GE make $5 billion in profits (in 2010, in the US alone) and pay no taxes

DarqueKnight

Danny Tse wrote: »

Kinda amazing, isn't it?

New York Times article on how GE avoid paying any taxes

I don't think it's amazing at all. These kinds of stories get people riled up, because it seems like corporations are getting a "free ride". However, theses kinds of stories seldom tell the whole story.

Although GE may not have paid any federal income taxes, they were, and are, heavily "taxed" in other ways. According to GE's 2010 10-K financial statement (page 62) GE owns $27.2 billion in real estate worldwide, with significant real estate holdings in the US. Do you think GE is not paying any property taxes? Tax lawyers, lobbyists and politicians don't come cheap. GE's 2010 10-K financial statement (page 32) says they paid a total (global) income tax of $2.7 billion. GE's 10-K statement is available here:

http://www.ge.com/investors/financial_reporting/index.html

GE offers a response to the New York Time's article here:

http://www.gereports.com/setting-the-record-straight-ge-and-taxes

There are always two sides to every story. Unfortunately, for the media hacks and pseudo-journalists, the other side is not always as sensational and attention grabbing. According to GE (at the web site linked above):

"Recently, some news stories have suggested that GE owes no income tax or questioned why GEs consolidated tax rate in the last few years has been lower than historical levels and lower than the U.S. statutory rate. These stories have grossly simplified the facts concerning GEs recent tax rates. An article in todays New York Times ("At GE on Tax Day, Billions of Reasons to Smile") presents a particularly distorted and misleading account of GE tax payments. A few facts about GE missing from the Times story:

In addition to corporate income taxes, GE pays many other taxes including payroll taxes on the wages of our employees, property taxes, sales and use and value added taxes. These so-called "indirect" taxes are accounted for as part of GEs operating expenses but are a significant source of funding for U.S. federal, state and local and foreign governments.

Since 2009, GE has announced the creation of more than 6,300 new U.S. manufacturing jobs, which will bring to nearly 50,000 the number of GE employees working to produce American-made goods the company sells around the world as part of its $17 billion-per-year in U.S. exports."

It's not like GE is making billions of dollars and not giving anything back to the communities in which they operate. GE, like most major corporations, provides generous health insurance and other comprehensive benefits to its employees. GE gives generously to charities. The economic stimulus effect of the intellectual property created by GE far outweighs any income taxes they would have paid to the IRS.

Let's say GE was writing a big check to the IRS each year rather than cleverly figuring out how to keep that money in their pockets. Who do you think would use the money most efficiently and most effectively: a corporation accountable to shareholders or the US government?

GE figured out a way to lawfully avoid paying any federal income tax? Good for them! The IRS plainly states that taxpayers should take every lawful opportunity to avoid (but not evade) paying taxes.

I worked for one of those "evil", income tax avoiding, major corporations for a long time. Here are a few of the low down, dirty things they did with the tax money they saved:

1. They paid every penny for all of my graduate degrees, including travel expenses.

2. They paid the better part of my very generous health insurance plan.

3. They paid for a very generous life insurance policy.

4. They paid for a very generous retirement plan.

5. I received very generous relocation benefits when I accepted job promotions in other cities. The relocation benefits were taxed as income, but the company paid the taxes for me.

6. The down payment and closing costs on my first home and subsequent homes were paid by the company as part of relocation benefits.

7. For approved charities that I gave to, the company would do a 100% match up to a reasonable and very generous limit, effectively doubling my charitable contributions.

Such Good Corporate "Welfare".

P.S. If the New York Times really wanted to do an insightful article on a multi-billion dollar, multi-national "corporation" that operates "tax free" and gives nothing back to the community but death, disease and destruction, they could have picked any one of the major illegal drug cartels.

Such Good Investigative Reporting.:rolleyes:

brettw22

txcoastal1 wrote: »

Stick it to big corporate and they will move or shut it down to minimal

I suppose if the concept of them paying what everyone else does to do business here would overnight cause them to offshore as many jobs as they can........oh wait.....they've been doing that for years while they've had their taxes at a minimum......doh.

Pretending that one side vs. the other is absolutely right while the other is wrong is idiotic. There is no denying that big corporations have been raping the tax code (legally or whatever) thus raping the economy. Can people go and spend money while they're jobless? Probably not, but to (IMO ignorantly) claim that if all these citizens would just go spend some money the state shortfalls would be fixed is naive and looking at the problem through your own rose colored slant imposed glasses.......

tonyb

Good points DK, investigative reporting however is a thing of the past for most main stream media. It's pointing fingers and agenda driven these days. Too many take stories at face value. We used to rely on the media to do the digging, now it's up to the individual.
Nobody likes to pay taxes, but it is a necessity. So when a story breaks of **** company reaping billions in profits and paying zip in fed taxes while the average joe gets it up the arse, are you surprised ? Sure, GE pays in other ways, but so does everyone else. The system gets too complicated, the tax code has too many loopholes available only for the rich is the complaint. By having a complicated system, you create government employees, a slew of accountants,lawyers, buisnesses, around it. The only people that can afford to fight the IRS is rich people. Others just lose their homes, small buisnesses, cars,boats, material things. Thats why a fair tax, like a flat tax, is just that, fair. You eliminate the lobbying, the excess government workers, deflate the IRS. My wife works in the corporate relocation buisness with many big name corps under her belt plus government contracts. The waste is astronomical. The bonus structure even more so. If corporations lost their loopholes, they too would self preserve and limit bonuses, benefits. People don't want to take a bath on the stock they own when the economy turns, and see the executives walk away with millions. I realize it's a free system, based on contracts and all that, but something isn't right that lets the shareholder take the brunt of losses while the top walks away with a small fortune. That just may well be protocall at the executive level, but big corps will change behavior if they have to, to survive.
GE gets under my skin,and others, because we gave them our money in tarp. Corporate welfare, too big to fail and all that B.S.. General Motors is another prime example. Banks too, even though some didn't want or need tarp, they were forced to take it. Your picking the winners and losers again, an area best left to the free market not government.

tonyb

slk55amg wrote: »

The " government" has never during my lifetime solved any of my problems. However I am not opposed to that circumstance changeing..........................................

Seeing you live in Carmel, can't imagine you have too many problems to fix.

inspiredsports

xcapri79 wrote: »

What is unfair is that small businesses can't take advantage of the tax loopholes the way big business can, so the burden is placed on small business with an existing high tax rate. That is why we need a fair tax.

There is no such thing as a "fair" tax.

DarqueKnight

xcapri79 wrote: »

Yes corporations are very very good not evil.

I think that corporations are as individual as people. Most corporations, that I know of, are good but some are evil.

xcapri79 wrote: »

However the laws, regulations and tax structure tend to be biased towards big business compared to small business.

I don't see anything wrong with that. As a company grows in size and positive societal economic impact, they should get more perks. Therefore, I see some incentive for small businesses to grow into larger businesses. Remember, these giant corporations were once small businesses. Some Fortune 500 corporations like Hewlett Packard and The Shaw Group started out in garages. Dell Computer started out in a college dorm room.

xcapri79 wrote: »

Small business does not have the lobbying clout of big business. They can't afford the teams of lawyers and accountants to pursue all the tax loopholes. They are burdened by excessive regulations and redtape.

I am a small business owner, but I don't feel "burdened" by excessive regulations and red tape. In fact, I get a lot of "breaks", particularly from the state and local governments in which I operate. Perhaps the burden you speak of depends on the type of business. I think a lot also depends on how well small business owners educate themselves on the loopholes, benefits and tax saving strategies that are available to them.

I am not envious of the tax loopholes afforded to large corporations. Most of them turn around and do a lot of good with the tax money saved.

xcapri79 wrote: »

I would like to see the playing field levelled by a general reduction of such laws, loopholes and regulations so that small business can thrive.

Can you be more specific? How exactly will closing corporate tax loopholes benefit small businesses? One such loophole is the tax benefit that large corporations receive from doing business with small companies. If that loophole is closed, who do you think will suffer?

Help me understand how my small business will be more successful, and thrive, if tax breaks for large corporations are taken away.

inspiredsports

slk55amg wrote: »

My data comes from the " Economic policy Institute"

In EPI's own words, they are a liberal non-profit American think tank created in 1986 to "broaden the discussion about economic policy to include the interests of low and middle-income workers." They focus on "the economic condition of low and middle-income Americans and their families."

It's comforting to know that amongst other socialists, Robert B. Reich, University of California, Berkeley and Richard L. Trumka AFL-CIO are on the Board of Directors.

slk55amg

tonyb wrote: »

Seeing you live in Carmel, can't imagine you have too many problems to fix.

your correct, its a spectaclular place to live, clear no traffic, high temperature in mid-august around 70, I lived in Los Angeles for 37 years, very bad air, traffic 24/7 hot, I can,t even go down ther anymore....................:biggrin:

Roy Munson

tonyb wrote: »

Regardless, I see your anti corporation. Makes me wonder who you would work for if they went away ? Or are you a share the wealth type ?

Humm..making big business pay their fair share or any share is going to make them go away?

Maybe GE will take some of that money and "create" some jobs..I wouldn't hold your breath waiting though. lol

cnh

inspiredsports wrote: »

They focus on "the economic condition of low and middle-income Americans and their families."

Why would such concerns be a 'bad' thing to focus on? Just curious. I doubt that is your point.

It sounds more like you're disturbed by what you call socialist, like Mr. Reich? Which is, I believe, a completely separate issue.

Don't you think the lower and middle-income Americans have some problems they need addressed?

Not really disagreeing just seeking clarification.

cnh

tonyb

slk55amg wrote: »

your correct, its a spectaclular place to live, clear no traffic, high temperature in mid-august around 70, I lived in Los Angeles for 37 years, very bad air, traffic 24/7 hot, I can,t even go down ther anymore....................:biggrin:

Took you 37 years ? Must say I'm envious of your local. BTW, I looked up the Mission Ranch last night. Nice place, and cheaper to stay there than I imagined. Think I might park my arse there for a night, a pic with Clint would make my day.

cnh

Roy Munson wrote: »

Humm..making big business pay their fair share or any share is going to make them go away?

Maybe GE will take some of that money and "create" some jobs..I wouldn't hold your breath waiting though. lol

Interesting point that we need to address. The usual answer is that we should cut taxes, eliminate most regulative bodies and allow corps to police themselves, even though there are 1000s of lobbyists in congress throwing heavy money at our representatives to institute just such measures...we're still waiting on jobs?

Wage labor--the concept of selling one's labor in a Free Market arena has been around since the inception of (at least) the Industrial Revolution. It is now the 21st century and while many many things have moved forward--we still retain an 18th century notion of employment and labor?

I don't have any solutions but I often scratch my head. Where is the NEW economic theory? Anywhere?

cnh

tonyb

cnh wrote: »

Don't you think the lower and middle-income Americans have some problems they need addressed?

cnh

Absolutely they do. The problem comes in when you teach them that something was stolen from them and they need to riot to get it back.

This country has always had low,middle income folks. Think about any relatives that came here from europe way back with a nickel in their pocket. Would you consider them low income ? Did they stay that way ? Why not ? I'm sure some did, but the majority just wanted to work, have the opportunity to better themselves. No freebies involved, no entitlements, no Robin Hood mentality. If you keep giving people stuff for free, where is the incentive to do better for yourself ?

inspiredsports

cnh wrote: »

Why would such concerns be a 'bad' thing to focus on? Just curious. I doubt that is your point.

It sounds more like you're disturbed by what you call socialist, like Mr. Reich? Which is, I believe, a completely separate issue.

Don't you think the lower and middle-income Americans have some problems they need addressed?

Not really disagreeing just seeking clarification.

cnh

They are a special interest group with a contentious agenda that has nothing to do with the core constitutional values this country was founded upon.

DarqueKnight

tonyb wrote: »

The system gets too complicated, the tax code has too many loopholes available only for the rich is the complaint. By having a complicated system, you create government employees, a slew of accountants,lawyers, buisnesses, around it.

Do you know what your income tax rate is? Did you pay the full tax rate or did you take advantage of loopholes (itemized deductions, personal deductions, etc.) Let's say an individual is in a 20% income tax bracket. Typically, if they take advantage of all the loopholes available to them, their real tax bill will be in the neighborhood of 8% to 11%. Many low income people pay no taxes at all.

tonyb wrote: »

The only people that can afford to fight the IRS is rich people.

This is simply not true! In every city, town and village that I have lived in, there were attorneys that specialized in tax law and who took cases from regular, ordinary non-rich citizens and who worked for very reasonable fees.

Also, lots of rich people have fought the IRS and lost because they did wrong and got caught. In addition to loss of money and property, some rich people have actually gone to jail for income tax violations.

Do a Google search on "wealthy tax cheats" and "celebrity tax cheats" and get some real info.

tonyb wrote: »

Others just lose their homes, small buisnesses, cars,boats, material things.

Were these people diligent in filing accurate and timely tax returns? In all of the cases I know of where people have had property seized there was some egregious wrong doing (lawbreaking) on the part of the taxpayer. Are you advocating that there be no penalties for people who break tax laws?

tonyb wrote: »

Thats why a fair tax, like a flat tax, is just that, fair.

For a low income person not paying any taxes at all, how is a flat tax fair? For a moderate income person in a 20% tax bracket but who only pays 7% in taxes due to deductions (loopholes), how is a 10% or 15% flat tax fair? Assuming a 10% flat tax is implemented, who pays a heavier tax burden:

A. The $40,000 a year factory worker who pays $4,000?
B. The $10,000,000 a year CEO who pays $1,000,000?

tonyb wrote: »

You eliminate the lobbying, the excess government workers, deflate the IRS.

That is a nice pipe dream, but as long as you have politicians, and human nature, you will have lobbyists, loopholes, excess government workers and an expansive IRS bureaucracy.

tonyb wrote: »

If corporations lost their loopholes, they too would self preserve and limit bonuses, benefits.

Uhhhhhhhhh no. They would look for, and find, other ways to save a buck.

I would love to keep every penny of my hard earned in my pocket. The fact is, I pay a lot of money every year in personal income, business income, sales and property taxes. On the other hand, its not like I am paying taxes and not getting any benefit. I receive a lot of services in return for the taxes I pay.

Roy Munson

Interesting that in an era of the lowest tax rates for businesses the last ten years have seen zero job growth. In fact we've lost millions of jobs!

If lower taxes "create" jobs I'd like to know why we haven't seen an increase in jobs?

I don't have any solutions either but I have the feeling we've been sold some wolf cookies.

DarqueKnight

xcapri79 wrote: »

By instituting a fair tax, your accounting costs will go down and you won't have to worry about the IRS because it won't need to exist.

I do not think you have thought this through very carefully.

OK, once the IRS is abolished, wouldn't we still need a government agency to collect the flat tax money? In a country the size of the US, how many people do you think it would take to manage the flat tax revenue from a trillion dollar economy? In addition to collecting tax revenue, wouldn't we also need a government agency to keep track of income, or do you propose that we just trust people to honestly report their income? How well do you think that would work?

tonyb

cnh wrote: »

Wage labor--the concept of selling one's labor in a Free Market arena has been around since the inception of (at least) the Industrial Revolution. It is now the 21st century and while many many things have moved forward--we still retain an 18th century notion of employment and labor?

cnh

I guess the basic principle of offering a skill set and what one is willing to pay for that skill set is a tried and true formula, I would think anyway unless you can prove otherwise, I'm all ears.

treitz3

DarqueKnight wrote: »

In addition to collecting tax revenue, wouldn't we also need a government agency to keep track of income, or do you propose that we just trust people to honestly report their income? How well do you think that would work?

Raife, if the Government will allow me to give that a try for the next, say 45 years, I'll be more than willing to let them know how it turned out.

:biggrin:

tonyb

DK,
To save a buck, a corp would limit benefits and then face either limiting the bonus structure, or reducing head count. They usually choose reducing head count. Now you take a small buisness, faced with economic turns, and reducing head count comes down to the last resort. Most owners of small buisnesses would take a pay cut themselves before reducing head count.
Most also realize you can't do away with the IRS all together, like you said, you still need a collection agency no matter what, just not that big.
As far as my pipe dream goes, yeah it is, but one can work in that direction a bit at a time,no ?
The way the system is set up, your right, everyone takes advantage of whatever loophole they can find,including myself. So why not get rid of them ? Will I pay more ? Most likely, but at the same time, those who don't pay at all will have to.
I guess it comes down to is if your on the receiving end of tax loopholes, you obviously don't want to change that. If your not, you do. Same with entitlements. If you receive them, god help ya if you want to take it away. If you pay for them, sucks to be you.
Just for the record, I love big corps, they make the economy go round, employee lots of people, provide good and services as only they can do. But there has to be a balance of sorts, between what they pay as a percentage of income, and the rest of small buisness and private individuals. That balance seems to be out of whack in recent years. How to fix that, or even if it should is the point of contention.
It's a complicated fix, and dives well into other areas as well. Trade agreements, labor contracts, regulation, keeping money overseas to avoid taxes, and so forth. From the average joes perspective, more and more is being asked of them to so call "sacrifice" as they see a jobless recovery. Are you surprised at the anger ? Top it off with tarp, our money given as corporate welfare, with no strings attached, and then that money being used to create jobs not here,but overseas, people are going to get upset. If the economy was rolling along and jobs were available,banks lending again, all of this would be mute, but it's not right now.

markmarc

The problem with our tax code as it now stands is that it creates winners and losers by assisting some individuals and businesses over others. It's become such a giant morass that more and more have to rely on outside help (tax attorneys) to navigate the code which grows every year. Corporate tax attorneys for small businesses come at a price much like regulations. In order to pay for them the owner may have to reduce employee hours or a position. Much like any closet, the tax code needs to get cleaned out, paired down in order to foster new growth.

Personally, had their been a flat tax in place for 2010, I would have paid more. But I'm painfully willing to accept that if it leads to greater economic prosperity for all.

inspiredsports

markmarc wrote: »

The problem with our tax code as it now stands is that it creates winners and losers by assisting some individuals and businesses over others. It's become such a giant morass that more and more have to rely on outside help (tax attorneys) to navigate the code which grows every year. Corporate tax attorneys for small businesses come at a price much like regulations. In order to pay for them the owner may have to reduce employee hours or a position. Much like any closet, the tax code needs to get cleaned out, paired down in order to foster new growth.

Personally, had their been a flat tax in place for 2010, I would have paid more. But I'm painfully willing to accept that if it leads to greater economic prosperity for all.

There we go again . . . "taxation leads to greater economic prosperity . . . "

Where is this belief coming from ?????

It seems you've all been brainwashed to believe taxation is the normal order of things.

Yes, we need some common elements where government is the logical aggregator and provider of resources, but to blindly accept the SPENDING scenario as it currently exists is missing the point.

Every ounce of energy wasted discussing "how to tax" misses the opportunity to discuss "how to NOT SPEND".

slk55amg

if thou I have been warned about be political, here goes, anybody oppossed to " the greatest good for the greatest number"?

tonyb

True Mark, but if it's not paired with spending cuts,limits, then all is lost.
Taxes are a must, I know we all hate paying them, but it'a a reality of life.
Question comes in at how much of the fruits of one's labor can you take ?
IMHO, the average citizen is overtaxed now,add up state taxes,sales taxes, tax for this and that, your probably at 50% of income.

slk55amg

tonyb wrote: »

True Mark, but if it's not paired with spending cuts,limits, then all is lost.

About this the UNITED States spends more on its military than the next 5 countries combined, want to cut spending, let,s start with the military.........................................

tonyb

slk55amg wrote: »

if thou I have been warned about be political, here goes, anybody oppossed to " the greatest good for the greatest number"?

Yes, how about you stand or fall on your own ? Worked for thousands of years.

BlueFox

Roy Munson wrote: »

Interesting that in an era of the lowest tax rates for businesses the last ten years have seen zero job growth. In fact we've lost millions of jobs!

If lower taxes "create" jobs I'd like to know why we haven't seen an increase in jobs?

I don't have any solutions either but I have the feeling we've been sold some wolf cookies.

Ditto. We have had tax cuts for the rich the last 10 years and it has created a mess. What is the solution to this mess? Tax cuts for the rich. :rolleyes:

tonyb

slk55amg wrote: »

About this the UNITED States spends more on its military than the next 5 countries combined, want to cut spending, let,s start with the military.........................................

Which 5 countries ? Mexico ? Germany?

How about China ?

I have no doubt the military has a waste factor that can be chopped. Entitlements is a good place to start, but that gets in the way of the socialists dream of being a collective.

tonyb

BlueFox wrote: »

Ditto. We have had tax cuts for the rich the last 10 years and it has created a mess. What is the solution to this mess? Tax cuts for the rich. :rolleyes:

Please show me how a tax cut is the only thing a buisness looks at to create jobs. Your missing the bigger picture. Think about what a buisness needs to grow,then create jobs, and get back to us.

slk55amg

I have an audio question, sorry to change the subject, How come when folks discuss AVR,s SONY ES is rarely mentioned? Before I purchased my Emotiva XPA5, my system ran off a Sony ES5300, never got hot,( warm yes but not hot) never went into protect mode, drove all 7 speakers with ease.................................