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My big question would be if there is such an excess of cash sitting around, do we really need to cut or keep down tax rates?  The whole tax cuts are good argument is that cutting taxes free capital for investment, but apparently there's a surplus so low taxes are apparently not needed.

Well, it should be obvious: since our corporate overlords know what's best, then sitting on all of this money must be what is best for all of us, right?

Too bad the corporations no longer serve their original purpose, which was to accomplish works of engineering too large for smaller companies, after which they were traditionally disbanded.

Why o why do you people hate capitalism?

radarman wrote:

Sassy wrote:

A very cogent argument! Simple questions that arise from the information reported by this article:

If these corporations have so much cash:
1.  Why do they need any help from the American taxpayers?

They don't - and they shouldn't be getting any.

Then why are they? ExxonMobile along with others are getting $10 billion dollars in subsidies over the next 10 years to look for new oil sources or to upgrade their refineries. It is a fact that with all the mergers, big oil closed good refineries and refused to sell them to potential buyers -- in California -- until pressed by the California public and legislature.

radarman wrote:

Sassy wrote:

2.  Why do they need to outsource jobs overseas?

3.  Why do they need to import 'foreign' workers to do jobs Americans can do?

To make more money? Not saying it's right, but investors are in it to make money, not make nice.

As the article points out, the shareholders are NOT getting the profits. Corporations are hoarding the money.

radarman wrote:

Sassy wrote:

4.  Why don't they give back to the country and local communities by subsidizing American education in mathematics and science and other fields that contribute to the social and economic welfare of the United States?

Because they don't have to. Supposedly, tax dollars are being used for this. Also, some companies do support education through grants and scholarships.

I commend those who do contribute and support the country and its community. However, if it is tax dollars that are 'supposed' to do this, then corporations should be taxed MORE in order to carry their full share of the load since they are the most who will benefit from well educated workers, community services and a grateful community.

radarman wrote:

Sassy wrote:

5.  Why are they making income on "interest payments" when that is the business usually done by banks and financial institutions who are regulated by the government?

To make more money. Why let the banks have all the fun?

Because, as I said in my post, the banks come under a different set of regulations which are more stringent and complicated. If corporations want to do this, then they can become lending institutions, e.g. GMAC and Ford Motor Credit are such companies.

radarman wrote:

Sassy wrote:

6.  Why are all these mergers and acquisitions not being investigated more closely by the government so as to forestall any monopoly in the field?

They are, when the merger is questionable. There have been quite a few attempted mergers that were challenged legally.

That may be, but politics in the form of the party in power often calls the shots on how far they pursue a case if one is even brought, e.g. Microsoft was prosecuted under the Dems but were given only a slap on the wrist in the settlement by the Reps. And, recently, the Chinese were endorsed by the Bush administration to buy Unical and the deal was scuttled for the uproar that hit Congress when the public found out.

radarman wrote:

Sassy wrote:

7.  Why aren't more of the profits being returned to the shareholders in dividends?Etc.

Investors haven't demanded them, and companies aren't required to offer them.

No? Institutional investors are getting pretty uppity about CEO package deals and the Board of Directors selection. Average investors don't have much say, the the institutional and well heeled ones can vote out or vote in the people and rules they want changed. The problem there lies with the SEC who often turns a blind eye to such shenanigans.

radarman wrote:

Sassy wrote:

There are more questions here than answers.

Not really. Companies are amoral (neither moral nor immoral) - they exist to make their
owners (or shareholders) money. That's it. Everything else is a bonus. If you want more civic minded corporations, make being non-civic minded more expensive.

This can be exactly what happens. It did during the hay-days of the 19th century when the money barons like the Rockefellers ruled. Unions began to be formed, laws were changed with regard to child labor and workers became human beings under government regulations. It became so dangerous for these slave drivers they feared for their lives. Especially for their children and grand children, who became philanthropists much as Bill and Melinda Gates are beginning to do with their charity work. Microsoft never paid dividends until just recently -- which the article clearly documented. It is said that Bill Gates has always considered Microsoft to be a 'small' business. Who knew?

Besides employing the locals?  A lot of corporations donate a lot of money to public areas such as parks and museums.  I can personally speak for Target Corporation, and the Dayton Family before them.

A lot of small communities that court these companies see the upsides (jobs), but not the downsides when they make these deals. However, they are offering these companies the deals, and have to abide by their agreements. It is the city officials that should be strung from lightpoles in this case.

As for institutional investors getting upset about pay packages, well that shows that they are interested (at least at that company) Every investor should get upset about that sort of thing - and if necessary, vote with their wallet. A declining share price due to investor unhappiness would get most company's attention.

sturner wrote:

But if they have an expemtion from local taxes, they aren't paying for wear and tear on water, electricity, and roads, and they aren't paying  for schools.

A lot of corporations have to do property improvement to the are they wish to build.  The last major company I worked for built 2 new buildings with a parking garage.

The town that it was in required the company to plant a certain number of trees and preserve a certain percentage of land that they owned, but were not building on.

They also had to pay for the repaving of the road that is used to access the building, once construction was complete.

On top of all of that, they had to pay for sound engineers to come in and make sure that the parking garage (which was required for the building due to the lack of available land they had to use) would be engineered in such a way that it would not be loud and cause disruption to the neighboring homes.

The Target corporation here also gives tons of money to schools, the arts, and other communities.  They had to add public access through the skyway system, which is open to the public, allowing people to travel outside, without actually being outside.

EDIT:  Arguably, having a lot of local jobs from big corporations also raises the value of people's homes, which in turn usually raises the property taxes, funding local schools and everything else.

I don't remember anyone complaining about their home value going up. 

Last edited by MacBoy4139 (2006-05-28 2:31 pm)

Metacell wrote:

MacBoy4139 wrote:

I don't remember anyone complaining about their home value going up. 

A lot of people who'd like to buy homes are complaining.

As do those who get an increase in property taxes based on the increased price of the land.

Personal Property Tax is not 40%. Now property tax for corporate buildings and land used by them could easily be 40%.

Anyway, the reason all these corporations need to hoard cash should be obvious...how else are they going to pay for those golden parachutes that execs have.

-mark

Ra wrote:

kb5zhh wrote:

Ra wrote:

Add to this 40% the property tax that local governments charge to all property owners.

40% property tax rate?  So if I own a $100,000 house I pay $40,000 every year in property taxes?  I rent, but I can't imagine that is correct.  Perhaps you are referring to the capital gains tax rate?

This is what I said: "For example, approximately 40% of the money for a gallon of fuel at the pump is taken away from those governments I listed. Add to this 40% the property tax that local governments charge to all property owners. "

I did not say that property tax was 40%, but that approximately 40% of the money one pays per gallon of fuel at the pump is Federal and local taxes. On top of this 40% (fuel tax), cities, boroughs, etc. also charge property tax. The gas station owner pays property tax; if there is a pipeline running through town, the oil company pays property tax not only for the oil facilities, structures, etc., but for the land being used by those facilities, pipeline, etc.

Ah, I see.  I misread it then.

kb5zhh wrote:

Ra wrote:

kb5zhh wrote:

40% property tax rate?  So if I own a $100,000 house I pay $40,000 every year in property taxes?  I rent, but I can't imagine that is correct.  Perhaps you are referring to the capital gains tax rate?

This is what I said: "For example, approximately 40% of the money for a gallon of fuel at the pump is taken away from those governments I listed. Add to this 40% the property tax that local governments charge to all property owners. "

I did not say that property tax was 40%, but that approximately 40% of the money one pays per gallon of fuel at the pump is Federal and local taxes. On top of this 40% (fuel tax), cities, boroughs, etc. also charge property tax. The gas station owner pays property tax; if there is a pipeline running through town, the oil company pays property tax not only for the oil facilities, structures, etc., but for the land being used by those facilities, pipeline, etc.

Ah, I see.  I misread it then.

Are you suggesting that the property tax, or any tax for that matter, is too much? Anyone who owns property will pay property taxes from which everyone in the community will benefit.

Are you forgetting the towns and small cities where industry moves out and leaves behind dilapidated and deteriorating buildings -- not to mention the pollution or dump sites they are supposed to clean up, but don't -- that contribute to the total degradation of the community? Many of these industries left 'owing taxes' that the town or county gave them temporary relief from in order to get them or keep them established. Other property taxes -- mostly residential -- made up for that corporate welfare incentive. Federal taxes pay for the clean up. Or, is that just part of the necessary cost to do business in a capitalistic society? Corporate welfare is as much  welfare as human welfare.

Hey, I don't like taxes, either! But, taxes are essential if the community is to grow along with modern society and that means education, refurbishing the superstructure and, yes, giving incentives to business to locate there to produce jobs -- jobs that will help the community to grow and keep the young people there.

It has been reported over and over of middle-sized businesses who were forced into bankruptcy because they chose to stay in and help their communities rather than relocate overseas -- good example is the textile, carpeting and furniture industry back east. They felt dedicated to their community and to their workers, but competing 'big' businesses moved on to Mexico and now even further overseas to China for the cheap labor. And, you know what? Looking at the rising prices of these same products, we are paying as much as before, and in more and more cases, MORE for a product that is inferior to the original made here in the USA.

I always buy American first if I can! Recently, we purchased new appliances for our kitchen. The new electronic range is German engineered, but built in N. Carolina. The fridge -- the only one of it's size we could find -- is Chinese. The range is first rate. The fridge is a disappointment over my old Whirlpool that was made in Benton Harbor, Michigan in 1985.

So, choice is the first thing to go. Price becomes the deciding factor. However, one doesn't save a dime if the product doesn't cut the mustard and the separate, extra cost customer support contract adds to the final cost of the item. Lou Dobbs reported recently that 75% of American clothing is now imported. Notice any change in the prices? I see prices going up and up and no quality improvement. Even our military clothing is made in China.

American business is betraying the hand that feeds it. The 'bottom line' is the only thing that counts, and that's on a strictly quarterly basis. The philosophy of the Harvard Business School rules the economic world nowadays. Wake up and smell the decay, folks. It's your country that is losing more than the war in Iraq.