With the American corporations in Standard & Poor’s 500-stock index holding a record $960 billion in hard cash and taxes on corporate profits the lowest they have been since the 1950s, the Obama administration appears ready to give them even more in the way of economic breaks.
That “more” will come in the form of temporary payroll tax cuts in the period leading up to the 2012 presidential election, Joshua Holland at AlterNet reports. —ARK
One would think that an almost daily barrage of grim economic news about working America might inspire a sense of urgency among policymakers, prompting them to think boldly about how to get the country moving again.
Meanwhile, the companies in the Standard & Poor’s 500-stock index are sitting on a record $960 billion in cash—the Wall Street Journal notes that “there is a cash crisis in corporate America—although it comes not from a shortage of the stuff, but from a surplus.” Given that the federal government has been collecting the lowest share of the economy in tax revenues since 1950 during the past few years, one might also expect that giving American businesses more “tax relief” wouldn’t be a terribly high priority.
But this is America, and the White House is reportedly courting big Wall Street donors to help finance Obama’s re-election campaign, so it’s considering the merits of offering a temporary cut in the payroll tax paid by businesses. It’s an idea that might stimulate the economy a little bit and could well gain bipartisan support, but it’s also fraught with risk and represents yet another sign that the administration has thrown in the towel in the larger debate over how to recover from a blistering recession.