At the core of the non-recovery in America’s economic crisis is the stockpiling of enormous sums of untaxed cash — totaling almost $1.5 trillion at the end of last year — by corporations that refuse to invest in new businesses and projects that would serve the public good, Alejandro Reuss, an instructor at the Labor Relations and Research Center at UMass-Amherst, writes at The Washington Spectator.

Nonfinancial corporations are the culprits here. Technology superstar Apple leads the way with nearly $150 billion in cash reserves. The resulting investment shortfall, Reuss writes, “is at the core of the sluggish ‘recovery’ and chronically high unemployment.”

Reuss offers a solution: a tax on this “idle cash that would light a fire under corporations to spend it now.”

“If focused on expanded production and new investment,” Reuss writes, “such spending would help close the still-enormous gap between the economy’s current production and its potential. And it could help boost employment, which has hardly grown (relative to the working-age population) during our current sluggish recovery.”

“The cash-reserves tax, if done right, would be an elegantly double-edged policy. If corporations still won’t spend their cash hoards, the tax would boost government revenue—which could be used to address human needs, build infrastructure, etc. (If corporations won’t invest, the government will.) On the other hand, the companies could avoid the tax by spending the idle cash, increasing output and employment.”

— Posted by Alexander Reed Kelly.