I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Thursday, March 17, 2011

The Biggest Lie In America

"We're broke!'

No, we're not:
Record earnings fueled by the highest profit margins since 1993 are giving executives more leeway than ever to boost dividends as the bull market enters its third year.
Margins will climb to 8.9 percent in 2011, the highest level in at least 18 years, according to data compiled by Bloomberg on non-financial companies in the Standard & Poor’s 500 Index through March 11. Greater profitability combined with dividend cuts during the credit crisis have pushed earnings to 6.53 percent of the gauge’s price, or 3.5 times more than its payout rate, close to the record 3.6 multiple in January.
The economic expansion that began in mid-2009 spurred the biggest jump in profits since 1988 last year, pushing cash to an all-time-high of $937 billion for companies in the benchmark U.S. equity index, S&P data show. This year, there have been 95 increases and no decreases to payouts in the S&P 500.
And while they're making all that money, many companies are not paying taxes:
Are some large U.S. businesses not paying taxes, as Fudge claims?

To back up her assertion, Fudge’s office cites media reports about particular companies – like General Electric and Bank of America -- that did not pay 2009 taxes as well as a July 2008 report from Congress’ Government Accountability Office that showed it’s relatively common for big companies to pay no taxes.

Between 1998 to 2005, GAO found that about 72 percent of large foreign controlled companies and 55 percent of large U.S. controlled companies reported zero tax liability for at least one year. About 57 percent of foreign controlled large companies and 42 percent of U.S. large companies paid no taxes in two or more years, and a third of the foreign companies and one quarter of their U.S. counterparts paid no taxes for at least four of those years. Just 45 percent of large U.S. companies and 28 percent of foreign companies reported a tax liability for each of the eight years. The report defined large companies as those with at least $250 million in assets, or at least $50 million in receipts
We're not broke: we just don't collect enough taxes from the people with the money.

It really is that simple.

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