You may have seen that GE, despite having a massively profitable year, will pay zero federal income taxes for 2010. That’s right, less than you! And this is the second year in a row. I have no love for GE and its hearty embrace of crony capitalism, but they are doing the right thing by not paying any taxes. How can I say this? Because I believe no business entity should pay taxes, and that includes behemoth GE.
Let me ask you a question: How many people do you think would die of cancer each year if all cancer cells could be somehow trained to start growing on the tip of your nose? Every morning the first thing you would do is look in the mirror and see if you had any cancer. If you saw something, you would immediately have it removed. That would be the end of cancer, right?
The price of runaway government today is like cancer in that it hides undetected until the symptoms begin. By then, it’s often too late. If every citizen woke up every morning and could see the true cost of runaway government on the tips of their noses, they would never allow it to metastasize, and that would be its ultimate demise.
Business taxes are a good example of this disease. The fact is, businesses don’t actually pay taxes. Citizens do. Businesses merely collect taxes and pass the cost along to the next entity in the supply chain until an ultimate “end-user” buys the product and pays the cumulative tax. Economically literate politicians, (an oxymoron) know this full well, but will never end stealth taxes unless forced to because they are a perfect way to ensure that the cancer they caused stays undetected.Today, Jeff Immelt addressed this issue, but claimed the reports were wrong, and asserted G.E. did pay taxes. That's a shame. Regardless of the facts, I'd have preferred he embrace my G.E. Rule, which states that no business should pay more taxes than G.E., which allegedly pays zero. "The G.E. Rule" would solve "The Buffett Rule" along with a plethora of other economic issues:
Of course your taxes would go up, but that would alert you to the TRUE size of government and how long would it be before you did something about that?
- Unemployment would plummet
- Growth would flourish
- Capital would flood into the US
- Your pay would go up
- Your company would be able to compete with the Big Boys who currently get special treatment
- It would end the deduction for employer health insurance freeing you to make your own health choices
- You could leave your job and your health insurance would go with you
- Obama’s Buffett Rule could be satisfied as it would end double taxation on dividends and capital gains which could then be taxed at the same rates as income
- Overseas profits could be repatriated instantly
- It would end taxation without representation for businesses
- It would deal a serious blow to Stealth Taxes (more taxes would be transparent to voters once and for all)
- Most corporate lobbyists would be out of a job
- Crony capitalism would be seriously curtailed
- Prices on all goods and services would plummet
- Stock bubbles, like the Tech Bubble of the 90s, would not happen as stocks would be rationally valued and taxed once at the individual level.
- Companies, even Warren Buffett’s Berkshire Hathaway, would pay dividends!
Jeff Immelt should be defending G.E.'s tax avoidance instead of denying it.