G.E.’s Strategies Let It Avoid Taxes Altogether

[Parkbandit]

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.

While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.

In a regulatory filing just a week before the Japanese disaster put a spotlight on the company’s nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back.

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

Yet many companies say the current level is so high it hobbles them in competing with foreign rivals. Even as the government faces a mounting budget deficit, the talk in Washington is about lower rates. President Obama has said he is considering an overhaul of the corporate tax system, with an eye to lowering the top rate, ending some tax subsidies and loopholes and generating the same amount of revenue. He has designated G.E.’s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President’s Council on Jobs and Competitiveness, and it is expected to discuss corporate taxes.

“He understands what it takes for America to compete in the global economy,” Mr. Obama said of Mr. Immelt, on his appointment in January, after touring a G.E. factory in upstate New York that makes turbines and generators for sale around the world.

A review of company filings and Congressional records shows that one of the most striking advantages of General Electric is its ability to lobby for, win and take advantage of tax breaks.

Over the last decade, G.E. has spent tens of millions of dollars to push for changes in tax law, from more generous depreciation schedules on jet engines to “green energy” credits for its wind turbines. But the most lucrative of these measures allows G.E. to operate a vast leasing and lending business abroad with profits that face little foreign taxes and no American taxes as long as the money remains overseas.

Company officials say that these measures are necessary for G.E. to compete against global rivals and that they are acting as responsible citizens. “G.E. is committed to acting with integrity in relation to our tax obligations,” said Anne Eisele, a spokeswoman. “We are committed to complying with tax rules and paying all legally obliged taxes. At the same time, we have a responsibility to our shareholders to legally minimize our costs.”

The assortment of tax breaks G.E. has won in Washington has provided a significant short-term gain for the company’s executives and shareholders. While the financial crisis led G.E. to post a loss in the United States in 2009, regulatory filings show that in the last five years, G.E. has accumulated $26 billion in American profits, and received a net tax benefit from the I.R.S. of $4.1 billion.

But critics say the use of so many shelters amounts to corporate welfare, allowing G.E. not just to avoid taxes on profitable overseas lending but also to amass tax credits and write-offs that can be used to reduce taxes on billions of dollars of profit from domestic manufacturing. They say that the assertive tax avoidance of multinationals like G.E. not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States.

http://www.nytimes.com/2011/03/25/business/economy/25tax.html

Fix the fucking tax code...

[crb]

You know whats hilarious... of the companies in the S&P 500 who paid the most in taxes (40% ish) the majority of them are oil or other energy companies, exactly the people Obama always says don't pay taxes. Meanwhile, his buddy Jeff Immelt, is the one skipping out.

But really, I don't have a problem with GE. I don't think a corporation should be taxed in one country for profits earned in another country. That is double taxing them.

Also, the thing about businesses which most peons don't grasp is, they don't have an employer that sends them a W2 at the end of the year. They aren't guaranteed to make a dime in any year. The worker who is employed will always earn something because he is paid merely for working, the business that employs him may earn nothing or lose money.

When a business loses money, those losses do not just count for the year in which they accrue, they carry forward. So a business that had billions in losses in say... 2008 can carry those losses forward to offset billions in profits in 2009 and 2010.

This is as it should be, and a lot of people just don't get that when they get all up in arms.

Only one place is stupid enough to still tax a business if they lose money on the year. That place is Michigan. Consequently only 1 state lost population the last 10 years. Also Michigan.

Then of course, the income taxes paid by employees thanks to the jobs provided by a business are a contribution that business is making to society/government. Let us not pretend that the jobs they provide do not matter. You could justify, in fact, a 0% corporate tax rate if you wanted. Because any corporate profits are either

A. paid to employees, which is taxed

2. paid to shareholders, which is taxed

III. Used to buy equipment, which is made by another business, who then pays employees, which is taxed.

We don't really need to tax it twice.

[Parkbandit]

But really, I don't have a problem with GE. I don't think a corporation should be taxed in one country for profits earned in another country. That is double taxing them.

I'm fine with that.. but they made $5.1 billion in the US.

My main issue is that for every GE out there, finding creative ways of not paying their fair share, there are a thousand small businesses that can't afford a whole department of scumbag lawyers who's only responsibility is to lower their tax bill... so they end up paying far too much in comparison.

Make it simplier. Make it more fair.

PS - I'm all for 0 corporate tax system.

[Androidpk]

Not to nickle and dime but isn't Walmart the largest corporation in the U.S.

[Keller]

I don't think a corporation should be taxed in one country for profits earned in another country. That is double taxing them.


Two things that make this sort of a silly statement.

As PB mentioned, GE had U.S. source income. That is taxable in the US.

Also, there are creditable foreign tax expenditures that companies can take for taxes they've paid in foreign jurisdictions that the U.S. attempts to tax when the company repatriates cash earned in another jurisdiction. So there is no double tax on profits earned in another country. Only where the US tax rate is higher will the company owe additional money.

That brings me to the next point. I don't know the whos or whys of why this GE story broke when it did, but I have a hunch it had everything to do with the GOPs push for a repatriation holiday. Like PB said, these companies spend pennies on the dollar for tax attorneys that efficiently structure transactions (mostly with very vague business purposes) that achieve significant tax benefits. They do not need the US government giving them freebies.

[~Rocktar~]

Not to nickle and dime but isn't Walmart the largest corporation in the U.S.

In the world and they pay a large hunk of taxes since over half of their operations are in the US.

Now, if you have a tax system based on sales tax, then you can't evade taxes nearly so easily. Value added sales tax on everything bought or sold in the US including goods AND services as well as brought into the US at a flat rate would simply preclude the majority of evasion and greatly simplify our tax code, filing taxes and our tax revenue stream. Freeing the billions upon billions spent to just file, record and monitor income taxes to be used by individuals, companies and the government on other things would be a boon for the economy. You could bring in all the money you want from overseas and as long as you don't spend it, then you are not taxed so it is tax free, start spending and then you pay your fair share.

[Parkbandit]

In the world and they pay a large hunk of taxes since over half of their operations are in the US.

Now, if you have a tax system based on sales tax, then you can't evade taxes nearly so easily. Value added sales tax on everything bought or sold in the US including goods AND services as well as brought into the US at a flat rate would simply preclude the majority of evasion and greatly simplify our tax code, filing taxes and our tax revenue stream. Freeing the billions upon billions spent to just file, record and monitor income taxes to be used by individuals, companies and the government on other things would be a boon for the economy. You could bring in all the money you want from overseas and as long as you don't spend it, then you are not taxed so it is tax free, start spending and then you pay your fair share.

1) Even with the Value Added Sales Tax, there will still be just as much fraud and evasion... there is no tax system that is fool proof.

2) A Fair Tax would be good for the economy... except for all the lawyers and accounting companies that deal with taxation... which accounts for a shitload of lost jobs. Given that the lawyers make the laws in this country, I wouldn't hold my breath for it to ever be enacted in this country.

[~Rocktar~]

1) Even with the Value Added Sales Tax, there will still be just as much fraud and evasion... there is no tax system that is fool proof.

True, but I see less ability to defraud/evade on the massive scale as is done now.


2) A Fair Tax would be good for the economy... except for all the lawyers and accounting companies that deal with taxation... which accounts for a shitload of lost jobs. Given that the lawyers make the laws in this country, I wouldn't hold my breath for it to ever be enacted in this country.

Hence the quote:

"The first thing we do, let's kill all the lawyers". - (Act IV, Scene II). King Henry the Sixth, Part II

In addition, I am quite sure that all that accountants would be put to decent use in the keeping of the sales tax records. A fair quantity of those employed in the income tax filing debacle we have these days are part time at best and seriously, the whole mess is a juggernaut anchor on our economy.

[Keller]

2) A Fair Tax would be good for the economy... except for all the lawyers and accounting companies that deal with taxation... which accounts for a shitload of lost jobs. Given that the lawyers make the laws in this country, I wouldn't hold my breath for it to ever be enacted in this country.

I've made this point before, and would find it if our search function worked, but even if we went with the "fair" tax, it would become complicated.

Congress cannot help themselves. It's just too easy to give tax breaks for "good" behavior/activities and create tax penalties for "bad" behavior/activities. Soon enough we'd be back to where we are now.

[Keller]

True, but I see less ability to defraud/evade on the massive scale as is done now.

So hire more IRS agents, pay them a decent wage (or even a commission), and let the money come pouring in.

I've had the opportunity of dealing with two agents in two separate audits. Neither knew their head from their ass. In one case, the agent was attempting to audit one of the surest parts of the transaction (he was arguing that a distribution from a partnership was a recognition event, which is clearly wrong - see section 731), but missed the very bad behavior the client was engaged in.

The IRS gets a bad rap, imo. They are only trying to enforce the law as CONGRESS wrote it (did you ever notice that congress persons always say, "the IRS Code" to try to deflect blame for having written the piece of shit). They are not trying to shill companies, only trying to get them to pay their actual tax liability.

So hire more agents and expand the budget of the IRS. You'll make significantly more from additional tax collections than it will cost to pay the employees.


In addition, I am quite sure that all that accountants would be put to decent use in the keeping of the sales tax records. A fair quantity of those employed in the income tax filing debacle we have these days are part time at best and seriously, the whole mess is a juggernaut anchor on our economy.

I agree that a VAT system would require a lot of labor from accountants. That is a good point.

[~Rocktar~]

Yes, congress made the mess and it is a gargantuan in the room that no one wants to attack. The problem with giving IRS agents commission is that you will see even more abuse and corruption then now. It costs an inordinate amount of money to defend from a false accusation from the IRS as it stands since there is automatically the presumption of guilt based on their ability to fine and inflict other penalties without a trial. Sure you can sue to make them back it up but that costs money and again reinforces the presumption of guilt instead of proof.

[Keller]

Yes, congress made the mess and it is a gargantuan in the room that no one wants to attack. The problem with giving IRS agents commission is that you will see even more abuse and corruption then now. It costs an inordinate amount of money to defend from a false accusation from the IRS as it stands since there is automatically the presumption of guilt based on their ability to fine and inflict other penalties without a trial. Sure you can sue to make them back it up but that costs money and again reinforces the presumption of guilt instead of proof.

I think the point you're making is that giving IRS agents/lawyers a piece of the pie will cause them to be more aggressive. Maybe.

I also think it would have the effect of them spending their time/resources on slam dunks. They won't waste their time trying to collect from a business when the chances of success are not high, so I actually think you might see LESS "abuse and corruption".

An added bonus is that hard working and intelligent individuals might want to work there. As it is now, they get the "choice" selection from the reject pile. But if they paid based on commision, they might have the opportuntiy to hire smart, motivated accountants/attorneys that would put in longer hours because of the increased reward potential.

[ClydeR]

You know whats hilarious... of the companies in the S&P 500 who paid the most in taxes (40% ish) the majority of them are oil or other energy companies, exactly the people Obama always says don't pay taxes.

Really?

http://www.businessweek.com/interactive_reports/corporate_taxes_2009_who_pays_the_most.html

[Tsa`ah]

You know whats hilarious... of the companies in the S&P 500 who paid the most in taxes (40% ish) the majority of them are oil or other energy companies, exactly the people Obama always says don't pay taxes. Meanwhile, his buddy Jeff Immelt, is the one skipping out.

Source(s)?


I don't know the whos or whys of why this GE story broke when it did, but I have a hunch it had everything to do with the GOPs push for a repatriation holiday.

The story first broke in 2009 ... and then in 2010 ... and is breaking again. Well, different stories, different years, but the same theme.

[ClydeR]

I think the point you're making is that giving IRS agents/lawyers a piece of the pie will cause them to be more aggressive. Maybe.

I also think it would have the effect of them spending their time/resources on slam dunks. They won't waste their time trying to collect from a business when the chances of success are not high, so I actually think you might see LESS "abuse and corruption".

Weren't IRS agents in the past evaluated on how much they collected? There were problems with it -- problems dramatized in 1997 Congressional hearings -- and Congress had to change the law.

[Kembal]

Yeah, uh, I don't see how oil companies could ever rank as some of the highest tax paying companies unless oil prices dropped like a rock. They're the biggest users of the LIFO cost method for inventory.

[Tsa`ah]

Considering his tirades elsewhere ... I don't think we're going to see any citation for that particular claim.

[crb]

Really?

http://www.businessweek.com/interactive_reports/corporate_taxes_2009_who_pays_the_most.html

I said the S&P 500, that list isn't limited to them, but if you scroll down you'll see ConocoPhillips at the 50th spot with just over 40%. The other big oil companies are just behind them.

[crb]

Considering his tirades elsewhere ... I don't think we're going to see any citation for that particular claim.

Watch the fucking news dipshit, and no, I didn't get it from Fox.

ClydeR's link shows up.

There is also this:

http://money.cnn.com/galleries/2010/news/1004/gallery.top_5_tax_bills/2.html

Do you own fucking Googling.

[crb]

Two things that make this sort of a silly statement.

As PB mentioned, GE had U.S. source income. That is taxable in the US.

Also, there are creditable foreign tax expenditures that companies can take for taxes they've paid in foreign jurisdictions that the U.S. attempts to tax when the company repatriates cash earned in another jurisdiction. So there is no double tax on profits earned in another country. Only where the US tax rate is higher will the company owe additional money.


I know that, you know that. The people making all the fuss about this don't know that. They see the US taxes paid and say the corporations are cheating and want to increase taxes on them - when doing so would create double taxation. Which is bad because you can very easily exceed 100%.

[Tsa`ah]

Watch the fucking news dipshit, and no, I didn't get it from Fox.

ClydeR's link shows up.

There is also this:

http://money.cnn.com/galleries/2010/news/1004/gallery.top_5_tax_bills/2.html

Do you own fucking Googling.

I'm embarrassed for you.

Read your link. Re-read your claim ... then read Clyde's link.

[crb]

I'm embarrassed for your parents.

Everything is there in black and white, if you cannot understand the concept of foreign taxes and why it would be inappropriate to retax those same earnings, it is not my job to educate you. You should take a class at your local community college when you get off work in the evenings.

[Tsa`ah]

I'm embarrassed for your parents.

Everything is there in black and white, if you cannot understand the concept of foreign taxes and why it would be inappropriate to retax those same earnings, it is not my job to educate you. You should take a class at your local community college when you get off work in the evenings.

How could you possibly educate anyone? Seriously?

Taxes paid to foreign governments are not taxes paid to the US government. Why in the hell would you interject what a company pays in foreign taxes into a conversation about companies that pay no taxes to the US government.

How much business did Exxon do in the US ... what were their profits on said business? Now justify them paying a considerably lower rate of taxes ... because of the taxes they paid elsewhere.

Stick to crying in sorc and game threads. You being the captain of the fail boat gets less humorous by the day.

[KerosineKiller]

Interesting conversation. I'm certainly no expert but I feel shafted when I see someone making 10 billion and paying no tax, while I make a measly fraction of that and they take 20-30%.

[Keller]

Why in the hell would you interject what a company pays in foreign taxes into a conversation about companies that pay no taxes to the US government.

It is the same reason you would bring up a person's state income taxes when talking about their federal tax liability.

It is directly relevant to the calculation of federal tax liability?

[Keller]

Interesting conversation. I'm certainly no expert but I feel shafted when I see someone making 10 billion and paying no tax, while I make a measly fraction of that and they take 20-30%.

Wage income is a bitch.

Not [m]any ways to get around it.

[Tsa`ah]

It is the same reason you would bring up a person's state income taxes when talking about their federal tax liability.

It is directly relevant to the calculation of federal tax liability?

Meh ... I've no idea how foreign tax liabilities are calculated into any entity's US federal tax liability, but pertaining to the flow of the conversation ..

GE paid no US federal taxes on over 5 billion in profits earned in the US.

insert back and forth

insert oil companies pay huge amounts of taxes (never mind that they don't pay them in the US).

... relevance? Perhaps on a technical level. Irrelevant to the conversation considering those taxes aren't US taxes.

[Back]

Haven’t read the whole thread but I found this link somewhere...

Setting The Record Straight on GE’s Taxes (http://www.propublica.org/article/setting-the-record-straight-on-ges-taxes)


Did GE get a $3.2 billion tax refund? No.

Did GE pay U.S. income taxes in 2010? Yes, it paid estimated taxes for 2010, and also made payments for previous years. Think of it as your having paid withholding taxes on your salary in 2010, and sending the IRS a check on April 15, 2010, covering your balance owed for 2009.

Will GE ultimately pay U.S. income taxes for 2010? After much to-ing and fro-ing -- the company says it hasn't completed its 2010 tax return -- GE now says that it will pay tax.

[Parkbandit]

Haven’t read the whole thread but I found this link somewhere...

Setting The Record Straight on GE’s Taxes (http://www.propublica.org/article/setting-the-record-straight-on-ges-taxes)

Tax benefit and tax refund are two different things.

[Latrinsorm]

Aren't tax returns supposed to be confidential?

[Warriorbird]

PB gets credit for posting a corporation being shady (even if it's only in the context of Obama bashing.)

[AnticorRifling]

I thought he was against this type of shit regardless who was in office.

[Warriorbird]

Pssh. We're supposed to reduce all corporate taxes or something! Zealously maintain those loopholes (unless they're Democratic tied companies)!

[Parkbandit]

I thought he was against this type of shit regardless who was in office.

Stop confusing WB with facts.. especially in political threads!

[Parkbandit]

Pssh. We're supposed to reduce all corporate taxes or something! Zealously maintain those loopholes (unless they're Democratic tied companies)!

And right on que.. the one trick pony offers up another fabricated gem.

Well done.

[Warriorbird]

And right on que.. the one trick pony offers up another fabricated gem.

Well done.

So you're for increased corporate taxes! Got it. And one trick pony wise, very stealthy not including "OBAMA!!!!!" in the thread title.

[Gan]

PB gets credit for posting a corporation being shady (even if it's only in the context of Obama bashing.)


I thought he was against this type of shit regardless who was in office.

That's just WB keeping it partisan.

[Parkbandit]

So you're for increased corporate taxes! Got it.

Just when I thought Tsa`ah had a huge lead in the stupidity parade, you start sprinting towards the finish.

It's going to be close... one of you should bring up Bush/Palin/Halliburton/AIG/Cheney in one post if you really want to win.

[Warriorbird]

That's just WB keeping it partisan.

There's this massive legion of non Republicans telling me how awful I am.

[Parkbandit]

So you're for increased corporate taxes! Got it. And one trick pony wise, very stealthy not including "OBAMA!!!!!" in the thread title.

What about extra credit for using a liberal rag like the NYT?

[Suppa Hobbit Mage]

There's this massive legion of non Republicans telling me how awful I am.

Awful isn't the word this Republican would use.

[Warriorbird]

What about extra credit for using a liberal rag like the NYT?

Definitely worth some. I can't wait to see you go on a crusade against tax breaks that aren't given to GE or Goldman Sachs. Channel Teddy Roosevelt!

[TheEschaton]

No, seriously, PB has consistently taken a stance (including in this very thread) for lower corporate tax rates, yet his OP says "fix the fucking tax code," implying he has a problem with GE paying no taxes, because Immelt, GE's CEO, is "Obama's buddy."

So, you're for lower tax rates, but not if the CEO is friends with a Democratic president?

P.S. The article you posted, crb, said that Exxon Mobil had a 152 million federal income tax CREDIT. This undermines your assertion that the oil companies are paying higher corporate tax rates due to any American policy, if anything they are paying lower because of it. The article mentions only 7.7 billion in American taxes through other avenues, and since 78.6 billion is 47%, I'm gonna assume their American tax rate is 4.7%. Care to refute that? The other examples in your article are farcical.

[Keller]

Meh ... I've no idea how foreign tax liabilities are calculated into any entity's US federal tax liability, but pertaining to the flow of the conversation ..

GE paid no US federal taxes on over 5 billion in profits earned in the US.

insert back and forth

insert oil companies pay huge amounts of taxes (never mind that they don't pay them in the US).

... relevance? Perhaps on a technical level. Irrelevant to the conversation considering those taxes aren't US taxes.

Assume Exxon, Inc. exists and is a U.S. Corporation. Exxon, Inc. has a Russian subsidiary, InRussiaOilDrillsYou ("RussiaCo"). RussiaCo operates an oil well and earns $100 in Russia. Assume Russia has a 20% income tax on income from oil drilling. RussiaCo pays $20 of tax to Russia. The following is now true:

RussiaCo has $80.
Russia has $20.
Exxon, Inc. has $20 of tax credits.

Now, Exxon, Inc. decides it is going to invest in drilling in Alaska and wants to capitalize its wells with the $80 of profit (that's for you, Clove) in RussiaCo. Exxon, Inc. causes RussiaCo to make a distribution of $80. In other words, it "repatriates" those earnings to America and owes a tax of $28 (35 percent of $80). Exxon, Inc. gets to use $16 (80/100 or 4/5 of its $20 credit) of its tax credit to offset its U.S. tax liability. So, instead of owing $28 on $80 of income, Exxon, Inc. only owes $12 on $80 of income.

Now ignoramuses get to cry about how Exxon, Inc. has $80 of income but only paid $12 of U.S. federal tax liability.

And that is exactly why foreign taxes paid is relevant to U.S. federal tax liability.

As for the rest of your post - GE had loss carry-forwards to use in 2010 from 2008. So did a lot of other U.S. groups that have financial services businesses. I'm not sure why that is so offensive to you.

[Parkbandit]

Definitely worth some. I can't wait to see you go on a crusade against tax breaks that aren't given to GE or Goldman Sachs.

I'll start that right after you mention how corrupt unions are or how Obamacare might not be the answer to quality healthcare for people.

[Parkbandit]

No, seriously, PB has consistently taken a stance (including in this very thread) for lower corporate tax rates, yet his OP says "fix the fucking tax code," implying he has a problem with GE paying no taxes, because Immelt, GE's CEO, is "Obama's buddy."

So, you're for lower tax rates, but not if the CEO is friends with a Democratic president?


Come on Simpleton... put the puzzle together. Why would I post a story about how a company making 6 billion in profits in this county paid no US taxes.. and then write "fix the tax code"

I'll even give you some clues:

1) Has nothing to do with Immelt being a buddy to Obama.
2) Has nothing to do with Obama being half black either.
2) Read the third post in this thread

Now, I could give you the answer.. but I bet with some help, you could actually put it together for yourself.

[Warriorbird]

I'll start that right after you mention how corrupt unions are or how Obamacare might not be the answer to quality healthcare for people.

Obama's Mitt Romney copy is not perfect... because he spent too much time trying to be negotiate with Republicans, who have simply been focused on torpedoing every effort at meaningful healthcare reform, including ideas that a Republican came up with. I've said so several times.

I'm not about to equate the teachers union with Jimmy Hoffa. Sorry.

Maybe I should make some effort though, what with you standing for higher corporate taxes.

[pabstblueribbon]

14 Billion isn't that good of a year for G.E.

They are extremely diversified and have huge costs to maintain their very broad workforce.

I haven't read this thread, but I'm sure someone has already stated that corporations don't pay taxes, they simply pass the cost along to the consumer.

In any event, G.E. is a very heavy R&D company and I wouldn't be surprised if much of that R&D is deductible due to research that may or may not lessen energy dependence on oil.

That being said, a consumption tax would close any tax loopholes. As companies would be paying taxes on goods they purchase, but once again, one could argue that they would simply pass along higher costs to consumers.

[Parkbandit]

Maybe I should make some effort though, what with you standing for higher corporate taxes.

Holy shit, he's CATCHING UP!!

OTP is galloping to the finish line.. with TheE trying his hardest to catch up.

It's going to be a photo finish folks.. HOLD YOUR TICKETS!!!

[Warriorbird]

Holy shit, he's CATCHING UP!!

OTP is galloping to the finish line.. with TheE trying his hardest to catch up.

It's going to be a photo finish folks.. HOLD YOUR TICKETS!!!

Is that the best you can come up with to answer what TheE said? Why aren't you cheering the laissez faire triumph?


PS - I'm all for 0 corporate tax system.

[Parkbandit]

14 Billion isn't that good of a year for G.E.

They are extremely diversified and have huge costs to maintain their very broad workforce.

I haven't read this thread, but I'm sure someone has already stated that corporations don't pay taxes, they simply pass the cost along to the consumer.

In any event, G.E. is a very heavy R&D company and I wouldn't be surprised if much of that R&D is deductible due to research that may or may not lessen energy dependence on oil.

That being said, a consumption tax would close any tax loopholes. As companies would be paying taxes on goods they purchase, but once again, one could argue that they would simply pass along higher costs to consumers.

You should read the thread.. we even talked about consumption taxes.

[KerosineKiller]

Most people seem to agree that this is a problem.


How do you fix it though?

[AnticorRifling]

Knife fights.

[pabstblueribbon]

You should read the thread.. we even talked about consumption taxes.

I will when I get a chance... extremely busy with projects for G.E., EMD, Metrolink, Union Pacific, BNSF, FRA, CSX, Canadian National, Canadian Pacific, etc..

I'll be in Montreal next Sunday through Friday for CP.. if anyone lives up there.

[Suppa Hobbit Mage]

Delete and Reinstall, IMO.

[Parkbandit]

I would bring a gun to a knife fight.. but that would be promoting violent rhetoric.

[Warriorbird]

Most people seem to agree that this is a problem.


How do you fix it though?

It's like illegal immigration or fake spending cuts (or Obama regulating Goldman Sachs). Republicans wouldn't even fix it if they were in power because too many big donors would line up against it.

[Parkbandit]

It's like illegal immigration or fake spending cuts (or Obama regulating Goldman Sachs). Republicans wouldn't even fix it if they were in power because too many big donors would line up against it.

LULZ

[AnticorRifling]

I will when I get a chance... extremely busy with projects for G.E., EMD, Metrolink, Union Pacific, BNSF, FRA, CSX, Canadian National, Canadian Pacific, etc..

I'll be in Montreal next Sunday through Friday for CP.. if anyone lives up there.

Do you have extra crab meat?!

[Tsa`ah]

And that is exactly why foreign taxes paid is relevant to U.S. federal tax liability.

As for the rest of your post - GE had loss carry-forwards to use in 2010 from 2008. So did a lot of other U.S. groups that have financial services businesses. I'm not sure why that is so offensive to you.

I'm not sure where you're reading offense. GE used the existing tax code, as any other multi-national company would and do.

I don't find the practice offensive in the least, I find the tax code offensive.

[Keller]

I'm not sure where you're reading offense. GE used the existing tax code, as any other multi-national company would and do.

I don't find the practice offensive in the least, I find the tax code offensive.

Peoples' opinions on the tax code are similar to peoples' opinions on global warming. No one has a comprehensive understanding of how either work. We've got anecdotal evidence and expert opinion. Based on those two things, everyone under the sun has absolute opinions and anyone who disagrees with them is an idiot.

So you think that companies should (i) not get foreign tax credits, (ii) not get loss carry-forwards, or (iii) both?

I'm just curious what you find so offensive.

To be absolutely clear, there are many, many offensive things about the tax code including hyping E&P pools in high tax jurisdictions, striping basis off of stock and attaching it to 7-year depreciable assets, using "founders" equity to reduce your tax rate of income from 35% to 15%, etc. But I don't think either of those items above are per se offensive.

[pabstblueribbon]

Do you have extra crab meat?!

Wut.

[pabstblueribbon]

Okay I read the thread, briefly.

I'm not so much concerned with taxes that corps avoid legally. And as Keller said in much more complicated means, the tax code is tricksy. In one hand, you could stifle spending in the corporate environment, but at the end of the day it will simply be shuffled over to the consumer.

What I am more concerned with are companies operating here that move their workforce overseas. It's almost double lose. We lose the workforces tax income compounded with having to support their unemployment.

I'm no economic genius, but there has to be some way to encourage companies to keep their workforce here... and keep American goods competitive with cheap outsourced labor produced goods from other countries.

Like uh.. tariffs. This is more important to me than TRYING to fix the tax code, which I have little hope for.

[AnticorRifling]

Wut.

http://i31.tinypic.com/nwzo7s.jpg

[Clove]

Now, Exxon, Inc. decides it is going to invest in drilling in Alaska and wants to capitalize its wells with the $80 of profit (that's for you, Clove).The real question is will Exxon's owners, er stocklholders (not managers) approve the capitalization?

[AnticorRifling]

So wait if we tax the profits is that income tax?!

[pabstblueribbon]

So wait if we tax the profits is that income tax?!

Yeah this confuses me. I would like more clarification from the tax lawyers.

Are profits not paid out to stockholders?

Are then said profits taxed through each stockholder as income?

[~Rocktar~]

http://i31.tinypic.com/nwzo7s.jpg

How do you FIND this shit? Never-mind, I probably don't want to really know.

[AnticorRifling]

How do you FIND this shit? Never-mind, I probably don't want to really know.

I mean it's no RT hypno-lactaction but yeah it's best not to know.

[Tsa`ah]

Probably the same way people find things like hypno-lactation bondage.

[~Rocktar~]

Yeah this confuses me. I would like more clarification from the tax lawyers.

Are profits not paid out to stockholders?

Are then said profits taxed through each stockholder as income?

Depends on how it is all set up, sometimes it is capitol gains, sometimes income tax, sometimes it is deferred and so on.

[AnticorRifling]

Probably the same way people find things like hypno-lactation bondage.

YOU ARE TOO SLOW SIR!!!!

[Tsa`ah]

So you think that companies should (i) not get foreign tax credits, (ii) not get loss carry-forwards, or (iii) both?

I'm just curious what you find so offensive.

Hmm ... all of those 401k plans that were essentially wiped out during this last melt down, can those individuals carry forward their losses?

If the answer is no, you have the answer to the second portion.

Tax credits for foreign taxes paid is counter productive, though not to recipients of said credits. If I make 50k in the US and another 50k in the UK ... tax my 50k in the US as 50k.

So yes, there are elements of either that I find offensive when compared to the majority of individual tax payers.

[Tsa`ah]

YOU ARE TOO SLOW SIR!!!!

Ya, I'm ashamed.

[~Rocktar~]

Probably the same way people find things like hypno-lactation bondage.

And yet, you still can't find your brain, an intelligent thought or relevance on this board. That doesn't mention your inability to find reality or a way to permanently remove your head from your ass.

[EasternBrand]

The real question is will Exxon's owners, er stocklholders (not managers) approve the capitalization?

I believe that in many (most?) states, a sale of all or substantially all of a corporation's assets only needs to be approved by the shareholders of the seller corporation, not the buyer corporation.

[Tgo01]

Obama's Mitt Romney copy is not perfect... because he spent too much time trying to be negotiate with Republicans, who have simply been focused on torpedoing every effort at meaningful healthcare reform, including ideas that a Republican came up with. I've said so several times.

You mean like when Nixon submitted a healthcare plan very similar to Obamas and the Democrats in Congress made sure it didn't pass?

[Warriorbird]

You mean like when Nixon submitted a healthcare plan very similar to Obamas and the Democrats in Congress made sure it didn't pass?

I'm not sure that road means what you think it does.

[Tsa`ah]

I'm pretty sure the Republicans of old could not win elections as Republicans today.

[Tgo01]

I'm not sure that road means what you think it does.

Probably not, I just read 'Republicans torpedoing every effort at meaningful healthcare reform' and instantly thought back to when none of this would even be an issue right now if Democrats weren't playing the same game 30 years ago that Republicans are playing now.

[Warriorbird]

Probably not, I just read 'Republicans torpedoing every effort at meaningful healthcare reform' and instantly thought back to when none of this would even be an issue right now if Democrats weren't playing the same game 30 years ago that Republicans are playing now.

Where was your sterling historical source for this? I'm quite familiar with the legislation, the bargaining, and Nixon backing off. Then Kennedy went single payer when Nixon removed himself from being a political factor.

Hell of a read, actually.

Suggests that Congress was a whole lot more willing to bargain back then.

P.S.

I'm related to a Watergate conspirator.

[~Rocktar~]

I'm related to a Watergate conspirator.

Who? Can't be Liddy, he would have shot you for being a dumbass by now.

[Warriorbird]

Who? Can't be Liddy, he would have shot you for being a dumbass by now.

Classy.

[Tgo01]

Where was your sterling historical source for this? I'm quite familiar with the legislation, the bargaining, and Nixon backing off. Then Kennedy went single payer when Nixon removed himself from being a political factor.

Why have any need for bargaining? Nixons plan was very similar to Obama's plan. Why would Democrats fight against a Republican president who was pushing for healthcare reform? In retrospect it was a pretty stupid move huh?

[Keller]

Hmm ... all of those 401k plans that were essentially wiped out during this last melt down, can those individuals carry forward their losses?

If the answer is no, you have the answer to the second portion.

Tax credits for foreign taxes paid is counter productive, though not to recipients of said credits. If I make 50k in the US and another 50k in the UK ... tax my 50k in the US as 50k.

So yes, there are elements of either that I find offensive when compared to the majority of individual tax payers.

Individuals can carry-forward capital losses.

I think you're misunderstanding the idea of a foreign tax credit. A foreign tax credit cannot be used against US income, it is used against foreign income that is repatriated to the US. So, in your example, you would pay taxes on the full 50k of US income and you would pay taxes on your 50k of UK income, but your taxes on your UK income would be reduced by your foreign tax credit relating to that UK income.

Individuals also get foreign tax credits. Individuals are subject to income tax on their worldwide income. So my friend in Hong Kong is subject to US income taxes and Hong Kong income taxes. He is able to reduce his US income tax liability by the amount he pays to the Hong Kong taxing authority. He is considering giving up his US residency so that he can avoid being subject to US income tax as he has no immediate plans to move back to the US. Many ex-pats are likely in similar situations.

So, what is it that you find offensive?

[Warriorbird]

Why have any need for bargaining? Nixons plan was very similar to Obama's plan. Why would Democrats fight against a Republican president who was pushing for healthcare reform? In retrospect it was a pretty stupid move huh?


You are familiar with the American government? There's some noteworthy related portions RE: HMOs in the Watergate tapes, actually, if you want to get actually academic about it.

It would've flown if Nixon hadn't gotten lobbied by small business owners at the last minute. Then, post Nixon removing himself from consideration, Kennedy got delusions of single payer.

[Suppa Hobbit Mage]

So, what is it that you find offensive?

ROFL. Good luck with that. First expect a post saying he isn't gonna do your reading for you... then posts about how your question isn't clear and then later finger pointing about how you are too blame for bringing it up when your very first post actually quoted him bringing it up.

Tsa'ah is the Violent Torpedo of Truth.

[~Rocktar~]

Classy.

True on both counts.

[Cephalopod]

Who? Can't be Liddy, he would have shot you for being a dumbass by now.

With his wife's guns!

(I love G. Gordon Liddy)

[Clove]

I believe that in many (most?) states, a sale of all or substantially all of a corporation's assets only needs to be approved by the shareholders of the seller corporation, not the buyer corporation.I would be surprised if your corporation would make a substantial purchase of capital without its board's approval at the very least.

[Clove]

So wait if we tax the profits is that income tax?!You're confusing profits with income. The answer is yes, but you can't spend any refunds (because refunds are monies you receive after all).

[Clove]

I've had the opportunity of dealing with two agents in two separate audits. Neither knew their head from their ass.True story.

[Valthissa]

So, what is it that you find offensive?

I don't think we shouldn't get this far into a tax discussion like this without the famous quote from Judge Learned Hand:

"Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands."


Not to speak for others, but I think it is the implication that GE is not paying it's fair share that some find offensive.

As you noted earlier, the remedy, a change to the tax code, is unlikely to produce a dramatically different results. Politicians of all types, despite overwhelming evidence to the contrary, believe they can guide the economy forward with a series of incentives and penalties and they use laws, taxes, and regulations to achieve their preferred ends.


C/Valth

[Atlanteax]

There would probably be a lot less effort placed in tax avoidance if we lowered our corporate tax rate to something more reasonable, like 20-25%, and then essentially set it as a flat tax (minimal write-offs, etc).

[Clove]

I don't think you're getting the gist of Judge Hand's quote...

[AnticorRifling]

I don't think you're getting the gist of Judge Hand's quote...

Judge Hand has nothing on Judge Fudge:

http://i112.photobucket.com/albums/n177/anticor/Misc/k49831_JudgeFudge.png

[Back]

There would probably be a lot less effort placed in tax avoidance if we lowered our corporate tax rate to something more reasonable, like 20-25%, and then essentially set it as a flat tax (minimal write-offs, etc).

Somehow I seriously doubt that.

And since we are pulling out quotations on the market this seems appropo...


“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” - Sir John Maynard Keynes

[TheEschaton]

Much as I admire Keynes, a quote from him is not going to win you points in any economic debate. I recognize my admiration is somewhat outdated, but my view on economics is as well.

[Clove]

Much as I admire Keynes, a quote from him is not going to win you points in any economic debate. I recognize my admiration is somewhat outdated, but my view on economics is as well.You're assuming Backrash has any idea what Keynesian economics represents.

[AnticorRifling]

You're assuming Backrash has any idea what Keynesian economics represents.

Kenyans?

[Warriorbird]

Kenyans?

http://www.quotezuki.com/avatars/2010/10/08/keenen-ivory-wayans-avatar-982.jpg

Keenens!

[Gan]

Much as I admire Keynes, a quote from him is not going to win you points in any economic debate. I recognize my admiration is somewhat outdated, but my view on economics is as well.

My world is officially coming to an end.

I hereby agree with 99.5% of the above post from TheE.

:help:

[Gan]

You're assuming Backrash has any idea what Keynesian economics represents.


http://www.riseinteractive.com/blog/wp-content/uploads/2009/12/bullseye.jpg

[Clove]

My world is officially coming to an end.

I hereby agree with 99.5% of the above post from TheE.

:help:I know it fucks with your head, but sometimes he's lucid.

[Parkbandit]

General Electric, the nation’s largest industrial company, on Friday reported net earnings for the third quarter of $3.2 billion, up 57 percent from the same period in 2010 despite what the chief executive called a “volatile” economic environment.

The company said it had operating earnings per share of 31 cents, exactly in line with expectations of analysts surveyed by Thomson Reuters. That excluded the $0.08 per share impact of its redemption of Berkshire Hathaway shares, which it subsequently redeemed this month for $3.3 billion. But the company said it expected that retiring the stock would improve annualized earnings per share by $0.03 in future quarters.

Revenue for the period from July through September, 2011, was $35.4 billion, which the company described as flat when compared with the third quarter of 2010. When the impact of the sale of NBC Universal to Comcast was excluded, the revenue for the quarter was up 12 percent.

Analysts had forecast $34.93 billion in revenue, according to a survey compiled by Thomson Reuters.

Jeffrey R. Immelt, G.E.’s chief executive, said that the company was pleased with the results, the sixth consecutive quarter of double digit growth in operating earnings, in what he called a "volatile macro environment."

"We ended the quarter with a record high order backlog of $191 billion and we remain confident in our full-year 2011 operating framework," he said in a statement.

The earnings report also provided another glimpse into the company’s progress in overhauling its business, which has a diverse range of products from jet engines to medical imaging machines. With its global reach, it also gives a snapshot into how business is faring not only in the United States but around the world.

The strongest industrial growth for large American manufacturers has recently come from abroad, accounting for more than half of industrial business in some cases. The outlook for industrial companies has been gradually improving, but in the past month the debt crisis in Europe has caused some concern about economic prospects.

“Up until September it was improving but now we have hit this bump in the road,” said Daniel J. Meckstroth, the chief economist for the Manufacturers Alliance /MAPI, an economics and policy research organization in Arlington, Va. He was speaking in general about the outlook for the economy, not specific companies.

Other markets could pick up the slack to some extent. Asia was decelerating but continuing to do well, with Japan rebounding after the devastation of the earthquake and tsunami, he noted. Companies could also look for more opportunity in Latin America.

“It is really a mixed outlook in terms of industrial production worldwide,” said Mr. Meckstroth.

As the reporting season gets under way, other industrial companies are weighing in.

United Technologies Corp. this week said its earnings per share for the third quarter were $1.47, up 13 percent compared with the same quarter in 2010. The company raised its full year earnings per share outlook compared with 2010, to $5.47 and said it expected its sales to rise nearly 7 percent to $58 billion for the year.

Honeywell International Inc. is also announcing its third quarter earnings on Friday. Caterpillar Inc. will report on Monday and Goodrich Corp. reports third quarter results on Thursday.

G.E. has been expecting its business for power generation equipment, which involves gas, steam and wind turbines, to improve this year. Profits in that component of its business were down 19 percent in the second quarter.

The company has invested heavily to expand its industrial divisions, including acquisitions related to oil and gas equipment. Its industrial orders for equipment and services have grown.

G.E. said that in the third quarter, its industrial segments had $23.4 billion in revenues, up 19 percent. International revenues were up by 25 percent, driven by strong growth in Brazil, Russia, China, India, Canada, Mexico and the Middle East.

But it has been gradually paring back its finance business, called GE Capital, as part of a long-term strategy to rely more on its core industrial units — even though GE Capital accounted for much of the profit improvement in the previous quarter.

GE Capital has been weathering the wake of the financial turmoil unleashed in late 2008.

In the third quarter of the year, GE Capital showed a 1 percent rise in revenue to $12 billion. It had a 1 percent decline in revenue in the second quarter, to $11.63 billion, when commercial real estate problems showed losses. GE Capital earned about $1.5 billion, up 79 percent, in the third quarter, the company said.

After the outbreak of the financial crisis, G.E. cut its dividend in 2009, the first time it did so since the Great Depression.

Since then, it has raised its dividend three times, to 60 cents a share.

http://www.nytimes.com/2011/10/22/business/ge-profit-up-despite-volatile-economy.html?_r=1



Glad I held my nose and bought their stock back in '09.

[Kuyuk]

Did they pay any taxes this quarter?

[Parkbandit]

Did they pay any taxes this quarter?

Of course they paid taxes... everyone pays taxes.

[Tgo01]

Of course they paid taxes... everyone pays taxes.

Tgo01 likes this.

[Parkbandit]

Tgo01 likes this.

Parkbandit is glad you do.

[Kuyuk]

Of course they paid taxes... everyone pays taxes.

http://img.chan4chan.com/img/2009-04-07/1239066755113.jpg

[Parkbandit]

PS - McDonalds is also showing pretty strong profits. Happy x2 for me.

[crb]

Own any ARCO PB? If you like MCD you'd probably like ARCO, they've got exclusive license to run MCDs in umteen south american countries.

[Parkbandit]

Own any ARCO PB? If you like MCD you'd probably like ARCO, they've got exclusive license to run MCDs in umteen south american countries.

No. I'm relatively out of the stock market and have been for almost 3 years now. I only own 5 total stocks at present.. not including funds.

[Keller]

Tgo01 likes this.

Seriously.

Whose dick does Drew have to suck around here to get "like" function?

[Parkbandit]

Seriously.

Whose dick does Drew have to suck around here to get "like" function?

Which Drew?

[Suppa Hobbit Mage]

President Obama has said he is considering an overhaul of the corporate tax system, with an eye to lowering the top rate, ending some tax subsidies and loopholes and generating the same amount of revenue.

Now this is something I could get excited about. I hope Obama or whomever replaces him in 2012 gets something done.

[Keller]

Now this is something I could get excited about. I hope Obama or whomever replaces him in 2012 gets something done.

Sounds like what Reagan did in 86. I'm all for that.

[Warriorbird]

PS - McDonalds is also showing pretty strong profits. Happy x2 for me.

I'm bothered by us owning similar stock.

[Parkbandit]

I'm bothered by us owning similar stock.

You could say we are co-owners of McDonalds!

Bring on the Happy Meals!

[Warriorbird]

You could say we are co-owners of McDonalds!

Bring on the Happy Meals!

I'll admit. I've actually drunk some of the coffee drinks. They weren't as bad as I'd imagine.

[Parkbandit]

I'll admit. I've actually drunk some of the coffee drinks. They weren't as bad as I'd imagine.

Dunkin Donuts ruined me from ever having a McDonalds coffee.

[Rinualdo]

Dunkin Donuts ruined me from ever having a McDonalds coffee.

DD coffee is awesome.

[Liagala]

DD coffee is awesome.
I wore a DD t-shirt to work this morning that says, "Friends don't let friends drink Starbucks."

[Warriorbird]

DD coffee is awesome.

Yes.

[Keller]

http://i417.photobucket.com/albums/pp256/bobberyt/duncandonuts.gif

[Rinualdo]

http://i417.photobucket.com/albums/pp256/bobberyt/duncandonuts.gif

Dude, clean out your inbox. Srlsy.

[Gan]

http://i417.photobucket.com/albums/pp256/bobberyt/duncandonuts.gif

Could you stop by the Radio Shack on the way home? I need a RCA to 1/8" Mini adapter for this weekend.

[Keller]

Could you stop by the Radio Shack on the way home? I need a RCA to 1/8" Mini adapter for this weekend.

Which Radio Shack?

[Keller]

Dude, clean out your inbox. Srlsy.

Negative ghostrider. The inbox isn't full.

[Latrinsorm]

Could you stop by the Radio Shack on the way home? I need a RCA to 1/8" Mini adapter for this weekend.I just needed one of those. :O

[Gan]

Which Radio Shack?

Inorite?

Its like one radio shack within a square mile is not enough for you guys.

[Keller]

Inorite?

Its like one radio shack within a square mile is not enough for you guys.

But we don't have a grocery store within that square mile.

[DoctorUnne]

do you work at celadon spa, tosca or barnes & noble?

[Keller]

do you work at celadon spa, tosca or barnes & noble?

I am a cuticle technician at the spa.

[Ceyrin]

I am a cuticle technician at the spa.

http://3.bp.blogspot.com/_wAxDMfEGhoY/TMuWrpgfuaI/AAAAAAAAAVk/tGhRx4Bmkt0/s1600/Not%20Sure%20if%20serious.jpg