If ever there was a reason to completely scrap our insane tax codes this is it.
CNN Money: 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.
That left GE (, ) 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. […]
But what about the $10.8 billion profit overseas? GE is "indefinitely" deferring income tax payments on those profits, Eisele said.
This country is in sore need of a very simple and very straightforward tax code. I would like to see a flat tax that allows no exemption and no deductions for anyone. The current progressive tax code with all its loopholes and schemes encourages cheating. Worse yet, those with money like GE have the most options to escape paying.
Does anyone really think GE truly lost $408 million in the United States? Most likely this crazy accounting that our current tax codes create. Under a straightforward flat tax system, GE and other like them could never get away with schemes like this.
Via: CNN Money