There is an article in today’s NYT about how little tax GE pays because of all the loop holes they take advantage. GE’s tax burden on it’s American profits last year was only 7.4%.
A lot of this is achieved by keeping profits offshore. this is why when the news states that businesses are sitting on $1 trillion in cash there is more to the story as that is all outside the US. Companies do not want bring that money in the country to avoid paying taxes on it. GE uses active financing which allows them to lend abroad while avoiding taxes on the income and amassing tax credits, write-offs and depreciation to offset their American taxes.
GE’s tax department employs 975 employees.
An even more striking figure is that the corperate share of US tax receipts in 2009 was ONLY 6.6%.
When the deficit appears to be national issue number one does it not seem ludicrous that corperations have so many loop holes that they pay so little tax?