GE made 14.2 billion in profits in 2010, but paid not a penny in taxes

I think the millionaires and corporations should get more tax cuts so their effective rate becomes negative! They should not pay taxes at all, and not only that, the “middle class” should have to pay a privilege tax in honor of the corporations, a form of tribute to the our beloved blue blooded execs. http://abcnews.go.com/Politics/general-electric-paid-federal-taxes-2010/story?id=13224558

GE actually paid $1.05 billion in income taxes in 2010, they just didn’t pay them to the US. Instead of paying the second highest corporate tax rate in the world (soon to be highest when Japan’s tax reforms go into effect), GE shifts profits overseas to more tax friendly countries and pays a boat load of money to lawyers and accountants to find loopholes in the US tax code. Eliminate the a lot of the loopholes (i.e. simplify the tax code) and lower the corporate tax rate and it won’t be worth the expense and effort for companies to play those kinds of games. Incidentally, I say eliminate some of the loopholes, not all, because GE receives tax benefits for R&D, particularly in the area of renewable energy.

@Higgmond, if you simplify the corporate tax code you’ll take a bunch of revenue from companies like BDO and Deloitte. So it’s not going to happen, IMO. I think something realistic would be a corporate version of the AMT but better. For example, if you’re a corporation with over $1 Bil in gross revenue, you can’t pay any less than 10% but no more than 40%; so the lowest a companies tax rate can be each year is 10%. And adjust this for level of revenue NOT profit.

Hey, don’t kill the goose that lays the golden egg! Even if you don’t get to keep the egg, or touch the egg, or benefit from the egg, and producing the egg takes resources away from you and raises the price of everything you do have access to. That’s all besides the point. The egg. It’s golden! Get it???

It would be interesting to see how much of the money paid to Lawyers and Accountants by GE in the form of salaries eventually flows back into the system via their taxes. Though I’m sure they have pretty efficient taxes since, you know, thats their profession and all. Imagine eliminating their jobs though, that could have a tangible effect on GDP, no? Fortune 500 companies eliminting 1000’s of lawyers and accountants due to simpler tax codes.

@bchadwick, please clarify? Please translate your hippie slang.

What is hippie slang?

bchadwick Wrote: ------------------------------------------------------- > What is hippie slang? what is mind?

Lots of companies do stuff like this actually.

ohai Wrote: ------------------------------------------------------- > Lots of companies do stuff like this actually. Yes, that partly explains the trillion dollar plus deficit.

marcus phoenix Wrote: ------------------------------------------------------- > I think the millionaires and corporations should > get more tax cuts so their effective rate becomes > negative! They should not pay taxes at all, and > not only that, the “middle class” should have to > pay a privilege tax in honor of the corporations, > a form of tribute to the our beloved blue blooded > execs. > > http://abcnews.go.com/Politics/general-electric-pa > id-federal-taxes-2010/story?id=13224558 You’re mixing two separate issues. Nobody (natural person or corporation) should get the benefit of tax loopholes, special treatment, or special support from the government. At the same time, taxes should be lower across the board. It’s a 2 sided coin that each side conveniently forgets, which side depends on political affiliation. If you want lower taxes, then you must also accept that you’re on your own to compete in the market. It really irritates me that the “small government” republicans don’t seem to explicitly acknowledge this. If there were a candidate that ran on lower taxes and eliminating special deals for certain corporations/industries, I think it would play extremely well with the public.

One thing that’s interesting is that in public opinion surveys, Americans almost universally loathe Congress, but they usually like THEIR Congressman/woman. Similarly, we have large numbers of people who loathe government spending, but they really like the pork THEY get.

Zesty Wrote: ------------------------------------------------------- > @Higgmond, if you simplify the corporate tax code > you’ll take a bunch of revenue from companies like > BDO and Deloitte. So it’s not going to happen, > IMO. I think something realistic would be a > corporate version of the AMT but better. For > example, if you’re a corporation with over $1 Bil > in gross revenue, you can’t pay any less than 10% > but no more than 40%; so the lowest a companies > tax rate can be each year is 10%. And adjust this > for level of revenue NOT profit. I agree that it’s very unlikely that the tax code will be dramatically simplified. If US corporate tax rates were more in line with the rest of the world though, companies would have less incentive to move their profits overseas. Of course all the transfer pricing guys would see a big hit to their top lines if that happened. I think one thing that people also lose sight of is the fact that corporate profits don’t just sit in box under the CEO’s desk for all eternity. Those profits are “distributed” in some manner eventually and most of those “distributions” have some tax paying component to them.

@higgmond, it’s distributed at a diminished value {because they are paying a lower rate on those profits and also a dollar today is worth more than a dollar tomorrow (assuming standard normal yield curve and etc.)}

bchadwick Wrote: ------------------------------------------------------- > One thing that’s interesting is that in public > opinion surveys, Americans almost universally > loathe Congress, but they usually like THEIR > Congressman/woman. Similarly, we have large > numbers of people who loathe government spending, > but they really like the pork THEY get. Brings to mind one of my favorite quotes: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.” We’re now 222 - 234 years old, depending on how you look at it.

Zesty Wrote: ------------------------------------------------------- > @higgmond, it’s distributed at a diminished value > {because they are paying a lower rate on those > profits and also a dollar today is worth more than > a dollar tomorrow (assuming standard normal yield > curve and etc.)} Better to get some portion of a smaller pie tomorrow than no portion of a larger pie today.

higgmond Wrote: ------------------------------------------------------- > > “A democracy cannot exist as a permanent form of > government. It can only exist until the voters > discover that they can vote themselves largesse > from the public treasury. From that moment on, the > majority always votes for the candidates promising > the most benefits from the public treasury with > the result that a democracy always collapses over > loose fiscal policy, always followed by a > dictatorship. The average age of the world’s > greatest civilizations has been 200 years.” > That’s a pretty interesting quote. However, do you believe that there is an historical basis for this? That is, how many democracies have actually collapsed due to fiscal policy, and then replaced by dictatorships? (When I think of the collapse of ancient democracies, I tend to think of roaming barbarian hordes.)

higgmond Wrote: ------------------------------------------------------- > bchadwick Wrote: > -------------------------------------------------- > ----- > > One thing that’s interesting is that in public > > opinion surveys, Americans almost universally > > loathe Congress, but they usually like THEIR > > Congressman/woman. Similarly, we have large > > numbers of people who loathe government > spending, > > but they really like the pork THEY get. > > > Brings to mind one of my favorite quotes: > > “A democracy cannot exist as a permanent form of > government. It can only exist until the voters > discover that they can vote themselves largesse > from the public treasury. From that moment on, the > majority always votes for the candidates promising > the most benefits from the public treasury with > the result that a democracy always collapses over > loose fiscal policy, always followed by a > dictatorship. The average age of the world’s > greatest civilizations has been 200 years.” > > We’re now 222 - 234 years old, depending on how > you look at it. The majority voted for Bush twice in 2000 (or did they?) and 2004. What benefits did they get from the public treasury? The only ones that truly benefited from his policies represented a very small segment of the population (defense contractors, big oil, the wealthiest Americans). So really your quote doesn’t hold much water when in reality policies are being crafted to mainly benefit mostly the rich and powerful.

ohai Wrote: ------------------------------------------------------- > > That’s a pretty interesting quote. However, do you > believe that there is an historical basis for > this? That is, how many democracies have actually > collapsed due to fiscal policy, and then replaced > by dictatorships? > > (When I think of the collapse of ancient > democracies, I tend to think of roaming barbarian > hordes.) I would not pretend to be an astute enough student of history to be able to honestly answer that question.

Authoritarian regimes collapse too, and are often just as prone to fiscal mismanagement. Engineers and economists often go for the “authoritarian regimes are better” argument because they see democratic haggling processes as inevitably inefficient and watering down “what needs to be done.” They think, “Gee, if we didn’t have to do that, we could have a sensible policy and just force people to live by it.” But there are two problems here: 1) their “sensible policy” may leave out key realities that don’t come up until you have the ability to haggle; 2) just because you have authoritarian leaders doesn’t mean that they will choose to implement sensible policies, particularly if the costs can be externalized onto future generations or repressed groups and have to be paid on someone else’s watch; and 3) if an authoritarian regime chooses to stop listening, there is really nothing one can do about it, except take to the streets to try to overthrow it, or attempt to leave the place. So it’s not that democracies don’t have a lot of problems, but it’s an illusion that authoritarian regimes can be depended on to resolve them consistently. What one is comparing is “real democracies” with “idealized authoritarians,” and that’s not a fair comparison. Compare real democracies with idealized democracies or real democracies with real authoritarianisms, but don’t cross real/ideal and democracy/authoritarian categories simultaneously.