When It Comes to Taxes, It Might Be Legal But It Ain't Always Right

[Donnachaidh]

http://www.huffingtonpost.com/joseph-j-thorndike/when-it-comes-to-taxes-it_b_854789.html

Tax avoidance is legal and tax evasion is not. Simple distinction, but not always relevant, at least not in politics. Consider the recent burst of outrage over corporate tax avoidance generally, and General Electric's tax bill in particular. In some years, GE's tax schemes might have escaped public notice. But in other years -- especially hard ones -- they get plenty of attention. And it was ever thus.

Consider the lessons of 1933. Wall Street investigator Ferdinand Pecora hauled J.P. Morgan, Jr. before the Senate banking committee. Pecora had been charged with uncovering malfeasance on Wall Street, but he focused much of his attention on tax issues. In particular, he forced Morgan to acknowledge from the witness chair that he had paid no income taxes in 1931 and 1932.

Morgan provided a reasonable explanation: stock trading losses in the great market crash had wiped out his other sources of taxable income (such losses were fully deductible in those days). Indeed, Morgan and his partners had seen their net worth plunge from $119 million to $53 million between 1929 and 1931. When all was said and done -- and all capital loss deductions had been taken -- there was simply no taxable income for any of the partners.

"I am not responsible for these figures," Morgan observed wryly. "I viewed them with great regret when they appeared."

More at the link --

[DJ13]

1. GE's tax schemes might have escaped public notice

If the GE's of the world werent funding politicians determined to destroy what remains of any government 'entitlements' it still would have escaped notice.

Unbounded greed on their part has (finally) illuminated the scheme they are concocting.

[Curmudgeoness]

2. Will history repeat itself, again?

Will the public disgust for GE and the other companies that pay nothing while making huge profits bring about a time when we will revamp the tax structure to avoid this in the future?

God, I hope so.