For the past few days, I’ve been covering the ridiculous position the administration’s taken by insisting on tax hikes on the “rich” whereas the only one’s who’ll suffer are the government itself and the fifty percent of the nation that’s dependent on it, because the successful will take care of themselves as they always have in the past.
In that regard, Patti Domm, of CNBC on-line reported this morning that “Companies are racing the clock to hand out billions in special dividends before year end—and some of them are taking on debt to do it. The latest is Costco which announced a $7-a-share payout to stockholders Wednesday and is issuing bonds to pay for the $3 billion dividend.”
Now, Costco is only one of hundreds of big businesses doing exactly the same thing, which means it’s likely hundreds of billions, and perhaps also the close to a trillion in off-shore holdings, will now be immediately distributed to investors because its cheaper to distribute those funds now than to pay the anticipated increase in taxes if the money were kept in the businesses themselves, including funds presently stored overseas.
So, it looks to me like what we have here is a double whammy in monumental ignorance compounded by outright gross stupidity in money management by the incumbent and his advisors, if any. Because not only won’t the government, as well as many of the incumbent’s constituents, get anywhere near what they hoped from tax hikes, but the entire gross national product will shrink next year because the corporate goal is now to get smaller to reduce tax exposure. Therefore the nation will go backward economically even faster, reducing tax revenues further.
But, the most important point to me is, the one I’ve been trying to make for weeks now. And that point is that the government's no match for the entrepreneurs, movers, shakers and doers that made this economy what it is. And those who produce and pay the bills aren’t going to sit still while some clown who’s clueless leads a band of morons in search of deep pockets to fund their survival. And what’s more, this battle didn’t even start yet.
So, if just for openers, we have the top business money-makers taking funds out of the economy hand over fist even before the tax game really begins, what do you think will happen when they start really planning?
While I have no clue at the moment as to what comes next for most businessfolks, my guess is we’ll soon see the incumbent sitting in a corner babbling to himself and drooling, as he wonders if entering a battle of wits unarmed is one of the wisest things he’s undertaken.
That’s it for today folks.
Adios
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