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.Former IRS staffer
Maryland
In any given year at least 59% of US corporations paid no federal income tax liability for 1998 to 2009 (the years studied). That statistic includes corporations of varied sizes.
Nearly one quarter of large US corporations don’t pay any federal income tax at least half of the time.
So how do so many corporation escape taxation? Deductions and credits. Corporations wipe out their tax liability by using tax credits or net operating losses (NOLs) from excess deductions. NOLs allow a company to deduct losses generated in previous years in a current year. In contrast, individuals, unless reporting business losses on their personal returns, are not allowed to carry forward federal income tax losses. In other words, if a company has a good year, it can offset taxable income from losses it faced in a bad year. If an individual has a bad year, the loss is wiped clean.
jeffp
nyc
"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."
Let me rephrase this in terms we can understand: GE avoids paying taxes by paying legal bribes to politicians, and by employing fraudulent accounting techniques to hide the money it makes in this country.
Now isn't it time to jail the people who aid and abet this egregiously criminal behavior?
RAB
Boulder, CO
Once again, this shows how corporations have come to control the U.S. government and use this power to legalize criminal activities. We were warned about this over and over:
"I hope we shall … crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country." –Thomas Jefferson (Letter to George Logan, 1816)
"Corporations have been enthroned. An era of corruption in high places will follow … until wealth is aggregated in a few hands … and the Republic is destroyed." –Abraham Lincoln, after the National Banking Act of 1863 was passed
"This is a government of the people, by the people and for the people no longer. It is a government of corporations, by corporations, and for corporations." –Rutherford B. Hayes.
"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government ever since the days of Andrew Jackson." –President Franklin D. Roosevelt, November 21, 1933.
"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist." –Dwight D. Eisenhower, farewell speech
One of the definitions of fascism is corporate control over the state, and we certainly have that. Behind all these corporations are the financial puppet masters, who have muscled their way to control over currency and credit, leveraging their position to profit by war and depression.
These are the folks Dickens had in mind when he created Ebenezer Scrooge. It remains to be seen whether these people have one iota of moral sense left from which redemption would be possible, for it certainly seems, metaphorically speaking, that they are fully committed to work of the devil.
Leon Breaux
Beijing
However, I see no mention of the fact that about 20% of GE's business is defense-related. http://www.referenceforbusiness.com/history2/98/General-Electric-Company... For the US's largest corporation, that amounts to a lot of revenue.
In other words, while scrupulously avoiding paying US taxes (in one sense of the word scrupulous, at any rate) they are also a huge recipient of tax dollars for defense spending. They suckle at the very teat they disdain compensating.
This is clearly not a sustainable business model. All the more reason to milk it for all it's worth before the inevitable collapse. All the more reason to pour your resources into private means, as you are destroying the public sector. All the more reason to insure that in the class wars, you and yours are not members of the losing class. You know, those poor, sad, misguided and pathetic folks who believe in fairness and equality.
This is how the big boys and girls play the game.
RLS
Virginia
“…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.”
We are NOT broke. Congress and state governments need to address this inequity. If corporations and the wealthy paid their fair share of taxes there would be no need to cut essential services that Republicans in Congress and GOP governors are pushing on the backs of the elderly, poor, children, and middle class. Revenue is also down because of the economic crisis caused by the reckless and illegal behavior of those on Wall Street.
Matt Taibbi’s recent article in Rolling Stone asks: “Why Isn’t Wall Street in Jail?” He writes: “This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth – and nobody went to jail.” http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-2...
Corporations are paying little or no taxes at the federal and state level. “According to the Wisconsin Department of Revenue, two-thirds of corporations in the state pay no taxes, and the share of corporate tax revenue funding the state government has fallen by half since 1981.” (Huffington Post)
In August 2008, the GAO reported that 2 out of every 3 three corporations (having a combined $2.5 trillion in sales), paid zero federal taxes between 1998 and 2005; some have received refund checks. Citizens for Tax Justice reported that in at least one year from 2001 to 2003, 82 Fortune 500 companies paid zero federal income taxes, earned $102 billion in profits, and received refunds totaling $12.6 billion.
In 2009, ExxonMobil made $19 billion in profit, paid zero taxes, and received a refund from the IRS for $156 million. After receiving a huge bailout and paying their executives obscene compensation packages, Bank of America received a refund check from the IRS. Chevron paid no taxes in 2009. At least $100 billion is lost annually to offshore tax shelters used by corporations and the wealthy in the Cayman Islands, Bermuda, and other countries.
Billionaire hedge fund managers actually pay a current tax rate of zero. The loophole allows them to pay a “capital gains” rate of 15 percent (yet it is “income” that they earn) when they cash out which could be decades from now. As a result of Bush tax policy the wealthy pay an effective tax rate of about 16 percent (the lowest on record). Middle class workers pay a higher tax rate than the top 1 percent. That’s wrong.
David Cay Johnston is a columnist at Tax.com and the author of “Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill).” His interview with Democracy Now: http://www.democracynow.org/2010/12/14/the_worse_off_you_are_your
“There’s something called the Shelf Project, done by a number of professors who have dug into the tax code very deeply, and they’ve shown that without raising rates, government could bring in a trillion dollars a year—that’s as much as the income tax brought in 2008—A TRILLION DOLLARS, by simply taking away loopholes for corporations."
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.
No comments:
Post a Comment