[JerryLove]

Despite massive profits: GE pays no income tax... in fact: it claims a multi-billion dollar tax credit.

Are corporations over-taxed in the US, as so many say?

Even FOX covered this one:
GE Pays No Taxes - Taxes - Fox Nation

Full story:
http://www.nytimes.com/2011/03/25/bu...5tax.html?_r=1

"[General Electric] 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."

[normajean777]

Flat tax anyone?

[Jfool]

It is only one example of why higher tax rates do not necessarily get you higher revenue. With such a high tax rate, GE has strong justification to move resources towards figuring out the code, influencing legislation, and lowering the amount they pay. It's simple cause and effect. Their shareholders expect nothing less.

Of course, there are the politicians responsible for the loopholes...

[JerryLove]

Originally Posted by Jfool

It is only one example of why higher tax rates do not necessarily get you higher revenue. With such a high tax rate, GE has strong justification to move resources towards figuring out the code, influencing legislation, and lowering the amount they pay.

With $14 billion in income: 1% would be $140million... which sounds like a "strong justification" still.

So lowering tax rates wouldn't appear to resolve the problem either.

Can we agree that this is an example of why the tax code should be altered to make sure we *collect* corporate taxes?

I wonder if the US has high tax rates because we offer the most to companies (political stability, access to resources, infrastructure, the largest consumer market in the world)?

[slap_j]

Originally Posted by JerryLove

Can we agree that this is an example of why the tax code should be altered to make sure we *collect* corporate taxes?

Haha. Right. Higher tax rates might not necessarily mean higher revenue, but collecting more taxes certainly does.

[Jfool]

Originally Posted by JerryLove

I wonder if the US has high tax rates because we offer the most to companies (political stability, access to resources, infrastructure, the largest consumer market in the world)?

Why not just add "lower taxes" to the list? Then we would offer even more to companies.

I am all in favor of simplifying the tax code.

[Jfool]

Originally Posted by JerryLove

With $14 billion in income: 1% would be $140million... which sounds like a "strong justification" still.

So lowering tax rates wouldn't appear to resolve the problem either.

It's all relative, and dependent on the payback. What's the likelihood of seeing a ___ return for ___ in resources committed to some percentage of $140 million? On the other hand, $4.9 billion (35%) is a whole different ball game.

[Napoleon17]

The GE example makes me sick. Especially when all I hear from Republicans about how to fix the economy is lower taxes and less regulation. I agree generally that the government should not impose uncompetitive tax rates on corporations to the point that the corporations have no reason to continue doing business in America. But I think our actual rates are pretty darn low compared to the rest of the world (not 100% sure though) and we are a better market than every other country in the world. Corporations should have to pay some significant level of taxes if they want to do business here.

I think tax levels make more of a difference going from state to state rather than country to country. In other words, corporations may be more sensitive to tax rate movements depending on how hard or easy it is to move to another location where the tax rates are significantly lower. It's not probable that GE is going to leave America if they had to pay a higher tax rate than 0%. Yet the continued rhetoric is lower taxes.

[JerryLove]

Originally Posted by Jfool

Why not just add "lower taxes" to the list? Then we would offer even more to companies.

The same reasons we don't offer "slave labor" and "immunity from prosecution for crimes"?

Besides: how much lower than "we are actually giving you billions when you made $14billion" can we go?

It's all relative, and dependent on the payback. What's the likelihood of seeing a ___ return for ___ in resources committed to some percentage of $140 million? On the other hand, $4.9 billion (35%) is a whole different ball game.

Return on $140 million? Erm... "really high"?

That, of course, doesn't touch the negative "tax credit" state either.

[Jfool]

You're not answering the question.

I grant you GE should pay their fair share. A simplified tax code is the answer.

[JerryLove]

Originally Posted by Jfool

You're not answering the question.

Which question?

I grant you GE should pay their fair share. A simplified tax code is the answer.

Can you support that or are you just guessing?

[normajean777]

Ya exactly they pay a ton of money to lobbyists and accountants to do this... The answer is not higher taxes, its to simplify the tax code. But like that will ever happen.... And its not like its just Republicans or Democrats to blame for this, its definitely both.

Also to do that you'd probably have to get rid of lobbyists, but how could we get congress to give themselves massive paycuts (though someone sent me this fox article)? It'd be near impossible.

[slap_j]

Originally Posted by normajean777

Also to do that you'd probably have to get rid of lobbyists, but how could we get congress to give themselves massive paycuts (though someone sent me this fox article)? It'd be near impossible.

You need a militia.

[Jfool]

Originally Posted by JerryLove

Which question?

Why not offer companies political stability, access to resources, infrastructure, the largest consumer market in the world, AND lower corporate taxes?

Originally Posted by JerryLove

Can you support that or are you just guessing?

I'm assuming that if we eliminate the loop holes, then there won't be loop holes. Not sure what you want as far as support.

[JerryLove]

Originally Posted by Jfool

Why not offer companies political stability, access to resources, infrastructure, the largest consumer market in the world, AND lower corporate taxes?

I was certain I had. I shall rephrase my answer.

Because of costs associated with running government, securing reasources, and building infrastructure.

I'm assuming that if we eliminate the loop holes, then there won't be loop holes. Not sure what you want as far as support.

I'm not sure "simple" and "loophole-less" are synonymous.

A "simple" tax might be "10% of net earnings", to which GE simply declares all its earning in Jamaca (where they have some office with 3 employees. Jamaca can afford to offer 0.5% income tax because they need offer no real services in return).

Not to mention that such a simple tax would fail to encourage growth. [hypothetical] Sure both we and Tiwan offer "10% tax" but Tiwan (not worrying about "simple") is offering to make new infrastructure 100% deductable and is willing to secure financing if GE builds there. [/hypothetical]

And so on, and so forth.