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Philosophy & Action Essays
Volume XI - Essay #96: August 2011
"U.S. Corporations Hoarding Profits"
Capitalism is here defined as the creation of jobs, products, and services. This does not include the anti-capitalism practices of union-busting, off-shoring, asset-stripping, down-sizing, or cash hoarding that is claimed as the Divine Right of the Robber Barons who have the sheeple convinced that feudal economics is capitalism.
George Dubya Bush's economic Great Recession continues to deplete America's net worth, while increasing the share of the Oligarchs (top one percent) and the Wealthy Class (top twenty percent) and shrinking the net worth of the rapidly-disappearing Middle Class.
The Revolution is never over, the Class War is perpetual. And the Oligarchs are winning. (Because they lie and cheat, and it works.)
The Master Class is intentionally hoarding their unearned profits, both within domestic corporations and in foreign bank accounts, because they already make plenty of money churning trades on the Stock Market Casino (40 percent of G.D.P.!). By keeping capital in short supply they can charge higher interest and also prevent the Middle Class small business person from producing anything (thus no profit to them) and also prevent small businesses from hiring fear-driven workers.
One element of the Reason-Based Taxation proposal is that corporations be taxed at a rate of FIFTY percent for profits in excess of 10 percent of revenue. Reason-Based Taxation encourages actual Capitalism by providing the incentives of raising wages, lowering prices, domestic expansion, or buying treasury shares as simple methods to reduce profits below that 10 percent boundary. What you will see below is the extant of the greed that is today in violation of the Reason-Based Taxation proposal parameters.
This data is based on a January 2011 Atlantic Monthly article and other sources; revenue and profit figures are a consensus of projections for 2011. Notice that the Top Ten are made up of three banks, three computer companies, two oil companies, one drug company, and Wal-Mart.
Exxon Mobil
Projected 2011 profits of $32.3 billion on revenue of $417.6 billion equals 12.93%
Exxon Mobil also has $35 billion in untaxed foreign profit
Per Fortune Magazine, Exxon Mobil does so much international business that over 80% of its 2009 profit came from overseas. Due to excess profits at the pump, Exxon Mobil, while second to WalMart in total revenue, nonetheless managed a 2010 net profit nearly double that of Walmart's – $30.5 billion to $16.4 billion.
Microsoft, Inc.
Projected 2011 profits of $21 billion on revenue of $73.4 billion equals 28.6%
Microsoft also has $29.5 billion in untaxed foreign profit
Chevron
Projected 2011 profits of $19.8 billion on revenue of $247.23 billion equals 8%
JPMorgan Chase
Projected 2011 profits of $19.1 billion on revenue of $101.57 billion equals 18.8%
Pfizer
Projected 2011 profits of $18.3 billion on revenue of $66.09 billion equals 27.7%
Pfizer also has $48.2 billion in untaxed foreign profit
Apple, Inc.
Projected 2011 profits of $18.2 billion on revenue of $103.3 billion equals 17.6%
Bank of America
Projected 2011 profits of $16.3 billion on revenue of $109.7 billion equals 14.9%
Wal-Mart, Inc.
Projected 2011 profits of $15.7 billion on revenue of $444.2 billion equals 3.53%
I.B.M.
Projected 2011 profits of $15.6 billion on revenue of $103.15 billion equals 15.12%
I.B.M. also has $31.1 billion in untaxed foreign profit
Wells Fargo & Co.
Projected 2011 profits of $15.3 billion on revenue of $84.8 billion equals 18%
There are, of course, large and even smaller corporations such as Goldman Sachs that are making huge profits
percentage-wise without being on this list. Such companies in the 'also ran' category include:
AT&T
AT&T had higher net profits than Wal-Mart in 2010
AT&T reported 2010 profits of $19.86 billion on revenue of $124.3 billion equals 16%
Cisco Systems
Cisco Systems is hoarding $31.6 billion in untaxed foreign profit
Citigroup
Citigroup is hoarding $32.1 billion in untaxed foreign profit
General Electric
General Electric paid NO U.S. corporate income tax for 2010 on revenue of $150.2 billion
Goldman Sachs
2010 profits of $8.4 billion on revenue of $39.16 billion equals 21.45%
Merck
Merck is hoarding $40.4 billion in untaxed foreign profit
Procter & Gamble
Procter & Gamble is hoarding $30 billion in untaxed foreign profit
There is right now a gigantic pile of cash stashed away by U.S. corporations in European banks and elsewhere, waiting for another 'free pass' like the Bush Administration set up for them in 2004. Instead of paying the then-current 35% corporate income tax rate, $362 billion was repatriated at a 5¼ percent tax rate, at a loss to tax payers of $70 billion. But, as is typical of shenanigans devised by the fascist Oligarchy, the stated purpose for the special rate of hiring more workers did not happen: virtually the entire low-tax repatriation of 2004 resulted in payouts to executives and shareholders (and a few purchases of treasury shares) - no jobs were created.
The Oligarchs are singing the same song and dance this time; anyone who believes them is a fool. And since the hoard is much larger – estimated at one trillion dollars of the pharmaceutical industry, one trillion dollars of the banking & finance industry, and one trillion dollars of the insurance industry – the loss to taxpayers could be as much as $900 billion.
[copyright 2011 by Gary Edward Nordell, all rights reserved]
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