Do you think I am full of it? It is okay if you do. Conservatives who read Winkest Link will point out how I am always railing about how the GOP seems to be off base on a number of issues. Maybe I am just a liberal wacko.
I don’t think of myself as a liberal wacko. I don’t even think of myself as especially liberal at all. I believe in the free market and a strong military. I believe America is a uniquely outstanding country.
I am liberal on some things, conservative on others. I try to let facts and logic dictate which views I take. I try (really) to leave emotion out of my decision-making.
Regular liberal readers might be disappointed in how conservative I can be on certain issues.
I don’t ‘like’ taxes. In that way I am conservative. I do, however, understand why tax is necessary: To maintain an orderly society, we need a strong central government, which requires tax. We need good roads and bridges. We need to educate our children. We need military and police and firefighters to protect us.
So we need tax.
In a pure economic sense there are times to lower corporate tax rates, and there are times to raise them.
Many conservatives, and especially teabaggers, hate tax. They don’t believe there is EVER a good time to raise tax. Naturally they accept the fallacy that all corporate tax just falls back on to the consumer.
The GOP, as it is currently constituted, preaches only one tax theory: Lower taxes create more jobs. The more money corporations have, the more they share!
Nope. Sometimes corporations just have more money than they know what to do with. Let us test the theory…
According to the Bureau of Economic Analysis, in the second quarter of 2011 American Corporations made $1.94 trillion in profits. Record profits.
That number is not operating expense. It is not gross income. It is profit. And that amount is after tax. (It is also after unimaginable executive salaries, and after those ‘horrible’ union wages.)
I repeat: $1.94 trillion profit after tax. Record profits. So apparently the tax they pay is not such a horrible drain.
BUT, the unemployment rate did not improve. Why? Because ‘More jobs’ is not a corporate goal. ‘More money’ is the only goal. And they already have more money than they know what to do with.
If making profits created jobs, we would be swimming in jobs right now.
So, if the corporations refuse to hire, now is the time for the government to do it. Private industry is sitting on trillions of dollars. (Remember, the $1.94 trillion profit mentioned above is for ONE QUARTER.)
Time to raise the corporate tax rate and/or remove loopholes.
This will help our whole economy. Bridges and roads are in desperate need of repair. We need more teachers and more police. Jobs. Jobs. Jobs. These are jobs that will create more jobs.
Notably, this will also help the industries that are being taxed. People with jobs will buy the products/services they produce. More jobs help everybody, even the wealthy!
But let us, for a moment, take the Republican technique, and apply it to the 2nd quarter. Instead of $1.94 trillion profit, let’s say taxes were lower and these companies netted $2.5 trillion profit. Would that have created more jobs?
Rhetorical Answer: Why didn’t $1.94 trillion profit create more jobs? What difference would another half a trillion make?
It just becomes more and more profit, not more and more jobs.
Obviously more profit does NOT equal more jobs. These companies already have MORE PROFIT. More than ever. Ever.
Republicans (except for the stupider among them) know this. They just use the phrase ‘more jobs’ to convince you to give more money to the already wealthy.
When companies are struggling, taxes should be lowered. When companies are robust (and ‘robust’ does not begin to describe $1.94 trillion profit in three months time) we have to look at the big picture.
Big-picture circumstances have now converged to swing to pro-tax.
- Companies are flush
- Unemployment is high
- Infrastructure has aged to a dangerous point
Lowering tax will fix none of America’s problems.