopted dogs.
Every time a new dog was brought home, the ‘politics of the pack’ had to be renegotiated, including the rule about not marking with urine in the house. Inevitably, some dog (suspicion on the new dog) would pee in the house. Every other dog reasserted their position in the pack, if they had a position to protect, by doing the same. It was impossible to determine who the culprit was. There was yelling anyway, tension, stress all around, eventually calm and clean floors – until the next dog.
I think the predictable outcome of Eric Holder giving the banks a free pass with ‘too bog to fail’ is a bit like Landon’s pack. Some banks peed, other banks watched and waited then joined in jockeying for profit and position. The crimes were discovered and there was a lot of posturing and yelling. The biggest dogs were singled out for ridicule. They had the good sense to lower their ears and tuck their tails, but admitted to nothing. The executives claimed SODIT (some other dog did it). No one got chucked from the pack to live and hunt with street mongrels. The kibble kept coming.
And every other corporate dog watched this and the get out of jail free card from the Washington, and thought, ‘If we eat enough smaller companies, we too could be big dogs, and reap the benefits thereof.’ Hiring increases labor costs and lowers profits, less money for executive’s private kibble stash and/or growing company with smaller more manageable dogs.
Meanwhile, every large company’s HR department will tell you they have thousands, if not millions, of jobs available if only they could find the talent to fill those positions. This too is a fiction; it’s all just entertainment.
O/T
Jon, Will the Intercept be Live Blogging the congressional hearings next week on the Intelligence Report ….eg Russian Hacking?
I think it would be great for Intercept Staff to critique their very public obfuscations, lies and general B.S.
Say what now!?
There are hearings going on this morning with Clapper and company. Clapper mentioned other hearings next week, etc.
I could have this messed up and apologies if i do.
nothing like being a neutral observer.
confirmation bias, prejudice, partiality, do not contribute to discovery of truth.
I’d like to see someone acknowledge that the existence of bona fide secrets, especially with regard to sources, methods and means.
They are genuine concerns for a functioning government….and all too often derided as only cover for deceit.
Deceit has been discussed at great length here and is acknowledged, is a real concern. However, on the other hand, it would be evidence of intellectual rigor to explore, discuss the real need for maintaining secrecy on some matters….and how these needs are balanced against the need to satisfy public obligations for disclosure and evidence.
How does this circle get squared?
Barton Gellman tweeted as much yesterday:
I’m the last person you want to ask with regards to sources and method, RMD. Yes, I believe intelligence agencies have a right and need to have secrets.
But their methods are being used against US citizens. I am specifically referring to myself and my family in this instance. I have been under 24/7 surveillance now for years with their ‘methods’ and it pisses me off that I have to go to lengths to have a private conversation with my wife, family or friends.
If you want to talk methods, then here’s one for you. They (CIA and NSA) are actively forcing software to people’s mobile phones that enables them to upload all your data, use your microphone to record your calls, use your camera to take photos and video of anything around you.
there is absolutely no debate…and you rightly point to deeply troubling developments that are structural alterations to Constitutional guarantees to be free from unwarranted searches and seizures… our rights to privacy, freedom of association, etc…
I should have clarified that my comment narrowly was directed to the hearings underway. …and to the inquiry into assertions about Russian hacking…
I am very sorry for your ordeal… along with the rest of the citizenry…
The job capacity needed by WE THE PEOPLE is for each and every individual to be empowered in their own business of having been entitled to the blessing of liberty to which governance in our land was founded. Everyone for themselves and dependent loved ones is entitled to be able to put food on the table, keep a roof over head and clothing on their bodies and enjoy enough rest and leisure to keep going and to find it worthwhile to do so. And such should be served by advancing technology of robots, drones and automated systems that are the product of our culture and not that of the hoarders of wealth that have gotten their greedy hand in control of them. To the service of all this generation’s needs it is a time for our own rendezvous with destiny by increasing the pace of taking the nation totally electric off of the same forces of nature that over the eons turned and accumulating biomass into fossil deposits that are to valuable and troublesome to incinerate. This source of power is the boundless supply of energy of the wind, sun and gravity that belong to all of us, will exit as long as there is an inhabitable planet Earth, transport themselves for free, do not have to be found, fought or haggled over, and leave no costly waste to be cleaned up or ignored.
So much electricity can be thus produced that it can be licensed for free individual use; provide economic power to industrial, business and public facilities; electrify low-cost fare and laden high-speed and light rail; and leave a peak-plus supply for use when the skies are dark and the wind is still. This ends the nation’s servitude to the wealth hoarders who would keep of addicted to oil and our involvement in sending troops to defend and die the oil holding and transport of what it black gold to a greedy few and a black future to us and our posterity.
Licensed power for free individual use provides everyone with their own free enterprise to have their own backyard and community green houses and gardens for growing food, coops and pens for animals, and electrical, woodworking and machine shops for creating of gizmos, gadgets and furnishing that come of the great entrepreneurial imagination and spirit of common mankind engaged in the governance of their own lives. And those that more enjoy exchanging their work for remuneration by others will have a foundation from which to bargain in a market that needs fewer hours of human labor because such is being replaced by robotics, automation and drones. No need to listening to the endless rant of Luddites left over from Middle Age blindness, we only need do that which maximizes the independent freedom and good life for WE THE PEOPLE.
Although I enjoy the boundless optimism modern technology has created, I have to warn that all technology are just tools. Tools are used by people, and to just ostensibly trust people to act on their better angels when given total “freedom” I think is a little naive. It’s the same argument hyper-capitalists uses about the free-market. The old advertisement “If you just take away the restrictions we would want to play fair” but that never happens, and in fact the game benefits the more ruthless people in that game.
As liberating as technology can be we always should remember that they are tools. If we don’t teach and condition our kids about compassion and understanding of a common humanity then they will use the tools in perhaps not so beneficial ways. Maybe more self serving ways, like personal gain or service to nefarious groups.
Just look at the Internet as an example. It’s very much a double edged sword as we saw with the recent US election and controversy about media.
I absolutely share the optimism tech provides. I’m just offering a counter-point grounded in practicality to add some perspective. I work in scientific research and know a lot of zealous tech worshipper types who fall in love with the ideas and tech with which they work. It’s almost religious in a weird way. Just a warning to not get seduced by the sales pitches from tech-giants. Always fight for your corner.
First of all, we need machinery and resources to be able to harness wind, solar etc. It would be an absolutely massive undertaking, in manufacturing and implementation. It could be done, but the people doing it aren’t going to make it free (sadly a lot of solar companies are subsidiaries of big oil). It’s not like you snap your fingers and boom there’s free energy.
As for automation, there would be complete chaos for a long time ( “Rossum’s Universal Robots” dude. Read it). There are going to be ALOT of people without work. If there are companies that manage to survive this transitional process though, they’d be even more monolithic because their competitors have died out. And actually you’re not making people freer, you’re giving all the power to the people that essentially control all of the technology. It’s not going to belong to “we the people”.
I’d rather be labelled a Luddite, than blindly believe in technocratic, utopian nonsense.
Trickle down, oh yeah
Corporate tax breaks are now a euphemism for crony capitalists with help from corrupt politician, all with their hands on the nations treasure. The blue collar voter will soon have voters remorse as they realize Trump is a pathological liar.
I wonder when people will wake up from the delusion that wealthy people create jobs. Hiring people is a last resort for a business since people are the biggest cost. If businesses and the wealthy people want to maintain what they have, why would they throw money away to hire people? Especially when a computer algorithm or machine can do the job better. They don’t get sick, they never need a break, and they don’t demand a fair wage. And the bright people inventing those programs get screwed cuz they get bought out of the IP rights for a lump sum of money and the business crushes any competition while improving its own productivity. The game is rigged against the consumer. It always has been and always will be unless people are willing to change their behavior to force things in their favor.
I doubt people will notice or care though. Not until there are enough homeless people camping out on streets and highways that commutes are affected on a daily basis.
The thing that baffles me, is they’re also destroying their customer base. There’s going to be a tipping point where automation is so widespread, nobody’s going to have a paycheck to buy these products. I almost want to see these businesses shoot themselves in the foot and destroy themselves, because you know, schadenfreude, but then I remember that good people are inevitability going to suffer too.
I share in the schadenfreude. Everything in terms of politics has become a dark comedy to me.
And yeah, the behavior of business is like a meth addict in the downward spiral. Their so addicted that their usual fixes don’t even get them that high anymore, so their mission for more stronger stuff puts them on a mission. Anybody who knows an addict knows that behavior. Like most addicts, they never snap out of it until they hit rock bottom, and even then that’s just a chance at recovery, no guarantees.
Guess we can hope after things hit rock bottom there are enough thoughtful people left to build something worthwhile. Until then, I’m learning to grow food, defend myself and my family, and enjoying the show.
Pardon my typos. Meant They’re instead of their in that 2nd paragraph. And didn’t mean to use mission twice in the same sentence. Gotta love mobile keyboards.
If what I’ve observed in San Francisco is at all predictive, when that happens the homeless campers will be despised, hated, abused, and blamed for destroying the community.
People with no bathrooms will be reviled for peeing in alleys and corners. People with nowhere to sleep except doorways and parks, or in encampments under overpasses, will be rousted and harassed, by neighbors, passersby, merchants and police.
This is America. The poor have always been guilty of being poor.
I’m witnessing the same in Sacramento. And I don’t see those attitudes changing either. But, people, even the well off ones, will be dragged down into it eventually. They can plug their noses, but sooner or later they are gonna have to learn to swim too.
People who study history know what happens when people get pushed like this long enough.
Here’s a thought. Take the incoming President at his word and tie the “repatriated” funds to specific job growth (and not phony M&A actions) otherwise the dollars if funneled into share buybacks or dividends could be taxed at a higher rate (read penalty) for those activities not taken.