US Competitiveness Chief Immelt's GE Tax Bill: $0 436
theodp writes "'He understands what it takes for America to compete in the global economy,' President Obama said of GE CEO Jeff Immelt, as he announced Immelt would chair the President's Council on Jobs and Competitiveness. On Friday, the NY Times reported that one trick Immelt employs to keep GE competitive is paying no American tax bill. In fact, GE claimed a 2010 tax benefit of $3.2B on worldwide profits of $14.2B, $5.1B of which came from US operations. According to the NYT, GE's extraordinary tax-avoidance 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. GE's giant tax department is led by a former Treasury official whose 975-member team includes former officials not just from the Treasury, but also from the IRS and virtually all the tax-writing committees in Congress. GE's return to rock-bottom tax rates marks a dramatic reversal from the mid-80's when President Reagan reacted to corporate accounting gamesmanship and supported a change that closed loopholes and required GE to pay a far higher effective rate, up to 32.5%. 'That GE can almost set its own tax rate shows how very much we need reform,' said Rep. Lloyd Doggett. 'Our tax system should encourage job creation and investment in America and end these tax incentives for exporting jobs and dodging responsibility for the cost of securing our country.'"
corporate tax rates are a distraction (Score:4, Informative)
The reason wealth concentrates more and more is because of the Federal Reserve system, where the banks (NOT the government) create the money supply by making loans.
And now "Deficit Terrorists" are campaigning to slash federal spending. The real reason the federal debt is skyrocketing is because the banking system can't make loans like it used to, so the Federal Government has to be the "borrower of last resort", taking out loans from the "lender of last resort" (the Fed) and everyone else.
I don't remember the exact figure, but 40-50% of the Federal Government's debt is either held by the Federal Government (in the Social Security "trust fund"), or by the Federal Reserve (which is held to "back" the money supply). 100% of the interest paid to the ss trust fund is returned to the government, as are most of the Federal Reserve's profits (after operating expenses and a fat dividend to its owners, the private banking system).
If the debt were to be instantaneously paid off, all money would instantly vanish from the economy.
If the federal reserve system was nationalized, and the Department of the Treasury could issue debt-free "greenbacks" (like Abraham Lincoln used to pay for the Civil War), wealth would be much less concentrated that the current status quo.
Required reading:
Money and the Crisis of Civilization [realitysandwich.com]
A Bailout for the People [richardccook.com] (pdf).
Re:One thing... (Score:3, Informative)
It's only fraud if you're doing it illegally.
GE are operating completely within the letter of the law (laws I'm sure they helped to draft in the first place) and any other entity in their situation would be crazy to behave any differently.
The problem is not GE, it's the US Government.
Imagine this scenario: You earn $50k and through various pre-existing tax rules you are eligible to pay $10k in tax. If tomorrow a law was drafted that allowed you to, say, receive a tax rebate for every post here on /. and say for instance, you were eligible for $10k of rebates, would you turn this rebate down?
No, of course not. GE are playing it smart. The US Government needs to take a good look at it's own laws and tighten things up to prevent this happening again.
For what it's also worth, this $0 tax burden is most likely a one-off with rebates and other concessions that they're taking advantage of this year and they most likely won't be able to do it again next year. Look at how much tax they paid last year for instance...
GE's response . (Score:5, Informative)
http://www.gereports.com/setting-the-record-straight-ge-and-taxes/ [gereports.com]
- GE paid almost $2.7 billion in cash taxes in 2010 on a consolidated basis (almost 19% of pretax income from continuing operations).
Re:Relevance? (Score:5, Informative)
Re:One thing... (Score:5, Informative)
Re:May I be the first... (Score:5, Informative)
Sure, they have liberal commentators on in the evening... but they also have Chris Matthews...
Chris Matthews? He ran for the House in a Democratic Primary, he was a speechwriter for Carter, and he was a top aide to Tip O'Neill. He said in 2008 that he has "made a commitment to covering politics in a liberal way, starting in 1987." He "felt a thrill going up his leg" when Obama speaks. He also said, "I want to do everything I can to make this thing work, this new presidency [the Obama administration] work." He said this as a journalist theoretically covering the administration from the outside. This guy is as liberal as they come. Don't let his hate-on for the Clintons obscure that.
Re:A Little Quick Math (Score:2, Informative)
"How the RNC and big business... have managed to still get support from the very people that they shaft over and over again."
Religion.
Re:Why is there an elephant standing in your room? (Score:5, Informative)
Not gonna comment on the rest, but low teacher salaries are just the public education system trying to spin their atrocious performance the best way they can. Currently the U.S. spends about $10,000 per student [ed.gov] on public education, which is among the highest in the world and up nearly 4-fold since the 1960s in inflation-adjusted dollars. So a teacher in charge of a class of 25 students actually represents an expenditure of a quarter million dollars every year. The problem is most of that money is being squandered on administration, rather than in the classroom. It's incredibly difficult to fix this problem when any attempt to address it is immediately characterized as an attack on underpaid teachers, whose salaries represent less than 20% of expenditure.