GE pays no income tax implies that the corporate tax system needs “reform”?
This nytimes article describes how GE, despite being America’s largest corporation, does not owe any corporate income tax. The company’s shareholders, of course, pay income tax on dividends, and the company collects sales tax, pays payroll taxes, pays real estate tax, etc., but through cleverness, trickery, and, mostly, lobbying, GE escapes the 35 percent corporate income tax.
The author of the article explains to some extent how GE’s purchase of a Congressman (New York’s Charles Rangel) enabled them to get the tax breaks they wanted, but mostly the author interviews people who believe that the system can somehow be “reformed” so that GE will pay more in the future.
Given that our politicians are more or less openly for sale, I don’t see how a company with more than $100 billion in annual revenue can be denied the laws that it wants, particularly if those laws are obscure and hard for the general public to understand. Is it reasonable to believe that somehow the laws will be adjusted so that small companies, without the resources to purchase Representatives and Senators, or even attend $5,000 per person dinners, pay less while GE pays more?
Wouldn’t it make more sense to scrap the corporate income tax (which a lot of economists have never liked) and replace it with something less susceptible to lobbying by the largest companies?
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