NEW YORK -- Despite high unemployment and a largely languishing real estate market, U.S. businesses are more profitable than ever, according to federal figures released...
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...
President Barack Obama called on Congress to lower corporate tax rates in his State of the Union address Tuesday night, suggesting the measures could be...
WASHINGTON -- Friday's announcement that General Electric Chairman and CEO Jeffrey Immelt will serve as chair of the President's Council on Jobs and Competitiveness has...
Lawrence O'Donnell spent an entire segment criticizing his show's part-owner, General Electric, for paying no income taxes on over $5B of profits in 2010. Now, that is integrity writ-large.
The US tax code for both corporations and individuals is a job destroyer! Big companies and financial institutions are motivated to export jobs to lower cost countries. Their are multiple components to costs. Labor cost are one, taxes are another. Their are all kinds of taxes, but let's simplify things and only look at income tax rates. If a country has a marginal rate of 35% and another a marginal rate of 20% where would you put the corporation? On a billion of profits, the difference is $150m. That's a lot of money available to invest, in a low tax country. But we have a real contradiction, the % of taxes received by the IRS from these organizations has dropped from about 30% to roughly 10% today! Congress has provided so many special tax rules for these big organizations, that they now contribute a relatively small portion of the total paid taxes. What is the solution? Frankly it is so easy, it is embarrassing to describe! Eliminate all specials in the tax code and all deductions for any entity or individual. Then lower the rates, but collect an extra $500B. Our marginal rates would be less than half, but the IRS would collect more money. Most of the changes will actually increase taxes paid by big business, perhaps getting closer to the 70/30 split between individuals and big business, but remove the incentive to export jobs for tax purposes. Simple!
Independent66: The US tax code for both corporations and individuals is
Tax parity is important, but income taxes are not the whole story. For example, European countries may have lower income tax rates, but they also have a 17% value added tax ("VAT"). There are also various excise taxes and employment taxes to include in this incomplete comparison as well.Merely comparing income taxes is an incomplete analysis.
ChasG: Tax parity is important, but income taxes are not the
I agree 100%. My intent was to try and isolate one item and not try an solve the whole problem in 250 words. The US has a complex system because we have Federal, State and Local taxes that vary State to State and that in turn affects the Federal taxes paid. There are a number of vey good reports that do this in great detail. Then there are lots of web sites for the Fair Tax, the Flat Tax, etc. I read a number of reports from economists, finance people, etc. It's a good thing I'm retired and have the time to read all this stuff. I think it is important to understand what is really happening at all levels of government. The WWW really helps, but you need to know where to go to get the unbiased information. The real problem we have is that Americans have not been properly educated for decades in the public schools. It is not simple to read and understand what these people are saying. Thanks for your comments.
Independent66: I agree 100%. My intent was to try and isolate
Maybe we can shame General Electric to 'donate' $500 million to the Federal Treasury in lieu of taxes since it certainly feeds at the federal trough so greedily!
JohnK26: Maybe we can shame General Electric to 'donate' $500 million
There is a difference in taxes paid and tax expense reported on financial statements. Two different accounting rules are at play. Generally accepted accounting principles are used to report to the public, because these rules more accurately reflect actual net income or loss. Tax accounting rules are used to report to the IRS and to determine taxable income and taxes to be paid. GE actually paid $2.7 billion in taxes in 2010, but due to adjustments in taxes accrued in prior years (GAAP accounting) they reported a negative income tax expense; taxes reported on the GAAP statements were over-estimated in prior years, and the correction of the estimate is reported in the current year (GAAP accounting).
Why are we going after GE, which pays an average effective rate of over 20% income tax on its worldwide income, when we should be going after Exxon and the oil & gas industry which is allowed to deduct expenses they will never pay for (e.g., depletion allowances in excess of the cost of the land being depleted)? Who is intentionally distracting us from the real crooks? It wouldn't be Malcolm Forbes would it?
ChasG: There is a difference in taxes paid and tax expense
False equivalence. GE was paying plenty of taxes when they contributed that paltry sum to Obama's campaign (paltry = less than one-tenth of one percent of the $750 million). Obama's campaign received about 90% of its donations from individual donors like you and me.
In addition, there is no public source of how much GE paid in taxes to the US government, because the author of the NYT article that got this false hysteria going does not know the difference between GAAP and Income Tax accounting rules. Taxes paid based upon tax accounting rules are not the same as income tax expense reported on GAAP financial statements. In 2010, GE paid $2.7 billion in income tax payments on its worldwide income. And GE's average effective tax rate on its worldwide income has been over 20%; it has been somewhat lower recently, but only because of the financial crisis and the recession.
Why don't we go after the real bad guys, like the oil & gas industry? This is a distraction; a false alarm.
ChasG: False equivalence. GE was paying plenty of taxes when they
there is no reason that any federal law be more than twenty pages.. 12 point font 1 inch margins.. in english.. complete sentences and paragraphs.. and should not refer to any other document.. There is no reason the tax law should be 60,000 pages except to hide and obfuscate things in it.. only the rich folks with good lawyers know the loopholes.. put all the pork in those twenty pages as you'd like... but we'll be able to read it..
scrappydoodle: there is no reason that any federal law be more
we shouldn't worry about taxing corporations.. we should be taxing the rich individuals making huge money from the corporations... Bill Gates, Charlie Sheen, Barack Obama, John Kerry, Steve Jobs, etc... - those people should be paying more taxes...
scrappydoodle: we shouldn't worry about taxing corporations.. we should be taxing
The huge U.S tax code is like the Bible... subject to interpretation. Even on a smaller scale, for example, your personal taxes may require a paid preparer (who, just to get your business, may "guarantee" a bigger refund than the other guy down the block). Corporations are not philanthropic - they will "legally" use every loophole available to maximize their profits.
GeeziePeezie: The huge U.S tax code is like the Bible... subject
When it comes to paying the least amount of taxes possible, corporations and individuals are no different.
By the way, if any tax practitioner who "promises a bigger refund" than another practitioner, walk away immediately and find a tax preparer with credentials and experience, not "promises" of anything.
ChasG: When it comes to paying the least amount of taxes
Vote republican and you get the slippery slope of low corporate taxes paid for out of middle class pockets. Only publicly financed elections will stop politicians from trading corporate fiscal relief for campaign funds at the people's expense.
jedwightn: Vote republican and you get the slippery slope of low
Both D's and R's take money from corporations and actually in the last presidential election they gave more to O than McCain.
University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130
US Government $494,820
Latham & Watkins $493,835
In fact Latham & Watkins alone gave more than McCain's top contributor by over 120K! Don't be disollusioned, it's the D's too and more so than the R's.
zipowitz: Both D's and R's take money from corporations and actually
The corporations saw the writing on the wall and new that the Dem's were going to win. So they gave their money to the ones that could do them the most good.
You are right however that the problem is on both sides. There will be no relief until elections are totally public funded.
Smartguy47: The corporations saw the writing on the wall and new
Of Obama's $750 million in campaign donations, about 90% came from individuals like you and me. Your list above is less than 2% of the Obama's 2008 campaign donations.
ChasG: Of Obama's $750 million in campaign donations, about 90% came
The goverment could always spin this by saying "We tax their employees by way of their pay checks and we tax their customers...so in a way they do pay more in taxes. :P
johnb123: <blockquote><strong><em>The goverment could always spin this by saying "We tax
Corporate taxable income is taxed twice. GE's average tax rate on its worldwide income has been over 20%. What that does not include is the taxes paid on GE's dividends paid to its US shareholders (in most cases another 2%, which will be increasing when dividend income becomes subject to the ACA tax).
Why are we going after GE instead of the real bad guys, like the oil & gas industry? This is a distraction.
ChasG: Corporate taxable income is taxed twice. GE's average tax rate
Funny, your explanation that you were joking shows up in my email, but not on this page. Anyway, message received. I haven't followed your posts, so I am not familiar with your sense of humor, much less your political views.
ChasG: Funny, your explanation that you were joking shows up in
There really aren't a lot of choices here... either:
They made a lot of money and paid a lot of taxes.
They made a lot of money and paid very little in taxes.
They made a lot of money and paid nothing in taxes.
They made a lot of money and got a tax rebate from the broken back of the American worker.
They made a lot of money and laughed, and laughed, and laughed.
SeenItBefore: There really aren't a lot of choices here... either: They
When they made a lot of money, they paid a lot of taxes. When they didn't make a lot of money, they didn't pay a lot of taxes. GE's average tax rate has been over 20% on its worldwide income. This attack on GE is a straw man attack. The real bad guys are the oil & gas and nuclear industries. Let's go after them.
This from Forbes, which isn't anthing close to a Liberal publication.
The most egregious example is General Electric ( GE - news - people ). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.
Yahoo! BuzzAvoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%.
a) Bank of America paid no taxes in a year that they had no taxable income. b) Bank of America repaid all of its TARP money, plus 5% annual interest on that money.
This article, like the New York Times article, is misleading. There is a difference between income taxes paid, and income tax "expense" reported on public financial statements filed with the SEC. Different accounting rules apply as a matter of law. GE showed a huge tax credit in 2009, but in 2010 it paid $2.7 billion in income taxes on its worldwide income.
This is a complete red herring. I'm an accountant and Enrolled Agent (licensed tax representative). The only thing I can't figure out is whether or not this red herring is intentional deception or deception by ignorants.
Let's go after some real bad guys, like the oil & gas industry; they are fracking our planet for crying out loud!
ChasG: This article, like the New York Times article, is misleading.
It annoys me when there is no link provided to a source article. Anyone can draw a cartoon that is based on pure speculation. Give me a source link HuffPost, so I can read the full story. That way when I tell others about this subject, I have a source I can quote, not just a cartoon.
Why are we going after GE, which pays an average effective rate of over 20% income tax on its worldwide income, when we should be going after Exxon and the oil & gas industry which is allowed to deduct expenses they will never pay for (e.g., depletion allowances in excess of the cost of the land being depleted)? Who is intentionally distracting us from the real crooks? It wouldn't be Malcolm Forbes would it?
In addition, there is no public source of how much GE paid in taxes to the US government, because the author of the NYT article that got this false hysteria going does not know the difference between GAAP and Income Tax accounting rules. Taxes paid based upon tax accounting rules are not the same as income tax expense reported on GAAP financial statements. In 2010, GE paid $2.7 billion in income tax payments on its worldwide income. And GE's average effective tax rate on its worldwide income has been over 20%; it has been somewhat lower recently, but only because of the financial crisis and the recession.
Why don't we go after the real bad guys, like the oil & gas industry? This is a distraction; a false alarm.
By the way, if any tax practitioner who "promises a bigger refund" than another practitioner, walk away immediately and find a tax preparer with credentials and experience, not "promises" of anything.
University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130
US Government $494,820
Latham & Watkins $493,835
In fact Latham & Watkins alone gave more than McCain's top contributor by over 120K! Don't be disollusioned, it's the D's too and more so than the R's.
You are right however that the problem is on both sides. There will be no relief until elections are totally public funded.
Why are we going after GE instead of the real bad guys, like the oil & gas industry? This is a distraction.
They made a lot of money and paid a lot of taxes.
They made a lot of money and paid very little in taxes.
They made a lot of money and paid nothing in taxes.
They made a lot of money and got a tax rebate from the broken back of the American worker.
They made a lot of money and laughed, and laughed, and laughed.
The most egregious example is General Electric ( GE - news - people ). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.
Yahoo! BuzzAvoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%.
http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-corporate-taxes.html
b) Bank of America repaid all of its TARP money, plus 5% annual interest on that money.
Let's go after the real bad guys, shall we?
This is a complete red herring. I'm an accountant and Enrolled Agent (licensed tax representative). The only thing I can't figure out is whether or not this red herring is intentional deception or deception by ignorants.
Let's go after some real bad guys, like the oil & gas industry; they are fracking our planet for crying out loud!
Here's a link to further reading on this subject...
http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=3&hp