The New York Times: General Electric, the nation’s largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.
Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress. [MORE]
This story is a perfect example of everything that is wrong with Washington today. I hardly know where to begin with pointing out the problems.
Here we are a nation that is $14 trillion in debt and here we are giving $3.2 billion in refunds! Chalk this up to our insane progressive tax system with its myriad of social engineering tax breaks and crony capitalism loopholes. The entire system should be scrapped and a flat tax with no deduction or exemptions should be instituted.
This story also represents the cozy relationship between large corporations and the Federal government. Corporations, unions and special interest groups will always be able to raise vast amounts of money to sway the political process in their favor. I often think that banning contributions from anything but individuals should be the way to go. Set contributions to a modest level so that no one individual will have great sway. It would wipe out cronyism and help to bring the cost of campaigns down. Furthermore, it would also cut down on all the pandering as politicians would have to reach out to a much broader array of voters in order to raise cash.
This story also represents the cozy relationship between large corporations and the Federal government. Corporations, unions and special interest groups will always be able to raise vast amounts of money to sway the political process in their favor. I often think that banning contributions from anything but individuals should be the way to go. Set contributions to a modest level so that no one individual will have great sway. It would wipe out cronyism and help to bring the cost of campaigns down. Furthermore, it would also cut down on all the pandering as politicians would have to reach out to a much broader array of voters in order to raise cash.
We also have to once again point out the blatant hypocrisy of supporting progressives with their love of taxation and then ducking the high taxes that are always the result. G.E. 's CEO Jeffrey Immelt was on board for the higher taxes of Cap and Trade. No doubt knowing that G.E. could use its money and insider influence to duck the high taxes while its smaller competition would drown from it.
Via: Memeorandum
Via: The New York Times