The corporations’ profits are at their highest point in history. Yet they keep dangling the carrot of “give us tax breaks and we will hire people” in front of the foolish masses and Congress.
From Business Week:
Corporate profits in the U.S. reached a record $1.97 trillion in the third quarter of 2011, according to the most recent data from the Commerce Department. That’s up 1.7 percent in the third quarter from the previous three months and 7.5 percent higher than the same period in 2010.
Limited Wage Pressure
“In regards to labor, we currently do not anticipate significant pressure for 2012 for both wages and salary,” Gregory Levin, chief financial officer at BJ’s Restaurants Inc., said on a Feb. 16 conference call with analysts.
The Huntington Beach, California-based company, which owns and operates restaurants in California, Colorado, Oregon, Arizona, Nevada and Texas, said revenue increased 29 percent in the three months that ended Jan. 3 from the prior year, while net income rose 42 percent.
Although the profits are at the highest point, the amount they pay in taxes is lower than in previous years. Right now, they are quite comfortable to squeeze the existing workers as much as they can and spend on lobbying instead to get more breaks, more tax cuts and undo regulation that is crimping their profits.
They have 3 ways of increasing their profits:
1) produce more widgets
2) reduce their taxes
3) avoid regulation that cuts into their profits
In this environment, they are doing very well with #2 and #3. #1 is more complicated, because they have to hire more people and there is the risk that they won’t be able to sell everything. Since they keep making gains with #2 and #3, they have little incentive to risk by embarking on #1.
We are all subsidizing these enterprises through the constant breaks and incentives that we give them day by day: from building stadiums for sports teams to tax breaks for companies to set up shop in our state/county, to tax breaks for oil companies to do something is to their benefit anyway.
And now they are “people”. But unlike a “person” that pays 35% on income exceeding a certain amount, their tax rates are much lower… Is it any wonder that they grew so powerful they are out of control?