Tax Avoidance

[Teatownclown]

G.E.'s Strategies Let It Avoid Taxes Altogether

http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=2&hp

GE Made $5.1 Billion in U.S. Profits in 2010, Paid No Taxes!

"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."

I am attempting to post some welfare issues for those on TNF (truth n fun?) having difficulty separating the haves from the have nots. Yes, corporate welfare that deprives society from spreading safety, education and well being through out to each other's neighbors.

Good for their shareholders. So is war and greed.

"Our tax system should encourage job creation and investment in America and end these tax incentives for exporting jobs and dodging responsibility for the cost of securing our country." Lloyd Doggett

[we vs us]

This is a market failure, in essence.  Corporations must strategize to pay as little tax as possible because their main duty to their shareholders is to maximize profit.  Taxes are always viewed as a negative event, even though we as citizens might be able to agree that some taxes are necessary to pay to support a functioning society.  

The problem is that, even though corporations quite obviously benefit from paying some tax, it's in their primary interest not do it.  

EDIT:  And if they can turn it into a profit center -- a $3.2 BILLION dollar profit center -- then so much the better.

[Conan71]

Funny part is, it's been prominent Democrats like Charles Rangel (D-corrupt) running interference for GE up on the Hill.  Also clever is GE employing former treasury and IRS officials to help minimize their tax burdens.

I agree it seems ridiculous that a corporation making over $5bln in profit pays no corporate income tax.  I would also assume, they've raised the threat of moving elsewhere when property tax credits run out in the areas where they have facilities.

One thing the article does not mention is whether or not their individual business units are paying corporate taxes, other than GE Capital which seems to be one of their biggest tax shelters.

All that said, they do provide jobs and pay a boatload in payroll taxes.  Their employees pay quite a bit in income tax, as well as the vendors and all the ancillary business which results from GE having facilities in the U.S. and all the people they employ.

Do you give a break to one of the bigger teats in the economy to ostensibly create an even larger tax base?  I'm split on it.  Would taxing that profit result in reducing the overall tax base GE creates with it's various operations?

I did find it interesting that the image is always of Republicans providing corporate welfare, yet it was Ronald Reagan who ordered the closing of many loopholes GE was taking advantage of in the '80's to get them from zero or near zero taxes to an effective rate of near 33%.  

[we vs us]

It rankles me that we have to treat corporations as these fragile, precious golden-egg laying geese.  Not because I'm hostile to corporations per se, but because it means we have no leverage against them.  Because they are employers, and because we've come to value employment beyond all other things, we just have to give and give and give, and not get anything in exchange.  It's an unequal relationship. 

It wouldn't be so bad if there was an incentive for companies to not only make profit but to do good.  But there isn't.  So, since there's no carrot for do-gooding, we have to use the stick, which is taxation. 

[Conan71]

It rankles me that we have to treat corporations as these fragile, precious golden-egg laying geese.  Not because I'm hostile to corporations per se, but because it means we have no leverage against them.  Because they are employers, and because we've come to value employment beyond all other things, we just have to give and give and give, and not get anything in exchange.  It's an unequal relationship. 

It wouldn't be so bad if there was an incentive for companies to not only make profit but to do good.  But there isn't.  So, since there's no carrot for do-gooding, we have to use the stick, which is taxation. 

But we DO get something in exchange: employment and the opportunity for entrepreneurship to cater to the folks who have these jobs and the corporations who subcontract for and supply GE and companies like that.  They've also helped develop technology which has made life better for all of us as well as defense technology which has made the country safer.  

With a quick Google I can't seem to find a good count on GE's employment within the U.S.  Globally it's reputed as 287,000 to 300,000.  Let's assume 1/2 the workforce is here in the states, those are significant, high-paying jobs.

Unfortunately, they've got the ability to pick up and pack up and move the jobs wherever they want to.  Our government essentially helps level the playing field for them on the global market by allowing them to keep that revenue so that they get global contracts which brings in money from other nations which finds it's way into our economy.

I agree with you that on the surface it looks like a bad practice and perhaps it is.  Unfortunately, there's too many other options for a company to relocate when you raise the tax hammer on them.  Whether it's a domestic company threatening to move a state or two away for better property tax or other incentives or a global giant like GE who could move entire plants of 2000 workers to Mexico in a matter of months or start subbing from Chinese companies.

However, you can't say we get nothing in exchange.

[Teatownclown]

I don't think any corp is in a hurry to move down to Mexico.

What would you consider "high paying jobs?"

GE has spent 250 million dollah on political money since 2000. This is an ongoing problem with our government cuddling up to shareholder representatives.

I believe our tax code is unfair.

And yes, we are in competition with the rest the world for jobs. Maybe we need to encourage open borders. It would increase tax receipts, solve the housing crisis, and drive labor costs down far enough to compete world wide.

[guido911]

Not to drift, but how many people paid that Oklahoma Business Activity Tax this year? Apparently, just conducting business in this state is now taxable. 

[Teatownclown]

Not to drift, but how many people paid that Oklahoma Business Activity Tax this year? Apparently, just conducting business in this state is now taxable. 

Nothing new...the bill comes from ex mayor Savage....is she still Sec. of State?

[Red Arrow]

Not to drift, but how many people paid that Oklahoma Business Activity Tax this year? Apparently, just conducting business in this state is now taxable. 

Hey, if you're going to have the lowest taxes in the region, you have to have them all.  

Gives the illusion of being under taxed.  Compare one tax to Texas, another to Kansas, another to New Mexico.....

[Teatownclown]

Want to Cut the Deficit? Restore Fair Taxes on Corporations and the Wealthy
by Deborah Burger

http://www.commondreams.org/view/2011/03/25-13

" Apparently paying no taxes is a model for how to be competitive."

and!

"According to Merrill Lynch Global Wealth Management and Capgemini Consulting, there were about 3 million high net worth individuals and ultra high net wealth individuals in the US in 2009, those with investable assets, excluding primary residences and consumables, of from $1 million to $30 million.

Calculations by the Institute for Health and Socio-Economic Policy, research arm of National Nurses United, shows that a one-time wealth surcharge of 14% on those assets would more than pay for the $1.6 trillion budget deficit projection for 2011. Or, it would support about 33.8 million households at the national real median income level for 2008, pay for a year's worth of AIDS medication for about 142 million patients, or create 34 million jobs at $50,000 per year."

[guido911]

Hey, if you're going to have the lowest taxes in the region, you have to have them all.  

Gives the illusion of being under taxed.  Compare one tax to Texas, another to Kansas, another to New Mexico.....

The tax itself was only $25 for my PLLC, but I imagine its a cash cow given how many little mom and pop shops are around. As for my "illusion" of being under taxed, I don't have it. The surgery I need to repair the injuries from my annual governmental rectal roto-rootering is scheduled for next week

[Teatownclown]

It's doubled in 7 years I think....now $50.
I get ripped much more by well operators.

If you make money, you pay taxes. Fact of life. Quit the complaint about contributing to protect your community, your country, and your neighbor's education. No matter what light you are placing on it, it is not the fact that government is the administrator of these funds but the benefits the less fortunate receive that really seems to bother you.

[guido911]

It's doubled in 7 years I think....now $50.
I get ripped much more by well operators.

If you make money, you pay taxes. Fact of life. Quit the complaint about contributing to protect your community, your country, and your neighbor's education. No matter what light you are placing on it, it is not the fact that government is the administrator of these funds but the benefits the less fortunate receive that really seems to bother you.

No. What bothers me are calling those with less money "less fortunate". The implication is that whatever success I have achieved was a result of being "fortunate", and not sacrifice and hard work. In my opinion, everyone should contribute equally, but that ain't going to happen any time soon.

[Teatownclown]

No. What bothers me are calling those with less money "less fortunate". The implication is that whatever success I have achieved was a result of being "fortunate", and not sacrifice and hard work. In my opinion, everyone should contribute equally, but that ain't going to happen any time soon.

Define "equally". I am sorry if you've never caught a break or were offered a good opportunity. I have known many who sacrificed and worked especially hard that were spiritually rewarded rather than financially. That costs the government take, you know. 

[Gaspar]

You get what you pay for.

GE has spent almost $500,000 in campaign contributions in 2008.

$40 million in lobbying in 2010 (more than twice what they spent under previous administrations).

2/3 of what they spend in 2008 went to Democrats.

They've paid for this prosperity, and have been duly rewarded.