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Obama on Corporate Taxes – “Whatever GE wants”
Jeff Immelt, the boss at GE and the President's Best Executive Friend Ever ("BEFE") had this to say about reforming corporate taxes:
Our
system is old, it’s outdated, it’s complicated -- and all of us are for
closing the loopholes. Absolutely, a lower corporate tax rate, and a territorial system, just like our global competitors have.
I love it when 'Jeff Boy' says “all of us”. Who is he referring to with that? American citizens in general? Not the case. Employees of big companies like GE? No, not them either. The “Us” that Jeff is referring to is America’s CEO’s and top exec’s. That lucky group comes to about 0.01% of the population.
Unfortunately, guys like Immelt have the President’s ear. That Jeff Boy
is actually a formal adviser to the president while at the same time he
is pushing a tax plan to benefit himself and another 30,000 execs is over the top. From GE’s top bean counter, Gary Sheffer:
GE favors closing loopholes, a lower corporate tax rate, and a territorial system in line with every other developed country in the world.
So GE and the rest of the execs are willing to give up loopholes, but in exchange they want a lower marginal rate and they want a territorial system.
This territorial system that is being pushed means that companies like
GE will not be taxed at all on any of their foreign income. These
companies will be tax motivated to build new productive facilities in
the lowest tax haven. A territorial system will just push productive
assets (and jobs) offshore until the US tax rate falls to a level that
is equal to (or less than) another country. As a result of this proposal, the big US companies will hold the country hostage. Either they get the lowest marginal tax rate, or they just ship off some more jobs abroad.
Truly global companies like GE will be able to drive a truck through
these new rules. They will push profits offshore so they will not be
subject to even the new lower US rates.
This chart from the CBO shows the tax contributions of US corporations.
Does it surprise you that all of our successful companies combined pay
about 1/8th the amount that individuals do? If the proposals put forward by Immelt are adopted, the amount that those companies will contribute will fall further.
Lower taxes is exactly what the “Us” crowd wants. That’s understandable, they are Us’s. But for the life of me I can’t understand why Obama has joined with the Us’s. If voters actually figure out who is calling the shots on tax and economic policy they will turn on the big O. Having Jeff Boy as the President’s BEFE is the worst conflict of interest I can think of.
Note:
As an individual (and US citizen) you are subject to taxation on a
global basis. If you invest in Australia and make a buck, you owe taxes
to Uncle Sam. If you went over the border to Canada to work for a year,
you would owe taxes in the US.
Assume that individuals had a territorial system on tax as the Execs are
pushing for. What might you do? You might be inclined to work outside
of the US and you certainly would have a motivation to put your money to
work some other place.
These tax motivations would be very much to the disadvantage of the US. The economy would suffer and tax receipts would fall. Of course there is no discussion for individuals to be taxed on a territorial system. That carve-out is only for the big shots in the S&P 500.
If it’s not reasonable or fair for individuals to be taxed on a
territorial basis how could it possibly be fair for the S&P 500? Answer: it can’t be.
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I don't believe you had any actual U.S. employees. I suspect your "businesses" consisted of passive investments, real estate and other parasitic activities of the rentier class. How do I know? Because there is no business requiring employees that could be made more profitable in highly regulated, high wage land-constrained Switzerland than in the U.S., regardless of tax rates.
The US is more highly regulated than Switzerland. Owning land in Switzerland actually exposes a person or organic entity to worldwide taxation. If you think a business requiring employees can't be more profitable in Switzerland than I feel sorry for your shareholders, because the fiduciary responsibility for their investment is being filled by a fool.
Investing and real estate are parasitic? So we're supposed to spend all our money on cheap Chinese made crap or stick it in the banks and receive 0% interest? No thanks. You can keep your Bennie Bucks. I'll invest mine in land and non-Bennie Bucks.
Good Buy. See ya, don't let the door hit you on your way out. GE paid zero taxes. With all the tax code for big business all I have to say is you need a better tax man. And wow, how many jobs did you create here in the last ten years of tax breaks for all. In America their are two tax methods. Up front or Big Ben printing. Either way, they get you. Last time I checked, Robo and all the Wall Street guru's said profits and earnings have never been better. You must be a piss poor businessman or quite simply, there is NO demand for your products or services here. Eh. That's what the NFIB says there feed back is. The economy sucks. So who should pay the bill for ten years of military froth on a charge card? Who? Nobody? Free military for all. Yup.
GE is bank, that has some smaller businesses manufacturing shit in heavily government subsidized industries. They have been offloading manufacturing in non-subsidized industries for years. I don't need a better tax man, and simply I refuse to make poor strategic business decisions, in exchange for short term taxation and subsidy benefits.
If US regulators and lawmakers actually knew how to profitably run a business, and structured their control mechanisms accordingly, there could be jobs for everyone that wanted one and balanced budgets. However, replacing one insane regulatory framework with an equally insane one does not solve the problem.
There is actually plenty of demand for my business in the US, ironically the road building technology is in higher demand as a result of increased EPA stupidity masking as regulation, and budget shortfalls on the state level, and higer oil prices. However, demand is entirely unrelated to decisions as to the domicile and headquartering of a company and its operations. The several hundred thousand dollars of products that are required per mile of road is wealth that is exported from US to pay the wages and social insurance of EU factory workers, and my shareholders are richer for it.
The NFIB is largely irrelevant to my business, even when it was based in the US. More important would be ENR's new project rankings. What should scare Americans is the comparative number of large infrastructure projects in Brazil vs. the United States over the last 24 months. After $700 billion in shovel ready shit, and endless public temper tantrums about the sorry state of US infrastructure, the US is losing ground even faster than it was before- in terms of being the hemisphere's largest market. By the way, there is no double taxation treaty between the US and Brazil, so US companies are largely shut out of the largest growing market on a competitive basis.
What makes you think he's big business. Yeah keep driving small businesses offshore and we will no longer have big businesses. All big businesses started off small. GE spends tens of millions on tax lawyers, CPA's and former IRS agents. Not every business can afford that.
if we stop bailing out the cops... imean globalists... imean banks... how funny it all would be
Is Immelt Obama's latest "down-low" buddy?.
Immelt should have starred in Atlas Shrugged the movie, as Dagny's douchebag, cheesedick, slimebag brother.
Who is John Galt mother fuckers
+ 1,000,000
WE are John Galt, mother fuckers!
Galt was for corporate taxes?
becuase of your censorship Bruce I have held a grudge.. but your work lately is just to fucking good not to be hailed as excellent!
Keep up the good work you secret censorship freak!
Censorship? What makes you think that?
I assure you, I have no capacity to edit/delete comments on any location I post on including my own blog. Most certainly ZH.
If I did have the capacity to limit comments, I would not do it. I don't mind when people give me shit if I deserve it (rarely..) I love a fight.
b
Spot on Bruce... keep these facts rolling out.
Thank you!
My feeling is this issue is a red herring......get rid of the corporate tax system. Why should I have to pay taxes twice on the dividends I earn??? Why not get rid of the corporate taxes and instead focus on the regulation of the corporations and control by shareholders. Complacent boards and lax accountability are the true cause for the failed economic policy.
Yes, corporations are legal fictions, with the actual incidence of the tax being on employees, shareholders, suppliers, etc. The current system also discourages dividends because of double taxation. And enormous numbers of man hours are spent on the corporate tax--I know, because I worked for a top 100 corporation. All for insignificant collections. Flat tax or eliminate it.
Thank you for your contributions, Bruce.
I agree with that, great work lately! Bullseye on target.
I posted this Bloomberg article the other day - it is worth a read if you haven't seen it and while not about taxes the themes are the same. Pretty sad that Bloomberg has sunk to such levels, as this is one signifcant piece of propaganda.
Wall Street: Not Guilty
fully agree.
That article is basically saying if you're a CEO and turn a blind eye to fraud, you're not criminally liable.
The executive suite are suppose to set the 'tone at the top'. Sure Mozillo et al did not expressly say "use Linda Green" or "issue mortgages to high credit risk borrowers", but they failed in the fiduciary duty to their shareholders to keep the firm as a going concern, and not raid corporate assets (through excessive pay).
There's suppose to be a law requiring at least a simple majority of shareholders to vote when significant corporate assets are sold / transferred. But even if that law was enacted, all the C-suite would do is grant themselves Class A or some other form of options / shares giving them voting privileges for that.
I think it was Chuck Prince (or Stan O'Neal) who said it best... when the music's playing, you have to dance. So they knew everyone was leveraging up to their eyeballs, and taking on risks they knew they could not cover, with known fraudulent mortgages, and fraud when selling their 'AAA-rated' MBS/ABS/CDO/CDO2 etc.
You don't need legislation for fraud, there's a term called 'common law fraud'. Both the investment banks, ratings agencies and mortgage originators are all complicit in this fraud.
http://www.fraudlaw.org/Definitions%20and%20concepts/DEFINITIONS%20fraud...
http://www.houston-opinions.com/law-fraud.html
If only the Federal Reserve could be prosecuted for fraud and counterfeiting.
Agree: Lowenstein is a douchebag apologist for the Wall Street crooks/banksters and should be tarred and feathered. That article is complete, mindless horseshit. Roger, get a brain, or lease one at least.