Steadfast FinancesEx-Tax Collectors Turned Corporate Tax Dodging Heroes

Ex-Tax Collectors Turned Corporate Tax Dodging Heroes

Filed in Consumer Education , Taxes 8 comments

Many years ago, John Madden once gave a memorable quote about the necessity for speed at the skill positions in the NFL:

Speed: can’t teach it, can’t coach it, better draft it!

It would appear that General Electric, a “too big to fail” corporation, has a similar philosophy in paying their corporate taxes… if you want to cut your tax bill, hire people who wrote tax law and collected taxes.

The company [GE] reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.

G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

With that kind of “talent” on your roster, how can you not pay taxes lose?

Source
DAVID KOCIENIEWSKI
New York Times
G.E.’s Strategies Let It Avoid Taxes Altogether

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Posted by CJ   @   25 March 2011 8 comments
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8 Comments

Comments
Mar 25, 2011
10:21 am

Disgusting and despicable.

Mar 25, 2011
10:20 pm
#2 JLW :

I say good on ‘em! I wonder how many extra jobs were created for GE employees since they didn’t have to pay tax man?

Mar 26, 2011
12:03 am
#3 Matt SF :

You trying out for an anchor spot at CNBC?

Mar 26, 2011
3:37 pm
#4 JLW :

Nah… it’s just basic behavioral econ. Can you blame them? Aren’t we all looking for loopholes to pay less taxes? As individuals we may pay accountants, buy software, or hire tax attorneys. Companies are no different. They just have more to lose so it shouldn’t come as a shock that they do what they can (legally) to pay fewer taxes.

Mar 26, 2011
4:39 pm
#5 Matt SF :

I agree 100% – on the behavioral economics.

And if I had the skills of GE’s tax department, I’d be doing the same thing until I had enough cash to retire, then try to fix the system I exploited because (unfortunately for me) I know the difference between right and wrong.

It’s human nature to follow the the “I’m gonna get mine” voice in your head, but it’s another thing to rig the monopoly game in real time whenever it’s in your “shareholder’s interests”.

Mar 27, 2011
10:31 am
#6 Mike :

We game the salad bar and save a couple of bucks. GE games the tax system and saves billions. Both perfectly legal until the rules of the game are changed. Eventually, the salad bar price will go up to recoup losses in the higher priced items. Eventually, the tax loopholes will get closed when the pressure of the people is greater than the pressure of the lobbyists. Same philosophy of exploiting loopholes in the system is at work. Only the scale is different. Does any profession have greater job stability than tax lawyers?

Mar 28, 2011
6:38 pm
#7 Matt SF :

I’m sure I’ll regret asking, but how do you “fix it” by allowing a process where those who want to exploit the system are allowed to write the very laws supposed to regulate them. Rather like letting the inmates run the prison.

Mar 28, 2011
6:45 pm
#8 Matt SF :

Not sure Mike… maybe Wal Mart shelf stockers and fast food cooks.

I’d like to hope that the loopholes will be closed and the playing field will be equalized across the spectrum — from a Mom & Pop small business to 1 million plus employee multinational corporation — but I fear fairness across the board is deemed “unfair” by the powers that be.

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