If you were a corporation…2011 was a good year for you. Collectively – the Fortune 500 companies raked in $825 BILLION in profits in 2011 – a 16% increase over prior year earnings. The Fortune 10 made $140 Billion alone…that’s a lot of money. Those profits are AFTER taxes and that doesn’t even include the $98 billion in cash that Apple, Inc. is hoarding away in banks throughout the country. The “Horse and Sparrow” economic theory is an abject failure…it DOESN’T WORK. If you don’t know what “Horse and Sparrow” is – click HERE; you’re in for a treat.
“Corporate America is doing great right now”
~Andy Serwer, Fortune managing editor
This matters because corporate taxes are at a historic low for the modern era; corporations are paying much smaller tax bills than in years past (source and source). There is a correlation between paying less in taxes and the cutting of important social services that Americans depend on. Having starved the Treasury of vital funds by passing huge tax cuts that were not offset by spending cuts at the time of passage…the time has come to pay the bill. So – we are at a crossroads.
That’s basically where we’re at in the discussion. The House Republicans are completely wiping out the social safety net which amounts to $38 billion a year (for their first round of cuts). The House Republicans say these spending cuts are necessary to balance the budget…although that same budget gives even larger tax cuts for the wealthy that aren’t even included in the chart below. Those spending cuts are about half of what the “cost” of extending the Bush tax cuts for the wealthy are…which is $72 billion. And then compare that to the obscene $140 billion in profits just for the top 10 Fortune 500 companies and you might ask yourself if it’s appropriate to tax corporations just a tad more.
The chart below compares three budget lines that would affect the budget – all of these numbers are based on annual numbers.
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