Friday, March 25, 2011

G.E Turns a 14.2 Billion Dollar Profit... Claims a 3.2 Billion Dollar Tax Credit!

by: Les Carpenter
Rational Nation USA
Birthplace of Independent Conservatism


I am all for business organizations turning a healthy profit. We should all be in favor of this because profitable businesses generally create jobs that employ people, thus enriching lives.

A case can be made that profitable organizations ought to pay a "fair" share of their profits (gross revenue less legitimate business and operating expenses) to help support the infrastructure and financial stability of the country they call home.

It is just a tad disturbing {even for an avowed capitalist like myself} when I read about the phenomenal profits of G.E., 14.2 billion dollars, and at the same time find out they claimed a 3.2 billion dollar tax credit!

There is something very wrong with this picture. It reeks of special privilege secured by very aggressive lobbying tactics, and a tax code that is antiquated, burdensome, and is rife with loopholes and unjustified tax breaks for corporations and the very wealthy.

Now don't misread or misinterpret what I just said. I'm not talking about redistributing wealth. I am however talking about the need to revise the tax code and regulatory maize so as to make sense both for the individual taxpayers and businesses alike. For those who may be interested in my take on a simplified and more just tax code it can be found at, An Independent Conservatives View on Limited Government, an Objective Tax Code, and Regulatory Overreach.

Back to G.E.
N.Y. Times - Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

I presume knowing very influential people in high places doth have its advantages as well.

h/t Weasel Zippers

Cross posted to the Left Coast Rebel

Via: Memeorandum

10 comments:

  1. Here's another way to look at it, eliminate all corporate taxes. This may seem like an illogical approach but it would have many benefits, chief of which would be to level the playing field for all US companies and also give companies less incentive to off-shore jobs. This would in turn create much needed jobs who's resulting personal income tax revenue would more than offset the revenue lost.

    It may seem like a crazy idea but as we can see, multi-nationals like GE are already not paying taxes and actually receiving tax credits while they continue to eliminate US jobs.

    ReplyDelete
  2. Chris, if you go and read the full NY TIMES article you will find your answer:

    "While G.E.’s declining tax rates have bolstered profits and helped the company continue paying dividends to shareholders during the economic downturn, some tax experts question what taxpayers are getting in return. Since 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment. In that time, G.E.’s accumulated offshore profits have risen to $92 billion from $15 billion."

    While paying little to know taxes and here is another quote from the same original article: "As it has evolved, the company has used, and in some cases pioneered, aggressive strategies to lower its tax bill. In the mid-1980s, President Ronald Reagan overhauled the tax system after learning that G.E. — a company for which he had once worked as a commercial pitchman — was among dozens of corporations that had used accounting gamesmanship to avoid paying any taxes.

    “I didn’t realize things had gotten that far out of line,” Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan’s 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent."

    Even with not paying taxes on a 14.2 billion dollar profit and all the while receiving subsidies of 3.2 billion GE is not going to create one more job in the United States than they have to....

    ReplyDelete
  3. TOA

    All the more reason to end corporate taxes. Why should a company like GE be able to get a $3.2B tax credit because they know how to work the system when other companies that do not have friends at the White House pay full rate?

    Now before you accuse me if being pro-business, I also believe that businesses should not be given subsidies, incentives, bailouts or any other form of corporate welfare. Let the free-market dictate the winners and losers, not the government. If you run your business well you succeed, if not you fail. It's that simple. This goes for GE, GM, Wall Street along with every other business, large and small.

    While GE may not create any more jobs in this country, many more companies will once they are freed of the burden of paying the IRS.

    ReplyDelete
  4. I'd be happy if GE paid back (in it's entirety) their bailout money.......I agree with Chris. Get rid of the corporate income tax. If you want to hammer the rich, tack on a few points to the top individual rates.

    ReplyDelete
  5. Hey! How about this! No more corporate moeny in elections!!!! Wouldn't THAT be &^%$#@!@#$$%%&^&**&^%^%$#@!!@#$%^^&^& GREAT???????????????????????????????????????????????????????

    JMJ

    ReplyDelete
  6. JMJ

    I'd agree to that as long as there was no money from unions, PACs, lobbyists or any other special interest group allowed in campaign financing. I'd also be all for capping the amount of money that a candidate could spend out of their own personal finances too.

    ReplyDelete
  7. Chris, it's as simple as this; no money from anyone or anthing other than individual human contributors, with a small cap - like ten bucks per donor, are allowed in any representative campaign.

    JMJ

    ReplyDelete
  8. Chris buddy, I am pro business because I own a business and have been in business for over 25 years now.

    Not real sure how this competition ideal of yours would work in an economic system where "too big to fail" is just another term for monopoly.

    So, pull the government out of the economy and let business compete! Tell me, are you going to break up these mega monster corporations before you do away with government? In case you have not noticed but during this "recession" we witnessing the greatest period of consolidation this nation has ever seen in banking and healthcare.

    The only competition there could possbily be would be between small companies and large companies and lets be romantic...the small companies are losing their ass...

    Our mega corporations have gotten so big that they have even taken over our government....and everyone on the right wants to make government smaller and let corporations compete!

    I would advise all would be capitalists to read John Kenneth Galbraith if your goal is to save capitalism....

    As a small businessman let me tell you, taxes are secondary right now inregards to jobs creation....what small business people need to create jobs is CAPITAL....and you can't get it from a bank anymore....trust me, I know that for a fact!

    ReplyDelete
  9. @ Chris - In a perfect proper capitalistic economy and society I agree. Completely.

    Unfortunately this ideal, as Rand observed, has never existed and we can be sure {IMHO| never will.

    Therefore, ideas such as outlined in my link to my essay on the subject ought to be entertained. It, and others like it, offer a vast improvement to the status quo.

    In the meantime please continue arguing your point with passion. But be prepared to compromise in our effort to swing the pendulum our way!

    The battle to achieve the ideal will be a long and tedious labor.

    ReplyDelete

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