Well, there's the right way to learn about GE's federal taxes, and then there's the Press Release way.
In the Press Release way, we are told that GECapital took $32Bn in losses over a few years, which reduced their taxable income. (I don't doubt that for a second, by the way.)
But as PowerLine notes, the 10-K filing has another story altogether.
Our consolidated income tax rate is lower than the U.S. [35 percent] statutory rate primarily because of benefits from lower-taxed global operations, including the use of global funding structures, and our 2009 and 2008 decisions to indefinitely reinvest prior-year earnings outside the U.S. There is a benefit from global operations as non-U.S. income is subject to local country tax rates that are significantly below the 35% U.S. statutory rate. These non-U.S. earnings have been indefinitely reinvested outside the U.S. and are not subject to current U.S. income tax.
(Emphasis added.)
Taximagination!!
Which is why jobs and capital will never be repatriated at a 35% rate.
ReplyDeleteRegardless of GE or any other company.
...won't be repatriated at less than 35% either.
ReplyDeleteWe did, um, try to "repatriate jobs and capital" at a lower rate back in 2004. You know it wasn't that long ago. Don't remember how it worked?
Well almost all of that repatriated "capital" ended up as dividends and stock buybacks. As predicted of course. IOW, another tax holiday for rich people. A scam for the rest of America. Business as usual.
Corporate America doesn't have a free cash flow problem. They don't have an earnings problem right now either. In fact, corporate profits are at a post war high as employers slash overhead.
Lack of sales is our problem.
Repatriating offshored profits isn't going to do anything to fix that.