Cash Reserves: Evil?
The Grand Game, in Raleigh!
During the Roosevelt Administration, government officials repeatedly tried to find ways to tax what they called "retained earnings." Those rat bastard businessmen were trying to INVEST! And that meant that profits were not being fully taxed. Something must be done. In fact, I would attribute much of the second dip, in 1936-7, to business uncertainty about tax treatment. The Roosevelt officials even went so far as to threaten businesses with prosecution for taking LEGAL tax breaks.
The Obama administration is now considering doing the same thing, in a variety of ways, increasing taxes on investment and productivity. The result will be lower investment and productivity, which may snuff out the recovery.
But that's not what today's Grand Game is about. Today I want to thank KPC friend BR for pointing out this article, in the Raleigh paper. A large company has the gall to hold large cash reserves, instead of paying out profits (so that the profits can be taxed), or reducing prices (which they would do...I'm not sure why having cash reserves means you should cut prices. It just doesn't follow).
Anyway, as frequent readers know, the Grand Game is where we ask you to check out the article, and point out the absurdity you find most amusing! I'll go first:
IT'S AN INSURANCE COMPANY! THE STATE IS MAD AT AN INSURANCE COMPANY FOR HOLDING CASH RESERVES? No, this is not the Onion.