Saturday, July 18, 2015

Hillary's Corporate Profit Sharing Plan

Recently, Hillary Clinton announced some bullet points from her proposed economic plan; should she become President.  One element of the plan was this:
"Hard working Americans deserve to benefit from the record corporate earnings they helped produce."
So, if employees should share in record earnings, shouldn't they also share in losses?  After all, using Hillary's logic, a loss in profits is also something "they helped produce".

This is pure left-wing, socialist dribble.  Let's just force companies to pay people more; I suppose with tax penalties.

In the corporate world, people's jobs and their salaries are their reward for profits.  When companies are profitable, they hire more people and typically hand out raises.  Generally, speaking, those standouts, the ones that really did help the company generate more profits, are rewarded with even larger raises, bonuses, or promotions. After all, a janitor sweeping floors has very little to do with someone making a decision to sell a strong product like an Apple iPad, but the designer certainly does.

The latest Hillary idea also shows her ignorance of how corporations use profits.  Profits help companies retire debt and other liabilities.  They are used to expand Research and Development and the business itself.  Some are set aside to help weather temporary losses of business; as was the case in the years 2007-2009 during the Great Recession and the recession following 9/11. Forcing corporations to give more profits to their employees, merely jeopardizes future stability and growth and could actually stall the economy.  It may also force corporations to leave the country.

Lastly, a point about her "record profits" statement.  This is another Hillary lie.  In 2014, corporate profits fell by 8%.  This was the biggest drop since the peak recession year of 2008. In the first quarter of this year, profits declined by 8.7%.

References:

Clinton unveils economic plan, calls for corporate profit sharing: http://onpolitics.usatoday.com/2015/07/13/hillary-clinton-economy-speech/

Economic News: Consumer Cheer Rises, But Corporate Profits Fall: http://news.investors.com/economy/032715-745409-economic-news-consumer-sentiment-up-corporate-profits-down.htm

The GDP report also showed after-tax corporate profits declined 8.7 percent. That was the largest drop in a year and the second quarterly fall: http://www.reuters.com/article/2015/05/29/us-usa-economy-idUSKBN0OE0BF20150529









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