I visited the IRS website on tax day, where I noticed that they use the term "tax products" to describe materials they produce, as if they were an industry selling toothpaste.That reminded me of something the scholar Noam Chomsky said: "It's the same techniques that are used to market toothpaste."
One of the members of MOMCOM evidently purchased the right "tax products", because no taxes needed to be paid after all was said and done:
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.(CNN, GE: $0 U.S. tax bill). The government back door bailout "tax product" seems to be popular with IRS corporate customers eh?
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.
GE has always been a mystery to investigative accountants who have compared GE accounting to AIG and Madoff.
"GE has always been a mystery to investigative accountants who have compared GE accounting to AIG and Madoff."
ReplyDeleteThat's a hilarious comment, because of course regulators do have the power to clean up such nonsense by forcing GE to comply with rules of accounting that would clear up such chicanery. But of course they won't do that because most regulators know the people working at GE and presumably want to join them someday (revolving door and regulatory capture). The system is now blatantly corrupt as opposed to merely corrupt, as the corporate boys no longer even try to hide their contempt for the rest of us.
disaffected,
ReplyDeleteI don't know if you followed the links in the post, so let me short cut if for you to this link in one of the Dredd Blog posts in the link chain.
One comment quoted by the Dredd Blog post is:
"Shining one of its famous light bulbs onto its financial statements would help explain one of the great mysteries of the stock market -- how GE has managed to produce steady earnings growth for better than two decades even though many of its businesses are cyclical in nature."