GE Makes 14 billion in profit... pays NO taxes

[Koolblue13]

Larry, that doesn't seem to bad at all. It might be a good way to get companies to move here.

[Bang]

Theory that just occurred to me: Maybe what we need is a VAT or sales tax or some such?

Instead of taxing things that get made here, tax things that get sold here?

Now, usually, when I see people talking about one of the flavors of consumption tax, they want to get rid of the personal income tax. And I hate that idea, because I'm absolutely certain that such a tax would shift even more of the tax burden to the middle class. (I think that's why most fans of it, are fans of it.)

But I've never thought of a "sales tax" being used as a replacement for the corporate income tax. At least at first, casual, glance, it looks to me like that might work.

Under such a scheme, it doesn't matter where something gets made. If it gets sold here, it gets taxed here. Move your widget factory somewhere else, and every widget you sell here will still get taxed, anyway. (And if you keep your widget factory here, then every widget you sell abroad is tax free.)

Thoughts?

It would be interesting to consider. We do have a problem that we can't solve with our own ideological battles. There's outside factors who are playing our game, and we need to be competitive. I'm all for creative solutions.

~Bang

[DCsportsfan53]

Raise our taxes and give them breaks....makes perfect GOP sense to me. Screw the worker reward the filthy rich. Anyone ever read any history of the Russian revolution?

Stop being so blind, who just rubber stamped the continuation of those taxes? You'll never see the light until you realize the entire system is corrupt and both parties serve the same master. The fact that you think one is better than the other is what they thrive on, it's what keeps them in power because if you step back you realize the best possible thing might be to put all of them in front the proverbial firing squad and start over clean with a lot of changes to how things function.

[PeterMP]

Theory that just occurred to me: Maybe what we need is a VAT or sales tax or some such?

Instead of taxing things that get made here, tax things that get sold here?

Now, usually, when I see people talking about one of the flavors of consumption tax, they want to get rid of the personal income tax. And I hate that idea, because I'm absolutely certain that such a tax would shift even more of the tax burden to the middle class. (I think that's why most fans of it, are fans of it.)

But I've never thought of a "sales tax" being used as a replacement for the corporate income tax. At least at first, casual, glance, it looks to me like that might work.

Under such a scheme, it doesn't matter where something gets made. If it gets sold here, it gets taxed here. Move your widget factory somewhere else, and every widget you sell here will still get taxed, anyway. (And if you keep your widget factory here, then every widget you sell abroad is tax free.)

Thoughts?

That's essentially what a tarrif is and historically they haven't worked well because other countries start to use them and you get trade wars, but I think if things continue to go the way they are we should consider such things more fully.

Let's face it, for the most part people aren't buying things from us that they can get elsewhere. People that want to put corresponding taxes on goods made where will have to make a real choice in terms of taxing it or doing without.

[Larry]

That's essentially what a tarrif is and historically they haven't worked well because other countries start to use them and you get trade wars, but I think if things continue to go the way they are we should consider such things more fully.

Not quite. (Although I could certainly see people objecting, for various reasons.)

This would be a tax on imported and domestically made items. Yeah, a widget imported from Ireland would be taxed, but so would a "Made in USA" widget.

Let's face it, for the most part people aren't buying things from us that they can get elsewhere. People that want to put corresponding taxes on goods made where will have to make a real choice in terms of taxing it or doing without.

Dunno if it's your grammar or my dumbness, but I don't get what you're saying, here.

----------

I can see something I don't like about my tax proposal.

Me, I think we need a "Big Business Tax". Something that will only hit really large corporations.

Because I think we've been seeing for a few decades, that really big businesses really distort the marketplace, in many ways. (Not the least because of their political influence.)

I've had this mental image for some time that one thing we need is a "Corporate AMT", where really gigantic businesses would be taxed simply for being too big. (Maybe "too big to fail"?) I've been imagining something like a 1% tax on gross revenues (not profits) over some really big number, say, $1B?

[Burgold]

The fudiciary responsibility thing is an interesting issue to me. In the short run, read in the immediate run, going foreign is a good strategy for these corporations, but you could make an honest argument that over the medium and long haul they are harming their businesses through these practices. For instance, retail was way down following the financial crash. No one particularly wanted to spend. If more money were flowing internally the crash wouldn't have been so hard and with more people employed more goods and services would be bought. By saving a buck today they are costing themselves money in the future. This is probably overly simplistic, but I think there is truth to it. Unemployed people just can't buy enough and eventually even a broke government will have to cut spending.

It's sort of like the oil refinery issue. The company that first breaks down and builds a new oil refinery short term will be in the hole and playing catch up, but long term because of higher efficiency and greater technology will be more profitable than all the other refiners. The question is, are you willing to invest and think past today? America was at its best when it did so. The greatest companies had grander visions and sewed into the communities they were a part of.

(Okay, it's not 1:1, but it is related)

[PeterMP]

Not quite. (Although I could certainly see people objecting, for various reasons.)

This would be a tax on imported and domestically made items. Yeah, a widget imported from Ireland would be taxed, but so would a "Made in USA" widget.

Dunno if it's your grammar or my dumbness, but I don't get what you're saying, here.

----------

I can see something I don't like about my tax proposal.

Me, I think we need a "Big Business Tax". Something that will only hit really large corporations.

Because I think we've been seeing for a few decades, that really big businesses really distort the marketplace, in many ways. (Not the least because of their political influence.)

I've had this mental image for some time that one thing we need is a "Corporate AMT", where really gigantic businesses would be taxed simply for being too big. (Maybe "too big to fail"?) I've been imagining something like a 1% tax on gross revenues (not profits) over some really big number, say, $1B?

Tariffs hurt (us) when there are multiple countries producing the same or similar things.

For the most part, things that people are buying from us, they can't get elsewhere because if somewhere else has it/makes it, it'll almost certainly be cheaper there.

I think there should be a to "big" to fail fund. The money would be used to invest in "small" businesses as very low interest loans, with some kept aside at any point in time in case of failures of big businesses (but not to bail out the big businesses, but to fund things like extending unemployment benefits).

[Stadium-Armory]

Somewhat off topic, but.. ever since my wife stopped working, we purchased a home, and had four kids - I barely pay any taxes either. My 2010 effective tax rate was 4.5%. I almost feel guilty about it.

[adam@section118]

60 Minutes did a report on this over the weekend.

A very large number of very large companies are now keeping their 'corporate HQ' in a small town in Switzerland, and no one is there. But they file their paperwork there because the tax rate is like 12%. Some of them maintain nothing more than a post office box there.

Ireland hosts a great many large corps that used to be American for the same reason, their corporate tax rate is under 15%.

Ours is 35%.

There's a congressman from Texas who's name i forget, that wants to close this by forcing these companies to define their corporate HQ by where their upper management actually shows up for work.

And even though a lot of companies exploit the law by keeping their HQ here but filing their papers in another country, a good many of them have picked up stakes and have actually moved their entire corporate HQ elsewhere, mostly to Ireland.

And as much as I know we need money, the problem seems to me to be classic capitalism. Other countries simply have offered them a better deal, and now they have money and jobs that would have been ours. They offer a lower price and equal workforce. We can argue the nuances til we're blue in the face, but it seems to me that when there's a bottom line difference in operating costs of over 20%, a company would be foolish to ignore that. As a country, we can't afford to ignore it. We're being run out of business.

To compete it seems obvious we have to re-think our position. Otherwise we rely on appealing to patriotism or force to keep them here, and that obviously doesn't work.

~Bang

Good post, wish I would have said the same

60 minutes did a really interesting piece last night on corporate tax.

Anyone else catch the piece?

http://www.cbsnews.com/video/watch/?id=7360932n

I agree with you. I think we need a new system. I do not know the right answer, but I think a flat tax might be a good place to start

---------- Post added March-28th-2011 at 10:10 PM ----------

60 Minutes did a report on this over the weekend.

A very large number of very large companies are now keeping their 'corporate HQ' in a small town in Switzerland, and no one is there. But they file their paperwork there because the tax rate is like 12%. Some of them maintain nothing more than a post office box there.

Ireland hosts a great many large corps that used to be American for the same reason, their corporate tax rate is under 15%.

Ours is 35%.

There's a congressman from Texas who's name i forget, that wants to close this by forcing these companies to define their corporate HQ by where their upper management actually shows up for work.

And even though a lot of companies exploit the law by keeping their HQ here but filing their papers in another country, a good many of them have picked up stakes and have actually moved their entire corporate HQ elsewhere, mostly to Ireland.

And as much as I know we need money, the problem seems to me to be classic capitalism. Other countries simply have offered them a better deal, and now they have money and jobs that would have been ours. They offer a lower price and equal workforce. We can argue the nuances til we're blue in the face, but it seems to me that when there's a bottom line difference in operating costs of over 20%, a company would be foolish to ignore that. As a country, we can't afford to ignore it. We're being run out of business.

To compete it seems obvious we have to re-think our position. Otherwise we rely on appealing to patriotism or force to keep them here, and that obviously doesn't work.

~Bang

Good post, wish I would have said the same

60 minutes did a really interesting piece last night on corporate tax.

Anyone else catch the piece?

http://www.cbsnews.com/video/watch/?id=7360932n

I agree with you. I think we need a new system. I do not know the right answer, but I think a flat tax might be a good place to start

[Chicken Fried]

Huh? Care to explain?

My bad. I was thinking about the company the government does own - GM. GE is a puppet, though. That's why it was bailed out.

[ABQCOWBOY]

I find it a bit amusing that people find it so easy to accuse the GOP of these sorts of Tax Loopholes. It's not a coincidence that many companies have moved their base of operations from the U.S. to other countries. This point was brought up before the elections and brought up again when increased taxation was discussed. Corporations are going to do what is in the best interests of their own financial well being. The GOP has not controlled Tax Laws for many years. I would also bring up the point that it's not the President who is directly responsible for this. You want to know why GE is in such an advantageous situation, perhaps somebody should ask Charlie Rangel. Does everbody think it's a matter of coincidence that Rangel's district received considerable support from G.E. and that G.E. has received such favorable conditions in which to operate? Rangel has been on the weighs and means committee since 1975 and has chaired it since 2007. He also chaired the joint committee on Taxation. This is where the tax law is developed and it has not been in control of the GOP for many years now. I would agree that both Democrats and Republicans take advantage of this but the concepts of GOP being behind this is absurd. Both parties are and have been interested for some time in making money. There is no one party that is more heavily involved in this type of thing. To suggest this is simply not accurate.