When politicians talk about the need for tax breaks for businesses, we are always to assume it is because business is struggling and needs more cash to invest in their ventures. When politicians on the right talk about it, it comes with the assumption that, as long as these businesses have enough money, that money will “trickle down” to the masses in the form of higher wages and new investments creating new or additional jobs.
That, however, is clearly not true.
Mitch McConnell has pushed hard for an extension of tax breaks for businesses and corporations that expired at the end of last year and he has asked that these breaks not be paid for since they are “existing tax policy”, even though they expired. The reason he wants this is not because he has the interest of his constituents in mind but because he has been lobbied hard by the “people”* with money who can make his campaign coffers a lot fatter.
(*”People”, of course, stands for corporations since five justices on planet Earth decided they are people so the rest of us have to go along with that…for now.)
These tax breaks, known as “tax extenders,” largely benefit big corporations like General Electric, HP and Citigroup. The report finds that between January 2011 and September 2013, 1,359 unique lobbyists representing 373 companies and trade associations contacted members of Congress or their staff about the tax package…McConnell alone has received more than $100,000 in total from the top 10 companies who have lobbied most intensely…
The tax-extender package…would add $46 billion to the deficit in 2014.
Obviously, the “people” these tax breaks are for must be struggling to put food on their collective tables. They must be down to their last pennies and at their breaking point and will be closing up shop very soon.
Except their not. According to Pulitzer Prize-winning journalist, David Cay Johnston:
Instead, the biggest companies are putting profits into the corporate equivalent of a mattress. They are hoarding what just a few years ago would have been considered unimaginable pools of cash and buying risk-free securities that can be instantly converted to cash, which together are known in accounting parlance as liquid assets…
My analysis of the latest data from the Federal Reserve, the IRS and corporate reports shows that American businesses last year held almost $7.9 trillion of liquid assets worldwide.
Those who follow the news may be surprised, because the figure that’s been mentioned lately has been just under $2 billion. That figure, which comes from the Federal Reserve, is only for domestic cash…My estimate is conservative. I did not count cash due to American companies from their offshore subsidiaries as accounts receivable because the IRS does not provide fine details on these additional trillions of dollars. (Emphasis added)
Which brings about two important questions. First, how much more money do corporations need in their mattresses before they are willing to say we have enough to increase wages, pay a higher minimum wage that is truly a living wage, or hire back the tens of thousands of workers they have shed?
Second, why do politicians, mostly on the right like McConnell, continue to coddle these “people” while thumbing their noses at the real and actual people that they are supposed to serve?