Rachel Maddow had a nice segment last week about taxes. In the first minute or so she talks about a middle class tax cut no one knows they have. Interesting.
Then she lays into the "high corporate tax rate" hypocrisy (starting about 1:40 in the clip). This theme is everywhere these days, almost part of the water supply, and always disguised as concern for "jobs". (Jobs? What they really mean is "profits" — make that substitution and their words start to make sense.)
Though both discussions are interesting, it's the second one I draw your attention to. Note especially the run of politicians (first at 3:10, then 5:00) pleading for lower corporate taxes — it's quite a display.
And as these people speak their obfuscations, keep in mind the notion of "political retainers". You really are watching retainers in action, earning their daily bread, just as you and I do when we go to work.
One quibble — big corporations don't "find loopholes" (as she says at 2:50 in the clip), they purchase them. But that said, good on her for pointing this out, and also for including GE (her boss's boss's soon-to-be ex-boss) in the list.
Olbermann was on fire Monday, with enough Big Money pieces to make your head spin — or rather your stomach turn — as you consider the future of what used to be the Republic. (I'll have a piece up later on how it's become the Republic of Rove.)
But this Countdown piece is both so visceral, and has so many angles, that it deserves pride of place. The background elements:
• A rural county in Tennessee (close to Rand Paul's state) • A city fire department supported by taxes • A supplemental fee required of county residents to get city fire services extended to their individual homes (on a home-by-home basis) • A county resident who forgot to pay his fee (but see below on "forgot")
It's a witch's brew of natural contradictions and consequences. The clip:
First, a question: Would you change your mind about this person if you thought he was a Republican voter?
Now some thoughts. This situation presents a rich set of on-the-one-hand, on-the-other-hand conflicts:
Misfortune vs. fairness. On the one hand, this is unfortunate by any measure, a terrible and inhumane tragedy. Firemen watching a fire! On the other hand, this is fair in a pay-to-play world. He says he forgot (though by his own admission, he didn't pay three years ago either). Others choose not to pay. Either way, pay up or lose. The IRS doesn't take "I forgot" to pay taxes. The cops don't take "I forgot" to stop drinking.
Pay-to-play vs. public services. On the one hand, as progressives we think that pay-to-play is wrong on its face, always. We would ask, why doesn't the county simply tax all county residents and provide city-subscribed fire service to everyone?
But on the other hand, this guy didn't see that as the solution. His solution is a fire chief who winks at the rules in his favor. In other words, he's fine with pay-to-play, but he wants to cheat the system by paying for insurance only when he has a claim, and pocketing his money otherwise. This keeps his own costs down at the expense of funding a needed public service for all. And he wants an enforcement official who guarantees that kind of "deal."
Taking responsibility. On the one hand, people like him — people with the least, or at least, with less — are always hurt by pay-to-play. And the sell to him by the Big Boys is that pay-to-play denies "undeserved" services to the undeserving Other. The Other needs to "take responsibility," a nice moralizer's argument for self-dealing and withholding.
On the other hand, it's inevitably people like him who end up "taking responsibility" (i.e. paying the price) themselves, since in their ignorance, they don't ever see that withholding from The Other always results in withholding from themselves as well. And that's where he is; given that he likes the solution he voted for, the party of "take responsibility" hands him these results, and that admonition. He's stuck.
Finally, incentives and the problem for progressives. On the one hand, we don't want this world for anyone, for us or for them. (I'm deliberately rejecting revenge as a motivation; in my opinion, to be socially vengeful is to be exactly what they are, and what we reject.) We want quality government services, fairly funded by equitable (and progressive) taxation, available to everyone.
On the other hand, the incentives are all wrong. Yes, the working poor are always hurt, but Tea Party "freedom-loving" low-enders and retirees (not the most affluent of folks), as voters, are a big part of why we're in this mess. It's rural Mississippi that keeps Mississippi shoeless. It's eastern Oregon that keeps all Oregon in fiscal woes. It's small-state senators, representing almost no one, who pack the Senate with more conservative votes than there are conservative voters.
So how do we "incentivize" conservative voters, as opposed to their Big Money manipulators? In a Freakonomics world, the answer is consequences. Wall Street is incentivized by government bailouts to take more risks; in that world they call it "creating moral hazard." How do you re-incentivize Wall Street the other way? The pain of a world without bailouts.
Thus the problem for progressives. Wall Street's pain is corporate pain as much as individual pain. Mr. Cranick's pain is only individual pain — very tough to countenance. The man is in tears for a reason; as would be any of us. And yet, it's the incentives, stupid. Conservative voters need a reason to stop voting against the interests of us all. If they don't stop, we will all go down with them.
See what I mean? Contradictions and consequences. Or, to quote Latka in one of my favorite Taxi episodes, "America is one tough town."
Continuing to post the connections that emerged during my recent adventure on trains, planes and strangely-named buses, here's a follow-on discussion between Keith Olbermann and Chris Hayes from the excellent "small businesses means billionaires" show.
Note, however, that this discussion veers wider than the earlier one:
It brings in Karl Rove's Billionaire Boys Club & Election Purchase Boutique (introduced here by Chris in Paris).
It includes a discussion of the real motives of our snarling can't-live-without-em Blue Dogs (Movement Conservatives in People's Party clothing).
It adds a soupçon of Citizens United, the gift that keeps on taking.
Then wraps the package in a metaphor that technically can't be applied.
An interesting mash-up — a very small number of ever-hungry billionaires buying congressional tax benefits over the corpses of the middle class; a well-bribed Congress eager to drain those corpses to feed that hunger; specialty pass-through shops to funnel those bribes to waiting congressional hands; and a court case (Citizens United, a Mr. Roberts specialty) poised to turn a fire hose of cash into a river.
It's all very neat. Chris doesn't want to call it a putsch, but he may as well have. The phrase "slow-motion coup" also comes to mind.
Side note: If you care, here's a taste of the Amazon blurb for Winner-Take-All Politics, the book Chris Hayes mentioned:
A groundbreaking work that identifies the real culprit behind one of the great economic crimes of our time— the growing inequality of incomes between the vast majority of Americans and the richest of the rich. ... Jacob S. Hacker and Paul Pierson demonstrate convincingly that the usual suspects—foreign trade and financial globalization, technological changes in the workplace, increased education at the top—are largely innocent of the charges against them. Instead, they indict an unlikely suspect ... American politics.
Sounds like a well researched read. Available now in poor houses and homeless-shelter bookstores everywhere.
While I've been traveling, much has happened; and much of it connects. So let's start here, with the concept of "small business" beautifully explored by Keith Olbermann in a brilliant Countdown segment late last week. First the video, then a few comments:
This looks like original reporting, or at least original research. Big kudos to Olbermann and his staff.
The video is rich; I want to make just a few points:
I've touched lightly on the concept of "replacement phrases" but not really explained myself. A replacement phrase is what you do to convert something said by Movement Conservatives (the "say anything to win" crowd) from something that makes no sense, to something that perfectly expresses what they mean.
For example, if you take any statement containing the word "jobs" and substitute "profits", the statement is wonderfully transparent. Test it and see; "job creation" means "profit creation" every time, for instance (h/t Noam Chomsky for that one).
So let's add to our library. New replacement phrase: When a Movement Conservative says "small businesses", substitute "billionaires".
In the recent Pledge to Wipe Out America, for example, we have the statement "small business must have certainty that the rules won't change every few months". A quick substitution and you know exactly what they want. Don't go changing the rules on billionaires, especially those pesky tax rules we're just now discussing.
3% of "small businesses" control 50% of small business gross profit. That's worth memorizing. For me this is the most stunning statistic of them all, and John Boehner, the Tan Who Would Be Speaker (hereinafter, "the Tan") offered it up on MTP without beginning to think he was giving away multi-decade language fraud. For that, thank you sir.
And I'm not just referring to Republicans in that multi-decade deception. Clinton did quite a lot for "small businesses" as well. I'll bet they were ever so grateful.
The technical definition of "small business" makes this usage perfectly clear. It's worth memorizing as well. If you file taxes as part of an S corp, a partnership (LLC or law firm, for example), or a sole proprietorship, you're a "small business" — period. This means you get Form K-1 or 1099, and/or file income on Schedule C and Schedule E. That's it. In this definition, "small" has no relation to size (for a change), simply to type.
So let's apply Boehner's Rule to this world. The 3% that enjoy 50% of SB gross income are huge entities. They range from the Koch brothers to Bechtel ($31 billion in revenue), down to the KKR range (a paultry $445 million). A big chunk of the pie for a very small world. The rest of us, the other 97%, divvie up the remaining 50% (yep, I'm included here). This part of the pie is small, given the number of sharers. A struggling writer in Hollywood making $5000/year (a recent average of all WGAW writers) files a Schedule C. The woman who runs the restaurant near me files a Schedule C; I hope she survives the recession. Both Stephen King and Sarah D'Almeida (author of Death of a Musketeer, which few have read) file Schedule C or E for royalties. So yes, "small business" really does mean small business — when normal people say it. But when Movement Conservatives say it — and you're going to hear it a lot between now and when Congress caves* in December — just keep the replacement phrase in mind. "Small business" means billionaires who bought tax breaks from both parties for their partnership and S corp earnings. They paid for a service, and they want it delivered, or at least not stopped.
GP
*Yes, I think it's now certain that Congress will cave in December. I'll have more on that soon, but just ask yourself — if the rich-man fanboys (conservaDems & Repubs) are a risk to lay down even under hard pre-election populist scrutiny, how fast will they debase themselves when all the pressure is off?
I say if both houses don't vote now, it's a done deal. The only game left will be ID-ing the ones who pretend to stand straight in December when there's no risk the slimy deal will fail — but would fold in a minute if the deal were at risk. That list will be worth having, for later.
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This doesn't sound very encouraging. Krugman believes the Democrats will give in and extend the Bush tax cut plan for everyone, including the top 2%. If that happens, expect even less enthusiasm from the left, not that that matters to the White House. The Democrats certainly have a way of caving to their foes and ignoring their supporters. As John often says, "because the Republicans are worse" is hardly a strategy for success. It definitely doesn't inspire me.
Democrats abandoned plans to vote before Election Day on extending Bush-era tax cuts for the middle class while eliminating them for better-off Americans, spooked by protests from vulnerable incumbents and bleak prospects for passage.
With time running out to plan for 2011, the delay raises uncertainty for small businesses and individual taxpayers over their future liabilities. It also sets up a titanic battle over taxes after the election.
If returning lawmakers don't pass legislation by Dec. 31, the expiration date of the cuts, tax rates would rise not only on income, but also on estates, capital gains and dividends. Important corporate tax credits and relief from the Alternative Minimum Tax also are up for renewal.
As Congress and President Obama fight over the Bush tax cuts, a small number of left-leaning rich people have come out in support of paying higher taxes. The most famous are the members of the Responsible Wealth Project, who say they pay too little in taxes and want to address inequality.
They may be an eccentric minority, or (in the view of conservatives) a lunatic fringe. But a Quinnipiac University poll this year showed nearly two-thirds of those with household incomes of more than $250,000 a year support raising their own taxes to reduce the federal deficit.
So not all of the wealthy are angry about tax hikes. But that doesn’t mean they just want bigger government. What they want is better government – and investment in growth.
The state of the Krugman is Not Pleased about Republican gangster tactics:
“Nice middle class you got here,” said Mitch McConnell, the Senate minority leader. “It would be a shame if something happened to it.”
O.K., he didn’t actually say that. But he might as well have, because that’s what the current confrontation over taxes amounts to. Mr. McConnell, who was self-righteously denouncing the budget deficit just the other day, now wants to blow that deficit up with big tax cuts for the rich. But he doesn’t have the votes. So he’s trying to get what he wants by pointing a gun at the heads of middle-class families, threatening to force a jump in their taxes unless he gets paid off with hugely expensive tax breaks for the wealthy. ...
[T]here’s an even bigger issue here — namely, the question of what constitutes acceptable behavior in American political life. Politics ain’t beanbag, but there’s a difference between playing hardball and engaging in outright extortion, which is what Mr. McConnell is now doing. And if he succeeds, it will set a disastrous precedent.
Notice that this is the Senate. Here's the reason John Boehner ("The Tan who would be Speaker" in Joe's formulation) can cave to Obama in the House — in a plan to turn House seats red with populist cred. If the game is fixed, it's fixed in the Senate.
Krugman lays the blame for this situation in several places. Then he adds: "The deeper answer lies in the radicalization of the Republican Party, its transformation into a movement willing to put the economy and the nation at risk for the sake of partisan victory."
"Radicalization of the Republican Party" ... almost sounds like that "revolutionary force" someone wrote about in 2003.
The column is a good read, with a nice history lesson folded into the middle. The fact that he ends by calling for the administration not to cave, almost suggests that he's worried they might.
I'm not sure they will; they've put themselves very far out there on this one. But just in case, I'll add my small voice as well — You're holding four aces; don't fold.
Poor Larry. It's just not his week, is it? First the Elizabeth Warren news and now he has to talk down tax cuts for the wealthiest Americans, also known as his best friends and former clients. How much can the poor guy take?
"With deficits looming as seriously as they are, why is now the right moment to lock in several hundred billion dollars of tax cuts for 2 percent of the population when we could be using those revenues to strengthen incentives for investment in the country's future?" Summers said.
"I think the case is pretty clear, if you look at what the vast majority of economists are saying, (that) what will stimulate economy more are measures that are targeted at investments, it's measures that are targeted at research and development," he continued. "So I think those are the right steps forward."
This does seem to suggest that the Obama administration is ready to stick with this position and fight, which is good news.
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Haven't they added enough economic problems to the US economy to last a few lifetimes? Once again the GOP plan is to rally 'round the richest Americans and then stick the bill with the shrinking middle class. This is insane. From the Washington Post.
Even as they hammer Democrats for running up record budget deficits, Senate Republicans are rolling out a plan to permanently extend an array of expiring tax breaks that would deprive the Treasury of more than $4 trillion over the next decade, nearly doubling projected deficits over that period unless dramatic spending cuts are made.
The measure, introduced by Senate Minority Leader Mitch McConnell (R-Ky.) this week, would permanently extend the George W. Bush-era income tax cuts that benefit virtually every U.S. taxpayer, rein in the alternative minimum tax and limit the estate tax to estates worth more than $5 million for individuals or $10 million for couples.
Wow, who ever would have guessed that Goldman Sachs would support maintaining the Bush tax cuts for the wealthiest 2%? The average salary - including secretaries, not that they get are paid especially higher than elsewhere - is well over $600,000 per employee. Whether this is from a Goldman "economist" (whatever that means these days there) or not, this only adds fuel to the fire. What middle class American who bailed their sorry butts out of the gutter wants to fund yet another windfall for Goldman or anyone on Wall Street?
Oh how convenient. What did Jan Hatzius make last year? And how much would he have made if Goldman wasn't bailed out?
Extending the Bush tax cuts for all income levels beyond year-end would add a "couple tenths" to US economic growth, while allowing the tax cuts to expire would result in "well over a percentage point" hit, Jan Hatzius, chief U.S. economist at Goldman Sachs told CNBC.
"If everything was allowed to expire, as is the current legislation at the end of this year, that would be a major impact," Hatzius said.
For the GOP, if you're not making $250,000, screw you. Strange that it sounds like the Republican party might have an small internal conflict on the issue. It's an interesting approach for the midterm elections so let's see how that floats with the public who support increasing taxes on the richest 2%. Right about now would be the time for Obama to go for the jugular and drive a larger wedge within the GOP. Let's hope he finds it in him to continue his recent (good) attacks against the obstructionist Republicans.
Senate Republicans have enough votes to block President Barack Obama's plan to extend tax cuts for the middle class while allowing those for the rich to expire, a spokesman for the Senate Republican leader said Monday.
Republicans Monday scrambled to regroup on the tax issue ahead of Nov. 2 congressional elections after House Republican Leader John Boehner appeared to open the door for a possible compromise.
Don Stewart, spokesman for Senate Republican Leader Mitch McConnell, said Senate Republicans are united on the issue. "There are no Republicans who support a tax hike," he said.
The GOP's House leader will vote to increase taxes on the wealthiest Americans. I didn't expect to hear Boehner ever say that:
"But aren't you kind of holding the tax cuts for the lower income people, the people making less than $250,000, hostage, so you can give those tax cuts to the upper brackets?" Schieffer asked. "There are a lot more people below those top brackets than are in . . . those upper brackets. Why wouldn't you want to do something for those folks?"
"I want to do something for all Americans who pay taxes," Boehner said.
"If the only option I have is to vote for some of those tax reductions, I'll vote for it. But I've been making the point now for months that we need to extend all the current rates for all Americans if we want to get our economy going again, and we want to get jobs in America."
"So you are saying you would vote for the middle class tax cuts, if that's all you can get done?" Schieffer asked.
"Bob, we don't know what the bill's going to say, alright? If the only option I have is to vote for those at $250,000 and below, of course I'm going to do that. But I'm going to do everything I can to fight to make sure that we extend the current tax rates for all Americans."
The NY Times headline reads: House G.O.P. Leader Signals He’s Open to Obama Tax Cut
Boehner is going to be doing backflips to get out of this one. I don't think the House GOPers are going to like it. This could mean "the Tan" won't be Speaker. Seriously. This puts Boehner to the left of many Democrats.
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Actually some shocking studies that I'd never heard of, from CBO at that (i.e., truly independent), about how tax cuts do NOT help stimulate the economy. Then why did we give away 35% of the already-too-small-by-half stimulus bill to the Republicans in the form of tax cuts?
But economic research suggests that tax cuts, though difficult for politicians to resist in election season, have limited ability to bolster the flagging economy because they are essentially a supply-side remedy for a problem caused by lack of demand.
The nonpartisan Congressional Budget Office this year analyzed the short-term effects of 11 policy options and found that extending the tax cuts would be the least effective way to spur the economy and reduce unemployment. The report added that tax cuts for high earners would have the smallest “bang for the buck,” because wealthy Americans were more likely to save their money than spend it.
No matter how many times Boehner and Fox News hammer away at the issue it won't change the fact that Americans are fine with Obama's tax plan. Getting wobbly like Peter Orszag is not what we need from Democrats when the numbers there. Folding so easily has something to do with the perception of this administration being weak so it's good to see the team (outside of Orszag) holding firm.
A majority of Americans favor letting the tax cuts enacted during the Bush administration expire for the wealthy. While 37% support keeping the tax cuts for all Americans, 44% want them extended only for those making less than $250,000 and 15% think they should expire for all taxpayers.
Well well well. First, Peter Orszag floats a "compromise" to the Bush tax cut problem — the problem being how to hand more billions to the billionaires without stirring up the peasants.
His compromise? Hell, extend them all, temporarily of course. Everybody wins, even the peasants (sorry, voters). See, couldn't be more fair.
At the same time, Obama is traveling the country sounding like a retro version of his 2008 self, conveniently timed to the 2010 election. "We should not hold middle-class tax cuts hostage any longer," etc.
You might think that a newly exited Obama official (Orszag) would not be speaking for the administration, or even floating trial balloons for them. And you might be right.
Division in the Democratic Party over whether to extend expiring tax rates has led to several different scenarios that could play out this fall.
President Obama on Wednesday doubled down on his position, personally calling for the phasing out of tax cuts for the rich in a high-profile speech in Cleveland. ...
But many vulnerable Democrats in the House and Senate aren’t as sure as Obama. They oppose raising any taxes, even on the rich, given the sluggish economy. Others want middle-class tax cuts only; while some are prepared to accept the "millionaire compromise" or let the cuts expire. ...
Senate Majority Leader Harry Reid (D-Nev.) has signaled that he will move a tax package that aligns with Obama when Congress returns next week, but it is far from clear whether he has the 60 votes necessary to pass it.
Ah, the Senate and their 60 votes. Can you smell it? I can. It has that "public option" aroma, with a generous helping of post-election lame-duck trickery ladeled in. It's almost time for Ben Nelson — oh:
I support extending all of the expiring tax cuts until Nebraska’s and the nation’s economy is in better shape, and perhaps longer, because raising taxes in a weak economy could impair recovery.
Look, I'll make it simple for 60-vote Reid and Mr. Pragmatic in the White House. The default is no tax cuts for anyone. That means they have to find 60 votes. You bring a clean bill to Congress; tax breaks for the under $250,000 crowd and no other compromises. You defeat all amendments.
You've now kept your word. If the bill passes, you win. If the bill fails, everyone who voted No, loses big. It's not on you if it loses. There's no other way not to look bad — like either a fool or a tool.
It's your move, Mr. President. And December 2010 is your month. If you betray real Dem values one more time, the base could sit on its hands all through 2012. How's that for pragmatic?
In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.
Why does this combination make sense? The answer is that over the medium term, the tax cuts are simply not affordable. Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.
Did you spot it? We just have to give more money to Jaime Dimon (and Pete Peterson and Richard Mellon Scaife), because ... well ... jobs!
Later in the article he equates all taxes with taxes on the rich:
Higher taxes now would crimp consumer spending[.]
Right out of the Movement Conservative playbook, whose plays he now seems to be running. All you need to know about Peter Orszag.
That playbook is classic, but very easy to read. HINT: Every time a Conservative says "jobs" — substitute "profit" and the comment will make perfect sense.
By the way, my guess is that Orszag will follow this up by repolishing his obfuscation (i.e., saying something Dem), so as to continue to appear unlike a rebranded Republican. My advice — keep him on your you've-been-made radar until you know for a fact he's off it.
So once again, Obama has made attempts to reach out to business and those on the right and surprise, surprise, it's not enough. They want more. Do these people realize that we're in a recession and there are limitations to what's possible? One of these days Democrats are going to learn that there is no pleasing the right. No matter how far to the right Obama moves, it will never be far enough. Never. The end result is wingnut mania, who now have another opportunity to bash Obama and an even more annoyed and alienated left, who continue to wonder whether the administration can ever stand up for them. Somehow the administration believes that pushing back against that remaining 1% will charm the left. It's fine and it makes sense not to change that position but is it enough to energize supporters?
Tell me again how maintaining the Bush tax cuts for 1% of the population is a "game changer" and makes sense right now? There is zero proof that keeping tax cuts for 1% of the population will provide economic benefit. If anything, it will only worsen the economic pain for everyone else. LA Times:
"He's not really addressing the big issues," Brad Benson, president of Squires-Belt Material Co. in San Diego, said of Obama. Benson does welcome the president's proposal on depreciation costs, which would save businesses $200 billion over two years.
"I think it's maybe a small step in the right direction, but as a manufacturer, I'm more concerned with the tax-cut issue," said Benson, whose company supplies drywall and other building supplies for commercial and residential construction.
Mark Zandi, chief economist of Moody's Analytics, said Obama's proposal would help the recovery but was not "a game changer."
Besides negative household income growth and fifty five year low job growth, it was dreamy. Tell me again why any Democrat is promoting more of this? More from the Center for American Progress:
Yet conservatives continue to argue for another round of permanent tax cuts similar to those of the Bush administration. Even if all of the Bush tax cuts are allowed to expire as scheduled, the projected cost of the Bush tax cuts to the federal budget over the next ten years is $3.9 trillion, an average of 1.4 percent of the country’s total economic activity (GDP) per year. Those asking for more permanent tax cuts continue to justify the cost, claiming tax cuts create jobs.
But their analysis ignores what actually happened during the economic cycle that began in March 2001 and ended in December of 2007—which almost exactly coincides with the Bush presidency and the implementation of the Bush tax cuts. This period registered the weakest jobs and income growth in the post-war period. Overall monthly job growth was the worst of any cycle since at least February 1945, and household income growth was negative for the first cycle since tracking began in 1967. Women reversed employment gains of previous cycles. And for African Americans, the worst job growth on record was matched by an unprecedented increase in poverty.
Oh sorry, that was Saint Reagan in August of 1982. Why is it that Reagan could do this but Obama is a socialist for letting tax cuts expire for a few percent of the US taxpayers? Imagine the possibilities if the administration had not been so aggressive against "the left of the left" during their laughable and pathetic attempts to win over the extreme right. If there are any signs of success from that adventure they don't look obvious in the polls.
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Whether it's an attempt to corner the GOP or not, it's anything but good news for working Americans. Robert Reich:
The economy needs two whopping corporate tax cuts right now as much as someone with a serious heart condition needs Botox.
The reason businesses aren’t investing in new plant and equipment has nothing to do with the cost of capital. It’s because they don’t need the additional capacity. There isn’t enough demand for their goods and services to justify it. Consumers aren’t buying because they’re trying to come out from under a huge debt load, including mortgage debt; they have to start saving because their nest eggs are worth substantially less; and they’ve lost or are worried about losing jobs and pay.
In any event, small businesses don’t have enough profits against which to use these tax credits and deductions, and large corporations are sitting on over a trillion dollars of profits and don’t need them.
Republicans and corporate lobbyists have been demanding tax cuts on corporate investments for one reason: Big corporations are investing in automated equipment, robotics, numerically-controlled machine tools, and software. These investments are designed to boost profits by permanently replacing workers and cutting payrolls. The tax breaks Obama is proposing would make such investments all the more profitable.
