Carl says "Yes Icahn"

Billionaire investor activist Carl Icahn sent a letter out to his followers, members of congress and senate stating his intention to start Super PAC to campaign for Congress to pass  legislation to prevent what he terms as "corporate tax inversions" , an action where large corporation allow other companies to buy them over, thus depleting the US of much needed tax revenues.

He goes on further to say that over the year he has seen a number of companies choosing this option as a result from pressure from hedge fund who hold a significant portion in the company who profits a great deal from such transactions. He also points to the impasse of a double tax when these corporates who have earned abroad and subsequently paid taxes in the country of origin of the earnings who wish to bring these profits back to the US but have to be taxed twice to bring it back which does little to encourage them.

What happens then these corporations leave these deposits overseas accumulating mass amounts over the years. Icahn says currently there is a cash pile of $2.2 trillion lying in foreign bank accounts that could be used to inject much needed life into the American economy.

He then proposes that if Congress were to lower this "double tax" rate to between 5-10% companies would be willing to bring back this money effectively creating $200 billion in tax revenue. This he says can be used to fund the Highway Bill, a law which proposes the upgrade of highways across the country.

1/2 I am starting a Super PAC with my initial commitment of $150 million to help end the crippling dysfunction in Congress

— Carl Icahn (@Carl_C_Icahn) October 21, 2015

 He goes on to say that it is evident that the US economy has suffered as a result of non action by Congress that is needed to stimulate the economy. He states that observing the current state of affairs in the financial markets with the interest rates being on zero, any suggestion of a hike triggers panic, indicating the seismic weakness that lies in the economy.

He goes as far as to say that the Fed has exhausted all of its options and has now reached a point where it is forced to act, either which way could prove fatal for magnificent bull run we've witnessed since the 2008/09 financial crisis. It does call into question the relevance of the trend and whether the uptrend is supported by such views that all is fine within the US.

2/2 I have therefore sent the following letter to the relevant committees and leaders of Congress: https://t.co/EGcuHvzou4

— Carl Icahn (@Carl_C_Icahn) October 21, 2015

What Icahn is doing is what America needs to get its economy moving again. We haven't seen sweeping government programs that promote job creation or capital expenditure that is necessary to resuscitate normal economic activity. A project such as upgrading the highway infrastructure could create million of jobs, something that would flow freely into the real economy.

The real danger Icahn highlights is the situation the Fed finds itself in backing up into a corner. To be honest with ourselves, the Fed was never going to be a saviour for the poor, their job was to create financial stability long enough to prevent further damaging implications on the world economy. However what this administration has failed to do is implement changes focus specifically on the average guy on the street.

By allowing the Fed to pump the economy with fictitious money they've merely made the rich richer and the poor staying the same with little improvement. The Fed's objective is to ensure stability in employment levels however it does not focus on creating specific jobs that fall within the category of the working class, jobs which attempt to spread the pool of income evenly so as to create faster economic activity.

Can we really expect the US economy is thrive based on spending by the wealthy? Unfortunately not on account that the wealthy make up a handful of percentage of the entire population and their need to spend is far outstripped by the propensity to earn. The real activity happens from the millions who go on living their lives day to day.