G.E.’s Strategies Let It Avoid Taxes Altogether

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You know this is why Huckabee's flat tax idea instead of the current tax structure makes sense. If you simplify everything it makes it harder to insert in loopholes.

Which is why he included the bolded part.

I suppose Huckabee thinks he can ask God to bailout the whole f***ing country once the rich are done looting the treasury.

Huckabee's idea is much more radical, though, and it has a lot of problems of its own. I am for simplifying the tax code, but not for the sort of changes Huckabee promotes.

And for the record, the tax Huckabee promotes is not flat; it is regressive.

Not really, because it is flat across the board (talking income and not sales which would be regressive). So say you make 10,000 dollars a year and the tax is 5%, you pay $500. If you make $1,000,000, the tax is $50,000. now while you can argue it may seem to hurt people that are poor, we don't have tax brackets anymore, and people are encouraged to make money without being penalized.

Huckabee did not suggest a flat income tax, only a flat sales tax.

Thanks. I wondered what ruveyn was on about. I'm too intelligent to be cynical and believe monied interests will win out? That doesn't make any sense.

There is a body of economic thinking that suggests that is it not a question of how much government takes in tax that has the most important impact on economic growth and stability, but rather the quality of government that is the key.

Not really, because it is flat across the board (talking income and not sales which would be regressive). So say you make 10,000 dollars a year and the tax is 5%, you pay $500. If you make $1,000,000, the tax is $50,000. now while you can argue it may seem to hurt people that are poor, we don't have tax brackets anymore, and people are encouraged to make money without being penalized.

Um... that's not Huckabee's proposal. He supports the so-called "fair tax" which would eliminate income taxation entirely and leave us with a ridiculously jacked-up regressive sales tax that would crush the poor and explode the deficit.

As to your laughable claims about being "penalized" for making money, this only shows your staggering ignorance of the nature of a progressive tax system. Even under the current flawed implementation, you always reap a financial benefit for earning another dollar.

Is "fair tax" some kind of newspeak? It should be called the "unfair tax".

Now I actually hope that Huckabee wins the Republican nomination.

Last week, the New York Times published a rather indignant article on how GE paid no US taxes in 2010 despite earning $5.1 billion in US income; "In fact," says the New York Times, "GE claimed a tax benefit of $3.2 billion". I found the article rather messy and underwhelming--what does it mean that they "claimed a tax benefit"?--and its main point seems to be the rather extraordinary position that GE has a moral obligation to maximize the taxes it pays. The author seems to think it's outrageous--outrageous!--that GE has a lot of people in its tax department who spend a lot of time trying to minimize the company's taxes. Many paragraphs are devoted to this, to no obvious point, including a ludicrous quote from Len Burman:


"In a rational system, a corporation's tax department would be there to make sure a company complied with the law," said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. "But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative."

This is, of course, exactly what the tax department does--ensure that they pay the minimum of taxes while complying with the law. I am quite sure that neither Mr. Burman nor Mr. Kocieniewski refuse, as a matter of conscience, to take the deductions to which they are entitled, and they almost certainly pay someone or some company to ensure that they're . . . um, paying the least possible taxes while in compliance with the law. And they're not under basically continual audit. Fantasizing about a world in which corporations behave more generously than Mr. Burman and Mr. Kocieniewski doesn't seem either fair or realistic.

His complaints about lobbying are on firmer ground. I don't like the fact that GE lobbies aggressively on tax rules, and I certainly wish that Congress would not oblige them by passing bad laws that benefit GE. On the other hand, the author of the article takes it as obvious that any law which benefits GE must ipso facto be a bad law. So a publication which has not, in the past, been particularly hostile to green energy tax credits is suddenly outraged that GE has lobbied in support of them. (GE sells wind turbines, which were, last time I looked, squarely within the standard definition of green energy). I mean, I'm against green energy tax credits and all--but you can't simultaneously think that this sort of egregious government meddling is okay in the service of the environment, and also think that it's wrong for GE to lobby in favor, or benefit from selling the stuff. If it's good for the environment, we want companies to benefit from selling more stuff! Moreover, I am under the impression that these tax credits go to people who buy wind turbines, not people who make them--in other words, that this particular tax credit boosts GE's sales, not reduces its taxes, which is the ostensible subject of the article.

And while the author gives paragraphs and paragraphs to complaints that we don't do enough to tax foreign earnings, he offers only the weakest and least convincing counterarguments. Of course, he doesn't even consider that this is an argument against the corporate income tax.

So I was rather skeptical of the factoid about GE's freedom from taxes. First of all, the definition is as muddy as the article: what are "US taxes"? US federal income taxes? Because I'm quite sure that GE paid some payroll tax, various fuel taxes, etc. And no matter how good their tax department, I'm pretty sure it didn't work GE's personal liability below zero.

GE Capital lost billions in the financial crisis, which I assumed gave them a nice, fat, NOL carryforward to lessen their tax burden in future years. And I am unaware of any good arguments against at least moderate allowances for loss carryovers--corporate income is frequently much lumpier than personal income, and the tax code should allow for that. The article gives brief mention to the losses, but curiously, does not quantify how they might have contributed to GE's lower tax bill even though I'm sure GE would have provided those numbers. The treatment of the losses, moreover, is confusingly opaque, and rather buried.