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US Competitiveness Chief Immelt's GE Tax Bill: $0

samzenpus posted more than 3 years ago | from the gaming-the-system dept.

Businesses 436

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.'"

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But think of the accountants! (1)

Anonymous Coward | more than 3 years ago | (#35635428)

They've got almost 1000 people reasonably employed. Surely that's worth something.

Ok, so a good number of them are probably lawyers, others are soulless accountants, but hey, they'd be doing that regardless.

Re:But think of the accountants! (2)

c0lo (1497653) | more than 3 years ago | (#35635584)

To what good would it be to be the president of Jobs and Competitiveness if one still has to pay taxes? Everybody knows that paying taxes make one less competitive.
(grin)

Re:But think of the accountants! (2, Insightful)

Anthony Mouse (1927662) | more than 3 years ago | (#35635856)

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.

Re:But think of the accountants! (3, Insightful)

Anonymous Coward | more than 3 years ago | (#35635952)

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.

Re:But think of the accountants! (2)

h4rm0ny (722443) | more than 3 years ago | (#35635954)

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.

So basically, countries compete with each other to sell themselves the cheapest to the corporations. I think our nations need to unionize.

Re:But think of the accountants! (1)

halowolf (692775) | more than 3 years ago | (#35636100)

You need not look at what other countries are doing when the states with-in your country do exactly that, as they do in mine.

Re:But think of the accountants! (2)

symbolset (646467) | more than 3 years ago | (#35635748)

In our representative republican form of government we deserve what we get because we demanded it. It's an inside joke that took 200 years to hear the punchline.

Re:But think of the accountants! (0)

Anonymous Coward | more than 3 years ago | (#35635882)

you see this is what makes me ROFL you dumb smuck americans you are paying someone elses taxes and you could not give a fuck you are being conned out of all sanity in the name of the big corps and no one of you has the has the balls to stand up and be counted to say this aint right , What a bunch of freakin two legged sheep ( by far and away the worst form of sheep are the 2 legged variety ) i have e to deal with them all the time

If corporations are persons... (2)

AliasMarlowe (1042386) | more than 3 years ago | (#35635886)

If a corporation is a person for legal purposes, it should be a person for taxation purposes. Why is this not the case already?

Maybe scale up the personal exemption based on the number of full-time employees (or number equivalent to full-time employees, if part-timers). Then pay on the same sliding scale as the millions of actual persons in the USA. Effectively, the corporation would be treated like a person with a number of dependents/spouses/whatever equivalent to its number of full-time employees.

May I be the first... (5, Insightful)

shellster_dude (1261444) | more than 3 years ago | (#35635432)

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?

It takes a hacker (2)

goombah99 (560566) | more than 3 years ago | (#35635444)

Just like people hire hackers and crackers to improve their security, maybe higher tax evaders to reform tax laws is a good thing.

Re:It takes a hacker (1)

Oxford_Comma_Lover (1679530) | more than 3 years ago | (#35635486)

Hire retired tax evaders, maybe. Ones who are looking for work next year in tax evasion should not be hired to write the tax code this year.

Re:It takes a hacker (1)

c0lo (1497653) | more than 3 years ago | (#35635918)

Just like people hire hackers and crackers to improve their security, maybe higher tax evaders to reform tax laws is a good thing.

His job is to improve "Jobs and Competitiveness", not to plugs the holes in taxation. And he's showing a big promise: one way to be competitive is to avoid taxes.

The paradox of "partial optimization" ("divide and conquer" methods applied to optimization) - one may end hurting the overall objective even if the partial objectives are met.

Re:May I be the first... (1)

PopeScott (1343031) | more than 3 years ago | (#35635460)

So, MSNBC like to deride FAT CATS, in spite of their GE ownership. That to me sounds like a news corp that isn't fully bought. You appear to be suggesting otherwise. ?

Re:May I be the first... (1)

Anonymous Coward | more than 3 years ago | (#35635506)

Why would GE care if its station is against tax evaders when they are in control of the laws? It is just talk that boosts ratings after all.

Re:May I be the first... (1)

countertrolling (1585477) | more than 3 years ago | (#35635524)

Yeah, it's a great PR trick. MSNBC can spew what it wants. What's gonna come of it?

Re:May I be the first... (-1)

Black Parrot (19622) | more than 3 years ago | (#35636028)

So, MSNBC like to deride FAT CATS, in spite of their GE ownership. That to me sounds like a news corp that isn't fully bought. You appear to be suggesting otherwise. ?

Contrary to popular opinion, MSNBC isn't particularly liberal.

Sure, they have liberal commentators on in the evening... but they also have Chris Mathews and Joe Scarborough.

They just stand out because most networks don't carry any liberal content at all. And because people want to believe the myth of the Liberal Media.

Yay The Rich Win Again! (1)

Anonymous Coward | more than 3 years ago | (#35635434)

As a member of poor America, thanks for confirming my beliefs.

Relevance? (-1, Offtopic)

AdamHaun (43173) | more than 3 years ago | (#35635446)

I know the definitions of "News for Nerds" is very broad, but does this really belong on Slashdot? It's a straightforward article on corporate taxes without a sci/tech or otherwise nerdy slant. Wouldn't this be better discussed on a real political blog?

Re:Relevance? (1)

Revotron (1115029) | more than 3 years ago | (#35635490)

Would you be deriding this article if it had a left-leaning slant as opposed to its obvious right-wing spin? I must ask this because someone with a 5 digit UID must have surely seen the dozens of other non-tech political articles that have made their way past our ever-diligent editors and the mighty Firehose.

I would and am (1)

SuperKendall (25149) | more than 3 years ago | (#35635548)

Would you be deriding this article if it had a left-leaning slant as opposed to its obvious right-wing spin?

I don't think he's deriding the article, just the presence on Slashdot.

I fully agree with the article, but I too question why this is on Slashdot... juste because sometimes there are other purely political stories, does not make it OK this time.

On the other hand the political world is so intertwined with all fields now perhaps it's time to abandon the illusion that all technical stories are not really political stories to some degree, and allow even totally non-technical stories like this one as well by way of showing how technology truly gets funded these days.

Re:Relevance? (4, Insightful)

Tumbleweed (3706) | more than 3 years ago | (#35635648)

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.

Re:Relevance? (5, Informative)

drsmithy (35869) | more than 3 years ago | (#35635674)

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.

Re:Relevance? (2)

Tumbleweed (3706) | more than 3 years ago | (#35635702)

Absolutely. I have to be careful to make sure I'm not drinking anything whenever someone calls Obama a 'Progressive'.

Re:Relevance? (5, Interesting)

TheEyes (1686556) | more than 3 years ago | (#35635784)

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 [politifact.com] (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.

Re:Relevance? (1)

Khyber (864651) | more than 3 years ago | (#35635846)

Implying the firehose has always existed when in fact it's a fairly new feature.

Re:Relevance? (0)

Anonymous Coward | more than 3 years ago | (#35636080)

There has been a Firehose for the two years I have been here... you have an odd definition of "new".

Re:Relevance? (0)

Anonymous Coward | more than 3 years ago | (#35635500)

I agree with you, but, Slashdot has become a pit of anti-corportionalism. If it involves a corporation getting away with not putting a plastic bottle in the recycling bin, it will be on good ol' /.

(Don't my UID, I've been here a long long time)

Re:Relevance? (1)

martin-boundary (547041) | more than 3 years ago | (#35635556)

I agree with you, but, Slashdot has become a pit of anti-corportionalism

A pit of anti-corporatism.

And grammar Nazism.

A pit of anti-corporatism and grammar Nazism, spouted from a comfy chair.

Slashdot.

Amongst the three weapons of slashdot readers are anti-corporatism, ...

Re:Relevance? (-1)

Anonymous Coward | more than 3 years ago | (#35635586)

Agreed. The techies have been driven out, and Slashdot has become the stomping ground of Communists and Jews. But I repeat myself.

Re:Relevance? (0)

Anonymous Coward | more than 3 years ago | (#35635654)

Hey, I resemble that remark. Techie...Yes, Communist...Not quite, more Socialist, Jewish...Yep.

Re:Relevance? (1)

Oxford_Comma_Lover (1679530) | more than 3 years ago | (#35635502)

Slightly O/T, but in a related vein, is there a good political blog for intelligent people where stuff like this should be posted? At least something with some kind of good moderation system and user base, ideally that isn't too slanted?

Re:Relevance? (1)

Tumbleweed (3706) | more than 3 years ago | (#35635662)

Slightly O/T, but in a related vein, is there a good political blog for intelligent people where stuff like this should be posted? At least something with some kind of good moderation system and user base, ideally that isn't too slanted?

Yeah, it's standing over there behind unicorn.org.

Re:Relevance? (2)

sonicmerlin (1505111) | more than 3 years ago | (#35635796)

reddit.com/r/politics

Re:Relevance? (1)

Jstlook (1193309) | more than 3 years ago | (#35635656)

I know the definitions of "News for Nerds" is very broad, but does this really belong on Slashdot? It's a straightforward article on corporate taxes without a sci/tech or otherwise nerdy slant. Wouldn't this be better discussed on a real political blog?

The reason this is on Slashdot is simply that the article was posted via the NYTimes twitter feed. This has to be News for Nerds! Sides, we have to do due diligence, and make sure whoever is choosing to re-tweet the NYTimes feed doesn't get sued.

Right?
(bird chirps)

Re:Relevance? (0)

Anonymous Coward | more than 3 years ago | (#35635700)

"Stuff that matters"?

Without wanting to troll... (0)

Anonymous Coward | more than 3 years ago | (#35635454)

You elected George and Dick twice in a row.

Tell me you're surprised. I dare you.

Re:Without wanting to troll... (2)

Seumas (6865) | more than 3 years ago | (#35635466)

Yeah, thank god this administration finally put a stop to all those Corporate==> Government and Government ==> Corporate revolving doors! And The next administration will, too! It was just that one guy for those few years that did that. It's a totally new form of shadiness and corruption that we'll almost never see again now that that jackass is out of office!

New boss; same as the old boss. Even when they do say they won't allow revolving doors like this (that allow things like this to be taken advantage of and initiated) . . . which this current president DID say.

Re:Without wanting to troll... (3, Insightful)

Bill Dog (726542) | more than 3 years ago | (#35635568)

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.

Re:Without wanting to troll... (0)

Anonymous Coward | more than 3 years ago | (#35635580)

Hell, we didn't even elect Tweedle Dee and Tweedle Dumbass the first time and they still won. Go figure. So no... not surprised at all. ;)

What do you want? (1, Insightful)

redemtionboy (890616) | more than 3 years ago | (#35635462)

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.

Re:What do you want? (0)

Anonymous Coward | more than 3 years ago | (#35635480)

I want you to read the article.

Re:What do you want? (1)

MrEricSir (398214) | more than 3 years ago | (#35635570)

Does this have ANYTHING to do with green energy? Granted, I couldn't read the article that was linked to (thanks, NY Times!) but from everything else I've read, this is just a standard offshore tax scam.

So unless you can produce something that shows how GE was using a green energy tax credit/subsidy of some kind to avoid taxes, please be quiet.

Re:What do you want? (1)

Dan667 (564390) | more than 3 years ago | (#35635576)

incentives to do something is different from paying no taxes at all. Really makes me question why individuals have to pay taxes if corporations don't.

Re:What do you want? (5, Insightful)

hairyfeet (841228) | more than 3 years ago | (#35635764)

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.

Re:What do you want? (4, Funny)

Nursie (632944) | more than 3 years ago | (#35635822)

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.

Oh sure, but Mr Schwarzenegger isn't all that bad surely?

One thing... (0)

Laser Dan (707106) | more than 3 years ago | (#35635474)

How is this not fraud?

Re:One thing... (1)

preaction (1526109) | more than 3 years ago | (#35635512)

It's not fraud when rich people do it.

Re:One thing... (1)

Greyfox (87712) | more than 3 years ago | (#35635518)

Because GE is doing it. If you or I were doing it, it would be fraud.

Re:One thing... (2)

redemtionboy (890616) | more than 3 years ago | (#35635542)

Not really, if you worked in multiple countries you could do the same thing. Why does GE have any motivation to pay the US tax rate when it's the highest in the world? If you had the option of paying $5 billion in taxes instead of $10 billion in taxes, wouldn't you? It's impractical policies that don't understand how business works and it ends up hurting all the smaller businesses who can't afford to do the same practices as GE. It's a barrier created by government policy that prevents further competition in the market by allowing the larger corporations to prosper.

Re:One thing... (1)

dgatwood (11270) | more than 3 years ago | (#35635658)

Not really, if you worked in multiple countries you could do the same thing.

No, you are expected to pay U.S. income tax even while working overseas. There's an exemption for middle class levels of income and below, but everything above that dollar limit is taxed. Only corporations can get away with paying no tax on arbitrarily large profits made overseas.

Re:One thing... (1)

lawnboy5-O (772026) | more than 3 years ago | (#35635668)

That is truly disheartening.

Re:One thing... (2)

HornWumpus (783565) | more than 3 years ago | (#35635780)

There are two exceptions: Stay overseas for longer then x years (I think it's three) and owe no tax. Also military in a war zone pay no tax. There is no exception for 'middle class income and below'.

Also you get to deduct your overseas tax payments from you final tax (not your income), which for individuals is usually more then you would pay at home. You cannot deduct bribes you pay even though they are the same thing as taxes.

Finally, if you are not ever planning on coming back you can pretty safely tell them to fuck off.

Re:One thing... (1)

AK Marc (707885) | more than 3 years ago | (#35635972)

My understanding is that I am responsible to the IRS for taxes for the rest of my life, unless I renounce my citizenship (and even then, if I ever set foot on US soil again, the IRS can arrest me and hold me in jail, if they feel I renounced my citizenship for a tax break). If you can document something that lists x years (even if that x is 10 or longer) I'd love to know. I'm filing my taxes from abroad. http://www.irs.gov/publications/p54/ch01.html#en_US_2010_publink100047318 [irs.gov] I don't see anything in the IRS rules where someone gets to stop filing if they've been overseas for some set period.

Re:One thing... (0)

Anonymous Coward | more than 3 years ago | (#35636032)

The USA generally avoids double taxation on incomes less than $91,400. But I think it requires a tax treaty with each country, so it's possible that you work somewhere where there there is no exemption for middle class income and below.

http://en.wikipedia.org/wiki/Double_taxation [wikipedia.org]
http://www.irs.gov/publications/p54/index.html [irs.gov]

And I don't think it's safe to tell any tax authority to fuck off.

Re:One thing... (0)

Anonymous Coward | more than 3 years ago | (#35635670)

> Why does GE have any motivation to pay the US tax rate when it's the highest in the world?

Considering GE is paying ZERO taxes, that argument is completely transparently bullshit. No matter how many tax breaks they get, if the remaining tax rate is nonzero, they'll make the same argument.

Secondly, it's *also* bullshit because the US's "highest in the world" tax rate is only on paper. The actual taxes collected in practice put the US solidly around the average, sometimes a little below. Remember, US corporations get to deduct damn near everything as an 'expense' (therefore it's not profit, therefore they don't get taxed on it). The rates aren't a flat rate, but, like personal income tax, they're in increasing tiers; like most citizens, most corporations aren't being taxed at the highest rate.

> It's impractical policies that don't understand how business works and it ends up hurting all the smaller businesses who can't afford to do the same practices as GE. It's a barrier created by government policy that prevents further competition in the market by allowing the larger corporations to prosper.

This isn't a magical government barrier to competition - the government gave the small businesses lower rates (remember, progressive tax tiers). Why do you think people are outraged at GE? GE is cheating.

Re:One thing... (1)

tsm_sf (545316) | more than 3 years ago | (#35636098)

Not really, if you worked in multiple countries you could do the same thing.

I used to work for a smaller payroll company, and I can tell you that the average person who works in multiple countries pays multiple taxes. There's no simple LOL THAILAND trick that everybody uses, they just pay through the nose.

This isn't a "you can do it too" scenario.

Re:One thing... (0)

Anonymous Coward | more than 3 years ago | (#35635682)

I live and work in three countries and do not pay tax - except for duties and GST/VAT - just like GE.

You can do it too, if you are willing to put up with the travel and security issues. There is nothing illegal about it.
 

Re:One thing... (1)

AK Marc (707885) | more than 3 years ago | (#35636000)

Yeah, you can claim that as an AC. But just so you know, your statement is a felony in the US. You are giving incorrect advice that would lead to illegal tax evasion.

Re:One thing... (2, Informative)

PhunkySchtuff (208108) | more than 3 years ago | (#35635522)

It's only fraud if you're doing it illegally.
GE are operating completely within the letter of the law (laws I'm sure they helped to draft in the first place) and any other entity in their situation would be crazy to behave any differently.

The problem is not GE, it's the US Government.

Imagine this scenario: You earn $50k and through various pre-existing tax rules you are eligible to pay $10k in tax. If tomorrow a law was drafted that allowed you to, say, receive a tax rebate for every post here on /. and say for instance, you were eligible for $10k of rebates, would you turn this rebate down?

No, of course not. GE are playing it smart. The US Government needs to take a good look at it's own laws and tighten things up to prevent this happening again.

For what it's also worth, this $0 tax burden is most likely a one-off with rebates and other concessions that they're taking advantage of this year and they most likely won't be able to do it again next year. Look at how much tax they paid last year for instance...

Re:One thing... (0)

Anonymous Coward | more than 3 years ago | (#35635602)

For what it's also worth, this $0 tax burden is most likely a one-off with rebates and other concessions that they're taking advantage of this year and they most likely won't be able to do it again next year. Look at how much tax they paid last year for instance...

Yeah, about that... [cnn.com]

Re:One thing... (4, Insightful)

Nursie (632944) | more than 3 years ago | (#35635690)

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.

Re:One thing... (1)

Black Parrot (19622) | more than 3 years ago | (#35635916)

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.

Over the past 30 years, greed has become the highest civic virtue in the USA.

Paying taxes is unpatriotic (if not outright treasonous!) because it is in contradiction with that higher virtue.

Re:One thing... (-1)

Anonymous Coward | more than 3 years ago | (#35635604)

Fraud is only a bad thing if it's not furthering leftwing agendas.

corporate tax rates are a distraction (3, Informative)

nido (102070) | more than 3 years ago | (#35635504)

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 [realitysandwich.com]
A Bailout for the People [richardccook.com] (pdf).

Donate all your money to the IRA (0)

Anonymous Coward | more than 3 years ago | (#35635534)

if you think there is something wrong with GE's behaviour. You might as well bend over.

what did GE do wrong? (0)

Anonymous Coward | more than 3 years ago | (#35635592)

I really don't understand why everyone is upset with GE, they're doing what corporations are supposed to do, make money.

It's the politicians that are writing the laws so they don't have to pay taxes, it's every one of those corrupt bastards that created a system that allowed this to happen. Why isn't anyone screaming for the heads of the tools in congress that take kickbacks to write laws that let them do this?

Gee... (0)

Anonymous Coward | more than 3 years ago | (#35635598)

...it's almost as if all the powers we hand to our government only end up being abused; as if the vast majority of government is a disease masquerading as its own cure; as if the object and practice of liberty lies in the limitation of governmental power, not in its expansion or perpetual rearrangement.

Re:Gee... (1)

sonicmerlin (1505111) | more than 3 years ago | (#35635854)

Gee, it's almost as if a reduction in government power would make it even harder for the government to track the thousands upon thousands of giant corporations using innumerable loopholes to avoid taxes. It's almost as if the Republicans' attempt to decrease funding for the IRS would actually cost the taxpayers *more* money by preventing the IRS from going after tax dodgers. It's almost as if you're an idiot.

Their motto is actually appropriate: (2)

Lord_of_the_nerf (895604) | more than 3 years ago | (#35635614)

(Financial) Imagination at Work

Re:Their motto is actually appropriate: (1)

Tumbleweed (3706) | more than 3 years ago | (#35635666)

(Financial) Imagination at Work

"We imagine this will be a pretty profitable year."

Nothing new from Obama administration (0)

Anonymous Coward | more than 3 years ago | (#35635618)

What is ironic is people still love to yell and shout about how Republicans are so in bed with their corporate tax-evading buddies.

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.

Re:Nothing new from Obama administration (3, Insightful)

TheEyes (1686556) | more than 3 years ago | (#35635852)

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 [opensecrets.org] , and, probably as a result, has kept more than three times the number of campaign promises as he's broken [politifact.com] (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 . [americanpr...action.org]

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.

GE's response . (5, Informative)

sdiz (224607) | more than 3 years ago | (#35635672)

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

- GE paid almost $2.7 billion in cash taxes in 2010 on a consolidated basis (almost 19% of pretax income from continuing operations).

Re:GE's response . (2)

jhoegl (638955) | more than 3 years ago | (#35635930)

So what it says is, it got a bunch of tax breaks during our worst financial issues ever.
It does not deny their lobbying efforts, instead they say they "comply with laws"...well no shit, if you write them..
What does "2.7 billion in cash taxes" even mean?

Corporate taxation is silly. (0, Troll)

RightSaidFred99 (874576) | more than 3 years ago | (#35635716)

Crybabying about low corporate taxes is fashionable, but doesn't really hold up to reason. It's just a way for certain types of people to rouse the rabble about how the "fat cats" (be they fat cat Washington politicians, fat cat lawyers, fat cat CEOs, fat cat top-hat wearing bankers with monocles, you name it) are pulling one over on Joe American. What's funny is we're soon approaching the point of no return where on average Joe American pays no net taxes, so it's hard to imagine the kind of contortions you'd have to go through to whine about corporate taxation then.

Anyway, corporations don't realize profits - people do. And corporations are not people, not even legally. It's certainly cool to blather about how "corporations are legally people!!" but it's simply wrong. They have some legal protections similar to those of a person, but it's not hard to tell the difference.

Corporate "profit" goes towards either creating jobs or as real profit to a person. You want the first, and you tax the second. The only gray area is when corporations helpfully buy someone something, e.g. they buy their CEO a car that only he ever uses and that he uses for private business. That should be taxed.

Re:Corporate taxation is silly. (1)

pipedwho (1174327) | more than 3 years ago | (#35635832)

The simplified explanation is that corporate tax is paid on whatever is left over in the bank account after paying out all those other things. Fringe benefits tax catches the situations such as your CEO car example to stop companies buying things for employees with pre-tax dollars instead of paying out a taxable wage.

Many corporations reinvest their profits or pay dividends which reduce their tax burden (or in reality push the profit and thus tax burden onto another entity or person). However, it is not always expedient for them to blow 100% of their cash reserve just to avoid paying a 30% tax on the same amount. And it is sometimes wiser to purchase fixed assets that may not be 100% depreciable in the first year instead of wasting money leasing them just to avoid paying tax.

Companies are also lucky in that generally all of their operational costs are tax deductible, whereas you and I are only able to deduct costs directly related to that earning. ie. We can't deduct the cost of food, rent, or transport to/from work, even though we still need those things to survive. Whereas, pretty much anything a company does is directly related to generation of revenue, and thus deductible to some degree.

So when you hear about a company paying tax (or not paying tax), it is basically talking about tax on income that was surplus to its operational requirements. It is indeed possible for a company to reduce its tax burden to zero by simply paying out the remaining profits and pushing the tax burden onto the recipient(s). But, if they keep it, it gets taxed.

Re:Corporate taxation is silly. (4, Insightful)

Black Parrot (19622) | more than 3 years ago | (#35635962)

Corporate "profit" goes towards either creating jobs

...in China.

Re:Corporate taxation is silly. (1)

Americium (1343605) | more than 3 years ago | (#35635996)

You still want the second, you want to tax consumption, or sales. Money people don't spend goes into a bank or stocks as is also invested or creates jobs. That's why a national sales tax and 0 income and 0 capital gains is the best environment for economic growth. This also promotes freedom, since now the government doesn't have to have detailed information about your job.

Re:Corporate taxation is silly. (1)

dargaud (518470) | more than 3 years ago | (#35636150)

You still want the second, you want to tax consumption, or sales. Money people don't spend goes into a bank or stocks as is also invested or creates jobs. That's why a national sales tax and 0 income and 0 capital gains is the best environment for economic growth. This also promotes freedom, since now the government doesn't have to have detailed information about your job.

No:

"You can only drink 30 or 40 glasses of beer a day, no matter how rich you are." — Adolphus Busch.

Which means that you end up paying as much tax as Bill Gates on those beers. Seems fair to you ?

Re:Corporate taxation is silly. (1)

Americium (1343605) | more than 3 years ago | (#35636178)

I don't buy yachts, which would be taxed. I don't buy nearly as much as Gates'. But any any event, all the money Gates isn't spending on beer is going into the banks or stocks, where the money is invested into new businesses. He's not burying gold in his backyard, he's making available his profits for investment, would you rather the government take his money? Are the government's social programs as effective as Gates' charities? Are the tax breaks they give as good as the investments Gates would make?

Re:Corporate taxation is silly. (1)

AK Marc (707885) | more than 3 years ago | (#35636046)

Anyway, corporations don't realize profits - people do. And corporations are not people, not even legally.

Corporations are legally persons. And as such, I agree with you. They shouldn't be taxed on "net" income, but just do what they do with persons. Abolish corporate income tax, and just treat them as persons. That would be much easier and more fair than what we have now.

A Little Quick Math (5, Interesting)

Plekto (1018050) | more than 3 years ago | (#35635724)

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.

Re:A Little Quick Math (0)

Anonymous Coward | more than 3 years ago | (#35635876)

Uh. Did you forget to carry the one or something, or was that a subtle joke about Republican tax breaks that whooshed right over my head?

Using your numbers:
0.2 * 320 million = 64 million taxpayers
3,200 million dollars / 64 million taxpayers = 50 dollars per taxpayer

Re:A Little Quick Math (1)

Llian (615902) | more than 3 years ago | (#35635958)

Whilst I applaud your math, did you read everything? HALF pay taxes (roughly).
So:
0.2*320m*0.5= 32 million.

Re:A Little Quick Math (3, Insightful)

Black Parrot (19622) | more than 3 years ago | (#35635994)

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.

Forget the laws (2)

Gunnut1124 (961311) | more than 3 years ago | (#35635746)

Just push the global community of governments for higher corporate taxes all around. It'd be like price fixing, except with tax rates. That increases the income in these emerging economies and ensures that companies pay taxes SOMEWHERE. If a country refuses, impose trade restrictions. That gives gov't control of how taxes are collected, even if not within their borders.

Re:Forget the laws (1)

Americium (1343605) | more than 3 years ago | (#35636010)

The US government is giving them tax breaks in their income in the US. Their income made outside the US shouldn't be taxed, and currently other 'tax breaks' cover those too..

Re:Forget the laws (1)

DMiax (915735) | more than 3 years ago | (#35636024)

I second that sentiment. I would also include in that civil rights and worker protections.

Jobs and revenues are shifting towards the develping world because of lower wages. Now if this happens because the workers have less needs and/or life is cheaper, this means that the market is working towards leveling those conditions worldwide. But if this is because there is no civil rights/worker protections in other countries this should not be tolerated because it can only lead to losing the same rights and protections in the "developed countries" in order to reestablish competitiveness.

Moreover, in "developed countries" why should we protect our citizens only? If we think it is a basic human right to work no more than 10 hour a day (or any other arbitrary value) then we should not accept goods made violating this right anywhere in the world. One way or the other.

Finally keep in mind this would not increase the prices because they are already fixed based on what you can pay, not on how much it costs to produce something, which is proven by the fact that prices do not decrease when jobs are outsourced.

Re:Forget the laws (0)

Totenglocke (1291680) | more than 3 years ago | (#35636112)

People with your mindset lead the Sunkist Tuna closing up several factories in third world countries. Sunkist paid something like three times more than the average wage in the country, but it didn't meet the level YOU thought it should be, so they were forced to pack up and leave or pay an obscene amount for labor. Tell me - were those hundreds of workers better off making three times the average wage or unemployed due to someone with no knowledge of economics trying to play god and decide who gets to make what?

As for this idiocy...

Finally keep in mind this would not increase the prices because they are already fixed based on what you can pay, not on how much it costs to produce something, which is proven by the fact that prices do not decrease when jobs are outsourced.

Wrong, Prices would go up. Yes, they may not go DOWN when labor costs decrease, but they also don't increase as a result of inflation either. Think about plenty of things we buy on a daily basis that have been outsourced over the last 10 years - prices never changed on many things despite an inflation rate of 3 - 4 % per year. If input costs go up, prices WILL go up. Please, learn what you're talking about before you run your mouth and look like an idiot.

Re:Forget the laws (1)

Americium (1343605) | more than 3 years ago | (#35636128)

How does 'price fixing' or taxing prices way up help me? Global taxation? and I thought the UN was bad enough.

Nothing new here... (0)

GrpA (691294) | more than 3 years ago | (#35635872)

You can be sure that this isn't a surprise to the people who receive the benefit of political lobbying...

GrpA

Should we be surprised? (0, Troll)

theygoto11 (2027152) | more than 3 years ago | (#35635906)

NBC, MSNBC, CNBC are all mouthpieces of the Obama administration. GE will probably/or already has land(ed) contracts in health care information systems, solar, rail and even the "smart" odometers for cars. Not to mention the TARP money that GE Capital got after the converted themselves to a bank. "Imagination at work" - by some lobbyists and tax accountants. Disgusting! Any word on what Jack Welch thinks?

Who isn't doing it? (1)

greg1104 (461138) | more than 3 years ago | (#35635938)

With even the "do no evil" Google doing major tax evasion [businessweek.com] , is anyone surprised an old boy's club like GM is doing even fancier tricks? I'm at the point now where I don't even consider companies that are net tax neutral to be that bad. You have to actively be siphoning money away from the taxpayers via bailouts and unprosecuted financial fraud [rollingstone.com] to register on my radar nowadays.

Sadly... (-1, Flamebait)

Totenglocke (1291680) | more than 3 years ago | (#35636066)

Sadly the overwhelming of people here have no understanding of Economics and thus don't realize that if you want to create jobs and improve the economy (as well as reverse outsourcing) you want corporate taxes as low as possible. However, the general ignorance of anything economic / finance related on slashdot combined the the trendiness of hating businesses that create jobs and write paychecks will lead to hundreds of "business are evil" comments by people who think that they should be given a paycheck just because they were born.

Really people, given how intelligent you believe yourselves to be, would it kill you to read some Economics textbooks or god forbid, take some classes in Economics? Think about how incredibly annoying it would be to hear someone with no knowledge of particle physics try to talk about the best way to do research in particle physics - that's how annoying it is to hear people with no knowledge of Economics try to talk about Economic policy.

Re:Sadly... (1)

Partaolas (1926386) | more than 3 years ago | (#35636148)

It is also sad that some people think that the theory of Economics they read in textbooks works as advertised in an international environment.

Unfortunately I don't see how the "tax breaks" to GM and others have improved the unemployment situation in the US or the US economy. What I see (and I could be wrong) is that the money that they save is invested elsewhere, where it is more profitable. They do invest in lobbying, but I doubt that trickles down to the rest of us.

I'm an American (1)

symbolset (646467) | more than 3 years ago | (#35636160)

Last year the US government paid me back my tax witholding, plus $4000. I have a problem with that. I'm an American. I don't expect the government to pay me for the privilege of living here, enjoying the benefits of being in the land of the free. I figure that money, and some more, could have gone to buying down our debt and, difficult as it was, I'd have paid it. Now, because I took this money I have complicity. I am complicit in the downfall of the republic. I'd rather they kept me out of it and paid our bills with ready cash.

"Reform" (0)

Anonymous Coward | more than 3 years ago | (#35636172)

Yes, lets `reform.' Lets add another several volumes to the gargantuan tax code to make it `fair.' We'll do a really good job so money can't wiggle out and dodge our good work; we're smart enough to write thousands of pages of brilliant new `fairness' that won't simply expand the playground in which the lawyers play. Right?

We'll need to be careful to not impact our `non-profits' however; tens of billions flow through the exempted `non-profit' bits of the medical industry. Also, we'll want to not draw any parallels between the exempted GE and the low-income individuals that count themselves among the exempt. No, we'll need to make sure the blinders that allow us to focus exclusively on corporations remain firmly affixed.

Our governments are going broke because the only people contributing revenue are middle class workers. Everyone else is exempt.

My problem with the IRS (1)

subreality (157447) | more than 3 years ago | (#35636196)

Any time you have a 975-member team to do your taxes - I don't care how big a company you have - something is broken. That's an immense waste, mirrored by similar wastes on the IRS's side.

That waste runs all the way down to the smallest scale. I shouldn't need to hire a professional to handle my individual tax return.

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