GE 0% tax on multi billion profit


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Profile Gary CharpentierProject donor
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Message 1095414 - Posted: 9 Apr 2011, 21:02:27 UTC - in response to Message 1095302.

Under Kennedy, the highest marginal tax rate in the U.S. was 90%.

I'm going to call BS here. The subject is not personal income tax rates.
http://www.irs.gov/pub/irs-soi/02corate.pdf
I see the top rate ever imposed as 52.8% although my eyes may have missed a line.

As has been pointed out many times the higher the US Corporate tax rate, the fewer jobs there will be in the USA.


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Message 1095416 - Posted: 9 Apr 2011, 21:11:33 UTC - in response to Message 1095407.
Last modified: 9 Apr 2011, 21:16:39 UTC

You can look it up, I am out for the night.

If you can't find it, I'll provide the documentation tomorrow.

You read it in the New York Times or someone who used that as a sole source.

Turns out they didn't get it right.
http://features.blogs.fortune.cnn.com/2011/04/04/the-truth-about-ges-tax-bill/

Why would they distort? Sell more copies maybe?
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Message 1095420 - Posted: 9 Apr 2011, 21:42:22 UTC - in response to Message 1095402.

You tax the poor enough to make them hurt. What would it take to make the corporations to hurt with taxes? Or is it only ok to tax the powerless that way?

You can't hurt corporations with taxes, because 100% of every single tax they pay is passed directly onto the consumer. All that does is drive prices up.

So what of all that talk about only being able to charge what the market can bear? What you've said seems to contradict that.

When you drive prices up, that hurts the powerless and the poor, the most. It erodes their purchasing power, and puts a drag the economy as people can afford less.

Again, I understood that business charge as much "as the market can bear". I think that it's hogwash that they can drive prices up indefinitely.

It's a tax, and as such, it is applied to every company, and they all pass it on 100% to the consumer. That drives prices up and prices the entire market higher.

What happens is that as prices rise, less and less people are able to afford to buy--as always that hurts those that can afford it the least, the most. You are right that they can only charge what the market will bear, similarly they can only price above their costs. If the market won't bear a price that is too high, they cannot drive prices infinitely higher. What happens is that as people cease to be able to afford their product, they go out of business. When they go out of business, they pay zero tax. Even if you charge them 100%, 100% of zero is zero. No taxes are paid. Whatever taxes are paid are paid for by the consumer in the form of higher prices.

If it is, then there is something wrong with the system. How about we tax each according to their needs and means rather than putting a heavier burden on those that can least bear it?

Interesting that you understand that the poor can least bear the heavier burden, and yet you advocate a policy that directly and instantly makes their burden worse.

That is the constant cry of the corporations, yet what evidence is there that it's actually true?

Simple economics. It's self-evident. In a car, the cost of steel goes directly into the price. The cost of glass goes directly into the price. The rubber. Plastic. EVERYTHING. Taxes are no different: They are a cost that must be paid for just like steel or glass--they go directly into the price.

That's the evidence. Since prices go up, that places a heavier burden on those that least bear it.

The problem with income taxes are that they are a disincentive to earn. I'll ask you again, if you had your choice, would you like 10% of $1000.00 or 90% of $100.00?

I don't think anyone has advocated a 90% tax level. However, you've left out the part that most taxes are graduated. You do not pay the 90% rate (assuming we were going to charge a 90% rate) on the whole amount.

Sure they have. 90-94% was a REALITY in the U.S. from 1943 to 1963, and there were I think 26 tax brackets. You would get a 2% raise, that could easily throw you into a higher tax bracket--net loss.

I'm not leaving it out, I'm simply talking about the marginal tax rate--meaning that in higher brackets, that is a disincentive to earn further income. People hit those rates and stop trying to earn, because no one wants to continue to work if they are only going to net 10% of what they have earned.

Under Kennedy, the highest marginal tax rate in the U.S. was 90%. So, with extra work you can earn an additional $1000 income. With a 90% tax rate, how hard are you going to work if you only get to keep $100? With a 10% tax rate, how hard are you going to work if you get to keep $900? Who in their right mind works all that hard to keep only 10% of what they earn?

I think you need to examine what they are working so hard at to get into that bracket. Where is that money coming from? How are they externalising their costs (eg cleaning up the toxic waste they dump?). These profits aren't just coming from 'working harder'. In fact companies such as Walmart have benefited from terrible employment practices that put up their profits, but don't make life better for the people that end up working for them. They are all 'sound' economic practices, but they are absolutely not to the benefit of society.

We disagree. Even if I grant that working for Walmart doesn't make life better for Walmart's employees, Walmart is ABSOLUTELY to the benefit of society because Walmart drives down the prices of everything they sell, thus helping to lift the heavier burden on those that can least bear it.

I would rather drive prices down for the billions of people who shop freely at Walmart, than worry about how many benefits Walmart pays its thousands of employees. I want to help countless millions, not x number of thousands. THAT is definitely to the benefit of society.

My point being that these mega profits are not made through 'working harder' When we discuss companies such as GE we aren't talking about you or I working harder to make more money. They are simply not comparable. For example a single mother who works 3 jobs to support her children because wages are so low and has no benefits from companies such as Walmart simply because they can get away with keeping her hours below the threshold for benefits. A person such as this works very very hard I'd say. I'd also say you'd help her better by cutting her taxes and making sure that companies such as GE pay more taxes. Cutting Walmart's taxes are in no way going to help her. Giving her better employment rights so that she can get her benefits no matter how many hours Walmart schedule her for would directly help her.

Again, GE doesn't EVER pay taxes, the consumer does. This is true for every corporation, for the reasons noted above. But GE certainly does take taxes into account--if the taxes crush them, they take their resources somewhere else.

But it really doesn't matter, taxes, benefits, rights, they are all costs that are passed directly on to the consumer. Cutting Walmart's taxes may not directly help your woman, you are right. But significantly cheaper costs for everything she needs certainly does.
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Message 1095421 - Posted: 9 Apr 2011, 21:43:26 UTC - in response to Message 1095403.

Is that so? It must be true because you said so.

That, my dear, sounds strangely familiar... 8^]

It was a deliberate homage. :D

One of the many reasons I love you so much.
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Message 1095422 - Posted: 9 Apr 2011, 21:47:30 UTC - in response to Message 1095414.

Under Kennedy, the highest marginal tax rate in the U.S. was 90%.

I'm going to call BS here. The subject is not personal income tax rates.

The arguments remain the same: the higher the taxes, the higher the cost of the available goods in the marketplace because the taxes are passed directly through to price.

Taxes are just costs like all other raw materials.

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Message 1095424 - Posted: 9 Apr 2011, 21:51:53 UTC

Welcome back, Rush!

(back on topic)

Boo GE!
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Message 1095428 - Posted: 9 Apr 2011, 22:07:40 UTC - in response to Message 1095424.
Last modified: 9 Apr 2011, 22:09:23 UTC

Boo GE!

Yeah for GE.

Obey the tax law.

Show them what fiduciary duty is.

Move those jobs overseas and make them learn what their tax law means.

Yeah GE!
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Message 1095620 - Posted: 10 Apr 2011, 11:11:40 UTC

Protect the poor by not taxing the corporatists.
Rush, you're haven't missed a beat.
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Message 1095640 - Posted: 10 Apr 2011, 12:29:47 UTC - in response to Message 1095620.

He sure hasn't. I'll say it again. If you don't tax corporations then they just run on profit They also don't need to be worried about being fiscally lean or responsible.

Corporations can only pass along their tax burden to a certain extent and still maintain their level if profit. At a certain point people slow then stop buying products when the price becomes to high. That is the point where corporations start reducing their profit margin and megabonuses to maintain product viability.

I recall the several Corporatist apologists declare that Corporations shouldn't be rescued but be allowed to fail or thrive on their own. Knowing you are going to be taxed the same thing still applies. If you can't survive under the conditions then your extinction is inevitable
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Message 1095711 - Posted: 10 Apr 2011, 17:09:14 UTC - in response to Message 1095620.

Protect the poor by not taxing the corporatists.
Rush, you're haven't missed a beat.

Address the arguments.

Since the poor (and every consumer) pays every single cent of taxes on a corporation, you aren't helping them by taxing corporations. You're just driving the prices that they pay for what they need, UP.

Since they have very very limited disposable income, higher prices mean they can afford less of everything.

How does that help them?
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Message 1095726 - Posted: 10 Apr 2011, 17:32:59 UTC - in response to Message 1095640.

He sure hasn't. I'll say it again. If you don't tax corporations then they just run on profit They also don't need to be worried about being fiscally lean or responsible.

Sure they do. Because every other corporation out there is trying to crush them out of existence. They have to constantly strive to make a better product at an ever lower price.

Just off the top of my head: Borders, bankrupt. Blockbuster, bankrupt. GM, bankrupt. Lehman Brothers. Chrysler. Enron. Washington Mutual. Delta. United. The list is endless.

Despite being some of the biggest companies in the world, they did not "just run on profit," they failed. They very much had to worry about being fiscally lean and responsible, and they failed. They went bankrupt.

However, that does not address the simple truth that 100% of the taxes they pay are passed directly onto the consumer, driving prices higher, and hurting those that can afford it the least, the most.

Corporations can only pass along their tax burden to a certain extent and still maintain their level if profit. At a certain point people slow then stop buying products when the price becomes to high. That is the point where corporations start reducing their profit margin and megabonuses to maintain product viability.

You got the first two sentences right, that's very true. But the profit margin is one of the smallest aspects of any corporation. There's a very small amount to how high you can drive costs and the corporation still exist.

As far as payroll and bonuses, rare indeed is the company that ceases to reward it's most important employees, though bonuses are sometimes cut, because those employees will go somewhere else.

I recall the several Corporatist apologists declare that Corporations shouldn't be rescued but be allowed to fail or thrive on their own. Knowing you are going to be taxed the same thing still applies. If you can't survive under the conditions then your extinction is inevitable

Exactly. They should be allowed to fail. No bailouts. Ever.

But you have a problem with the last two sentences: How many taxes to extinct corporations pay? Zero. What is one of the number one things they stop paying as they get closer to failing? Taxes.

Odd, I can't fathom how you would help anyone with corporate tax dollars when you don't get any.
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Message 1095754 - Posted: 10 Apr 2011, 18:10:27 UTC - in response to Message 1095726.

extinct major corporations make room for smaller more agile business to fill in where they have failed.

Excess profits that are merely offshored (yes money can be taxed before it leaves these shores, or comes in, and should be) simply speed the death of ANY income.

There is no trickle down. It is a lie.
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Message 1095776 - Posted: 10 Apr 2011, 19:11:29 UTC - in response to Message 1095711.

Protect the poor by not taxing the corporatists.
Rush, you're haven't missed a beat.

Address the arguments.

Since the poor (and every consumer) pays every single cent of taxes on a corporation, you aren't helping them by taxing corporations. You're just driving the prices that they pay for what they need, UP.

Since they have very very limited disposable income, higher prices mean they can afford less of everything.

How does that help them?

So what you are saying is that G.E. have passed these tax cuts onto the American people. So those millions of dollars they have sitting in offshore bank accounts doing nothing aren't there? They've been used to cut prices? So you are saying that the price of Oil and Gas has gone down because of these tax breaks? Oh...they have trains too..train fares have gone down right?

G.E. has NOT passed these tax breaks on to the American people. It's a nice theory you have, but reality tells a different story.

Our underpaid worker at Walmart might be saving money on their shower curtain and bath mat, but her rent has gone up, her fuel costs have gone up. her bus fares have gone up and she is paying a larger proportion of her wages on taxes than Walmart. I think she'd be better off with a pay rise and a tax cut, because Walmart are not going to give her that money out the goodness of their hearts. They charge for products what the market can bear, it doesn't matter how big or small their profits are.
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Message 1095782 - Posted: 10 Apr 2011, 19:17:27 UTC - in response to Message 1095754.

extinct major corporations make room for smaller more agile business to fill in where they have failed.

Who bought Enron?

I'm afraid it doesn't work like that. Their huge competitors snap up the business in a NY minute, because they have the excess capacity and sales force in place. A start up stands no chance.

Excess profits that are merely offshored (yes money can be taxed before it leaves these shores, or comes in, and should be) simply speed the death of ANY income.

Jesus had something to say about money changers, which is what a tax on money going in or out of a country is.

There is no trickle down. It is a lie.

Yes we know. Corporations don't hire people and pay them wages. Only the government does that.

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Message 1095784 - Posted: 10 Apr 2011, 19:19:01 UTC - in response to Message 1095782.

corporations use excess profits to cut and export jobs.

THAT is reaganomics in action.
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Message 1095787 - Posted: 10 Apr 2011, 19:22:59 UTC - in response to Message 1095784.

corporations use excess profits to cut and export jobs.

THAT is reaganomics in action.

No that is fiduciary duty in action. Hire the worker who asks for the lest to do the job in the country with the lowest tax rate. That ain't the USA!

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Message 1095789 - Posted: 10 Apr 2011, 19:26:19 UTC - in response to Message 1095787.

corporations use excess profits to cut and export jobs.

THAT is reaganomics in action.

No that is fiduciary duty in action. Hire the worker who asks for the lest to do the job in the country with the lowest tax rate. That ain't the USA!


As I said, tax all the money coming in and out of the country.
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Message 1095790 - Posted: 10 Apr 2011, 19:28:48 UTC - in response to Message 1095789.
Last modified: 10 Apr 2011, 19:37:45 UTC

corporations use excess profits to cut and export jobs.

THAT is reaganomics in action.

No that is fiduciary duty in action. Hire the worker who asks for the lest to do the job in the country with the lowest tax rate. That ain't the USA!


As I said, tax all the money coming in and out of the country.

Be the money changer!

[edit]Now that I think about it, that idea on taxing all the money is so far to the right it is more right than the tea party. Just imagine the tax money generated from all those western union money transfers from all the illegals sending money back home. Just imagine it. Might stop them from coming in the first place!
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Message 1095812 - Posted: 10 Apr 2011, 19:50:05 UTC - in response to Message 1095790.

It sure would put a damper on those offshore accounts in the Cayman Islands.
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Message 1095835 - Posted: 10 Apr 2011, 20:09:21 UTC - in response to Message 1095812.

It sure would put a damper on those offshore accounts in the Cayman Islands.

Really? http://www.nytimes.com/2010/03/18/business/18launder.html Just because there is a law. Amazing.

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