Corporate Tax Dance

All we have heard out of Washington D.C. for months is the spewing all of the gloom and doom of no money and the high deficit, the high deficit that most of these same politicians had a big hand in. Of course the real fighting over the budget doesn’t have anything to do with money.  It’s all about politics and social issues.  Issues that don’t have a damn thing to do with running the country like Planned Parenthood, funding NPR, to name a few. These are cuts that won’t make a pittance of difference in the budget; they are just things that some politicians don’t like.

Now while the slugs in the capitol were pandering to their big donors, this was happening in the corporate world. In the fourth quarter, profits at American businesses were up an astonishing 29.2 percent, the fastest growth in more than 60 years. Collectively, American corporations logged profits at an annual rate of $1.678 trillion.  Where in the HELL is the great trickled down effect?  Or could it be that the trickle down effect is another fat lie told to the worker bees?
 
Another fabrication that is being sold to the masses is how high the corporate tax rate is.  By law, the corporate tax rate is quite high, higher than most other countries, but the truth is most of these companies don’t pay the rate and are actually paying very little in taxes.  They have figured out every loop hole from here to China.  For example, GE America's largest corporation made 5.1 billion this year and isn't paying a dime in taxes. As I said a couple of weeks ago, there is over a trillion dollars overseas, sitting in European banks that American companies have made, but don’t bring back here because they would have to pay taxes on it.

And what are they doing with all that money? Well here is where a lot of it goes, CEO salaries.  How does this grab you?  H  Philippe P. Dauman of Viacom made $84.5 million in just nine months.  Exactly what does a person do to earn that kind of money? You know if the asshole came up with a cure for cancer, I might not call him an asshole.

Lawrence J. Ellison of Oracle, the software giant, was second in earnings with a $70.1 million payout, though that is down 17 percent from 2009. Still, Mr. Ellison’s fortunes are just fine: he had more than $26.3 billion in stock and other holdings in Oracle in 2010. Gosh, glad to hear it.

Here are a number of other guys who are not worrying about paying the rent or how they are going to feed their family.  John F. Lundgren, chief executive of Stanley Black & Decker, whose pay rose 253 percent, to $32.57 million, after a huge stock award. His counterpart at Emerson Electric, David N. Farr, saw his pay rise 233 percent, to $22.9 million, also because he was granted millions in stock. The median pay for top executives at 200 major companies was $9.6 million last year.

These guys may be making elephant bucks but what they are not doing however, is hiring. Unemployment, although down from its peak, stood at 8.8 percent in March. And few economists predict the jobless rate will drop substantially anytime soon.

Bottom line is as long as our politicians are tied to corporate money, this same little song and dance will continue in Washington D.C.

Today's good read is Devil Red by Joe R. Lansdale.  The is an excellent little murder mystery set in East Texas with two great lead characters.  The author is from just up the road in Nacogdoches, TX



Stay tuned for future adventures