Companies claim that they’ll hire more US workers if corporate taxes were lower. Seriously? I’m gonna lay out a case in point of hypocrisy:
U.S. companies hoarding almost $1 trillion cash: Moody’s (2010-10-27)
-What are they doing with that cash?
$10 billion of that from IBM, just to name one, is being used to buy back stock.
-What does that do to the stock price?
Artificially increases the stock price. (Say IBM is worth $100,000, made up of 100,000 shares. Means each share is worth $1. Say you buy back stock and now have 10,000 shares. Means now each share is worth $10.)
-So who benefits with rising stock prices?
Top 20% of wealthiest Americans that own 90% of all stock in America.
– I get it, so companies are spending billions of dollars increasing the wealth of the richest Americans. What’s happening to the rest of us?
IBM Employees in the US:
2007: 121,000
2008: 115,000
2009: 105,000 (Fall #, more layoffs since then)
Corporate cries about high taxes need to stop.
Note: I’m not saying this is wrong for small-cap and mid-cap companies; yeah, they can probably hire more people then. But for large-cap companies with an oversized balance sheet with so much cash they don’t know what to do with it, claiming that they’ll hire more US workers if taxes were lower is simply hypocritical.
Sources:
http://www.reuters.com/article/idUSTRE69Q00T20101027
http://www.computerworld.com/s/article/9169678/IBM_stops_disclosing_U.S._headcount_data
http://www.stateofworkingamerica.org/tabfig/2008/05/14.jpg