TGIF 4/1/22

Lots of 'week' stuff for you tonight, for people and corporations - because they're people too, of course. 

I'd have to say President Biden had a good week, Oh sure, there's still fallout from him not using his inside voice saying that Putin needs to be removed from power, but there was another good jobs report. And we know that presidents (and their daughters) create jobs. The latest figures? 

U.S. employers added 431,000 jobs in March on a seasonally adjusted basis, the Labor Department said Friday. The figure was just shy of forecasts, and there was an upward revision of 95,000 for the previous two months of this year.

The unemployment rate was 3.6 percent, down from 3.8 percent a month earlier and just a touch higher than its levels right before the pandemic.

We'll have to see what the pundits do with this news in the classrooms on Sunday. 

Speaking of pundits and the media and whatnot, I'm confident in saying that both Fox News and CBS News had bad weeks. 

The folks at Fox hired Caitlyn Jenner, saying in a press release

Caitlyn's story is an inspiration to us all. She is a trailblazer in the LGBTQ+ community and her illustrious career spans a variety of fields that will be a tremendous asset for our audience.

That's quite a contrast with how the network's shows covered Jenner when her Vanity Fair cover hit the Internet, but as we know, times change and opinions evolve. Well, some do; - it'll be fun to see what happens if Jenner and Tucker Carlson get together for a chat.

For their part, CBS decided to hire former Trump guy Mick Mulvaney. Reaction, as they say was swift. Vanity Fair's Charlotte Klein noted that "the backlash is rooted in a litany of stains on Mulvaney’s track record that hang over whatever analysis or expertise CBS is now paying him to provide." 

Also not impressed? CBS staffers who are "embarrassed" and "baffled" at the decision, and Stephen Colbert, who was more vocal in making Mulvaney '"welcome."

I for one can't wait to hear Mulvaney's trenchant and objective political analysis, given his calling COVID-19 a media "hoax," telling everyone to "get over it" after Trump extorted Ukraine for political gain, and predicting Trump would accept his 2020 loss gracefully. Is Mick Mulvaney psychic? Get this man to Vegas! He's Nostradumbass.

Obviously, I'm just joking, but why would the Tiffany network's venerable news division put this craven toady-to-a-tyrant on their payroll?

Because the Rs are going to win the midterms, Stephen, you silly goose.

Who else had a week? Jared Kushner, the WhatsApp-wielding son-in-law of the former president. Rep. Elaine Luria (D-NC) said "it was really valuable" that he talked with the January 6th Committee, for six hours or so. Not sure whether he had a good week or a bad one, since it was the Biden administration's refusal to extend executive privilege to him that allowed his testimony, but since he did testify, and Ivanka will as well, I'll give them both a luke-warm good week.

Moving away from the luke warm power couple, let's give a red-hot good week recognition to corporate profits! According to an Axios article, 

...Companies complained loudly about rising costs for raw materials and labor for most of 2021, but data released yesterday...show they passed those costs along — and then some. For the full year 2021, pre-tax profits rose 25% to roughly $2.81 trillion, handily outpacing the 7% rise in consumer prices over the same stretch. (Emphasis added.)

And to lobbyists! The Washington Post tells us

The lobbying industry had a record year in 2021, taking in $3.7 billion in revenue as companies, associations and other organizations pressed Congress and the Biden administration over trillions of dollars in new pandemic spending... (Emphasis added.)

And to stock buybacks! Here's what the folks at The Street have to say on that.

...buybacks reduce a company's shares outstanding, pushing its profit-per-share figure higher. Buybacks also can signal that a company has strong finances...So perhaps it’s no great surprise that companies are ratcheting up buybacks this year, after a record total in 2021. (Emphasis added.)

And don't forget dividends! From an Insider Monkey article a while back, we learned that

In the United States, common dividends in 2021 increased to $78.6 billion, up 89.7% from $41.4 billion in 2020. Higher earnings, sales, and improving margins have enabled companies to start returning shareholder wealth...(Emphasis added.)

All that red hotness has me feeling all patriotic and everything, which is why I have to say that our astronaut Mark Vande Hei had a good week, for sure. He's returned safely to Earth, along with a couple of Russian cosmonauts. after spending 355 days in space, an American record for a single trip. The head of Russia's space agency had seemingly threatened to leave him behind because our response to Russia's invasion of Ukraine, so him getting back in one piece was welcomed news. 

Hillary Clinton had a teeny little bit of a bad week, after she was fined $8000 by the Federal Elections Commission for funding the Steele dossier back in 2016. The DNC was fined $105,000 as well. The fines resulted from a 2018 lawsuit filed by the Coolidge Reagan Foundation, a 501 (c)3 organization with the flimsiest website I've ever seen for this type of group. I'd be surprised if they could even pay for the filing fee for the lawsuit. 

And speaking of lawyers, I'm giving a giant good week to folks involved in teaching law to students at the University of North Carolina. First-year law student Jess Errico filed for an extension on a project for her Research, Reasoning, Writing and Advocacy course, so she and her classmates could watch the Tarheels play the 'Dook' Blue Devils in the Final Four. A 'court' of eight professors and the associate dean for academic affairs granted her request - and added a day, on the hope that the Tarheels end up playing for the championship.

I love everything about this!  Except, of course for all the people who think this is some sort of miscarriage of justice, or that the professors should be fired, and all the rest. That's a whole lot of bad week, self-inflicted misery right there.  

TGIF, everyone. And Go, Blue Devils! Beat Carolina!

Wondering on Wednesday 10/6/21

Ready... Set... Wonder!

Tonight, I'm wondering on the Facebook thing: the whistleblower, corporate profits, marketing, artificial intelligence, actual intelligence, ethics, and more. 

How do you regulate Facebook's algorithm, content, and the decisions behind what gets promoted, and not do the same thing with every other social media outlet?

How do you regulate Facebook's algorithm, content, and the decisions behind what gets promoted, and not do the same thing with Fox News, MSNBC, and every other television network?

How do you regulate Facebook's  algorithm, content, and the decisions behind what gets promoted, and not do that with the NY Times, the NY Post, and every other print and digital newspaper? 

How does Wikipedia survive this new regulatory framework? Anyone can enter anything they want - who's going to be the boss of that? Are we going to create a regulatory framework for that, too?

Who gets to decide what content is abusive or divisive? Artificial intelligence can't do it, and humans can't do it either. What or who is left? And, even more fun, who gets to pick the arbiters?

What about the 1st Amendment? Doesn't that protect divisive speech?

How is it not insanely ridiculous and hypocritical for members of the House and Senate - professionals all, at spreading misinformation and division - to complain about Facebook's failure to stop the spread of misinformation and division? Seriously - how is that not the most insane aspect of this?

If the said misinformation- and division-spreading legislators decide to change the rules and let Facebook be held liable for 'harm' on its pages, which one of them will be the first to file a suit, and how long will it take - more than 30 minutes, or less than 30 minutes - after the rules are passed? I'm guessing Devin Nunes and less than 10...

If Facebook can be held liable for harm done to someone who's under age and on the platform, will Facebook be able to sue the parents for allowing the child to use the service?

And why do six-year-olds have smart phones, anyway? Who is responsible for that?

Before they go all out and regulate potentially harmful content - something that, by nature of the 'potentially' label, cannot be regulated - will the legislators do something to increase access to and the affordability of mental health services, particularly for children, and particularly for rural areas?

Isn't it ironic, and more than a bit ridiculous, that the same people who would to deny treatment options that would help transgender kids are all up in arms about body image issues on Facebook?

Why would the people who complain about their own voices being stifled on Facebook be willing to stifle other voices on Facebook? Is the algorithm unfair, or do they just not like what it does? Do they really care about any of this, or does it just look good to care, in which case they can make a profit, i.e., get re-elected because they 'showed they care?

How is Facebook to control the viewing habits of its users? For example, how are the people who ignore multiple notices that what they are reading is not real and then argue vigorously, and share widely, their outrage about the outrageously fake posts, supposed to be  protected from themselves?  Who's job is that, anyway?

Or the folks who wouldn't know sarcasm if it bit them on the butt cheek in the checkout line at Wegmans? (That's sarcasm, by the way. Sarcasm doesn't have actual teeth.) How is Facebook to be held accountable for them? 

Are we going to regulate comedians? Celebrity magazines, with pictures of stars or wanna-be stars and their "boldly topless" photos? The Kardashians and their puffy lips, 'trained' waists, and abundant behinds? People try to emulate them, and cause themselves real physical harm in the process; clearly, that can't be allowed to continue? 

How ironic is it, that the people who don't think the government should be able to require masks or vaccines during a pandemic are now contemplating having the government dictate what we're allowed to see on Facebook? What about "my mind, my choice?"

If we're going to ban detrimental content on Facebook, can we please ban Love Island, Big Brother, Hoarders, My 600-lb-Life, Married at First Sight, Real Housewives, Love After Lockup, Cellmate Secrets, 90-day Diaries, You, Me and My Ex, Ex-Rated, Naked and Afraid, Addicted to Marriage, 90-Day Fiancé, RuPaul’s Drag Race, My Big Fat Fabulous Life, and the rest of the unreal reality TV shows? Without much difficulty, I could make an argument that each of those shows is detrimental in one way or another...and I've never watched any of them.

Who gets to determine how 'good' a company must be in order to be allowed to make a profit? And how will those decisions be made? 

Are we going to require every company to provide us with their internal research on everything they internally research? Or is that just going to be shared with regulators? Just legislators (they're not the same thing as regulators, I can assure you.) And what if someone who gets the information as part of their job decides to leak it, for fun say, to the Wall Street Journal? What's the accountability there?

Based on the number of times the quote was shared, the big soundbite from Frances Haugen's testimony was, "Almost no one outside of Facebook knows what happens inside Facebook."  

I'm wondering if anyone reading this post can tell me everything that happens inside their current employer, or any of their former employers? I maintain that it's probably true for every company, even those in highly regulated industries, that outsiders don't know what happens inside, and neither do employees. I also maintain that that lack of knowledge can be positive (allowing a company to launch a new product, charitable plan, marketing campaign, etc. without leaks) as much as it can be negative (e.g., Enron, Wells Fargo, and perhaps Facebook, too). 

Especially in a country where we're supposedly working on improving the privacy rights of people. And, of course, where we consider corporations to be people, too. Unless, of course, corporations aren't really people after all. And isn't that a whole nother world of wonderment we can attack... 

What are you wondering about tonight? 

Quick Takes (v48): The Zero Percenters

Quick Takes

We've been hearing for a long time about the 10%, the 1% and even the .10%. You know, the rich, the richer, and the richest of Americans, the ones with all of the money. The people we love to hate. The millionaires and billionaires, the latter group which That Guy From Vermont says shouldn't even exist.

There are lots of ways to identify who falls into these buckets, as this article shows. I've put two calculations into the table: individual income, as of 2019, and net worth, as of 2016, the most recent data available for this method of calculation.

To be honest, I think many people who express concerns about the 'wealth gap' are in the Top 10% based on income, and some may be there based on net worth as well, who have no idea they've "made it" - which is just one problem we have when talking about all of this income stuff in generalities. 

We also hear a lot -- a LOT -- about corporations that don't pay any taxes, and of course, about their owners or executives. You know - Jeff Bezos. Jeff Bezos. Jeff Bezos. And maybe some other folks, but honestly I'd be hard pressed to name any of them, as would most people. Because, if we were to believe the politicians (you know the ones I'm talking about), Jeff Bezos is the worst person in the entirety of the history of the universe.

But here's the thing: there are LOTS Of corporations that don't pay federal taxes, or that get credits against their federal tax liability, giving them an effective tax rate of zero percent. Not just Amazon - although that's the one about which we hear the most.  There's a list, from CNBC, that came out back in December showing the 91 Fortune 500 companies - 91! - with that coveted 'zero percent or less' effective tax rate.

It includes Amazon, we know, but also companies I'm bucketing as follows:

• energy and natural resources, including American Electric Power, Atmos Energy, Chesapeake Energy, Duke Energy,Edison International, Occidental Petroleum and more; 
• financial services, including Ally Financial, Brighthouse Financial, Hartford Financial Services, Prudential Financial Services, and SPX; 
• food and beverage services, including Aramark, Darden Restaurants, MolsonCoors, and Starbucks;
• automotive, logistics and transportation: FedEx, General Motors, Goodyear Tire and Rubber, Navistar International, Penske Automotive, Ryder Systems, and Trinity Industries;
• travel and tourism: Alaska Air Group, Avis Budget Group, JetBlue Airways, MGM Resorts International;
• media: Netflix, Gannett;
• construction: Beacon Roofing, Builders FirstSource, Mohawk Industries;
• fashion: Levi Strauss, Phillips-Van Heusen, Tapestry;
• health care/pharmaceutical: Eli Lilly, McKesson, Tenet Healthcare;
• long-established companies with familiar names, including  Deere, DowDuPont, Halliburton, Honeywell International, IBM, OwensCorning, PitneyBowes, US Steel, Whirlpool; and
• tech companies: Activision Blizzard, DXC Technology, Nvidia, and Salesforce.com among them.

Note that my bucketing is based on personal knowledge or a quick, 100,000-foot-level Internet search and may not directly match how the company considers itself. I do know that many of these companies (and those from the list that I didn't include above) could be hugely diversified and may defy this kind of general bucketing done by a rank amateur like me, or even by an expert. 

That said, I tried to show the breadth of the issue of companies not paying federal taxes, and to illustrate the dearth of publicity about any of these companies - other than Amazon, of course - from the candidates who are running for president or other elected office.  

I get that we like to put faces and names on political issues - easier for people to understand, to remember, and to attack with anger -- I get it.

But,

• if you're running as the climate change guy, look at all the energy companies on the full list, and tell me why you're not shouting about those companies and telling me what we can do if they only paid taxes; 
• if you're running as the savior of health insurance (or even health care) as we know it, look Eli Lilly and McKesson, and talk to me about what you're going to do to make sure they pay their fair share; and; 
• if you're running as the person who's going to clean up Wall Street (again) and the financial industry (again), why are you not pointing your fingers at the easy, easy targets on this list, and showing us all the things you'll do with all that tax revenue?

And, instead of telling us how you're going to tax the wealthy a lot and tax the middle class not very much,l - understanding that people in that 10% bucket think they are the middle class and think they don't deserve to be taxed any more - why not start telling us how you're going to ensure we get that 21% corporate tax rate from all these companies?

The Speaker Speaks to NPR (Pt two)

In part one of the recap of House Speaker Paul Ryan's interview with NPR's Steve Inskeep, I looked at Ryan's take on the impact of the House plan on average middle-class Americans.

Highlights:

• middle-class is not defined, but generally seems to be a family making around $50K
• we will be able to file our taxes on a postcard
• anyone who takes advantage of deductions, 'loopholes' and benefits in the tax code is 'sophisticated' (yay me!)
• big businesses are the 'people' who are complaining the most about the plan, so it must be good
• if you're living paycheck to paycheck, which would happen 52 or 26  or 24 or 12 times a year, depending on your pay cycle, all of your woes will be gone when you get your $1,182 average refund the following spring.

Got it? OK. Picking up again: Inskeep asked about the deduction for medical expenses, which some nine million people claim today, and how eliminating that deduction could hurt "ordinary people with kids who have severe trouble." Ryan's answer was interesting, to say the least.

But it's typically a higher income person because of the way the Obamacare tax increase worked on that. You have to make a pretty good amount of money before you can even enjoy the ability to use that tax deduction.

According to the IRS anyone can deduct a whole host of medical expenses as long as those expenses are greater than 10% of the adjusted gross income for the year, the expenses are not already covered under insurance, and a bit of other fine print.  Here's  partial listing of the 'higher income person" expenses that are currently deductible:

• payments to doctors, dentists, surgeons, and other providers, including non-traditional practitioners
• payments for inpatient medical care, in hospitals or residential nursing homes
• insulin and drugs requiring a prescription 
• dentures, glasses, contact lenses, hearing aids, wheelchairs, crutches and more
• transportation to receive medical care, such as ambulances, and even costs associated with going to get care in your personal vehicle.

I'm not sure how this plays in Wisconsin, Ryan's home state, but nothing in the IRS guidance screams 'higher income" or having to make a "pretty good amount of money" to enjoy this deduction. But he did get to blame Obamacare for something, and any day a Republican can do that is a good day, I guess.

The interview then turned to history. As in, "history shows us that Congress will do the right thing when given the chance."  The question pertained to having the people tax cuts expire, or sunset, before the end of the ten year deal. This was done, Inskeep noted, to prevent too much damage to the deficit, and it requires a future Congress to continue the cuts or that $1,182 would be lost.

Here's the history lesson from Ryan.

Well, first of all history, if it's any guide Congress doesn't have a big tax increase on middle-income families. This was because of the Senate budget rules, which obviously we're not big fans of here in the House. But I'd also like to attest to the fact that this is going to produce economic growth. The Tax Foundation, a non-partisan think tank, showed that because of the tax relief in this bill and the pro-growth provisions in this bill, particularly for businesses to expense and hire and build more factories in America that will lead to about a trillion dollars in additional revenue because of faster economic growth...

Grow the economy means we can get out of this stagnant economic malaise we've been in with 1 to 2 percent growth, get ourselves up above 3 percent growth like we used to be. You get  that kind of economic growth which is clearly possible, and we think this helps us do that, then people can get wage increases. We have living standards go up. You have more jobs being created here that pay better. You have faster economic growth and you get more revenue as a result of that. 

And then Inskeep asked the question that all people who are not elected officials have been asking.After pointing out that there are conflicting studies on the tax plan, some supporting Ryan's take on things, some that don't.

We don't want to go back and forth with studies, but you do know that is is possible that businesses will take their tax savings and simply give it to stockholders in the form of dividends, or simply hold onto it in cash or buy back stock. What if they do? Does it matter to you?

That IS the real question, right? What if they don't do the right thing with their new-found wealth? And what about the companies that pay nothing, or pay next to nothing now - why aren't they papering the country with new factories, new investment, new jobs and higher wages? Again, Ryan's answer was enlightening. What if the corporations don't do the right thing?

That's still not an excuse not to put American businesses on a more level playing field with the rest of the world. Here's the dirty truth of the matter. We live in a global economy whether we like it or not. 

So -- the fact that we're tossing this gigantic, even bigly bone to corporations, knowing that they might just continue to act the way they do today - that's no reason not to do it. Sheesh, Inskeep - what on earth are you smoking?  Ryan didn't actually go that far, but he did go this far:

So what is happening in America is American businesses are leaving, going to other countries, building factories in other countries and foreign companies are buying American companies.  This is costing us jobs. It's costing us economic growth. It's removing headquarters from our communities, which - there goes the United Way campaign, there go the jobs. And so, I don't think any of these arguments hold a candle to the fact that we better get competitive with the way we tax our businesses so we can make an incentive to keep businesses in America. 

He cites a conversation he had with a major corporate executive.

Let me just give you one more thing. I talked to the head of Intel, one of the biggest companies in America. They make all the microprocessors in your computers for the most part. They have 50,000 employees in America, factories spread across this country. They ran the numbers. They would save in taxes alone, over a 10-year period per factory, $2 billion in taxes if they just moved to another country. If they just go relocate to another country. 

So our current tax code today rewards and incentivizes businesses to move money, capital, manufacturing, employees overseas. We want to reverse that trend so that we can keep businesses in America, jobs in America, expansion in America And that's why I'd say all these arguments about why we shouldn't be doing corporate rate reductions, I think they pale in comparison to the fact that if we don't do this, we'll see more of this ugly trend continue. 

According to this Marketwatch article, Intel's effective tax rate over the past five reported quarters, including state and local income taxes?  Just 22%.

There was more on business incentives (100% write offs for factories and equipment instead of having to depreciate the costs over multiple years, for example) and about the cash that's offshore that can't be brought back (as if the current tax code refuses to allow businesses to bring that money home) and about how this won't increase the deficit because the growth is going to be so great (I thought he was going to say #winning at some point, but he didn't).

The bottom line is, Republicans somehow feel that the sun, stars and moon are going to miraculously align in such a way that

(a) companies are going to build factories in America, paying dramatically higher wages and dramatically better benefits to their American workers than they do overseas, at the same time keeping their prices low enough that they are competitive with foreign companies in their same market, and

(b) that people's wages over across the board -- not just the for the people working in the new factories, but all of the wages paid to all of our American workers -- are going to rise much more than they have during this stretch of massive corporate profits, so that no one will be living paycheck-to-paycheck any more, and 

(c) that Americans are going to suddenly decide that it's great to pay more money for the products they need, want, and use.  

Do we really think all of that is going to happen with an additional $1,182 in a person's pocket, and a limited 'real' decrease in corporate taxes?

Well, all that matters is that Speaker Ryan and his colleagues in the House think so. And the Senate agrees, because very early this morning, they passed their tax plan, which will allegedly accomplish the same thing. Now, the two parties will have to sober up and figure out a way to reconcile the two bills and drop something on the president's desk so we get our big fat beautiful tax cuts for Christmas.

One more bit of Ryan's interview to come.

This Stuff Taxes My Brain

My Congressman, Rep. John Katko (NY-24), has said the House tax plan, as it was introduced earlier this month, was a 'starting point for desperately needed action on tax reform' and also offered this:

For thirty years, progressives have demanded exactly what this bill does - easing of the tax burden on low and middle income working families and eliminating loopholes. Anyone who dismisses this bill outright should be prepared to explain this discrepancy, and detail why hardworking Americans should continue to be taxed at excessive rates. No bill is perfect,which is why we need to keep this process moving forward. As this measure moves through the House over the coming weeks, I will continue to consult with individuals, families, small businesses and manufacturers across my district and seek their feedback. As I always have, I will advocate in Congress to ensure that this measure is a net win for Central New York. 

As part of that consultation with constituents, those of us on the Congressman's email list received a survey on tax reform, which I've shared below.

1. When it comes to reforming our tax code, what is most important to you? 

A. Lower tax rates for me and my family

B. Tax incentives for job creation in my community

C. Expansion of the Child Tax Credit

D. Reduce wasteful spending I have to ask why we can't eliminate wasteful spending without having to reform the tax code? If our representatives in Congress, in state government, and in local government can find ways to reduce  wasteful spending, to identify fraud and get that money back,  and stop borrowing money that can never be paid back,that would be a huge accomplishment, one that's much more important to me than getting a tax break.

2. What concerns you most about the U.S. Tax Code as it stands currently? 

A. Taxes are too high for me and my family

B. The current tax code encourages companies to invest their resources outside the US

C. There are not enough tax credits Um none of the above? What concerns me is how many tax credits and write-offs there are, for people and for corporations, how many special provisions there are for industry A and special interest B and family scenario C. These are the kind of things that, for example, allow corporations to earn billions and billions of dollars and pay no federal taxes. There are many examples, more current than this one I wrote about back in 2011. And having companies 'return their profits' to the US doesn't guarantee a single job will be created. It doesn't ensure there will be money invested in manufacturing, in R&D, in workforce training or anything at all that will help my community, or yours. It does ensure that bankers will make money, but even that doesn't necessarily help my community, or yours. It helps bankers.

3. Which answer best represents your viewpoint on addressing our nation’s $20 trillion debt: 

A. We should tax the wealthiest Americans more.

B. We should reduce discretionary spending programs.

C. We should reform mandatory spending programs such as Medicare, Medicaid, SNAP, and unemployment programs.

D. We should reduce our defense spending. This is a great question, but it isn't really about tax reform. My response is two-fold: one, we have to collect the taxes people and corporations owe, and two, we have to spend less money. Defense is an easy target.

4. As I represent you in Congress, what kind of tax reforms would you like to see pass in the House of Representatives? 

A. A tax plan that raises taxes on wealthy individuals and large companies.

B. A tax plan that cuts taxes for low-income and middle class Americans.

C. A tax plan that cuts taxes for everyone, regardless of income.

D. A tax plan that cuts taxes for individuals, but raises taxes on corporations.

Again, my answer seems to be missing:a tax plan that eliminates the loopholes that allow people and corporations to not pay taxes, or to pay less than their fare share. We don't need to raise taxes on anyone, we need to collect what we are owed. 
5.  Do you believe the tax code should be simplified? 

A. Yes, the tax code is over 30 years old, and is outdated, and in need of an upgrade.

B. Yes, taxes should be lowered and loopholes should be closed.

C. No, I believe wealthy individuals and companies should pay more in taxes.

D. No, I am happy with the current tax code. Should the tax code be simplified? Sure. But does simplification mean lower taxes or higher taxes? Not necessarily - it means that the code should be simplified and loopholes should be closed. We may find, once that happens, that the code is sufficient.

6.  Please share any additional concerns in the space provided below.
When I get these surveys, I wish there were answers for me to select.

Addressing Income Inequality (v3): Coporate Profits

My #FeeltheBern friends, my #ImWithHer friends, and my less overtly political friends and I have had conversations about the hot topics today. In this edition of my Addressing Income Inequality series, we'll look at corporate profits; the first post was on 'living wages' and the second was on CEO salaries.

Like most of you, I've heard and read that corporate profits are out of control, and they make CEO pay out of control, and the giant profits being shared with people other than the workers who make the profits possible are killing the middle class.

And like some of you, I sort of sit up and take notice when I see articles like this:

• Apple reports biggest annual profit in history with net income of $53.4B...
• ExxonMobil earns $16.2B...
• Berkshire Hathaway releases profits of $24B...

According to this article (from October of 2015), the ten most profitable companies in the world include the three above; Apple and Exxon Mobil were numbers one and two, respectively; Berkshire Hathaway came in at number four. Who are the rest of the top ten?

#3 Samsung Electronics (South Korea)
#5 Chevron (US)
#6 Toyota Motor Corp.(Japan)
#7 PetroChina (China)
#8 China Mobile (China)
#9 Walmart (US) and
#10 Johnson and Johnson (US).

That's six American companies, two Chinese, one Japanese, and one South Korean firm in the top ten.

So I have to ask, what was your first reaction seeing the list?

Are you on the "those bastages, look at all that money and why don't employees see any of it?" side of the fence?  Maybe you're on the "Alright, look at our American companies go!" Or, possibly, you just go "Hmm... how on earth do they do that?"

I'll be honest,  frequently find myself in the group that says "I sure hope my 401(k) is invested in companies like these!"

All of those reactions are possible, and none of them are really wrong; it's all about perspective, and all about perception.

Now, regular readers know I'm not an economist, a statistician, an accountant or an auditor. I mention this because, while I'm capable of finding lots of information on lots of topics, I'm not qualified to say whether the information I find is 'more right' or 'more wrong.'

But, after all we've heard from the politicians about evil corporations and huge profits, would you be surprised that (according to this info) corporate profits fell to their lowest level in four years in the last quarter of 2015?

Or that, for all of 2015, profits were down over 5%?

And for one of the most left-reviled industry sectors - petroleum and coal - profits were down $124.3 billion in the fourth quarter alone, and down $40.6 for the full year?

What does all of this mean?  As with our other Income Inequality measures - minimum wage and CEO salaries, the proof may be in the pudding, but the beauty is in the beholding.

Where some might seem happy that profits are down, because everything is so unequal, others lament the fact that the numbers are down, because that can negatively impact so many other things, including investment accounts, pensions and 401(k)s.  Some would say that not everyone has the chance to have a pension, or investments, or a retirement fund -- so too bad, so sad for those people who are rich enough to have them... And so it goes.

Should the government have the right to tell a company that they can't make as big a profit as they're able? Should we be complaining that our American companies are making great profits?  Isn't that what we want them to be doing? I mean, I can't imagine anyone --  an Apple, an ExxonMobil or a mom and pop corner store - going into business to lose money, any more than we all go to work every day to do a crappy job.

Why would anyone bother?

Sunday School 4/3/11: GE pays no federal tax (but I do)

By now pretty much everyone has heard that corporate giant GE paid no federal taxes on their $5.1 billion in US profits (about 36% of their $14.2B world-wide profit), and I think even the most jaded of us had to be at least a little shocked when the story appeared in the NY Times last month. 

How did GE do it?  Well, based on the article, it's a combination of aggressive lobbying; brilliant hiring (of former IRS and Treasury officials); expanding their mission-driven tax department to almost a thousand employees; shifting the company's focus from primarily manufacturing to a manufacturing/financial services combo; moving a lot of business to other countries; and of course, helping to write the rules that they live by. 

And clearly they're good at it, having realized a net tax benefit of $4.1B on American profits of $26B in the past five years.  They're also good at spinning their positions. Here's John Samuels, head of GE's tax department, speaking about our largest corporation's overseas success:

“We believe that winning in markets outside the United States increases U.S. exports and jobs,” Mr. Samuels said through a spokeswoman. “If U.S. companies aren’t competitive outside of their home market, it will mean fewer, not more, jobs in the United States, as the business will go to a non-U.S. competitor.”

In the past several years, GE has increased its offshore profits by some $77 billion, so that would seem like they're pretty competitive in markets outside the US. But at the same time, they've cut about a fifth of its domestic workforce. So, that means they're not competitive? Or do they just need to pay less taxes?  I'm so confused.

What's even more dismaying than the fact that GE's effective tax rate is less than zero is that, at the same time companies are enjoying this kind of tax management success, leaders in Washington are very focused on reducing the corporate tax burden even more. Here's what my Representative, Ann Marie Buerkle (R-Onondaga) had to say in a recent interview:

But we also need to reduce corporate taxes in this country. We are second (to Japan) in our corporate rate ... We’ve got to do things that are going to entice businesses to stay here, and work with them, and create certainty and not regulate them to death and not tax them to death.

And never mind the fact that businesses are sitting on oodles of cash, just waiting for the "stability" that will come from more business-friendly legislation, including tax code revisions.  Rep. Buerkle, again:

Right now we know businesses are sitting on billions of dollars because they are so uncertain as to what’s coming down the pike, they don’t spend it. They don’t expand, they don’t hire.

So, to recap today's lesson: huge businesses are paying very little federal tax, moving jobs and profits offshore, sitting on boatloads of cash, and feeling uncertain. 

And then there's me and millions of Americans like me: paying our taxes, sitting on our small nest eggs, hoping we'll be able to keep our American jobs, praying we can retire before we're 80 (or 90), and that there'll be some return on the money we've paid into Social Security, our pensions, our 401(k)s, and our IRAs.

Well, here's a thought, Washington: before you "create any more certainty" and stop "taxing them to death", what commitments are you going to get from companies like GE that they're actually going to put Americans to work, and help get us our of our uncertainty?