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Thread: GE: 7,000 tax returns, $0 U.S. tax bill

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    GE: 7,000 tax returns, $0 U.S. tax bill

    I have mixed feelings on this. Yes everyone should pay their fair share. But at the same time you could put a 50% tax on businesses and they would pass those costs onto the consumer just like when they buy materials,equipment, pay for employees and other things used to make a product. This is why I laugh my ass off when die hard anti-smokers think big tobacco companies suffered, especially many of those tobacco companies own food companies the die hard anti-smoking people buy food products from. Why would companies not pass taxes onto the consumer?

    GE: 7,000 tax returns, $0 U.S. tax bill - Apr. 16, 2010

    NEW YORK (CNNMoney.com) -- General Electric filed more than 7,000 income tax returns in hundreds of global jurisdictions last year, but when push came to shove, the company owed the U.S. government a whopping bill of $0.

    How'd it pull off that trick? By losing lots of money.

    GE had plenty of earnings last year -- just not in the United States. For tax purposes, the company's U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.

    That left GE (GE, Fortune 500) with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of $1.1 billion back into its reported earnings.

    "This is the first time in at least decades that GE has reported negative U.S. pretax income and it reflects the worst economy since the Great Depression," Anne Eisele, GE's director of financial communications, said via e-mail.

    But what about the $10.8 billion profit overseas? GE is "indefinitely" deferring income tax payments on those profits, Eisele said.
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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    Why doesn't this happen to me?
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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    Because you are not a transnational corporation.

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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    Quote Originally Posted by American View Post
    Why doesn't this happen to me?
    You are just trying to get me in trouble now...
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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    Quote Originally Posted by jamesrage View Post
    I have mixed feelings on this. Yes everyone should pay their fair share. But at the same time you could put a 50% tax on businesses and they would pass those costs onto the consumer just like when they buy materials,equipment, pay for employees and other things used to make a product. This is why I laugh my ass off when die hard anti-smokers think big tobacco companies suffered, especially many of those tobacco companies own food companies the die hard anti-smoking people buy food products from. Why would companies not pass taxes onto the consumer?
    Perhaps because they can't. A company's ability to pass the tax along depends on the price elasticity of the underlying product. Price elasticity deals with the consumers propensity to keep buying a product at a higher price. Consumers will continue to pay more and more for certain products, such as gasoline at the expense of other products they like to buy, but can live without (perhaps like the newspaper). Companies that offer products that are elastic can not pass taxes along as their attempt to increase prices is more than offset by a decline in the number of units people will buy. Given, according to economic theory, that prices rise to the point of elasticity, in theory, companies can not simply pass a tax increase along to its customer, as the customer just buys less.

    In other words, if people are willing to pay $1.00 of a soda and the government raises income taxes on the soda company, that company's attempt to pass the tax increase along to the consumer could likely be met with a decline in sales....

    The extent to which taxes are divided between manufacturer and consumer is usually referred to as the incidence of tax. Rarely does the manufacturer nor the consumer get 100% of the incidence, its usually divided.... in accordance with the price elasticity of the underlying product.

    So, yes.... GE can pay taxes.
    Last edited by upsideguy; 04-20-10 at 10:51 PM.

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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    Quote Originally Posted by upsideguy View Post
    Perhaps because they can't. A company's ability to pass the tax along depends on the price elasticity of the underlying product. Price elasticity deals with the consumers propensity to keep buying a product at a higher price. Consumers will continue to pay more and more for certain products, such as gasoline at the expense of other products they like to buy, but can live without (perhaps like the newspaper). Companies that offer products that are elastic can not pass taxes along as their attempt to increase prices is more than offset by a decline in the number of units people will buy. Given, according to economic theory, that prices rise to the point of elasticity, in theory, companies can not simply pass a tax increase along to its customer, as the customer just buys less.
    It depends on what they manufacture and besides less sales means less money and therefore less taxes collected.

    In other words, if people are willing to pay $1.00 of a soda and the government raises income taxes on the soda company, that company's attempt to pass the tax increase along to the consumer could likely be met with a decline in sales....
    What does G.E. make? You do not think they would pass those cost onto other products?


    The extent to which taxes are divided between manufacturer and consumer is usually referred to as the incidence of tax. Rarely does the manufacturer nor the consumer get 100% of the incidence, its usually divided.... in accordance with the price elasticity of the underlying product.
    Taxes are just another expense towards making a product just like labor, materials, equipment and so on. If they make multiple products they might change the prices to help compensate.



    So, yes.... GE can pay taxes
    G.E. won't be the one paying it, it will be the consumers.Because G.E. makes everything from lightbulbs(which people do need) to industrial automation and much more.
    "A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murder is less to fear"

    Cicero Marcus Tullius

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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    Congratulations, GE has been exposed for using one of the many loopholes which exist in the system to get tax credit. If you're smart enough to find them, pretty much anyone can reduce what they owe by quite a bit.

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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    Quote Originally Posted by Orion View Post
    Congratulations, GE has been exposed for using one of the many loopholes which exist in the system to get tax credit. If you're smart enough to find them, pretty much anyone can reduce what they owe by quite a bit.
    Individuals don't have anywhere near the opportunity to do this.
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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    I don't see anything wrong with it. They didn't make any money here to tax.
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    Re: GE: 7,000 tax returns, $0 U.S. tax bill

    Quote Originally Posted by Deuce View Post
    Individuals don't have anywhere near the opportunity to do this.
    You're 100% right.

    If you're an American citizen working and living in a foreign country you are required to file your taxes on your earnings in that foreign country.
    You are allowed to deduct your foreign taxes but you still have to pay your American taxes.
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