Nice discussion but you left out the major issue causing the corporations to retain cash well in excess of any reasonable operational need: the presence of a government which almost whimsically changes the rules of the game with almost no warning or lead time. That means that corporations have incredibly large risk and it is prudent to insure against risk. Holding large cash balances insures companies against new regulatory requirements and taxes, which the Obama Administration almost guarantees (at least, it could when Nanzi Pelosi held the GAVEL).
It is my humble opinion that the only purpose corporate income taxes serve is to raise prices. Taxes, no matter upon whom imposed, are entirely paid by final consumers. That would be you, moshiach, and me, BelegStrongbow.
Remember that cash earns next to nothing. The corporations would not hold it if they had a reasonable expectation of earning a positive net return on expending or investing it. So the only thing restraining them has to be that the risk of loss is higher than the expectation of gain. So they hold cash, earning 1 penny on each dollar every other year. Terrible return, but better than losing and maybe ending up sued by the Feds for taking a loss and ‘hurting the stockholders’ (like this Administration cares one whit for actual bond- or shareholders, heh).
If you can convince the corporate and industrial leadership of the US that there will be a stable and reasonable regulatory regime in place for at least 10 years, then the dam will break and all that cash will flow back into the economy. IMHO, the best corporate income tax rate is zero. Tax their property? Of course. Tax their purchases? If for corporate consumption and not for resale? Gotcha. Tax their income? Why? If it flows to shareholders, you’re going to tax it as income then. Thus it can’t be the revenue, because all you’ve done is displace it from the owners to the operators. It must be that it is politically expedient to tar the productive sector of the nation so you can extract taxes you couldn’t otherwise justify and thus build up your own political power base and grow government.
Is that what you want, moshiach? Bigger government? Myself, I’m much in favor of a much smaller government and a much more prosperous and productive private sector. So I want zero corporate income tax. How about you?
That would be best. Imagine the savings. How many hours a year are "wasted" on the record keeping and preparation of taxes. That would help make the US more competitive and bring capital back here.
It’s only a nice discussion with participates, thanks for joining. : )
“Is that what you want, moshiach? Bigger government? Myself, I’m much in favor of a much smaller government and a much more prosperous and productive private sector. So I want zero corporate income tax. How about you?”
Congress borrowing trillions grows government. Unless you end the borrowing, you can have all taxes to 0% and government will still grow.
I want to end Congress ability to borrow trillions to grow. And end Corporations ability to dam up trillions in dollars; which disrupts the circulation of dollars in the US economy. Giving Bernanke the power to print more money for “circulation.” Lol this must be a running joke. Since he has printed new money many times and no money gets circulated but the Corporate dams get bigger.
Is that what you want, moshiach? Bigger government?
____________________
Check his sign up date..7/11/2011. Concern troll? Today he said Paulson should have been arrested. I’m getting a very strong feel this n00b won’t be around long.