I just received this from my Congressman Mike Capuano (D-Somerville, MA) in his weekly e-mail update:
Our unemployment rate is too high and the economy continues to show signs of fragility. Many people are struggling to make ends meet and even if they are employed, they worry about their future financial security.
In the midst of all this continued economic uncertainty, corporations are sitting on the largest amount of retained earnings ever recorded. According to the Federal Reserve’s recent Flow of Funds Report for the 2nd Quarter of 2011, “non-farm, non-financial corporations” are sitting on over $2 trillion in cash and other liquid assets. This is a $500 billion increase in total liquid assets since 2007. Today’s corporate reserves account for over 7 percent of all corporate assets, the highest level since 1963. It’s clear that U.S. corporations are staying on the economic sidelines as millions of Americans struggle to find work.
America needs these corporations to re-invest in our economy. They have the cash and should use it either directly by hiring or indirectly by investing in their own company. I am not suggesting we should tell corporations how to use their money - but we should provide incentives to get them back in the game.
That is why I introduced H.R. 3018, The Corporate Assets Should be used to Hire (CASH) Act. The CASH Act would assess a temporary surtax on corporate retained earnings that exceed the average of that corporation’s retained earnings for the prior three tax years. This approach recognizes the need for reasonable cash reserves. My proposal exempts corporations with retained earnings under $5 million and corporations that have been required to increase their cash reserves as a result of federal law or regulation.
The sole purpose of this proposal is to encourage corporations to use the money sitting on their balance sheets to help put Americans back to work and get our economy moving again.
Corporations can easily avoid every penny of this surtax by using this excess retained money to hire people, purchase material, enhance capital assets, pay dividends, or for any other business purpose.
All funds collected under this surtax would be available ONLY to reduce the federal deficit and nothing else.
This is not an attempt to raise revenue - this is an effort to get our largest corporations to use excess cash reserves to help America’s economy get back on track. Job creation is the key to growing our economy and until the private sector steps up, we will continue to see discouraging unemployment numbers.
- Posts : 14
Join date : 2011-03-28
Latest Title: To amend the Internal Revenue Code of 1986 to provide a temporary surtax on increases in retained earnings of domestic corporations.
Sponsor: Rep Capuano, Michael E. [MA-8] (introduced 9/22/2011) Cosponsors (None)
Latest Major Action: 9/22/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.
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