Regarding all the posts about GE not paying any taxes...

[Rage for Order]

It certainly seems to be a hot topic. There must be at least a half dozen active posts in GD lamenting the fact that GE paid no taxes. People are blasting GE, and rightfully so. However, we seem to be overlooking a crucial detail in this story: GE is not accused of breaking the law or cheating on their taxes. Everything they have done so far is perfectly legal. We should lay the blame where it belongs: squarely at the feet of the Republican and Democratic politicians who write our nation's tax laws. These types of corporate tax abuses would stop tomorrow if our elected leaders wanted them to. It's not one party screwing us while the other party fights for the little guy. Remember, the Republicans had both houses of Congress and the presidency from 2000 - 2006, and the Democrats had both houses of Congress and the presidency from 2008 - 2010. At no time did either controlling party change the laws to ensure that companies like GE paid their fair share of taxes. Why do you think that is?

[CaliforniaPeggy]

1. You make an excellent point.

Recommended.

[Vinnie From Indy]

55. An excellent point to be sure, BUT...

it should also be added that G.E. was not a passive player in all this. They did not simply wake up and discover that the company had been given a pass on paying taxes. They actively and relentlessly worked for these breaks. They punished politicians that did not play ball and rewarded those that did.

G.E. has simply acquired enough of our political system that they get the laws they want. They are rightfully held up as villians in this scenario. These politicians are simply responding to their master's call in regard to favorable tax legislation and the like.

Cheers!

[w8liftinglady]

2. You are absolutely correct.

i communicated with my congressman Joe Barton...
once he was through ruining the working class,would he take a few minutes to review cutting welfare for corporations... so we all "share the cuts equally" ... I haven't heard back from him yet.

[OhioChick]

3. You're absolutely right. n/t

[GKirk]

4. I own stock in GE

when they pay me a dividend I pay taxes on it.

Some companies even pay dividends when they lose money for a short time.
Which means taxes are being collected even when no profit is being made.

[Rage for Order]

7. ....

:rofl:

[slay]

15. ....

i know right - the disconnect is mind-boggling. :rofl:

[GKirk]

17. Explain

:hi:

[slay]

24. You're paying GE's taxes and are OK with it?

yes, i know it's not that simple, but regardless of what you pay on your stock stuff, GE is still shorting the government on millions and millions of dollars in taxes we desperately need. and i'm sure you know it's actually worse than that - we acutaly GIVE money to GE to ""create jobs"". Why can't we have workers own the company - or profit sharing at least?

Can't say I like GE one bit. nope.

[GKirk]

32. It's not like they don't pay ANY taxes

I bet their property tax bill is HUGE!
And I'm more than willing to have 100% of their profits
go to the stockholders so we can pay the taxes on it.
Otherwise it's double taxation.



"Why can't we have workers own the company"

Uhmmm... whatcha saying there boss?

[Name removed]

35. Deleted message

Message removed by moderator. Click here to review the message board rules.

[GKirk]

37. I base this on my own experience

I own a small business (10 employees).
It's incorporated.
The corporation makes a modest amount of money.
If I had to pay a corporate tax and then had to pay myself after that
I would most certainly be double taxed.
And not able to stay in business.

[Sinistrous]

48. There is no "double taxation".

The money your corporation pays you is a cost of doing business, and therefore reduces the amount of its profit subject to corporate tax. The corporate income that becomes your remuneration is only taxed when it becomes your income. There would be no "double taxation", unless you have a really lousy tax accountant.

[GKirk]

63. Unless I misunderstand

I don't think that a corporation gets to deduct a dividend paid out like an expense of doing business as they would say raw materials to make a product.

[Rage for Order]

40. Double taxation is a result of incorporating

There are certain trade-offs involved in establishing a business. If GE did not want to be subject to double taxation then they should have established the business as a partnership or sole proprietorship. However, they elected to form a corporation. One of the advantages of being a corporation is that the owners of the corporation are not personally liable for losses incurred by the business like sole proprietors are, but a disadvantage is that they are subject to taxes on profits at the corporate level, and again when the profits are distributed to shareholders in the form of dividends. This is Accounting 101 material.

[Sinistrous]

49. Only dividends are subject to "double taxation", not salaries..

[Rage for Order]

72. True...it depends on who claims the income

Salaries get written off as an expense prior to calculating net profit for the business so the salaries aren't taxed, but they are taxed as income for the person receiving the salary, and their W-2 reflects this income at the end of the year. If it's not taken as a salary then it gets carried over to Schedule E on an individual's 1040 via form K-1 when distributed to the owner(s) of the business, which is likely how it is set up for the poster to whom I was responding.

In GE's case they (should) have to pay the corporate income tax rate on anything that they claim as net profit. Then, when they pay their dividend, the shareholders receiving the dividend have to pay taxes on it when they claim it on Schedule D of their 1040.

[GKirk]

33. Of course I am.

"You're paying GE's taxes and are OK with it?"

Of course I am. The less they pay the more I get.
The more I get the more I pay (in taxes).

[Hugabear]

50. Would you favor eliminating all corporate taxes?

After all, if corporations didn't have to pay ANY taxes at all, ever, then their shareholders would get more money. Right?

[GKirk]

64. I don't think

I would go that far.

[GKirk]

65. I don't think

I would go that far.

[BlueJac]

70. Corporations are people remember........

they should pay the own people way.

[GKirk]

23. Two people immediately hit the floor ROFL

but no explanation.

GE is in business to make money, not for GE but for the stockholders.

If a 100% of the profits get passed on as dividends 100% of the money gets taxed.

[slay]

26. Perhaps you did not read my reply

i gave you my response.

[girl gone mad]

29. I need to remember this 100% rule.

So as long as I spend 100% of my income on tax-generating transactions, it's okay for me to avoid paying my taxes on that income.

Cool.

[JoePhilly]

34. The falicy is your suggestion that 100% of the profits get passed on as dividends.

I rarely use wikipedia as a source, by they have a relatively simple description of what happens to profits relative to dividends.

http://en.wikipedia.org/wiki/Dividend

"Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.<1> When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend."

The key word above is PORTION.

The next phrase you need to learn ... STOCK BUY-BACK. See, lots of companies HOLD their own stock. And from time to time, they do a BUY-BACK to acquire more. Again, wiki-pedia does a decent job of describing this (read the section titled PURPOSE).
http://en.wikipedia.org/wiki/Share_repurchase

So what does all this mean? As I said, your belief that 100% of profit becomes TAXABLE DIVIDENDS is FALSE. Corporations can DECIDE how much profit to pass on to investors.

And then, many large companies pay NO DIVIDENDS to stock holders. The very Rich LOVE THESE, because as you correctly note, those dividends get taxed. The rich don't want the dividend, they want the stock price to go UP. Which is what the BUY-BACK does.

Catching on yet?

[GKirk]

36. I do understand buybacks

not sure that GE has been doing that.

My understanding is that when a buy back is done those shares more or less disappear.
That's why the it makes the price go up.

[JoePhilly]

39. You skipped the other part ... the 100% of profits part.

I gave stock buy back as an example of ONE reason that companies do not transfer 100% of profits into dividends.

They can also transfer profits into "stock options", "research" and a load of other TAX-ADVANTAGED vehicles.

The POINT is that the current tax structure allows them to pay ZERO in taxes on those profits that they do not pass on as dividends, and the amount involved is HUGE.

Take a look at these two sources.

First this one ...
http://www.reuters.com/article/2010/03/16/us-ge-idUSTRE62F2R720100316

It says ... "Analysts, on average, look for 2010 profit of 99 cents per share, including items, with 2011 profit forecast at $1.24 per share, according to Thomson Reuters I/B/E/S."

Then compare that to this one ...
http://www.ge.com/investors/stock_info/dividend_history.html

The table shows that the "dividend per share" in 2010 and 2011 ... was 14 cents.

And so, If I am generous, we take the 2010 "profit per share" value which is 99 cents.

99-14 = 85 cents per share that GE held on to.

On a percentage basis .... 14/99 = roughly 14% paid out as dividends.

What taxes did GE pay on that other 86% ... as we already know ... ZERO.

[girl gone mad]

25. So it okay if I stop paying my income taxes..

since when I use my income to buy a cup of coffee at Starbucks or to buy and sell stocks, taxes are being collected and it all works out in the end.

Right?

[niyad]

44. two questions: what are you on? do you share?

[GKirk]

46. Please ask me

a question that makes sense.

I'll be glad to answer it.

[liberation]

68. Woooosssshhhhh

LOL

Let me see if I can explain the situation in easier terms: You are paying taxes on YOUR income, GE still has to pay taxes on THEIRS.

[Freddie Stubbs]

5. This is why President Obama wants to lower corporate tax rates while closing loopholes

[walldude]

20. And he couldn't do that when Democrats held

all 3 branches of government?

Yeah I'm holding my breath :eyes:

[hedgehog]

27. Capture the sound bite and the money!

[TheWebHead]

6. well, you also can blame their financial division

which lost so much money that the company was teetering on the edge of bankruptcy in Q1 2009. If a company loses billions of dollars those losses get carried forward to be used in the event of future gains. It's sort of a silly argument to be lamenting the financial sector's limited taxes paid when they had been writing off gigantic losses. If someday we can hope for green energy sector companies to become profitable, more so without the benefit of subsidy, then they too will be paying a tiny effective tax rate.

[fascisthunter]

8. GE like all other Companies Comprise of Humans

so as a result, I expect human regardless to do the right thing. How many lobbyists have GE hired....? If you think GE doesn't influence our government and politicians so that they can get away with this shit you are kidding yourselves. They deserve blame as well as the politicians in both parties.

[Rage for Order]

16. Our politicans could always say "no"

When a lobbyist calls a politician and says, "Hey, Joe, how about writing a loophole into this upcoming spending bill that reduces our tax burden by 15%, and in return we'll make sure your next campaign is not underfunded (wink wink)?" our esteemed, duly elected representative could say, "No, that's not in the best interest of our country."

[fascisthunter]

30. GE is still responsible as well as our Government

they do not get a pass from me, is all I am saying.

[Amonester]

51. By virtue, yes, they *could* (I think they *should) say no.

The big problem is, you know, the *next* election dance, and the golf-club parties (the deep pockets), since their *job* benefits (salary+extras) never *seem* to be enough.

Besides, air-teevee campaigns are not free...

[rhett o rick]

18. With respect I disagree. Corporations are not human and have no consciences. The humans running

the corporations hide behind this to do horrible things in the name of profit. To exist in a capitalist society must increase profits or die. They will do anything to increase profits. The OP is right, the corporatists must be restrained or we will die.

[fascisthunter]

28. Actually you just agreed with me

I am stating we should lay blame at GE's feet as well our government's feet for they are all to blame. I also, implied that people hid behind corporations' while doing everything necessary to increase profits, when in fact it is morally reprehensible. I believe corporations should be held to a more humane standard.

[rhett o rick]

47. I think we agree, but I am doing a bad job of making my case. My point is that it is useless to

criticize GE for not paying taxes if they are obeying all laws and regulations. If they arent then someone in the government is failing to do their job. It is not reasonable to expect GE to pay taxes if they arent required to. Having said that, I will support the movement to boycott businesses for not paying taxes.

It's fairly common knowledge that the food dyes that many manufactures use is not healthy. We cant expect the food companies to discontinue on their own. They will argue that the degree of "unhealthy" is debatable and if they stop the colors, then the other brand will have an advantage.

The problem we have today is that we dont have proper regulations on major corporations. And we dont enforce those that we have.

Corporations have no morality and we should expect it. A failure of Ayn Rand and Greenspan is that they believed that corporations had morality and would do the right thing for humanity. We have seen great evidence that they dont do the right thing for humanity. Greenspan was shocked that corporations took the billions (trillions) given them and kept it. He assumed they would use it to help the economy. He is an idiot and doesnt understand the basics of capitalism.

[MichiganVote]

9. K&R

[slay]

10. Indeed

the Democrats have a lot to answer for in my book - and people get mad at me saying - you should blame the republicans! Well I Do. BUT - the Democrats are SUPPOSED to be my party, supposed to be the "party of the people". they sure as hell don't act like it when you look at the facts though.

[freshwest]

11. Well said, look for defenders to show up anytime.

[Warren Stupidity]

12. As one of the many outrage OPs: I agree.

GE is doing what every corporation is legally required to do: maximize their investor's value. The rules for doing so include massively corrupt giveaways by working people to the Plutocratic Class that benefits from this arrangement.

GE does not come out of this blameless however. They are most certainly part of the problem and they most certainly lobby for these advantages and fight tooth and nail to keep them (well not any more, as the fight has just completely gone out of the supposed leftwing major party.) Our system is corrupt. GE is just another corrupt actor.

[eomer]

13. Let's lay some blame at GE's feet too.

Nobody did anything illegal. But the politicians wrote those laws because they were bought ... and GE is among those who did the buying. GE is as guilty as anyone.

[Rage for Order]

73. I don't buy it when politicians say "The devil made me do it."

Lobbyists can only buy the willing. If you'd like to test this theory, the next time you're in public walk up to a random woman and offer her $100 to have sex with you.

[eomer]

74. That goes both ways.

Politicians can only be bought by someone willing to buy them. The next time you're in public walk up to a random woman and offer to have sex with her if she pays you $100.

What we're talking about is bribery, effectively. And bribery is a crime for both parties, not just for the receiver of the bribe:

bribery

The offering, giving, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties.

The expectation of a particular voluntary action in return is what makes the difference between a bribe and a private demonstration of goodwill. To offer or provide payment in order to persuade someone with a responsibility to betray that responsibility is known as seeking Undue Influence over that person's actions. When someone with power seeks payment in exchange for certain actions, that person is said to be peddling influence. Regardless of who initiates the deal, either party to an act of bribery can be found guilty of the crime independently of the other.

http://legal-dictionary.thefreedictionary.com/bribery

[vaberella]

14. Probably because it would never make it past Congress.

Congress is a shady piece of shit instrument---well in this day and age.

[ejpoeta]

19. you are so right. both parties are feeding from the same trough and while they

may talk a good game, it seems that they both have an interest in keeping the status quo or even putting their thumb on the scale. Sure there are some who truly are there to help us, but for the most part they use these issues as a means to get elected and re-elected. political animals. it's like curing cancer..... the money isn't in the cure, but the treatment. as long as they can keep stringing us along we will still vote for them. after all.... what choice do we have? it's the dem or the republican.

what will it take for us to have a third party. a viable third party candidate? one who actually represents us!!

[Snoutport]

21. we can still hold them accountable for not paying into the system on an ethical level

they benefit from roads and bridges and they are a bank so the economical wellbeing of the country also contributes to their prosperity. On an ethical level we can hold this against them. Greed is something that all of society agrees is not the best of attributes. If a corporation does not support the people, then it is OK for the people to not support a corporation.

[Shallah Kali]

53. what of lobbying they undoubtedly took part in to get those lovely tax loopholes

as well? What they do maybe legal but only because they and other businesses lobbied long and hard for it and donated to politicians for it.

[stockholmer]

22. the banksters(both the privately-controlled Fed & Wall St) OWN Republican & Democratic politicians

alike. Any other starting point in terms of systemic resolution is utterly in vain at best, cognitive dissonance in the medium, and purposeful dis-info at worst.

[blindpig]

31. It's the Capitalism...

everybody is just playing their parts.

[slay]

38. Yep

Capitalism is THE root problem.

http://3.bp.blogspot.com/_PpDUVvDyQ6M/S1yWW8C5uUI/AAAAAAAAA28/C5GwMMAZw9o/s400/capitalism+sucks.jpg

[GKirk]

41. That graphic while interesting...

... isn't going to win the Democratic Party any votes.

[slay]

42. I'm not here to prop up the Democratic Party

i'm posting truth. some people can't handle it. i'm a progressive Dem and those are the people i support. i could care less if people like Blanche Lincoln ever get elected. EOM.

[Name removed]

43. Deleted message

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[Name removed]

45. Deleted message

Message removed by moderator. Click here to review the message board rules.

[pnorman]

52. K&R!

For careful study od the entire thread later.

[notesdev]

54. "Legal" is bullshit when you specifically hire lobbyists to change the law to suit your purposes

If I had the lobbying clout that GE has, I'd be paying zero tax too, if I wanted.

If the law is OK with a company that made $5B in US profits paying $0 tax on those profits, then the corruption of the law is at such an extreme that it begs all sensible people to have no respect for it.

I'd wager that in the final analysis, the amount of bribery that had to go on to arrange the tax laws to suit GE's pleasure wouldn't pass any definition of "legal".

[crickets]

57. +1000 -nt

[Jester Messiah]

59. Exactly! Current law was created to their specifications!

It's the bought and paid-for legislators that have to be addressed first, before we can fix the corporate tax system.

[lonestarnot]

56. We should all be walking like Egyptians.

[notesdev]

60. oh, we will be

(ominous Yoda voice) we will be



Gone to the grocery store lately? Seen the 20% price hikes in pretty much everything? Fueled up the car recently? Seen the price on that?

Egypt revolted because the regular people simply couldn't afford to survive under that regime. And we are headed there at supersonic speed.

[sasha031]

58. I had heard this, trying to find original NYT article

Something to think about as tax day nears: General Electric is so good at doing their taxes, the government pays them. In 2010, the company reported global profits of $14.2 billion, $5.1 billion of which came from the U.S. But using a combination of offshore accounts and aggressive lobbying for tax breaks, GE managed to not only pay no taxes, but get a benefit of $3.2 billion. GE spent $200 million on lobbying in the last decade. At one point, when a generous tax break was about to expire, the head of GE's tax team met with Representative Charles Rangel, then chairman of the ways and means committee, and begged for an extension on one knee. Supposedly it was a joke, but GE got its extension, and Rangel got a $30 million gift for New York City schools. GE is an extreme example of a historical trend: The corporate share of the nation's tax receipts went from 30 percent in the 1950s to 6.6 percent in 2009.

Read it at The New York Times

http://www.thedailybeast.com/cheat-sheet/item/ge-pays-no-taxes/irs/#

[MilesColtrane]

61. Both parties suckle at the corporate teat in order to fund their campaigns.

That's why laws favoring businesses exist.

In the past Democrats didn't rely on big business to get elected. Unions and grassroots donations were their base funding.

The dwindling numbers of union membership (and donations) started steering the DNC toward corporate money.

The Citizens United decision severely reduced Union influence and has made Union money almost irrelevant.

The concerted GOP effort to destroy unions across the board in this country is the Holy Grail for them. They want to put a stake in the heart of progressive politics.

Some weasels in the ranks of the DNC strategy wing obviously believe that the future key to election success is to suck up to corporate interests in order to garner funding.

This way lies madness and it will destroy the Party and everything it once stood for.

[indepat]

62. I think it is because that's what the pols intend, just as they intend to cut social security and

Medicare to make up for some of this shortfall. The sad and simple truth is: this nation's pols are craven beyond description. :patriot:

[russspeakeasy]

66. Every tax law we have was written by, and for the "uber" rich.

[Hannah Bell]

67. kr

[liberation]

69. It's not an either/or proposition. Both parties are guilty in this case.

Politicians pass those laws because they are paid by those corporations to pass them.

As they say, it takes two to tango...

[polichick]

71. Corporate whores with R and D behind their names.