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US Competitiveness Chief Immelt's GE Tax Bill: $0
theodp writes "'He understands what it takes for America to compete in the global economy,' President Obama said of GE CEO Jeff Immelt, as he announced Immelt would chair the President's Council on Jobs and Competitiveness. On Friday, the NY Times reported that one trick Immelt employs to keep GE competitive is paying no American tax bill. In fact, GE claimed a 2010 tax benefit of $3.2B on worldwide profits of $14.2B, $5.1B of which came from US operations. According to the NYT, GE's extraordinary tax-avoidance 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. GE's giant tax department is led by a former Treasury official whose 975-member team includes former officials not just from the Treasury, but also from the IRS and virtually all the tax-writing committees in Congress. GE's return to rock-bottom tax rates marks a dramatic reversal from the mid-80's when President Reagan reacted to corporate accounting gamesmanship and supported a change that closed loopholes and required GE to pay a far higher effective rate, up to 32.5%. 'That GE can almost set its own tax rate shows how very much we need reform,' said Rep. Lloyd Doggett. '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.'"
I'd like to point out that GE used to (and still does) fund MSNBC which continually loves to deride corporations and the so called "Fat Cats" on Wallstreet. Oh the irony... Apparently it's okay to not pay taxes as long as you're friends of the current Administration. May I also be the first to ask why is this story on Slashdot, and why is it a weeks late?
You can't hand out massive subsidies and tax credits for green energies and then complain when the largest recipient of those credits and subsidies ends up not owning the government money. Here's a hint, when you offer the rich/smart corporations money and ways to reduce their tax burden, they take it. So which is it that you want? Do you want them to pay taxes or do you want them to develop highly cost ineffective green technologies that they wouldn't otherwise develop because they couldn't make the right profit on it. You can't have it both ways.
Each political side needs power to enact its agenda. That's why even the side that talks a good game about being anti- big money interests, nevertheless partners with them. Gaining and maintaining power requires money and swaying the people. The natural places to look for these, respectively, are Wall St. fatcats and big media conglomerates.
Attention zealots and haters: 00100 00100
It's only an 'obvious' right-wing spin if you completely discount the part about the guy being hired by the current DEMOCRATIC President. You DO remember he's a Democrat, right? Both parties are to blame for this mess; the Democrats just put a better spin on their corruption. You'll notice fuck-all was done about Wall Street during the two years the Democrats had control of the White House _and_ both houses of Congress.
There's a difference between playing it smart and investing a lot of money in getting the laws changed to keep your tax bill down.
One is an obligation of a business to keep tax down and profits up. The other is immoral and (IMHO) should be illegal.
What is sad is the GOP on the candidate and national level is still so inept and scared of being called racist they don't look good to beat the most blatantly corrupt president of post-WW2 America.
Barak Obama got more than half his 2008 campaign money from small donors, and, probably as a result, has kept more than three times the number of campaign promises as he's broken (and could have kept many more if, for example, Congress hadn't gone out of its way to defund the closing of Guantanimo.) Compare to .
No, it's clear that, when it comes to Democrats and Republicans, the Republicans are far more corrupt, and are more apt to sell out to corporate influence; at least Democrats take money from--and listen to--worker groups, environmentalists and scientists on occasion. Of course, that's sort of like saying that a black hole is denser than a neutron star; sure, it's technically an accurate statement, but I sure wouldn't want to try to live on either one.
Everybody knows that paying taxes make one less competitive.
You jest, but the trouble is that it's true. US corporations pretty much have three options:
1) Send their operations off shore where labor is cheaper and taxes are lower.
2) Keep operations in the US but hire a bunch of bean counters to avoid the higher US taxes.
3) Go out of business, because your foreign competitors have lower costs (in the form of taxes) which means you can't win in the competition for customers, investors, etc.
You can't "close tax loopholes" and not expect corporations to just replace (2) with (1).
The most effective way to reduce tax avoidance is to lower the tax rate. Become the country companies shift their profits to instead of from and you get a smaller slice of a much bigger pie. 4% of a billion dollars is a lot more than 35% of nothing. Plus, the way things are discriminates against small businesses: GE can afford to hire accountants to eliminate its corporate tax burden, smaller companies can't.
Oh bullshit. They do business in the USA because it's worth it to business here. Business taxes are paid on profit and wealth(in the form of inflation). So as long as their absolute profits are above the inflation rate, they will continue to do business in the USA.
Corporate "profit" goes towards either creating jobs
...in China.
Sheesh, evil *and* a jerk. -- Jade
In fact, this is one thing I cannot fathom. How the RNC and big business (which are essentially one now - with the other party quickly being subverted as well) have managed to still get support from the very people that they shaft over and over again.
That's why they brought us the Southern Strategy, the bedding-down with the Religious Right, and the new Southwestern Strategy.
I.e., they figured out that if they can make someone's knee jerk, they can make their finger twitch in the voting booth.
We've got a country full of citizens who will gladly vote away their freedoms, their privacy, their financial well-being, and their health, for the chance of foisting their prejudices and religious scruples off on the rest of society.
If Republicans ran on their real platform - making sure the rich get richer faster than they would without a Federal government - they wouldn't draw 1% of the votes. There just aren't enough rich people to get anyone elected, so they appeal to the basest instincts of the masses.
Sheesh, evil *and* a jerk. -- Jade
Pay their fair share, oh my. However am I going to survive the kharma hit for this one.
YOU IDIOT, CORPORATIONS DO NOT PAY TAXES EVER!
Now for the nice side. Tell me, where does a corporation get its money to operate?
From consumers of its products.
Now, where does a corporation get the money it pays in taxes?
From consumers of its products.
What we have here and the class warfare ideologues always miss whether on purpose for redirecting ire from their favorite politicians or because of self ignorance which was beaten into them by the same politicians is one simple fact.
A tax on a corporation is an indirect tax on the consumer of that corporations product. This tax can be buried many levels deep as obviously not everyone makes use of every corporations services but someone does somewhere and eventually we all hit each other.
You an I pay taxes. We do it on every purchase we make whether or not there is direct sales tax on the purchase. We pay indirectly every tax bill of every corporation we do business with. This is how it has always has been.
The real crime in this story about GE is that they NEED 975 tax accountants just to pay or not pay taxes. Think about that, nearly a thousand people who produce nothing but instead are there to make a system work. Now while not all companies are as large as GE think of how many tax accountants are required to operate businesses in the US. Now think how much more production we could have if just half the people involved in taxation were instead producing goods and services.
THINK ABOUT THE FACT THAT THE IRS'S BUDGET IS NEARLY AS LARGE AS NASA'S!
So why not stop this taxation of corporations. Because politicians know the holy hell they would be in for if people saw just how much they really paid. See we can kid ourselves and believe that 20 to 30% is OK for taxes. We can guilt ourselves into it. We cannot however guilt ourselves into accepting that plus nearly 20% more indirect taxes we pay. A progressive tax system with a "corporate tax" layer is all about deflecting attention from the tax load the people actually pay. There is nothing fair about it and never can their be fairness because it is purposefully obfuscated.
Still there is an answer, a consumption tax. Drop income taxes, drop fake corporate taxes, and tax consumption. Determine the proper costs to feed, shelter, and cloth a person or family and refund that the first of each month to all heads of households. A consumption tax will get the people who spend money. It will get those who have millions and want to spend it. They won't have their offshore accounts to hide their profits because there is no tax benefit to do so.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Americans have no clue what "poor" means. They own cars, computers, an XBox, and a smartphone, but go one week with Ramen and they're crying famine. Give me a break.
"Those highly skilled workers are being paid big bucks to increase efficiency and production with fewer and fewer resources, I.E., employees and payroll."
what country do you live in? Because here in the USA they are trying like hell to drive down wages. $21.00 an hour for a skilled BS degree holding 20 year experienced IT professional is NOT "big bucks" that's "chump change" because that job is massively more difficult than any job the idiots in the executive wing do.
In the USA there is a battle cry to reduce wages... Damned greedy teachers teaching for a super rich salary of $52,000 a year... OMG you can buy gold plated Mazaratis for that kind of coin!
And those uppetidy IT and CS people trying to tell us their job is skilled.... you are factory workers... get back to the foundry floor you saveges!
Do not look at laser with remaining good eye.
The tax system is a mess, but I think the key issue here is innovative accounting. I'm sorry, but accounting is supposed to be, by definition, crystal clear and straightforward. Innovation is this field is more properly described as "accounting in such a way as to hide money we've made while still (maybe) following the rules". Which says to me that the rules are not complete enough.
Unless GE gave every dime of profit they made to charity, they should be paying taxes. A lot of taxes. THIS is why we have a budget deficit.
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
Getting the milk bottle for $8 instead of $9.50 is little comfort when your job is shipped overseas and you can't get another one.
It's also no comfort to hear that "you just aren't as competitive" when compared to the guy living on $100 a year dodging livestock riding his bicycle down a dirt path on the way to work.
Hearing that you lost your job because your industry just isn't "efficient" enough because it was paying a livable wage...also no comfort.
Economic /theory/ in general does nothing to relieve the real-world impact. Those impacted are the "hidden costs" not considered in the rosy picture of a more efficient world. The hidden cost is that the efficiency comes from crushing out the unwanted in the meantime. Of COURSE those unwanted aren't on board.
If crushing out inefficiency means that YOU have to suffer, then there's pretty much nothing you can say to convince that person that it's good news that their job is gone. When the global economy is reframed into the perspective of the individual, or a particular country, then general "efficiency" is NOT the goal. While the overall system is not a zero-sum game, when seen from a mortal lifespan, or more appropriately, the length of time the average unemployed can live off of their savings, then globalization is full of winners and losers in a zero-sum game. Hearing that other people are made better off while you made much worse off doesn't help. In such situations, I could hardly blame someone for wanting protectionism.