hugh59
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Here is an example of a company that invests heavily in politicians... and keeps its tax bill low (or nonexistent):
G.E.'s Strategies Let It Avoid Taxes Altogether
GE, it brings good things to life. Yeah, but how about the rest of us? When you have friends in high places, you get loopholes.
This is just wrong. But it is what happens when a company can afford the very best tax planning and very generous political contributions.
gramarye
In Exile
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There are definitely some loopholes that could be closed. However, there are a lot of laws that allow corporations to engage in tax planning but which really aren't "loopholes" at all. The territorial tax system, for example, is a fairly common one, and I think the system is symmetric.
GE may not pay taxes on foreign income until it repatriates the money from abroad to here. However, I don't think Honda of America pays its tax to Japan until it repatriates money from its Honda of America to its Japanese parent, either.
Other tax laws really are corporate welfare, of course, and those could definitely stand to go by the wayside.
rus
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So, how are you defining corporate welfare?
http://reason.com/archives/2011/03/24/end-corporate-welfare
Left-wingers criticize corporate welfare until it's for something they likeâ€â€for example, "green technology.""The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones, and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
Seems like in a way it's like defining "wasteful spending", which can depend on one's perspective.
KSquared
Literally Hell
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rus wrote >>
So, how are you defining corporate welfare?
http://reason.com/archives/2011/03/24/end-corporate-welfare
Left-wingers criticize corporate welfare until it's for something they likeâ€â€for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones, and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
Seems like in a way it's like defining "wasteful spending", which can depend on one's perspective.
Well, it's not really a free market for green sources of energy when the oil industry gets billions of dollars in subsidies from the government, is it?
howatzer
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KSquared wrote >>
rus wrote >>
So, how are you defining corporate welfare?
http://reason.com/archives/2011/03/24/end-corporate-welfare
Left-wingers criticize corporate welfare until it's for something they likeâ€â€for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones, and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
Seems like in a way it's like defining "wasteful spending", which can depend on one's perspective.Well, it's not really a free market for green sources of energy when the oil industry gets billions of dollars in subsidies from the government, is it?
and any reduction of a tax on a company they don't like is a "subsidy".
KSquared
Literally Hell
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howatzer wrote >>
KSquared wrote >>
rus wrote >>
So, how are you defining corporate welfare?
http://reason.com/archives/2011/03/24/end-corporate-welfare
Left-wingers criticize corporate welfare until it's for something they likeâ€â€for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones, and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
Seems like in a way it's like defining "wasteful spending", which can depend on one's perspective.Well, it's not really a free market for green sources of energy when the oil industry gets billions of dollars in subsidies from the government, is it?
and any reduction of a tax on a company they don't like is a "subsidy".
I'm not going to derail this thread with partisan bullshit. My point was that in this particular example, it's difficult for green energy companies to compete on the same field. It has nothing to do with what I like or dislike.
rus
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KSquared wrote >>
howatzer wrote >>
KSquared wrote >>
rus wrote >>
So, how are you defining corporate welfare?
http://reason.com/archives/2011/03/24/end-corporate-welfare
Left-wingers criticize corporate welfare until it's for something they likeâ€â€for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones, and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
Seems like in a way it's like defining "wasteful spending", which can depend on one's perspective.Well, it's not really a free market for green sources of energy when the oil industry gets billions of dollars in subsidies from the government, is it?
and any reduction of a tax on a company they don't like is a "subsidy".
I'm not going to derail this thread with partisan bullshit. My point was that in this particular example, it's difficult for green energy companies to compete on the same field. It has nothing to do with what I like or dislike.
The point I was trying to get at is the question "what is corporate welfare"?
Tax breaks? Direct subsidy? A tax code so complicated those who can afford the best accountants ( read: large / rich companies ) can gain competitive advantage?
DavidF
Elysium Fields
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rus wrote >>
KSquared wrote >>
howatzer wrote >>
KSquared wrote >>
rus wrote >>
So, how are you defining corporate welfare?
http://reason.com/archives/2011/03/24/end-corporate-welfare
Left-wingers criticize corporate welfare until it's for something they likeâ€â€for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones, and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
Seems like in a way it's like defining "wasteful spending", which can depend on one's perspective.Well, it's not really a free market for green sources of energy when the oil industry gets billions of dollars in subsidies from the government, is it?
and any reduction of a tax on a company they don't like is a "subsidy".
I'm not going to derail this thread with partisan bullshit. My point was that in this particular example, it's difficult for green energy companies to compete on the same field. It has nothing to do with what I like or dislike.
The point I was trying to get at is the question "what is corporate welfare"?
Tax breaks? Direct subsidy? A tax code so complicated those who can afford the best accountants ( read: large / rich companies ) can gain competitive advantage?
All of the above? I do agree Rus, that it can be so broadly defined that it becomes meaningless, or that it can apply to both things we like and dislike.
I definitely defer to Hugh here. If the article is even remotely accurate, GE has gamed the system to an extreme degree that shouldn't be difficult for any of us to as unfair to both the taxpayers and the free market.
hugh59
Aboard the ultimate power in Olde Towne East
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DavidF wrote >>
rus wrote >>
KSquared wrote >>
howatzer wrote >>
KSquared wrote >>
rus wrote >>
So, how are you defining corporate welfare?
http://reason.com/archives/2011/03/24/end-corporate-welfare
Left-wingers criticize corporate welfare until it's for something they likeâ€â€for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones, and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
Seems like in a way it's like defining "wasteful spending", which can depend on one's perspective.Well, it's not really a free market for green sources of energy when the oil industry gets billions of dollars in subsidies from the government, is it?
and any reduction of a tax on a company they don't like is a "subsidy".
I'm not going to derail this thread with partisan bullshit. My point was that in this particular example, it's difficult for green energy companies to compete on the same field. It has nothing to do with what I like or dislike.
The point I was trying to get at is the question "what is corporate welfare"?
Tax breaks? Direct subsidy? A tax code so complicated those who can afford the best accountants ( read: large / rich companies ) can gain competitive advantage?All of the above? I do agree Rus, that it can be so broadly defined that it becomes meaningless, or that it can apply to both things we like and dislike.
I definitely defer to Hugh here. If the article is even remotely accurate, GE has gamed the system to an extreme degree that shouldn't be difficult for any of us to as unfair to both the taxpayers and the free market.
You raised an important issue that I missed, "if the article is remotely accurate...."
rus
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DavidF wrote >>
All of the above? I do agree Rus, that it can be so broadly defined that it becomes meaningless, or that it can apply to both things we like and dislike.
I definitely defer to Hugh here. If the article is even remotely accurate, GE has gamed the system to an extreme degree that shouldn't be difficult for any of us to as unfair to both the taxpayers and the free market.
From the article:
But critics say the use of so many shelters amounts to corporate welfare, allowing G.E. not just to avoid taxes on profitable overseas lending but also to amass tax credits and write-offs that can be used to reduce taxes on billions of dollars of profit from domestic manufacturing. They say that the assertive tax avoidance of multinationals like G.E. not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States.“In a rational system, a corporation’s tax department would be there to make sure a company complied with the law,†said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. “But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative.â€Â
Sounds like a great argument for tax reform, corporate welfare or not.
hugh59
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I am a tax lawyer. Deductions, credits, subsidies...they are all the same to me. They distort the economics of any businesses affected. Also, there is usually some favoritism built in to benefit certain entities to the detriment of all others. We are better off without these "benefits." Keep the tax law simpler. You can raise the same revenues with lower rates if you get rid of the deductions and credits and subsidies.
howatzer
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speaking of which, in classic NYT style, the article is misleading in that it claims GE "pays no taxes" - they may be beating the corporate tax, but if they hire workers in the US they're sure as hell paying payroll tax and a slew of other operating taxes. Also love how this rag likes to splash editorials like this all over their "news" sections.
and how much of these deductions come from charitable giving (like Charley Rangel's school)? NYT doesn't bother figuring that out.
Why do we tax profits anyway?
hugh59
Aboard the ultimate power in Olde Towne East
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howatzer wrote >>
speaking of which, in classic NYT style, the article is misleading in that it claims GE "pays no taxes" - they may be beating the corporate tax, but if they hire workers in the US they're sure as hell paying payroll tax and a slew of other operating taxes. Also love how this rag likes to splash editorials like this all over their "news" sections.
and how much of these deductions come from charitable giving (like Charley Rangel's school)? NYT doesn't bother figuring that out.
Why do we tax profits anyway?
You are right. One could argue that it might be better to tax this income at the shareholder or employee level, that would reduce the company's incentive to do tax avoidance planning.
Mercurius
First Avenue
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KSquared wrote >>
howatzer wrote >>
KSquared wrote >>
rus wrote >>
So, how are you defining corporate welfare?
http://reason.com/archives/2011/03/24/end-corporate-welfare
Left-wingers criticize corporate welfare until it's for something they likeâ€â€for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones, and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
Seems like in a way it's like defining "wasteful spending", which can depend on one's perspective.Well, it's not really a free market for green sources of energy when the oil industry gets billions of dollars in subsidies from the government, is it?
and any reduction of a tax on a company they don't like is a "subsidy".
I'm not going to derail this thread with partisan bullshit. My point was that in this particular example, it's difficult for green energy companies to compete on the same field. It has nothing to do with what I like or dislike.
Um... pretty sure green energy is just as heavily, if not more, subsidized. On that note:
http://www.gepower.com/prod_serv/products/renewable_energy/en/index.htm
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