Tuesday, March 29, 2011

Of Taxes, GE and Big Business

Of Taxes, GE and Big Business

Would you look at that, April is around the corner and you know what that means... TAXES! Yes, it's time to pay Uncle Sam. Now, we weren't all created equally... at least not in the tax bracket department.

Take for example big business. In 2010 GE made a total of 14.2 billion dollars. If you were a gambling man, what would you say would be your guess as to how much GE paid in taxes for the year?

Whatever you said, you're wrong. You're dead fucking wrong.
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.
Yup.. I'm not sure that most of you expected that. I wouldn't be surprised if at least one or two of you expected zero.. But I know sure as hell that no one expected it to be a negative number.

God damn, United States.. I say again, god fucking damn. Can we just give them all the money already and be done with it? I mean... it's just so fucking outrageous at this point. Even more of a slap to the face is that the White House defends embrace of G.E. CEO despite report company didn't owe taxes in 2010

Let's just burn civilization to the ground. We're not worthy of it anymore. Especially when they fucking want more of it...
Lawmakers have thus far been cool to the idea of a repatriation holiday. Passing one without reform "makes a farce out of the whole system," says Kent Conrad, a North Dakota Democrat on the Senate Finance Committee. Even corporate America isn't unanimous in its support. "A one-time repatriation of profits is a bad idea," says United Technologies (UTX) Chief Financial Officer Gregory J. Hayes. "My fear is that we'll have a repeat of 2004. If companies repatriate these profits and spend it on things like share buybacks, that will create such negative connotations around tax reform with the public."
Maybe if we give them even more tax breaks they'll send back some of those cushy phone support jobs that they sent to India. Though I guess I shouldn't be surprised by this. I mean, it is the same company that built a shrine for Reagan.

Who knows, maybe Tina Fey will make a joke about it. Nightly News on NBC sure as fuck didn't mention any of this. But maybe GE needs the money. Maybe it's better that it's in their hands. Just imagine if the money was still in our government's control...

Just think of how many patriot missiles they could have bought with that money... Oh wait, they're buying them anyway.

So what did GE have to say about all this tax breaks and any means to justify such an outrageous abuse of the tax laws? Well
GE posted a rebuttal to the whole matter.....

Yeah.. I guess by this point I can't even feign outrage about this anymore. Not to mention fuck all social democrats who think this kind of thing could ever be regulated.

The only real solution to the capitalist parasite involves a rope and a lamppost. Regulations just slows them down until they can pay someone enough to remove it all over again. Dragging them out to the street and hanging them leaves a warning sign to everyone who sees it.

I mean, let's just look across the ocean to a recently devastated land and how they react to similar situations. I mean, just look at how Japanese culture is utterly alien to our own.

Japanese corporations agree to forgo tax cuts, for good of their country
"I don't mind if the government skips cutting the corporate tax rate," Yonekura, who is also chairman of Sumitomo Chemical, told a regular briefing in Tokyo. "Instead I want the government to move swiftly in its recovery efforts."
My American mind is completely blown. If this happened in America it would only be in the form that Mega corporations would be demanding that taxes be temporarily abolished so they can invest in recovery efforts. Then a bill will be passed with overwhelming numbers in both the senate and the house.

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