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Corporate Profits Recover, Taxes Not So Much

Posted by: Dan Beucke on December 7, 2011 at 1:20 PM

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As the election cycle turns up the heat on the wealth debate, look for companies to argue that any corporate tax hike will be a vote against U.S. job creation. As the Bloomberg Government chart here shows, corporate profits as of last year had recovered from the recession, but corporate tax payments had not. There are two reasons: 1) Companies got a break three years ago on depreciation for spending on factories and equipment. That’s due to expire next year. 2) Much of the post-recession expansion is happening in places like India and China, where multinationals shield their profits from U.S. taxes until they’re repatriated.

Corporate execs say that without further tax breaks, investment will grind to a halt and foreign profits will stay where they are. Critics cite the drop in taxes paid as evidence the companies aren’t paying their fair share — and say that more tax breaks will only make it worse.

Reader Comments


December 12, 2011 4:23 PM

I love how companies always pull the "job" card when any discussion of making them toe the lines like everybody else comes up. Yet you never see their Executive staff take any pay concessions whatsoever. They'll axe everyone below them and still award themselves with 20%, 30%, and more in compensation growth. All while often driving their companies into the ground. I just want to know how do you ascend to the level at which you are immune to the financial impacts suffered by your subordinates, and by your very actions and decisions? I've heard and seen enough of the Top Brass in Corp America to know that there is but one thing that 90% of them are interested in: How much money will it put in MY pocket? They'll poison water supplies, do crooked financial deals, stock swaps, distribute bad medicine, there seems to be nothing off limits to what these people will do for themselves. And they want more tax breaks? Why? What have YOU done for this country lately?

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"The Wealth Debate" is a running discussion of wealth, poverty, the economy and income inequality in the U.S. and the world. It was started shortly after the Occupy Wall Street movement sparked a global protest about the fallout from the financial crisis and money in politics. You can reach the editors, Dan Beucke and Mark Gimein, by email, or follow BloombergNow on Twitter to keep up with posts.

Analyses or commentary in this blog are the views of the author and or commentators, and do not necessarily reflect the views of Bloomberg News.

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