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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?
The reason wealth concentrates more and more is because of the Federal Reserve system, where the banks (NOT the government) create the money supply by making loans.
And now "Deficit Terrorists" are campaigning to slash federal spending. The real reason the federal debt is skyrocketing is because the banking system can't make loans like it used to, so the Federal Government has to be the "borrower of last resort", taking out loans from the "lender of last resort" (the Fed) and everyone else.
I don't remember the exact figure, but 40-50% of the Federal Government's debt is either held by the Federal Government (in the Social Security "trust fund"), or by the Federal Reserve (which is held to "back" the money supply). 100% of the interest paid to the ss trust fund is returned to the government, as are most of the Federal Reserve's profits (after operating expenses and a fat dividend to its owners, the private banking system).
If the debt were to be instantaneously paid off, all money would instantly vanish from the economy.
If the federal reserve system was nationalized, and the Department of the Treasury could issue debt-free "greenbacks" (like Abraham Lincoln used to pay for the Civil War), wealth would be much less concentrated that the current status quo.
Required reading:
Money and the Crisis of Civilization
A Bailout for the People (pdf).
Learn the rules so you know how to break them properly.
www.teslabox.com
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.
http://www.gereports.com/setting-the-record-straight-ge-and-taxes/
- GE paid almost $2.7 billion in cash taxes in 2010 on a consolidated basis (almost 19% of pretax income from continuing operations).
No-one outside of America (and, I suspect, a whole lot of people inside America) would consider the Democrats to be Left-wing. They're Right-wing, just not so crazy Right-wing as the alternatives.
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.
They paid $0 last year. http://abcnews.go.com/Business/Tax/ge-exxon-paid-us-income-taxes-09/story?id=10300167
3.2 Billion - 320 million people in the U.S. Roughly half pay taxes (unemployed, children and so on of course don't). That works out nicely to: $100 refund for 20% of the U.S. population who pays taxes.
From one company working the system. ONE. Out of several hundred such companies that are manipulating things to their benefit.
You want a tax cut for the working people? How about making the corporations pay their fair share. There's more than enough money in their coffers to make taxes a thing of the past for the poor and middle class, as well as for small business owners and the self-employed. How does "if you make less than $50K a year, you don't have to file taxes at all" sound? You want to spur growth at the lower levels and create a solid foundation? Get rid of this burden. Doubly so on small businesses. You should get a tax *rebate* for starting a new business at this point. Instead it costs hundreds in taxes and fees. And that's if you aren't in California or some other state that really sticks it to you.
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. Big business won't trickle-down. They won't save us. They won't create jobs here at home. What's good for big business is not good for the rest of us. It never has been. We need to wake up and stop letting them get away with this. Because all we're doing is strangling the very people and small businesses that we need to create the next generation of jobs and innovation.
In case you weren't paying attention, big business and small business are diametrically opposed at this point. So when they say "we're all for business" - you have to ask the greaseball politician who's mouth is flapping which "business" they are talking about. You probably won't like the answer, though.
Didn't RTFA I take it? This isn't some "green subsidy" as you put it, this is the classic sleazy offshoring bullshit like the "double dutch" that lets so many fortune 500 companies enjoy our markets while not paying shit.
Frankly I say if you want to see the future of America, look at Egypt and the middle east right now. The top 1% will keep their "let them eat cake" attitude right up to the point when they get to re-enact the fall of Saigon thanks to the rioters in the streets. looking out my window all I see is abandoned stores and empty homes. Hell go to the business districts in any southern town, the places look like "Escape from New York" thanks to all the abandoned factories.
If it wasn't for accounting trickery by the fed the actual unemployment rate would be close to 30%, students are going straight from graduation to welfare or McJobs (what is it, Bachelors the new HS diploma?) while being crushed by debt they can't even get rid of with bankruptcy while being expected by these same pigs to compete with some guy brought off the boat from India that paid maybe 1/20th the amount for his education. Meanwhile every man, woman, and child owes something like $76k and climbing thanks in part to the USA playing the world's policeman and having to print money like it is going out of style simply to keep the poor from turning into a rioting mob.
But the presses can't run forever, sooner or later the world will stop accepting the funny paper and the bottom WILL fall out. Not in any way attempting to Godwin but I'd point out the crazy Austrian got elected by a landslide on a "bread and jobs" platform and frankly I know huge amounts of people that would happily elect our very own crazy Austrian if it meant a guaranteed good job and food on the table.
Shit is getting pretty bad for the working poor folks, and they outnumber the 1%ers by about a half a million to one and growing. What happens when uncle fed can't print them anymore checks? look to Egypt and see the future of America, and these greedy pigs will NEVER see it coming. Lenin had it right all those years ago when he said "a capitalist will gladly sell you the rope you hang him with" and by offshoring everything and handing the working poor and middle class the bill they are tying the noose as we speak. Don't think it can't happen here, because it can and it will. Just you watch.
ACs don't waste your time replying, your posts are never seen by me.
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.
The financial regulatory bill exists, and was in fact passed into law. Like the health care bill, however, it was fillabustered into near-ineffectiveness; most of the big reforms were bargained out of the bill in order to get a single Republican to agree to not fillabuster.
The essential problem in American politics is that most of the money comes from large donors, eg. corporations and the very wealthy. Small donations from individuals are so rare that it's actually historically relevant that Barak Obama received fully half his 2008 campaign money from small donors, making him one of the first presidents in recent memory actually bought and paid for, at least halfway, by the people. This explains why he has to date kept more than three times the number of campaign promises than he's broken (though he would have been able to keep more of them if Congress didn't, for example, block funding for the closing of Guantanimo) which for an American politician is shockingly true to his word.
Oh sure, but Mr Schwarzenegger isn't all that bad surely?
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.
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
This is very true. In the US I very often find that people give the rich a get out of jail card because they "think" they will be rich one day. I am for low taxes, live a country that has very low taxes. But even here there are rumblings that there are a limit to low taxes and that everybody has to pay taxes, including corporations.
Here is how I would solve the corporate tax issue. If you don't pay taxes in the country since you decided to move away, cool so be it. However, since you are still doing a billion dollars worth of business we will consider that profit and you will have to pay taxes on it. Oh you don't like that? Too bad, then don't sell your products here.
The moment you wave that in front of the corporation their tune will change pronto! The shareholder of corporations demand profit, and revenue. If you decide to not sell in a particular country then that means they are missing revenue. That will hurt their bottom line! And it will put them on level footing with the local corporations that can't afford to outsource or hire fancy tax lawyers.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
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.
Not gonna comment on the rest, but low teacher salaries are just the public education system trying to spin their atrocious performance the best way they can. Currently the U.S. spends about $10,000 per student on public education, which is among the highest in the world and up nearly 4-fold since the 1960s in inflation-adjusted dollars. So a teacher in charge of a class of 25 students actually represents an expenditure of a quarter million dollars every year. The problem is most of that money is being squandered on administration, rather than in the classroom. It's incredibly difficult to fix this problem when any attempt to address it is immediately characterized as an attack on underpaid teachers, whose salaries represent less than 20% of expenditure.
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.