It will also affect state pension plans, such as CalPERS and others which have multi-billion dollar investments in companies like Exxon-Mobil, Conoco-Phillips, etc. This will lead to higher state and local taxes to offset the loss of pension fund equity.
“It will also affect state pension plans, such as CalPERS and others which have multi-billion dollar investments in companies like Exxon-Mobil, Conoco-Phillips, etc. This will lead to higher state and local taxes to offset the loss of pension fund equity.”
Also true.
There is a post-response from a few weeks ago that I still need to respond to. It was posted from someone in France who was complaining about all the profits that go to the “shareholders” - in the form of dividends and equity value - when instead lower-prices should be going to the consumer - the person from France was explaining. I wanted to ask them where their pension/retirement plan money was invested, and if shareholders were not compensated and prices simply lowered, from where would the company build new capital to keep improving its business? I think that poster called it “shareholder greed”.
If all a company gets back from its prices is simply today’s costs, its continuing-to-age-capital (plant and equipment) eventually kill the business, when they die, for lack of profit to invest in tomorrow. Rewarding investors and being able to borrow - having profits (retained earnings above expenses), means you are running a business and not a dead-end operation.