OT: GE pays no income tax

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As local and state government realize they can't possibly pay the bennies they've promised, we're going to see more and more taxes levied on everything they can think of. Even union busting isn't going to help because so many contracts and promises are already in place. Next time they come, it won't be to shut them down, but to demand a cut of the cookie sales.
We've already seen lemonade stands shut for lack of a business license. Good way to teach kids about business: If you start a business, the government will be your worst enemy and the greatest barrier to success. Part of me wishes that the Feds let the big banks fail and gave the money instead to the SBA to make small business loans. Time and again it's shown that small businesses MAKE the jobs and big businesses either cut back or ship jobs overseas to boost their stock prices.
-- Bobby G
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No, a value added tax is very different from a tariff.

Typical. You don't even understand the basics, yet you want a VAT. Ever see a tax you didn't like? You think just maybe the problem isn't that the govt taxes too little, but that it spends way too much?

I just explained to you how your VAT or higher income taxes are just another cost that businesses then pass on to their customers, which include the "little people". What happens to the price of corn flakes when the cost of corn goes up? Why would that corn flake manufacturer treat the extra $1mil they have to pay for copper any differently than they treat it if they hand it over to the govt? Answer: they don't they just pass it on.
However,if you hit an American company with higher taxes while their competitors in foreign countries pay lower taxes, then they wind up at a competitive disadvantage, start to lose business, and so it goes. Eventually the govt here can wind up with either the same tax money they had before the increase, or less. Meanwhile economic growth suffers. Only libs think of the world as static when it comes to economics.

There may be no perfect free markets, but the closer we are to that ideal, the better off we all are.
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wrote:

You didn't read the links I provided, did you?

Now it's quite clear you didn't. Why would you comment on my post without reading all of it? You don't even know my point, yet you're telling me things I think which are entirely, and completely wrong. That does us both a disservice and we both deserve better.

You didn't read the links below - it's abundantly clear from your comments. The VAT I'm talking about is on imports. Do yourself a favor and read this one if not the other two - it's PDF and essentially a slideshow. Won't take you long. http://www.reverecopper.com/pdf/TownHall.pdf
Here's an excerpt:
Double Jeopardy • Currently, producers of goods & services in the USA pay numerous taxes to the USA government and health care costs for employees which are not rebated when the goods & services are exported. • But the USA produced goods & services must pay a VAT tax to finance a foreign government when they arrive in that country. We even help pay for their health care costs! • So exports from the USA are double taxed. • The VAT taxes collected by foreign governments allow them to have reduced (fewer/none) taxes and health care costs on production of goods & services in their countries.

There is no more sense in wishing for something akin to a free market than wishing to be able to fly. As soon as international trade and foreign customs (both cultural and financial) are added into the mix, there's no way in hell a free market can exist. Not even close. No matter what any economist, living or dead, might try to tell you. So it's a given - taxes, government, tariffs, VAT, etc. - the whole nine yards.
I am all for smaller government, smaller defense spending, smaller almost everything, but I'm even more for effectiveness. It's a question of people feeling they're getting what they're paying for. And that's not happening, so things need to be adjusted. The first and foremost thing that needs to be adjusted is all of this red state vs blue state, liberal vs conservative crap. It's counterproductive. It plays into the hands of those most vested in keeping big government and big spending. It's a ploy, and a very effective one.
We have a huge honking hole in our system, and it's staring everyone in the face, but no one seems to want to address it. They'd rather point fingers and attempt to assign blame, when everyone is complicit for letting this stuff go on.
First and foremost, in any lifeboat situation - stop pointing fingers and start bailing. There will be plenty of time for assigning blame once we get to the island.
R
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< There is no more sense in wishing for something akin to a free market than wishing to be able to fly. As soon as international trade and foreign customs (both cultural and financial) are added into the mix, there's no way in hell a free market can exist. Not even close. No matter what any economist, living or dead, might try to tell you. So it's a given - taxes, government, tariffs, VAT, etc. - the whole nine yards. >
Yes, indeed. The banks were awfully happy that big government was there to save them, but they balk at paying the taxes that enabled the Feds to keep the banking system from collapsing. Free market is just another meaningless slogan bandied about by people who haven't studied history and don't know what unrestrained businesses do to workers and the environment.
< The first and foremost thing that needs to be adjusted is all of this red state vs blue state, liberal vs conservative crap. It's counterproductive. It plays into the hands of those most vested in keeping big government and big spending. It's a ploy, and a very effective one.>
It's why I would never call the Republican politicians dumb. They're incredibly smart to use social issues and partisanship to get Americans to vote against their own interests. Their slash and burn "cut spending to the bone" mode is just going to throw more Americans out of work and worsen the economy - just in time for 2012. Maybe that's the way things are supposed to work, but it seems awfully wasteful to me.
< We have a huge honking hole in our system, and it's staring everyone in the face, but no one seems to want to address it. They'd rather point fingers and attempt to assign blame, when everyone is complicit for letting this stuff go on. >
It always takes two to tango, and the problem is that our elected officials aren't beholden to those who voted for them - they are owned by those who paid their ever-increasing campaign bills. We're heading down a very dark, narrow chute, made much darker by the Roberts court decided that money equals free speech and corporations have the same political rights as people.
< First and foremost, in any lifeboat situation - stop pointing fingers and start bailing. There will be plenty of time for assigning blame once we get to the island. >
With the press abdicating their role as a fair reporter of the facts there's little hope. They're the ones that think Donald Trump's throwing his hat in the ring is anything more than a publicity stunt for his TV show. Big Business has systematically bought up and looted the assets of many national newspapers in schemes that remind me of Tony Soprano's bust out scheme for the athletic store. Borrow like crazy on the name of a company with good credit, funnel the money to your cronies, leave the company in bankruptcy.
< http://www.google.com/url?q=http://www.nytimes.com/2009/10/05/business/economy/05simmons.html >
At Simmons, Bought, Drained and Sold, Then Sent to Bankruptcy ...
"Every step along the way, the buyers put Simmons deeper into debt. The financiers borrowed more and more money to pay ever higher prices for the company, enabling each previous owner to cash out profitably. But the load weighed down an otherwise healthy company. Today, Simmons owes $1.3 billion, compared with just $164 million in 1991, when it began to become a Wall Street version of “Flip This House.” In many ways, what private equity firms did at Simmons, and scores of other companies like it, mimicked the subprime mortgage boom."
The story above sickens me and is clear evidence that arbitragers are destroying the country, trade by trade, while politicians look the other way. Mobsters go to jail for what Wall Streeters get lavish bonuses for. That's just not right. Greenspan's "easy money" policy was responsible for both horns of the financial bull that nearly gored the country to death.
-- Bobby G.
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I read until I got to the part where you claimed a VAT and a tariff are the same thing. And you were wishing for a VAT as some kind of solution. As if we don't have enough taxes already. That is all I needed to read.

None of the above changes a VAT tax into a tarriff. Only someone trying to confuse people would refer to a protectionist trade tariff as a VAT. And who do you think is paying those VAT taxes? It's the people in those VAT countries who are consuming the goods they are importing.
So, because someone in Germany buys a Dell computer and gets hit with a 20% VAT tax, your solution is to put in place a VAT tax in the USA? So everybody that touches the material that went into that computer, all along the process, gets hit with a VAT tax too? Only makes sense if you're tax happy and looking for one of the worst possible taxes, complete with reems of paper work for everyone all along the way.
In response to the bitching about China devaluing their currency, if that's such a swell idea and how a country becomes a super power, how come it hasn't worked here? The dollar has fallen 35% against the euro and the price of gold has tripled in the last 10 years, yet here we are, stuck in the mud. The dollar has also fallen against the yuan over that same period. That's right, it's fallen about 20% in the last decade against the Chinese currency. Your buddy over at Revere is just bitching because he would like the dollar to fall more in international markets. And what makes him or anybody else the expert on what the yuan vs $$ exchange rate should be?
Even assuming your premise that the exchange rate is wrong, If the Chinese want to ship us stuff and subsidize it, that's fine by me. Just saves me $$$ and comes out of the Chinese pockets. Would you be bitching if someone offered to give you $1000 towards the purchase of a new car?

How about some of us not wanting what the govt wants to provide for us, no matter how effective you or anyone else think it is? Just because govt could do something effectively, not that it's even remotely possible, but that makes it OK for the govt to grow and take over more of the economy?

Couldn't disagree with you more. It is in fact very much about liberal versus conservative. If you had conservatives in Congress and the WH, you wouldn't have spending out of control and the govt growing larger as a percentage of the economy. That is fundamentally in conflict with conservatism. But expanding govt is a core part of the liberal philosophy.

You can't fix it unless you know what's wrong.

You can't start bailing when libs like the president and Harry Reid want to drill more holes in the boat.
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The point is that it is a VAT and how it works is important. The same value added tax that is imposed on every similar product in the EU. So, imposing that tax on imports into the EU means the playing field is level.
What you are apparently proposing is that the US do the same. That would require us to impose a 20% value added tax on all our goods. Then when you buy that Revere pot, it will cost you 20% more. And just like the EU, if someone imports a copper pot from China into the US, it would then have the same 20% VAT applied to it.
Is that what you want? I might be convinced to go with a VAT tax provided other taxes, ie the income tax were eliminated. However it is a regressive tax which will hit low income people the most by adding an additional X% tax on all the products they buy. From that perspective, a VAT is like a national sales tax.

It doesn't change anything and you're still confused.. The VAT is NOT a protectionist tax. It's applied on all the products within the EU. So, when you buy a copper pot manufactured within the EU it carries the exact same 20% VAT tax as a pot that is made by Revere and imported. In other words, with regard to the VAT, it's a level playing field.
Actually, it's quite shocking that Revere would not understand the very tax they are railing on about.

But what you don't get is with regard to the VAT it is level as it exists today,.

Yes, but the obvious problem is that the ride that is offered, as many of us see it, is 180 deg in the wrong direction. Hence, we don't want the ride because it's going to take us further away from where we need to be.

Then you are arguing for a new tariff on all imported goods. The day you do that, the other countries will impose a similar new tariff on US goods and you're back to square one. Take a look at the factors that helped make the Great Depression worse. One of them was imposing new protectionist trade tariffs, which reduced trade.

And how does yet another new tax, be it VAT or a tariff on imported goods, solve that? It doesn't. You could sent 1 trillion more to DC and you'd still have about the same size deficit, because they will just spend all of it and then more too. That's the problem. It's not that we're taxed to little, it;s that spending is out of control.

If we wind up in default it will be because of out of control spending. The Chinese didn't just create a new boondoggle of a program that s going to cost us trillions, namely Obamacare. Our own govt did that. They didn't pass the stimulus bill that cost us $850bil and has had little effect. They aren't the ones making the govt run $1.6tril deficits.

I don't like or trust the communist Chinese. But you have a world economy. We're not the only ones buying their goods. And they are not the only fierce competitor we have in the world today. People made the same predictions about Japan, then Korea. Now it's China and India that are developing, producing low cost products. As they develop, China will have it's own problems, including the eventual liberation of the country from the commies.
Your approach of having the govt here decide what price a Chinese hammer should or shouldn't be is more scary. You want them to wave a magic wand and levy some new tax to levy the playing field. Aside from the obvious problem of immediate retaliation, what makes you think the morons in DC know what the magic number is, what products it should or shouldn't apply to, etc?

Again, revenues are not and have never been the problem. When the typical household is short of funds is the answer just ask your employer for more money? Or is it usually to cut spending? My God, we had Harry Reid on the Senate floor last week bitching because the Repulbicans want to cut some programs he thinks are essential. He cited the cowboy poetry festival that the feds subsidize that's held in NV each year. He said "without the federal funding, those people would not exist." I'm sure you can find the video with google. And you want to send MORE money to these morons?
As regards the playing field, as I pointed out above, if you levy a new tariff, our trading partners will just counter. You think guys like Airbus are just going to role over and not demand their govt enact the equivalent against Boeing?

That approach is exactly how we got where we are today. The way they got along was by spending without regard to the consequences of where the money was going to come from. The Democrats with social programs. The Republicans with defense bugets they wanted and their own pork barrel projects. And the solution to keep everyone happy was to just get along by borrowing.
If there's gonna be a train wreck, I say let it happen now before the monster in DC is even bigger and more out of control. That's pretty much where the Tea Party is coming from.

I do agree that conservatives may at times go overboard on defense. However, under the Constitution it's very clear that defense is a vital duty of the govt. I'm still looking for the part where it says govt has to provide healthcare and everyone must have it or go to jail.
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wrote:

Not a bad long winded rant but do you have any more bullshit generalizations about Liberals?
Who was running Congress in the Late 90's? I do know.
What good will a $3 hammer do when there are no jobs?
What good will it do to lift other countries out of poverty while running ours into the ground?
Since you love generalizations, here's a good one.
"While not all Republicans are stupid, most stupid people are Republicans."
-C-
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On 3/29/2011 1:05 PM, Country wrote:

struck a nerve, eh.
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LOL, lordy no. Just stating the obvious.
-C-
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<Yes, there is a problem, and as usual, it's big govt as usual. That's why some of us are for tax simplification, flatter taxes, eliminating loopholes. But that would decrease the power of the guys like Rangel, so don't expect it to happen easily.>
Both parties happily do the bidding of their corporate masters which is why business contribute to both. No matter who's in power, corporations wants to make sure the pols are beholden to them. I'm with you, though, on a level playing field for taxation. The tax laws are too complex and too riddled with sweetheart deals. Like Homer said to Lisa on last week's Simpsons: "Enjoy our nice new shiny stadium because you'll be paying for it years after the team has moved to another city." Special tax deals rob Peter to pay Paul, and in this scenario, citizens are the Peters.
<And I thought libs were all for lifting folks out of poverty. That is exactly what is happening in developing countries. Those folks may only be getting paid $1 an hour, but that is 2X what they were getting before, they are happy with it, and it's increasing their standard of living.>
The riots taking place in the Middle East are not so much political, but economic. The price of food in the third world has skyrocketed. A bowl of rice that cost 5 cents two years ago can cost upwards of 25 cents. If you double a person's wages but his cost of living quintuples, are they really coming out ahead? At least before they could have tried to grow their own food, but working at a factory means that's hard to do.
Expect to see plenty more riots as the Japanese disaster costs work their way through the world economy. That's one reason why I think Bill Gates and his "lifesaving" missions are totally foolish. He's going to create incredible hardship down the line because the people he's saving from AIDS won't have a job or anything to eat. Famines lead to revolutions. Don't think it can't happen here. Look at how polarized and angry people are. Plenty of them are being driven close to the edge by the financial meltdown. I don't think the Bush/Obama bailouts prevented a financial blowout - they merely delayed it. I'm seeing the return of the no money down car deals. That means we've learned just about nothing from the last meltdown.
-- Bobby G.
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lessening the subsidization of foodstuffs more than actual increase in costs (although one obviously goes with the other).

--
"Even I realized that money was to politicians what the ecalyptus tree is to
koala bears: food, water, shelter and something to crap on."
  Click to see the full signature.
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And while looking at the factors driving up food prices, don't forget the biggest one. That is the diversion of food crops into ethanol, curtousy of those that claimed it was environmentally beneficial. It's been most beneficial to the big farmers, who've seen prices double.
Funny thing about that too. It gets back to my comments about how libs think the economy is static, ie if you just raise a tax from 5% to 10%, you get twice the tax revenue. It doesn't work that way. In the case of ethanol, ten years ago the cost point where ethanol was equivalent to gas was somewhere around $4. I'll bet that now that the demand for corn has gone through the roof by making it into ethanol, that cost increase now means gas would have to cost $5 or more for ethanol to be equivalent.
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wrote:

The error in food pricing far predates ethanol's recent surge. The error, at least in the US, was in artificially lowering the price of food and substituting food-like substances for food. It's created health issues which are driving the healthcare crisis.
The Japanese reactor fallout will just exacerbate things. I'm guessing all things to a greater or lesser degree.
R
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wrote:

There already ARE tariffs in the form of customs duty on products from the USA shipped to most overseas countries. My overseas clients pay 10%-35% extra to buy my USA made products. But...since they can't get them locally, they still come out ahead.
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Which is why we should "drill baby, drill"!
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On Tue, 29 Mar 2011 09:34:38 -0400, Stormin Mormon wrote:

But GE IS charged income tax, at a 35% marginal rate. As you say, we, the customer is actually paying it in elevated price. That is simply part of the cost structure of a product. The more a company makes, the higher the income tax component, the lower a portion investors receive from sales. If you want to increase their tax rate expect higher consumer prices and reduced economic activity. No matter how you look at it, too much taxes 9and too much government) destroys the economy. Right now the government is about 75% excess fat (conservative estimate), and growing quickly under Obama and the Democrats. Question, are you required to fail basic economics in order to become a Democrat?
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Without insulting anyone, I'll explain something you've missed. If GE pays no taxes, it can undercut the prices of competitors who do pay them and pass them on. If enough people buy the cheaper GE products, it can drive the taxpaying corporation into a bankruptcy we all pay for. Taxpayers have to make up the tax shortfall and fund the Pension Benefit Guaranty Corp. Then, when tax-free GE has driven out its competitors, it's free to hike its prices to the stratosphere. FWIW, it should be noted that one of GE's biggest source of profits is its virtually unregulated lending division. Ever wonder how usury laws got pushed aside and the big lenders can charge outrageous interest rates previously known only to loan sharks and mobsters? Lobbyists!
This nonsense about companies moving overseas in retalliation is hard to swallow. Corporate execs love it here because they are not kidnapped and held for ransom the way they are in South America and other locations. They love having the FBI and the US military protecting them and their assets. They love the US cultural opportunities and they love not having their companies nationalized by some dictator. A lot of US companies will one day find that China was pretty smart in keeping foreign ownership of any Chinese corporation to less than 50%. Smarter than we have been, anyway.
GE is able to "shelter" billions in income precisely because they have lobbied, threatened and bribed Congress. On GE's special behalf, they've passed laws that make it perfectly legal for GE and others to avoid paying income taxes that everyone else has to pay. All Congress has to do is to end all the sweetheart tax deals they've passed. If that forces companies to move overseas, so be it. I am sure the Europeans or pols wherever they land would realize they could start taxing GE quite heavily, so much so that GE might rethink its decision. By simplying threatening the US, they've gotten a free ride on Easy Street. Congress could make such a business exodus *very* painful. Instead, they turn belly up and give corporation like GE a blank check, knowing that by doing so they'll get big campaign contributions and a chance to stay in office.
One thing's for sure. From the comments here it seems that Big Business's propaganda mission has been entirely successful. They've convinced people that it's good for America for GE to weasel out of their income tax and to pass the shortfall onto the little guy. Starting today I am boycotting all GE products. There are a number of other companies that need boycotting as well. Seems to be a better proposition than punishing teacher's unions for our deficit/debt. As lawyers always say: "Go for the deep pockets." GE's are pretty damn deep. Not only that, THEY GET MONEY BACK from the IRS. Shameful.
So when you hear BS that the US has the highest corporate tax rate in the world (HeyBub, you listening?) you have to realize how many companies *should* be taxed at that rate but like GE, actually demand and get money BACK at tax time. They have an effective negative tax rate. How on earth is that fair?
-- Bobby G.
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they really have to do is move the site of incorporation off-shore. Tyco, for instance, was "headquartered" in Bermuda, and just had "offices" in the US.

relative to their competitors. Rather we are largely saying that their competitors shouldn't have to pay either.

--
"Even I realized that money was to politicians what the ecalyptus tree is to
koala bears: food, water, shelter and something to crap on."
  Click to see the full signature.
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It almost sounds like you're saying there should be no corporate tax, and only individuals should pay tax. Since the Supreme Court decided corporations are people, how can that be? Unless, that is, that you're of the opinion that there should be no taxes and therefore no government (volunteer government, anyone?). I'm of the opinion that I'd really like Santa Claus to be real, and all the Playboy centerfolds to be virgins. All of those scenarios are equally likely.
R
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There's a lot of people that don't think the government should be taking their money by force. (Actually, I hate it too... but) They seem to think that the government can run on pure magic.
-C-
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