America's companies are hoarding $1.4 trillion in cash

originally posted by: hoovercon
I would expect banks to be setting on 1.4 trillion not corporations.

Banks need corporations to survive(production). American banks cannot touch other countries. This leads to a bad situation. If America wins the war the bank takes total control of the planet. The very reason why we can't live in homes without peace. Constantly have to pay money even though you have none. Banks need to be fed some way or another, either by gov or corporation or small businesses. This doesn't mean Corporations can't create their own bank which they do today. Their big fat safety deposit box.

originally posted by: AugustusMasonicus

originally posted by: wantsome
Blah blah blah poor corporations. We also have the highest cost of living in the world. Been hearing for years that we must cut taxes for the job makers. All they do with it is buy more yachts. It sure don't end up in the citizens hands. Wages have been stagnant for 20 years.

So continued off-shoring is going to make it better? If you could make more money in Town A than Town B would you go there?

This is so unbelievably simplistic that I am astounded that everyone does not get this. It is a zero sum game, if we are not competitive somewhere else gets the money.

Competitive equals THIRD WORLD STATUS, A ZERO SUM GAME INDEED.

Time to remove the rights and powers some people have in this world, and stop listening to the lies spouted constantly.

Oh, and what percent profits are ZERO SUM.

a reply to: ParasuvO

I notice a pattern with a few highly regarded posters who consistently use circular logic to derail threads. One of them is very scientific, one is business minded and there are others...

I'm always wondering if their purpose to confuse whoever is reading the topic.

originally posted by: AugustusMasonicus

originally posted by: wantsome
Blah blah blah poor corporations. We also have the highest cost of living in the world. Been hearing for years that we must cut taxes for the job makers. All they do with it is buy more yachts. It sure don't end up in the citizens hands. Wages have been stagnant for 20 years.

So continued off-shoring is going to make it better? If you could make more money in Town A than Town B would you go there?

This is so unbelievably simplistic that I am astounded that everyone does not get this. It is a zero sum game, if we are not competitive somewhere else gets the money.

No, what we should do is get rid of Nafta, the GTA, and the new TPP trade deals and place taxes and tariffs on ALL imported foreign goods and materials. Then if any corporation on the face of the planet, wants to participate in our market place, ie take our money for their goods, they can pay back into our economy and government their fair share in the form of taxes and tariffs, and if not, oh well we don't need them, we can start making our own products again and selling them to ourselves, the same way we did for ages before the trade deals, you know back when the American production base and economy was unrivaled by any nation in the world.

It's so simplistic, I am amazed more people can't see that truth. The trade deals are what crippled our nation, our economy and allowed the corporations, many of which were American to pull up stakes and become the multi national locusts they are. Of course it will never happen, they own our politicians and fixing it now, would cause Americans to suffer for a while, until the production base could be rebuilt.

Just my opinion though.

originally posted by: AugustusMasonicus
a reply to: CB328

This is what happens when you have the second highest corporate tax rate in the world.

Funny how people support corporations that want a race to the bottom of corporate tax rates leaving everyone else to subsidise them and pay not just their own but the corproations share of tax too.

When I went out to work in 1969 the corpoate tax rate was 60% in my country. Around that time I read an article in Time mgazine, I think it was, that made the argument that the purpose of inviting foreign corporations into your contry was because of the tax they paid.

Why should wage and slalary earners pay the nations tax bill? Parciualrly, considering they get nothing for it. Not just do corproations not want to pay any tax but get all the goods and services in return, but they are also getting the welfare system taken off wage and salary earners and given them too?

Just how letcherous are these people and just how callous are those who support them? Morover, just how stupid are those small time insignificient nobodies who support the corporate sector when its the corporate sector who is screwing them stupid with low wages, high tax. Just how much do these corporate leachs laugh at those they are screwing into starvation.

Futher; just how rampantly stupid are those small time insignificient littles nobodies who are always members of the masses, are in the eyes of the corporate leaders, for not even knowing about corporate welfare because the corporate leaders make sure the media never tells them about corporate welfare.

How stupid are these poeple for not knowing the corporate controllers make sure the medial trains up all the small time insignificient little nobodies, to hate welfare for individuals and hate those who claim it but not even think of corporate welfare.

I could go on but whats the point, some people are just indoctrinated they will never learn.

This is not a new thing or a new trend.

From 2005 :Global Economy Depends on Investment

From 2006: Behind Those Stockpiles of Corporate Cash


From 2006: [IMF Report]

What Has Been Driving the Increase in
Corporate Excess Saving?
Since the 1980s, the corporate sector of the
G-7 economies has swung from being a large net
borrower of funds from other sectors of the
economy to a net lender of funds. Indeed, on
average over 2002–04, the excess saving (or “net
lending”) of the corporate sector—defined as
the difference between undistributed profits
(gross saving) and capital spending—was at a
historic high of 2!/2 percent of GDP in the G-7
countries (Figure 4.1). This behavior has been
widespread, taking place in economies that have
experienced strong economic growth (Canada,
the United Kingdom, and the United States)
and in those where growth has been relatively
weak (Europe and, until recently, Japan). Most
of these economies, however, were affected by
the boom-and-bust cycle in equity valuations in
the late 1990s–early 2000s, which left corporations
with high debt levels

originally posted by: chuck258
This is a genuine question so forgive my ignorance. What exactly is it that corporations are supposed to pay taxes on? When a car company buys steel sheets from a Foundry, are they not paying taxes on that? When Boeing buys Jet Engines from General Electric for their fancy new Dreamliner, are they not paying taxes on that? When Wal Mart pays it's employees are they not paying a payroll tax? When Starbucks pays their CEO, are they not deducting taxes?

Again, this is a genuine question, I have heard this claim several times before and it always confused me. Please if someone wouldn't mind explaining.

When steel sheets are bought from a foundry a sales tax is paid, however the profit on those sheets to the foundry also results in an income tax. The car company that buys the sheets however is able to offset their profits with operating expenses and it typically goes by retail value rather than the amount actually spent. This matters a lot with bulk purchases because things are usually cheaper due to economies of scale. Payroll taxes are typically paid by the employee, just because the money wasn't put on your check doesn't mean you didn't pay it.

Typically when people refer to corporate taxes they're referring to corporate income taxes. One of the biggest loopholes is in charitable donations, especially for digital products. Lets take Microsoft for example as this is a HUGE part of their operating strategy. Pretty much every computer in every school in the US uses Windows, and those licenses are usually gifted to the schools by Microsoft. What it costs Microsoft to do this is the cost of printing a DVD and shipping it, so just a few cents. Microsoft is able to turn around however and claim that what they gave is the full value of their product, which in the case of Windows 7 was about $150, and then deduct that from their profits. So if Microsoft gives out 1 million software licenses in a year, that's $150 million they get to credit themselves while it only cost them $100,000. Hollywood and the RIAA have taken this a step further, and they deduct the value of their product lost to piracy on the idea that a pirated copy is a lost sale, and the fact that you don't pay taxes on product lost to crime. So if they have a movie that gets pirated a million times, and they deduct the retail DVD value of that ($25 I think?) they get to offset revenues on that movie by $25 million dollars, that is effectively tax free.

originally posted by: AugustusMasonicus
History is irrelevant in this discussion, the article was clearly about the present and so are my replies.

Income is a profit from ones time.

Try this instead: John works and makes $60,000 in one year. John does not work and makes $0 in one year. How much profit does John make if he works?

Because Apple is still sitting on cash reserves totaling $159 billion. That is how.

Context is important, you are missing the links.

Income is not profit. Income is revenue in the context of business. This is not the same as profit.

I illustrated it specifically. You know how businesses calculate profit - they take their revenue, subtract taxes, subtract other expenses (power/internet/rent/etc) and what's left is their profit. You fail to consider such expenses when you wrongly call income profit.

Try this instead - John owes $60k a year in taxes, gas to get to work, spending on work clothes, living expenses, and loans but earns $60k a year at his job. Oh look, $0 profit. If instead John earns $0 a year in working, but has capital gains of $120k a year with the exact same taxes/expenses as before... suddenly he has $60k profit.

The money you are paid for your labor is not profit. The money you are paid is revenue. Income is revenue. Revenue minus expenses (including taxes) is profit. This can be negative if you have way more outlays than income.

This is seriously simple stuff and you are confusing it utterly.

originally posted by: CB328
So you think Obama and government bureaucracy in general is terrible for business and stifling their profit making and by extension job creation? Well guess again. In fact, not only have a lot of companies continued to see record profits during the Obama years, but they have a lot of money at their disposal that they could be using if they wanted to. How much? Nearly one and a half trillion dollars. What is true is that American companies often don't hire as many people as they could because they care more about being cheap than the well being of America or Americans. Now these same CEO's want to control the Presidency. I hope they don't succeed.

America's companies are hoarding $1.4 trillion in cash

money.cnn.com...

Well I own an American company. And hmmm, I seem to have misplaced my evil $quillion$ of dollars......

originally posted by: CB328
What is true is that American companies often don't hire as many people as they could because they care more about being cheap than the well being of America or Americans. Now these same CEO's want to control the Presidency. I hope they don't succeed.

Ahh yes, you got me.... I'm BUSTED!!!

It is true in fact that I could hire HUNDREDS of people tomorrow... well, that's a lot of interviews to go through, but maybe a few interviews a day, so yea, I could hire HUNDREDS!!!!

I could promise them fantastic wages too!!!!

Brilliant!!!!!

And all these people could sit around doing a bunch of NOTHING since I currently employ enough people to just get the work done!!!!!!

And then when payroll comes due, I can pay all my magical elves from my imaginary $quillion$ and the world will be UTOPIA!!!!!!




LOL. You're not exactly a world-renowned financial guru, or business owner eh ??

Capitalism is a trickle up economy. Always has been. It's sold to people by saying everyone has the chance to make it big, which is true up until a certain point.

There has to exist a large swathe of people from which to take money from in order for capitalism to even exist.

This is the problem with the economy now. Those who have made it are running out of people to take money from.

originally posted by: Greven

Context is important, you are missing the links.

It is, and you are avoiding it. You are not a business (unless you set yourself up as one) but you still profit from your labor.

Try this instead - John owes $60k a year in taxes, gas to get to work, spending on work clothes, living expenses, and loans but earns $60k a year at his job. Oh look, $0 profit. If instead John earns $0 a year in working, but has capital gains of $120k a year with the exact same taxes/expenses as before... suddenly he has $60k profit.

Actually, it is $120K, the government does not care about your personal fiduciary obligations.

The money you are paid for your labor is not profit.

Yes, it is, which is why you are taxed on the fruits of your time invested.

originally posted by: Thecakeisalie
a reply to: AugustusMasonicus

if we are not competitive somewhere else gets the money.

Apple, Nike- all those companies practically run Dickensian workshops, paying a pittance while earning a payload.

Why? because workers rights are a fantasy in many countries and megacorps do not want to pay extra wages.Yet a quarterly profit of a few billion dollars with change is unimaginable to someone who earns a hundred rupees per annum.

Well, public corporations are only accountable to shareholders, nothing else. And we know corporations are people too according to Mitt Romney.

originally posted by: UnBreakable

And we know corporations are people too according to Mitt Romney.

Corporate personhood has existed since the 1700's in Untied States law.

originally posted by: CB328

This is what happens when you have the second highest corporate tax rate in the world

Most companies pay very little in taxes. This has been debunked about a billions times, yet somehow people keep making this bogus claim. I'm going to have to call dishonesty here.

They might have the high tax rate but Congress, controlled by those corporations, made damn sure there were enough loop holes so they pay very little...all in the name of trickle down economics. But, it's not trickling anywhere. The Great Recession of 2007 scared the fat cats and now they are hoarding more cash than most countries on the planet have...for the next rainy day. And because of this, we are on the brink of that rainy day nearly every day and if they'd just start spreading that wealth (through jobs, dividends, investments, etc) the economy might get a jump start.

originally posted by: AugustusMasonicus
It is, and you are avoiding it. You are not a business (unless you set yourself up as one) but you still profit from your labor.

THEN WHY DID YOU EVEN BRING UP INDIVIDUAL INCOME???

Do you not bloody well remember the whole root of this?

originally posted by: Greven

originally posted by: AugustusMasonicus
It is a zero sum game, if we are not competitive somewhere else gets the money.

Corporations are legally bound to act like sociopaths in this game - they must seek profit

Profit requires more money coming in than going out. This can be achieved by increasing revenue and/or decreasing costs.

A ruthless company may lower its costs in morally objectionable ways (see: sweatshops).
A different company might spend money to lobby government to get tax breaks.
Another company might increase its revenue through innovative products.
Any way you look at it, profit means taking more than your share of output.

Profit-seeking requires continual growth to sustain.

Yet, we know from basic biological research that infinite growth is impossible. We are near or over the carrying capacity of the Earth, so where is our growth to come from?

What does that say about profit-seeking?

This is all about business. Yet, you keep trying to make it about the individual:

originally posted by: AugustusMasonicus
Do you work for free or do you produce everything you require yourself?

Make up your mind.

You can't have it both ways, you don't get to choose when to exclude and when not to exclude from context.

In case you have forgotten, this topic is about businesses not individuals.

originally posted by: CB328
So you think Obama and government bureaucracy in general is terrible for business and stifling their profit making and by extension job creation? Well guess again. In fact, not only have a lot of companies continued to see record profits during the Obama years, but they have a lot of money at their disposal that they could be using if they wanted to. How much? Nearly one and a half trillion dollars. What is true is that American companies often don't hire as many people as they could because they care more about being cheap than the well being of America or Americans. Now these same CEO's want to control the Presidency. I hope they don't succeed.

America's companies are hoarding $1.4 trillion in cash

money.cnn.com...

I don't get the criticism here. I really don't. So companies are hoarding cash. So what? Are they required by law to spend money? Is this not a free country? (Oh wait, we're now required to buy health insurance, so I guess not.)

Maybe they're because they don't have warm fuzzy hopey-changey feelings about the way the economy is going, and they want to build up a buffer for the inevitable next recession. (Which frankly looks like it's going to be a bigger doozey than the 2008 recession. Could be a Depression.) Maybe they want to earn an interest on their cash. Maybe they want to stand ready in case good bargains come along. Maybe t̶h̶e̶ ̶r̶e̶n̶t̶ the taxes are just too darned high to consider investing that cash.

Instead of getting mad at companies for acting responsibly, how about being mad at the Federal Reserve for making money cheap to borrow? They've blown up so many bubbles the next time they pop -- and they always do -- it'll get ugly. We're overdue for at least another recession and it'll be bad for companies who have no reserve cash.

Maybe I should learn from corporations and go hoard some cash as well.

Sincerely,
Not a Republitard nor Libertariantard