Today's news had a piece that I guess I knew, but it's discussion in the media made me mad.

I take care of a 95 year-old lady who was a friend of my Mom. She's been in a nursing home for about 10 years. Within a year, she'll have consumed all her assets paying the nursing home, doctors and her drug bill. In about a year, if she's still alive her ongoing care will have to be paid by Medicaid. She'll be all out of money.

Her income is quite modest--Social Security and a pension from her long-deceased husband. I've done her taxes for years and as unreasonable as it seems, she has had to pay both federal and Illinois state income taxes every year.

Then today's news...General Electric paid NO taxes last year on their $5 billion in profits! They were able to book the profits in offshore subsidiaries and the losses here in the U.S., thereby avoiding any U.S. taxation. I'm sure there were many other large companies that figured a way to escape the fingers of the IRS in their pockets as well. I worked for one of the biggest banks in the country and it didn't pay any federal income taxes for years!

So we have a tax system where a little old lady in a nursing home pays more in income taxes than one of America's largest companies. Yet there is a continued hue and cry from many who say we need to further reduce corporate taxes. Avoiding the discussion of how you can reduce taxes to less than nothing, I think this kind of a tax system is ridiculous...more than ridiculous, it's downright offensive!

This situation certainly demonstrates how the largesse that corporate lobbyists pours into the pockets of the members of Congress who write the tax codes is certainly working. And if you listen closely, it's exactly those members of Congress who continually use their opportunities to get their sound bites in the news who lecture everyone that if we further reduce corporate taxes, it will be good for the economy....pretty much saying what they've been paid to say.

In the meantime, a little old lady lying in a nursing home having her life savings sucked away by the healthcare industry, still has to pay income taxes.

Baloney!

As I'm hearing it, GE reduced their tax bill by carrying forward losses in addition to R&D credits (as well as offshoring profits).

In other words, you have to look at the long-term view. If GE loses a few billion dollars in one year, they can 'make' a few billion over the next years before they start paying taxes.

Individuals are allowed to do this as well. When I paid several thousand dollars to get my ex-wife's business started, I was able to write the losses off my taxes until we started making money.

When I lost $27,000 in a private company, I was allowed to write off $3,000 of my 'regular' income per year.

All is not what it seems. Though I'd like to hear more details of GE's situation - the chairman has been on a few news shows and doesn't seem to have a "hide in the bunker" mentality.

Heck, locally, a vacant GE factory in the Boston area might be re-opened because the locomotive manufacturing plant they have in Erie PA has too many orders. That would certainly be good news.

So why not tax the profits regardless of where they made them? Seems that's one reason so many US businesses have gone to other countries to do business. Seems like legal tax evasion to me.

pick up on the situation where they are holding profits overseas and not returning any of it for use in the USA. Why? Because the profits that are not taxed in the overseas operations would be taxed when they bring it back.
This is where they could consider a reduced tax for off shore profits brought home. At least there would be some taxes provided by one of America's largest companies...AND THE SUPPOSED TRILLIONS HELD OFF SHORE COULD BE PUT TO USE TO HELP AMERICA.

There is no doubt what so ever that GE and many others are leveraging the tax laws and loop holes to their benefit.


If you want a real shocker just google companies that do not pay taxes in America. You will be surprised at how many American companies pay little or no taxes. And you will also be surprised to find how many foreign owned companies pay zero taxes.

I don't care how one paints what they are doing or how it "may" look...they are avoiding paying taxes by design.

I suggested once before, all working folks should jack up their dependents for a 3 month period. This would drive their tax with held to a minimal or zero number. Then let's see what the response of the government would be. It is legal to do so as one has to settle up at tax return time. But it would have the intended effect...what if we all did like GE and manipulated to not have to pay taxes.

VK has the best call...............BALONEY!!!!!!!!!!!

BTK

It pays to be good buddies with Obama, as is GE CEO and jobs creations czar Jeffrey R. Immelt. I wish I could get Obama to take MY calls.

http://mnprager.wordpress.com/2011/0...000000-profit/

Congress is also about to launch an investigation into the process that gave 269 WAIVERS TO UNIONS from Obamacare, for a total now of 1040 waivers from Obamacare. Obama is good to his buddies.

http://dailycaller.com/2011/03/07/ob...can-spotlight/

So tell me.. How do you handle this situation:

Acme Corp is having a fairly good year.

They sell equal amounts of goods and services in the US and Ireland.

However - the million dollars in sales in the US made far less profit than the million in sales in Ireland due to differences in costs.

So let's say that the company made $50K here in the US but $250K in Ireland. Would you tax Acme on the $250K it made in Ireland?

That's what you're saying when you say "tax them on everything".

Now, I grant you, companies can use a lot of accounting tricks. For example, Google, who has a motto of "do no evil" pay HUGE "licensing" fees to their Bermuda operations.

As far as their US tax return is concerned, it's an expense. But, to the Bermudans, it's income and taxed appropriate (which is, I believe in that country, hardly at all).

How would you *fairly* tackle this problem?

[Mind you this seems exacerbated by something I read yesterday on msnbc.com - US corporations add jobs MUCH slower than their foreign counterparts which is why our unemployment is much higher even though the economy is increasing. In other countries, they're not so quick to lay off - they'll even do 'make work' which makes the company look less efficient than the U.S. company but that has other ramifications]

there is no such thing as making a profit and not paying taxes. No more so than we the people are taxed on WHATEVER we earn.
Tax them on what they earn in the USA...give them a break of some kind on the earnings they make off shore to incent them to bring the money back to the USA and invest in America.

Since more and more companies are becoming non manufacturing companies they make their earnings happen via accounting. During GE's heydays....pre Immelt...Welsh/Jones, with triple digit stock numbers and splitting every 3-5 years...GE was primarily a manufacturing company and earnings were expected and came from operations. That is not the case today. Their earnings are made via accounting and taking advantage of the laws here and abroad.

Fairness is in NOT letting companies making a profit NOT pay taxes.

Another easy to fix problem with America that will go unfixed due to the business as usual in Washington...which does not include fairness to we the people....never has!!

btk

Originally Posted by djplong

...So tell me.. How do you handle this situation...

Lets go back to the role that government could play to incent desired behavior by both citizens as well as companies doing business here. I'd suggest the following because I for one believe strongly that one role of government is to do exactly that, incent behavior that will benefit all ciizens...

• First, reduce the corporate tax rate. If it could be reduced to something near the level of other developed countries, including many of the low wage countries to which we're losing employment, that would be great.

• Next, substantially eliminate most if not all of the arcane corporate tax deductions so often authorized by Congress by tacking lobbyist-written amendments to other legislation.

• And then, require that all U.S. corporations pay taxes on all the income they report, regardless where in the world the accountants say it was earned.

Now I don't know what the total effect on revenues to the U.S. would be. I'm pretty sure there could be a whole lot of the almost 100,000 IRS agents laid off. And probably, there'd be some high-falutin' tax lawyers looking for another line of work.

But one other thing...a little old lady in a nursing home wouldn't be paying more in taxes than many of the largest companies in the U.S.

This situation certainly demonstrates how the largesse that corporate lobbyists pours into the pockets of the members of Congress who write the tax codes is certainly working. And if you listen closely, it's exactly those members of Congress who continually use their opportunities to get their sound bites in the news who lecture everyone that if we further reduce corporate taxes, it will be good for the economy....pretty much saying what they've been paid to say.


Sounds like the conservative Republicans to me.

Kahuna is 100% right.

as usual and that goes for both parties. As the big $ paying lobbyists wish so goes the politician...R or D or white or black or _ _ X _ _ (fill in the blank)...

business as usual with nobody caring enough to do something/anything about it...the promise of changing Washington's business as usual is part of what got Obama the independent vote....which he will not have in 2012.

btk

Originally Posted by Villages Kahuna

Lets go back to the role that government could play to incent desired behavior by both citizens as well as companies doing business here. I'd suggest the following because I for one believe strongly that one role of government is to do exactly that, incent behavior that will benefit all ciizens...

• First, reduce the corporate tax rate. If it could be reduced to something near the level of other developed countries, including many of the low wage countries to which we're losing employment, that would be great.

• Next, substantially eliminate most if not all of the arcane corporate tax deductions so often authorized by Congress by tacking lobbyist-written amendments to other legislation.

• And then, require that all U.S. corporations pay taxes on all the income they report, regardless where in the world the accountants say it was earned.

Now I don't know what the total effect on revenues to the U.S. would be. I'm pretty sure there could be a whole lot of the almost 100,000 IRS agents laid off. And probably, there'd be some high-falutin' tax lawyers looking for another line of work.

But one other thing...a little old lady in a nursing home wouldn't be paying more in taxes than many of the largest companies in the U.S.

VK, I'm in agreement with reducing the corporate tax rate and eliminating most of the corporate tax loopholes. I would like to see great simplification of the tax code for corporations and individuals including eliminating most deductions, charitable, mortgage interest and state income tax among them. I do not believe the taxpayers should subsidize my choosing to live in a private home rather than an apartment; deciding how I should spend my money - if I choose to give my money to a a stripper rater than a church should be of no concern to the taxman. Equally, I can choose to live in a high or low income tax state - again, this not be the concern of the Federal Government. The only tax break I like is for that lady in the nursing home. She did not have the choice whether or not to be in a home.

I do disagree with taxing on taxing US Corporations on income earned outside the US. This simply encourages corporations to relocate their national headquarters outside the US. We receive taxes from foreign companies that have operations in the US (Toyota, BMW, BP, etc) just as other nations receive taxes from US multinationals with operations in their countries. Insisting upon collecting taxes from US companies with operations in Taiwan would encourage the company to move its headquarters there. No gain for us in that.

The entire tax system stinks. Corporations want lower tax rates to be competitive yet they already pay little or no taxes now. Folks who want their entitlements and a large percentage who pay no taxes yet they receive refunds because it is based on the size of their families and the number of children they can churn out.

It is past time to look at The Fair Tax. Everybody gets treated the same and there are no loopholes.