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.'"
May I be the first... (Score:5, Insightful)
It takes a hacker (Score:3)
Just like people hire hackers and crackers to improve their security, maybe higher tax evaders to reform tax laws is a good thing.
Re: (Score:2)
Hire retired tax evaders, maybe. Ones who are looking for work next year in tax evasion should not be hired to write the tax code this year.
Re: (Score:2)
Just like people hire hackers and crackers to improve their security, maybe higher tax evaders to reform tax laws is a good thing.
His job is to improve "Jobs and Competitiveness", not to plugs the holes in taxation. And he's showing a big promise: one way to be competitive is to avoid taxes.
The paradox of "partial optimization" ("divide and conquer" methods applied to optimization) - one may end hurting the overall objective even if the partial objectives are met.
Re: (Score:3)
samzenpus
3 dupes already this shift. That's what happens when your Sunday "editor" doesn't read the site the rest of the week.
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: (Score:3)
He's bat shit crazy. It's easy enough to mistake that for being a Republican.
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).
Their motto is actually appropriate: (Score:3)
Re: (Score:2)
(Financial) Imagination at Work
"We imagine this will be a pretty profitable year."
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: (Score:3)
It does not deny their lobbying efforts, instead they say they "comply with laws"...well no shit, if you write them..
What does "2.7 billion in cash taxes" even mean?
Re: (Score:2)
Tax they had to pay, rather than tax they offset against expenses (at a guess).
It also doesn't state that those taxes were paid in the US, and it doesn't state that those taxes were income taxes, rather than the employment, property, etc taxes that they refer to later in their response. Check their financial report, it'll give you that clarity.
Sounds like they accrued tax in prior years, and are using current losses from GE Capital to write off that accrual rather than paying it. That is a tax loophole, but
Re: (Score:2)
So corporate taxes are not needed? Why not turn things around and abolish personal taxes.
Any personal income will still get taxed, either through sales tax or through inheritance tax, and you could eliminate at least half of the paperwork the IRS has to do.
Re: (Score:3)
So instead of having the IRS enforce taxes on payroll, you'd have a different government agency enforce sales taxes on trillions of business transactions. And you imagine this will lead to a reduction in administrative overhead.
And the benefit of this system which costs more to administer is, we get a tax which inflicts additional misery on the poor and working class, and discourages consumption at a time when we are in a recession driven by lack of consumer demand.
Maybe you should think this through.
Re:GE's response . (Score:4, Funny)
"Cash taxes" probably means "fines for breaking the law but with no admittance of guilt nor change of plans because this is a pittance compared to the profit we're making".
I could be wrong though.
Re: (Score:3)
http://www.sec.gov/Archives/edgar/data/40545/000119312510246292/d10q.htm [sec.gov]
http://www.sec.gov/Archives/edgar/data/40545/000119312510173396/d10q.htm [sec.gov]
http://www.sec.gov/Archives/edgar/data/40545/000004054509000071/frm10q.htm [sec.gov]
Corporations pay taxes in the countries they operate in. They report financials for each of those countries, and they file taxes in each of those countries. GEFS also known as GE Capital is based in the US
A Little Quick Math (Score:5, Interesting)
3.2 Billion - 320 million people in the U.S. Roughly half pay taxes (unemployed, children and so on of course don't). That works out nicely to: $100 refund for 20% of the U.S. population who pays taxes.
From one company working the system. ONE. Out of several hundred such companies that are manipulating things to their benefit.
You want a tax cut for the working people? How about making the corporations pay their fair share. There's more than enough money in their coffers to make taxes a thing of the past for the poor and middle class, as well as for small business owners and the self-employed. How does "if you make less than $50K a year, you don't have to file taxes at all" sound? You want to spur growth at the lower levels and create a solid foundation? Get rid of this burden. Doubly so on small businesses. You should get a tax *rebate* for starting a new business at this point. Instead it costs hundreds in taxes and fees. And that's if you aren't in California or some other state that really sticks it to you.
In fact, this is one thing I cannot fathom. How the RNC and big business (which are essentially one now - with the other party quickly being subverted as well) have managed to still get support from the very people that they shaft over and over again. Big business won't trickle-down. They won't save us. They won't create jobs here at home. What's good for big business is not good for the rest of us. It never has been. We need to wake up and stop letting them get away with this. Because all we're doing is strangling the very people and small businesses that we need to create the next generation of jobs and innovation.
In case you weren't paying attention, big business and small business are diametrically opposed at this point. So when they say "we're all for business" - you have to ask the greaseball politician who's mouth is flapping which "business" they are talking about. You probably won't like the answer, though.
Re:A Little Quick Math (Score:4, Insightful)
In fact, this is one thing I cannot fathom. How the RNC and big business (which are essentially one now - with the other party quickly being subverted as well) have managed to still get support from the very people that they shaft over and over again.
That's why they brought us the Southern Strategy, the bedding-down with the Religious Right, and the new Southwestern Strategy.
I.e., they figured out that if they can make someone's knee jerk, they can make their finger twitch in the voting booth.
We've got a country full of citizens who will gladly vote away their freedoms, their privacy, their financial well-being, and their health, for the chance of foisting their prejudices and religious scruples off on the rest of society.
If Republicans ran on their real platform - making sure the rich get richer faster than they would without a Federal government - they wouldn't draw 1% of the votes. There just aren't enough rich people to get anyone elected, so they appeal to the basest instincts of the masses.
Re: (Score:3)
Well, I don't know if you can blame everything on the southern strategy and the religious right.
I think the more general strategy is fear-mongering. Fear is especially useful to a politician because it removes any need to be consistent. One can use fear of foreign terrorists to lead people by the nose into foreign entanglements then soon after use fear of foreign entanglements to lead them in a completely inconsistent direction. Fear focuses people on a single outcome, not the big picture. The big pictur
Re: (Score:2)
>>If Republicans ran on their real platform - making sure the rich get richer
To be fair, they want everyone to get richer.
If it bothers you that the rich get richer too, then I can't help you.
I thought the platform was to make rich richer, and if everybody gets richer in the process, hey, that's nice too, nothing against it, more power to the people! As long as it's not too rich on average, and not too much power to the wrong people.
Re: (Score:3)
[Blah, dems are doing a lot of unrelated but bad stuff, blah] ... I rather remember seeing someone remark 1.5 years ago-- when Dems controlled a full 2 branches of the gov't by an overwhelming amount-- that it was "the republican's fault" that Obama couldnt fulfill some promise or other (think it was closing gitmo). Never mind that republicans had no power to block anything at that point.
No, it was Obama's fault for being naive enough to think the Republicans were capable of negotiating and making compromises to serve the interests of the American people as a whole. In batting his head against the wall for two years trying to work with them, he wasted time, what some might have called a mandate, and ultimately, the opportunity to get anything meaningful done not only during that period, but for his entire presidency. Listen, both parties suck. They both cater to the extreme because mobs of
Re: (Score:2)
Define "fair".
Corporations don't pay a penny in taxes (Score:4, Insightful)
Pay their fair share, oh my. However am I going to survive the kharma hit for this one.
YOU IDIOT, CORPORATIONS DO NOT PAY TAXES EVER!
Now for the nice side. Tell me, where does a corporation get its money to operate?
From consumers of its products.
Now, where does a corporation get the money it pays in taxes?
From consumers of its products.
What we have here and the class warfare ideologues always miss whether on purpose for redirecting ire from their favorite politicians or because of self ignorance which was beaten into them by the same politicians is one simple fact.
A tax on a corporation is an indirect tax on the consumer of that corporations product. This tax can be buried many levels deep as obviously not everyone makes use of every corporations services but someone does somewhere and eventually we all hit each other.
You an I pay taxes. We do it on every purchase we make whether or not there is direct sales tax on the purchase. We pay indirectly every tax bill of every corporation we do business with. This is how it has always has been.
The real crime in this story about GE is that they NEED 975 tax accountants just to pay or not pay taxes. Think about that, nearly a thousand people who produce nothing but instead are there to make a system work. Now while not all companies are as large as GE think of how many tax accountants are required to operate businesses in the US. Now think how much more production we could have if just half the people involved in taxation were instead producing goods and services.
THINK ABOUT THE FACT THAT THE IRS'S BUDGET IS NEARLY AS LARGE AS NASA'S!
So why not stop this taxation of corporations. Because politicians know the holy hell they would be in for if people saw just how much they really paid. See we can kid ourselves and believe that 20 to 30% is OK for taxes. We can guilt ourselves into it. We cannot however guilt ourselves into accepting that plus nearly 20% more indirect taxes we pay. A progressive tax system with a "corporate tax" layer is all about deflecting attention from the tax load the people actually pay. There is nothing fair about it and never can their be fairness because it is purposefully obfuscated.
Still there is an answer, a consumption tax. Drop income taxes, drop fake corporate taxes, and tax consumption. Determine the proper costs to feed, shelter, and cloth a person or family and refund that the first of each month to all heads of households. A consumption tax will get the people who spend money. It will get those who have millions and want to spend it. They won't have their offshore accounts to hide their profits because there is no tax benefit to do so.
Re: (Score:3)
A consumption tax will get the people who spend money.
Not if they take their business (luxury purchases) offshore. If I were rich, I'd go to London, Paris, or Milan to buy fancy jewelery and clothes if America taxed 20-30% on the things I buy. This is small potatoes for $100-200 items, but the rich can afford to spend $10,000 to $100,000 on luxury goods. It's a simple matter to compare the cost of things in America (with hefty consumption taxes) versus the cost of things elsewhere (without aforementioned taxes). You can't regulate this type of consumption
Re: (Score:3)
Forget the laws (Score:2)
Re: (Score:2)
So you're happy to both undermine the US economy by supporting overseas jobs AND perpetuate bad working conditions, in order to get cheap tuna.
You raise a false dichotomy by the way. It's doesn't have to be a choice between sweatshop labour or closing the factory due to costs. The third option is to pay a decent wage to well treated workers because that's the cost of entry to western markets. So long as the labour standards required to trade with the west are held consistent across companies seeking to sell
Who isn't doing it? (Score:2)
With even the "do no evil" Google doing major tax evasion [businessweek.com], is anyone surprised an old boy's club like GM is doing even fancier tricks? I'm at the point now where I don't even consider companies that are net tax neutral to be that bad. You have to actively be siphoning money away from the taxpayers via bailouts and unprosecuted financial fraud [rollingstone.com] to register on my radar nowadays.
My problem with the IRS (Score:2)
Any time you have a 975-member team to do your taxes - I don't care how big a company you have - something is broken. That's an immense waste, mirrored by similar wastes on the IRS's side.
That waste runs all the way down to the smallest scale. I shouldn't need to hire a professional to handle my individual tax return.
"innovative accounting" (Score:4, Insightful)
Unless GE gave every dime of profit they made to charity, they should be paying taxes. A lot of taxes. THIS is why we have a budget deficit.
Waste (Score:3)
TFA states that GE has 950 employees dedicated to navigating the tax laws. Think how much productive good those 950 could do if laws were not such that GE is better off employing them in that manner. OUR tax money is being used by people in government to make and enforce laws so that GE employs unproductive people to avoid those laws.
These games are played with humans whose efforts come to no good and make everyone else's lives worse. Wasted lives making waste.
Re: (Score:2)
Yeah, thank god this administration finally put a stop to all those Corporate==> Government and Government ==> Corporate revolving doors! And The next administration will, too! It was just that one guy for those few years that did that. It's a totally new form of shadiness and corruption that we'll almost never see again now that that jackass is out of office!
New boss; same as the old boss. Even when they do say they won't allow revolving doors like this (that allow things like this to be taken advant
Re: (Score:3, Insightful)
Each political side needs power to enact its agenda. That's why even the side that talks a good game about being anti- big money interests, nevertheless partners with them. Gaining and maintaining power requires money and swaying the people. The natural places to look for these, respectively, are Wall St. fatcats and big media conglomerates.
Re: (Score:2)
I would and am (Score:2)
Would you be deriding this article if it had a left-leaning slant as opposed to its obvious right-wing spin?
I don't think he's deriding the article, just the presence on Slashdot.
I fully agree with the article, but I too question why this is on Slashdot... juste because sometimes there are other purely political stories, does not make it OK this time.
On the other hand the political world is so intertwined with all fields now perhaps it's time to abandon the illusion that all technical stories are not really
Re:Relevance? (Score:5, Insightful)
It's only an 'obvious' right-wing spin if you completely discount the part about the guy being hired by the current DEMOCRATIC President. You DO remember he's a Democrat, right? Both parties are to blame for this mess; the Democrats just put a better spin on their corruption. You'll notice fuck-all was done about Wall Street during the two years the Democrats had control of the White House _and_ both houses of Congress.
Re:Relevance? (Score:5, Informative)
Re: (Score:3)
Absolutely. I have to be careful to make sure I'm not drinking anything whenever someone calls Obama a 'Progressive'.
Re: (Score:3, Interesting)
Re:Relevance? (Score:5, Interesting)
Both parties are to blame for this mess; the Democrats just put a better spin on their corruption. You'll notice fuck-all was done about Wall Street during the two years the Democrats had control of the White House _and_ both houses of Congress.
The financial regulatory bill exists, and was in fact passed into law. Like the health care bill, however, it was fillabustered into near-ineffectiveness; most of the big reforms were bargained out of the bill in order to get a single Republican to agree to not fillabuster.
The essential problem in American politics is that most of the money comes from large donors, eg. corporations and the very wealthy. Small donations from individuals are so rare that it's actually historically relevant that Barak Obama received fully half his 2008 campaign money from small donors, making him one of the first presidents in recent memory actually bought and paid for, at least halfway, by the people. This explains why he has to date kept more than three times the number of campaign promises than he's broken [politifact.com] (though he would have been able to keep more of them if Congress didn't, for example, block funding for the closing of Guantanimo) which for an American politician is shockingly true to his word.
Re: (Score:2)
Re: (Score:3)
Amazing how all that isn't enough to make any sort of significant difference. Obama campaigned on hope and change, but he just ended up proving how broken American politics are.
And, concerning Guantanamo, it doesn't cost anything to just unlock the doors and shut off the lights.
As I've linked above, Obama has kept far more promises than he's broken, and of the ones he's broken the majority of those are because either the Legislature or the Supreme Court has intervened on behalf of the special interests.
And it does in fact cost money to unlock the doors and shut off the lights at Guantanimo. First off you have to do something with the prisoners: either you have to move them to another prison (which only perpetuates the problem) or you have to release them. Congress has forbidden Ob
Re: (Score:2)
Slightly O/T, but in a related vein, is there a good political blog for intelligent people where stuff like this should be posted? At least something with some kind of good moderation system and user base, ideally that isn't too slanted?
Re: (Score:2)
Slightly O/T, but in a related vein, is there a good political blog for intelligent people where stuff like this should be posted? At least something with some kind of good moderation system and user base, ideally that isn't too slanted?
Yeah, it's standing over there behind unicorn.org.
Re: (Score:3)
Re: (Score:2)
A pit of anti-corporatism.
And grammar Nazism.
A pit of anti-corporatism and grammar Nazism, spouted from a comfy chair.
Slashdot.
Amongst the three weapons of slashdot readers are anti-corporatism, ...
Re: (Score:2)
Re: (Score:3)
Not really, if you worked in multiple countries you could do the same thing. Why does GE have any motivation to pay the US tax rate when it's the highest in the world? If you had the option of paying $5 billion in taxes instead of $10 billion in taxes, wouldn't you? It's impractical policies that don't understand how business works and it ends up hurting all the smaller businesses who can't afford to do the same practices as GE. It's a barrier created by government policy that prevents further competition i
Re: (Score:2)
No, you are expected to pay U.S. income tax even while working overseas. There's an exemption for middle class levels of income and below, but everything above that dollar limit is taxed. Only corporations can get away with paying no tax on arbitrarily large profits made overseas.
Re:Sig (Score:2)
Should you change your sig to read "Fun with shell corporation games"?
Re: (Score:3)
There are two exceptions: Stay overseas for longer then x years (I think it's three) and owe no tax. Also military in a war zone pay no tax. There is no exception for 'middle class income and below'.
Also you get to deduct your overseas tax payments from you final tax (not your income), which for individuals is usually more then you would pay at home. You cannot deduct bribes you pay even though they are the same thing as taxes.
Finally, if you are not ever planning on coming back you can pretty safely t
Re: (Score:2)
Re: (Score:2)
And I'm not only not a hiding AC, but I'm a US citizen living outside the US (and not military).
Re: (Score:2)
I used to work for a smaller payroll company, and I can tell you that the average person who works in multiple countries pays multiple taxes. There's no simple LOL THAILAND trick that everybody uses, they just pay through the nose.
This isn't a "you can do it too" scenario.
Re: (Score:2)
The US tax rate is NOT the highest in the world. Japan's is.
And I would argue that our effective tax rate is zero, since the multinationals are not paying it.
Re: (Score:2)
Re: (Score:2)
He didn't say that any of his three countries was the US, and there is no indication that he is evading tax (rather than merely avoiding it) in any of the countries in which he works or lives.
In Europe it's possible to pay very little income tax perfectly legally. Just because the US has obnoxious laws on out-of-country earnings doesn't mean everyone does.
Re: (Score:2)
Re: (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
Re:One thing... (Score:5, Insightful)
There's a difference between playing it smart and investing a lot of money in getting the laws changed to keep your tax bill down.
One is an obligation of a business to keep tax down and profits up. The other is immoral and (IMHO) should be illegal.
Re: (Score:2)
There's a difference between playing it smart and investing a lot of money in getting the laws changed to keep your tax bill down.
One is an obligation of a business to keep tax down and profits up. The other is immoral and (IMHO) should be illegal.
Over the past 30 years, greed has become the highest civic virtue in the USA.
Paying taxes is unpatriotic (if not outright treasonous!) because it is in contradiction with that higher virtue.
Re:One thing... (Score:5, Informative)
Re: (Score:2)
Does this have ANYTHING to do with green energy? Granted, I couldn't read the article that was linked to (thanks, NY Times!) but from everything else I've read, this is just a standard offshore tax scam.
So unless you can produce something that shows how GE was using a green energy tax credit/subsidy of some kind to avoid taxes, please be quiet.
Re: (Score:3)
Well from just making Energy Star compliant devices (Which is cake to do) GE earned itself about $200 million. . http://eyeonfreedom.com/index.php/whirlpool-parlays-obama-green-tax-credits-into-zero-tax-liability/ [eyeonfreedom.com]
Here's another $25.5 Million for batteries.
http://www.greencarcongress.com/2010/01/taxcred-20100109.html [greencarcongress.com]
This is from 2007, where they got a net profit of $250 million for BUILDING wind turbines. Just building them, not to mention the money they'll make when they're actually in use. They get a tax b
Re: (Score:2)
Comment removed (Score:5, Insightful)
Re:What do you want? (Score:5, Funny)
Oh sure, but Mr Schwarzenegger isn't all that bad surely?
Re: (Score:3)
"Shit is getting pretty bad for the working poor folks, and they outnumber the 1%ers by about a half a million to one and growing. What happens when uncle fed can't print them anymore checks?"
This is what you need the drones, robots, surveillance, cameras, etc. for. One thing Marx/Lenin never foresaw was automated security apparatus.
Re: (Score:3)
(grin)
Re: (Score:2, Insightful)
Everybody knows that paying taxes make one less competitive.
You jest, but the trouble is that it's true. US corporations pretty much have three options:
1) Send their operations off shore where labor is cheaper and taxes are lower.
2) Keep operations in the US but hire a bunch of bean counters to avoid the higher US taxes.
3) Go out of business, because your foreign competitors have lower costs (in the form of taxes) which means you can't win in the competition for customers, investors, etc.
You can't "close tax loopholes" and not expect corporations to just replace (2)
Re: (Score:3, Insightful)
Oh bullshit. They do business in the USA because it's worth it to business here. Business taxes are paid on profit and wealth(in the form of inflation). So as long as their absolute profits are above the inflation rate, they will continue to do business in the USA.
Why is there an elephant standing in your room? (Score:3)
Bullshit again. There will always be need for highly skilled workers, that much is obvious. Those highly skilled workers are being paid big bucks to increase efficiency and production with fewer and fewer resources, I.E., employees and payroll.
Increasing the education levels of the West's population will not solve the jobs crisis. Protectionism is the only defense we have against being obliterated by cheap labor pools. We're fine with blowing human flesh to bits in the middle east, but it is unthinka
Re:Why is there an elephant standing in your room? (Score:4, Insightful)
"Those highly skilled workers are being paid big bucks to increase efficiency and production with fewer and fewer resources, I.E., employees and payroll."
what country do you live in? Because here in the USA they are trying like hell to drive down wages. $21.00 an hour for a skilled BS degree holding 20 year experienced IT professional is NOT "big bucks" that's "chump change" because that job is massively more difficult than any job the idiots in the executive wing do.
In the USA there is a battle cry to reduce wages... Damned greedy teachers teaching for a super rich salary of $52,000 a year... OMG you can buy gold plated Mazaratis for that kind of coin!
And those uppetidy IT and CS people trying to tell us their job is skilled.... you are factory workers... get back to the foundry floor you saveges!
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.
Re: (Score:3)
Welcome to the real world, where most of the IT work people do isn't as hard as they make it out to be. This is evidenced by the fact that people in other countries can do a passable job at it for less money. It's just petty nationalism to assume that the best and brightest minds are in the United States. Our education system isn't magical and neither is our gene pool.
Have you ever actually worked on a job that has been outsourced to a country willing to do the work for less money? Every single time I've seen a company try to save money by outsourcing work, it winds up costing nearly as much, if not more. Usually, the software is not written to the specifications, and needs to be rewritten. Other times the software is poorly written, and is at the point where it is completely unusable for production code. I've NEVER seen an outsourcing project go right, and especially ne
Re: (Score:3)
^ Complete economic ignorance ^
If someone overseas can do your job so much less expensively that it covers shipping costs and communications difficulties, a number of things are wrong. People who use your services are paying more than they should (or if you're being helped by protectionism, they're being ripped off.) You are charging more than your efforts are worth, therefore either your prices are too high, or you are
Re:Why is there an elephant standing in your room? (Score:4, Insightful)
Getting the milk bottle for $8 instead of $9.50 is little comfort when your job is shipped overseas and you can't get another one.
It's also no comfort to hear that "you just aren't as competitive" when compared to the guy living on $100 a year dodging livestock riding his bicycle down a dirt path on the way to work.
Hearing that you lost your job because your industry just isn't "efficient" enough because it was paying a livable wage...also no comfort.
Economic /theory/ in general does nothing to relieve the real-world impact. Those impacted are the "hidden costs" not considered in the rosy picture of a more efficient world. The hidden cost is that the efficiency comes from crushing out the unwanted in the meantime. Of COURSE those unwanted aren't on board.
If crushing out inefficiency means that YOU have to suffer, then there's pretty much nothing you can say to convince that person that it's good news that their job is gone. When the global economy is reframed into the perspective of the individual, or a particular country, then general "efficiency" is NOT the goal. While the overall system is not a zero-sum game, when seen from a mortal lifespan, or more appropriately, the length of time the average unemployed can live off of their savings, then globalization is full of winners and losers in a zero-sum game. Hearing that other people are made better off while you made much worse off doesn't help. In such situations, I could hardly blame someone for wanting protectionism.
Re: (Score:3)
Go out of business, because your foreign competitors have lower costs (in the form of taxes) which means you can't win in the competition for customers, investors, etc.
So basically, countries compete with each other to sell themselves the cheapest to the corporations. I think our nations need to unionize.
Re: (Score:2)
Re: (Score:2)
Everybody knows that paying taxes make one less competitive.
You jest, but the trouble is that it's true. US corporations pretty much have three options: 1) Send their operations off shore where labor is cheaper and taxes are lower. 2) Keep operations in the US but hire a bunch of bean counters to avoid the higher US taxes. 3) Go out of business, because your foreign competitors have lower costs (in the form of taxes) which means you can't win in the competition for customers, investors, etc.
You can't "close tax loopholes" and not expect corporations to just replace (2) with (1).
The most effective way to reduce tax avoidance is to lower the tax rate. Become the country companies shift their profits to instead of from and you get a smaller slice of a much bigger pie. 4% of a billion dollars is a lot more than 35% of nothing. Plus, the way things are discriminates against small businesses: GE can afford to hire accountants to eliminate its corporate tax burden, smaller companies can't.
Hell, yes.
Except that... optimizing the prices/competitiveness of the economy and optimizing the overall good for the society are two different objectives, isn't it? Chasing one with means for the other is what brought US in the current situation.
Re: (Score:3)
Aren't I supposed to know that Tariffs are evil and the cause of the great depression? Even though international trade was a tiny sliver of the economy.
Re: (Score:2)
If corporations are persons... (Score:3)
If a corporation is a person for legal purposes, it should be a person for taxation purposes. Why is this not the case already?
Maybe scale up the personal exemption based on the number of full-time employees (or number equivalent to full-time employees, if part-timers). Then pay on the same sliding scale as the millions of actual persons in the USA. Effectively, the corporation would be treated like a person with a number of dependents/spouses/whatever equivalent to its number of full-time employees.
Re:But think of the accountants! (Score:5, Interesting)
This is very true. In the US I very often find that people give the rich a get out of jail card because they "think" they will be rich one day. I am for low taxes, live a country that has very low taxes. But even here there are rumblings that there are a limit to low taxes and that everybody has to pay taxes, including corporations.
Here is how I would solve the corporate tax issue. If you don't pay taxes in the country since you decided to move away, cool so be it. However, since you are still doing a billion dollars worth of business we will consider that profit and you will have to pay taxes on it. Oh you don't like that? Too bad, then don't sell your products here.
The moment you wave that in front of the corporation their tune will change pronto! The shareholder of corporations demand profit, and revenue. If you decide to not sell in a particular country then that means they are missing revenue. That will hurt their bottom line! And it will put them on level footing with the local corporations that can't afford to outsource or hire fancy tax lawyers.
Re: (Score:3)
However, we frequently give corporations the same rights as individual citizens. It would only be fair to give them the same responsibilities as well (in other words, paying taxes on income.)
Re: (Score:2)
The simplified explanation is that corporate tax is paid on whatever is left over in the bank account after paying out all those other things. Fringe benefits tax catches the situations such as your CEO car example to stop companies buying things for employees with pre-tax dollars instead of paying out a taxable wage.
Many corporations reinvest their profits or pay dividends which reduce their tax burden (or in reality push the profit and thus tax burden onto another entity or person). However, it is not alw
Re:Corporate taxation is silly. (Score:5, Insightful)
Corporate "profit" goes towards either creating jobs
...in China.
Re: (Score:2)
Anyway, corporations don't realize profits - people do. And corporations are not people, not even legally.
Corporations are legally persons. And as such, I agree with you. They shouldn't be taxed on "net" income, but just do what they do with persons. Abolish corporate income tax, and just treat them as persons. That would be much easier and more fair than what we have now.
Re: (Score:2)
You still want the second, you want to tax consumption, or sales. Money people don't spend goes into a bank or stocks as is also invested or creates jobs. That's why a national sales tax and 0 income and 0 capital gains is the best environment for economic growth. This also promotes freedom, since now the government doesn't have to have detailed information about your job.
No:
"You can only drink 30 or 40 glasses of beer a day, no matter how rich you are." — Adolphus Busch.
Which means that you end up paying as much tax as Bill Gates on those beers. Seems fair to you ?
Re: (Score:2)
Re:Nothing new from Obama administration (Score:4, Insightful)
What is sad is the GOP on the candidate and national level is still so inept and scared of being called racist they don't look good to beat the most blatantly corrupt president of post-WW2 America.
Barak Obama got more than half his 2008 campaign money from small donors [opensecrets.org], and, probably as a result, has kept more than three times the number of campaign promises as he's broken [politifact.com] (and could have kept many more if, for example, Congress hadn't gone out of its way to defund the closing of Guantanimo.) Compare to . [americanpr...action.org]
No, it's clear that, when it comes to Democrats and Republicans, the Republicans are far more corrupt, and are more apt to sell out to corporate influence; at least Democrats take money from--and listen to--worker groups, environmentalists and scientists on occasion. Of course, that's sort of like saying that a black hole is denser than a neutron star; sure, it's technically an accurate statement, but I sure wouldn't want to try to live on either one.
Re: (Score:2)
Re: (Score:2)
Ok, then someone with a BBA that has read a many Econ books and attended so many classes, passed so many exams, and actually knows something about Econ should be able to respond.
First, theoretical economics and real-world economics are different things. In fact, most macro and micro Econ classes for new business students focus on the theoretical part, but upper level and post graduate focus on the real world economics. The basics are always the same: people respond to incentives. So, let's put some real wor
Re: (Score:2)
If companies don't have to pay taxes in the US, then it's a HUGE incentive for them to move as much as possible to the US. Even if they don't move ALL production to the US, merely moving corporate headquarters to the US creates more jobs (which also results in more income taxes). Also, if there are no corporate taxes, then they have no NEED to waste money on lobbying (or the billions of dollars they waste every year on complying with tax codes). But hey, why think about that when we can demonize the peop
Re: (Score:2)
Why would they move their production to the US, when they can just keep it in 'insert 3rd world country here' - reducing their labor costs to just about 0, while reporting their profit in the US. That way they don't have to take the trouble of creating a profitable subsidiary in Cayman islands or a place like that.
Re: (Score:2)
There's also the ever popular
3) Buy stuff for an individual while pretending that it's an investment in order to dodge income and consumption taxes
"Why yes, that lamborghini is a company car, and this 100 inch TV is absolutely necessary for my company function"
Re:Yay The Rich Win Again! (Score:4, Insightful)
Americans have no clue what "poor" means. They own cars, computers, an XBox, and a smartphone, but go one week with Ramen and they're crying famine. Give me a break.
Re: (Score:3)
Just because you reform doesn't mean you can't do it by reducing the number of tax codes. Look at what the Lib Dems are trying to do in the UK.
The low income individuals are exempt because they are the principal consumers driving demand, and there is a demand gap (which is never going to go away any more). If you see redistribution as a necessity for a healthy economy rather than something to be ashamed of there is really no reason to fear a parallel between GE and low income earners.
Re: (Score:3)
Equating wealth redistribution with welfare is a straw man. You do know you are arguing against Milton Friedman here right? Even he saw the limits of flat tax ... he was in favour of negative income tax for the low income brackets.
Greece and Portugal didn't get into trouble because of their work ethic, they got into trouble because they can't manage money well. At both the local and global levels we have rewarded short term mismanagement of money on a huge scale, that is the source of the problem. Greece an