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General Electric filed a 57,000 page tax return

Discussion in 'Off-Topic' started by Integral, Nov 25, 2011.

  1. Integral

    Integral Can't you hear it?

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    What does it take to earn $14 billion in profits and still pay zero corporate income tax? Only the best tax accounting team money can buy.

    Ideally I'd like this thread to be less about the level of taxation (omg GE didn't pay any taxes!11!!11) and more about the method by which they reduced their tax bill to zero.

    Does anyone think that this is efficient? Isn't this the part of the tax code we ought to be focusing on, rather than squabbling about one flat rate or a few progressive rates?

    source
     
  2. useless

    useless Social Justice Rogue

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    If you tax them fairly all those jobs will magically and instantainously disappear, or something, or whatever the rhetoric used to lower or out-right abolish corporate income tax.
     
  3. Cutlass

    Cutlass The Man Who Wasn't There.

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    Corporate tax structure is definitely an issue. And it's an issue so complex that, like the tax code itself, it almost defies addressing.

    The only rational thing to do is to simplify the process. If I was running for president, I would have a campaign slogan of putting a million tax preparers out of work.

    But is that really possible?

    What works on business taxes? It is so complex a subject, that do we even know? I want simple business taxes. But I don't know how to achieve that. I want to incentivize investment. But how do I achieve that? And can I do both at the same time?
     
  4. JerichoHill

    JerichoHill Bedrock of Knowledge

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    dude, GE is single handedly propping up the printing industry
     
  5. Artifis

    Artifis El Gato is not happy

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    THESE are the tax loopholes we need to be closing, but I seriously doubt American politics is gonna solve this.
     
  6. Integral

    Integral Can't you hear it?

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    Corporate tax structure is hard. And I don't know nearly enough about corporate finance to start making recommendations. I can offer ill-informed thoughts though.

    Ideally we simply wouldn't tax corporate profits; we'd only tax dividends. I wouldn't tax retained earnings at all. But we're a long way from that point.

    My main complaint is that the complexity of the corporate tax code incentivizes businesses to do really inefficient things solely to get out of paying taxes. So not only are they wasting millions of dollars hiring tax accountants, they're wasting billions more on socially inefficient projects in order to claim tax credits.
     
  7. Cutlass

    Cutlass The Man Who Wasn't There.

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    That last part isn't new to corporate taxes in this latest era of tax code complexity explosions. It has been true for a long time. And not only does the tax code give incentive to inefficient economic behavior, but there are a lot of the "incentives" that are lobbied for by one industry, taken advantage of by others, and the economy as a whole pays the price.

    When the tax code is largely written by lobbyists and for special interests, you really do get a strong argument against crony capitalism.



    So your idea is to only tax what the company pays to owners? I think I could get behind that. But what about stock buybacks? And other stock manipulations that take money out of the enterprise?
     
  8. Zelig

    Zelig Beep Boop

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    And this is a good thing?
     
  9. G-Max

    G-Max Deity

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    True fact: Republicans in the House have been offering Democrats a deal that would help to solve both our deficit problem and our employment problem by reducing nominal tax rates and closing a lot of these loopholes. Naturally, the Democrats' response was to reject it, then accuse the Republicans of being unwilling to compromise. :rolleyes:
     
  10. Cutlass

    Cutlass The Man Who Wasn't There.

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    If they were actually doing that, you might have a point. Since they are not, you don't. :rolleyes:
     
  11. G-Max

    G-Max Deity

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    Dude, it has to be true. I read it on the Internet!

    (seriously, I should be able to prove it soon enough. I just have to go over to another forum and ask for sauce. In the meantime, enjoy the modification that I made to my signature)
     
  12. warpus

    warpus In pork I trust

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    That's because the U.S. uses a parabolic tax system in which the more you make, the more you get taxed, up to a point. After that point the tax rate drops again, until it eventually reaches zero.

    If you make more than $3 billion in profits you never pay taxes. It'd be unamerican.
     
  13. Incodcito

    Incodcito King

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    Gotta love crony capitalism, which an overly complicated tax code with loop holes only the wealthy and powerful have any chance of exploiting certainly allows to prosper and thrive.

    Oh well, no chance of it being corrected in the near term.
     
  14. dutchfire

    dutchfire Deity

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    According to wiki, GE has a $ 150 billion revenue. So they have 3,8 * 10^-7 pages of tax return per dollar of revenue. By that ratio, a company with a million dollar revenue would have just half a page.
     
  15. Silurian

    Silurian Deity

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    I would assume that most of those pages are evidence.

    Correct me if I am wrong.
     
  16. emzie

    emzie wicked witch of the North

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    Where is this mythical party of Democrats who refuse to compromise? I want to start voting for them instead of the Democrats that exist.


    I would also assume this. It doesn't change the fact that a very profitable GE is paying a negative tax rate. That's kinda the issue; the absurd 57,000-page return is just a sideshow to it.
     
  17. JollyRoger

    JollyRoger Slippin' Jimmy Supporter

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    GE starts with a 5 page tax form, just like the rest of the big corporate world. The additional pages just represent support for the lines on the 5 pages. There is no good way to solve the corporate tax problem. A significant portion of the profitable Fortune 500 companies paid 0 federal income taxes in 2008-2010, yet when we think of tax deadbeats, we tend to think of the working poor. If you simplify the tax code, the loopholes are fairly big for companies such as GE. As you make it more complex (to close down the loopholes), you eventually get to what I call "smoke and mirrors" where complex provisions of the tax code can be played off against each other in ways that the lawmakers never imagined. Perhaps we move to a gross revenues tax for entities (like the insurance companies are taxed at the state level), though that will hit some companies and industries much harder than others.
     
  18. luiz

    luiz Trendy Revolutionary

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    I assume GE gets a lot of tax breaks for investing in "susteinable energy", "researching in America", etc etc. A lot of feel-good legislation supposed to give us a greener future actually result in tax breaks for large corporations.
     
  19. JollyRoger

    JollyRoger Slippin' Jimmy Supporter

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    To get those breaks, you actually have to spend mopney on the items in question, so yeah, instyead of the U.S. Treasury getting the money, the targets of the legislation are getting it. GE is putting the money into private projects rather than the government treasury - is that a problem?
     
  20. luiz

    luiz Trendy Revolutionary

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    Not necessarily. But if people don't see that as a problem they shouldn't be concerned about GE paying zero corporate tax income.
     

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