General Motors Co., which has earned more than $13 billion since 2009, said Thursday its worldwide tax rate will increase to as much as 13 percent.
But the Detroit automaker, which reported $1 billion in profits for the first three months of the year, has legally avoided paying U.S. federal income taxes since exiting bankruptcy. And GM likely will pay no income taxes for many more years.
A series of Treasury Department rulings since 2008 let GM use $18 billion in losses — from the "old GM" that was left behind in bankruptcy — to offset any profits.
GM spokesman Jim Cain said the automaker pays "significant" state income taxes, but because of its prior losses doesn't incur federal tax liability. "We did not pay federal income tax last year," he said.
GM isn't alone among automakers that have paid little, if any, federal income taxes in recent years.
I agree with the "evil rich guys" chant and rant. But I'm talking about rich "public servant" guys who have created a true hell of insane and illegal laws.
I have no problem with a company like GM not paying income tax for a couple of years following bankruptcy. I have problems with companies like GE and Exxon get by with it. We somehow have created a system where we have a fairly high corporate tax rate - officially - but where some companies are allowed to skirt it entirely. We should be trying to close the loopholes and lower our tax rate to something like 10%, for everyone.
And as for our tax code, when you get 10 different interpretations from 10 different IRS officials regarding some of the complexities, obviously the monkeys in DC have created a system based on bribes, corruption, and outright stupidity with no comprehension or care for consequences, intended or unintended.
I'd scrap the entire code and limit the new one to five pages.
I have no problem with a company like GM not paying income tax for a couple of years following bankruptcy. I have problems with companies like GE and Exxon get by with it. We somehow have created a system where we have a fairly high corporate tax rate - officially - but where some companies are allowed to skirt it entirely. We should be trying to close the loopholes and lower our tax rate to something like 10%, for everyone.
I'm of the mind that taxing corporate profits doesn't make a lot of sense. Global companies like GM can just move their profits elsewhere; for other companies, it just encourages shopping for low tax locations. Better to encourage the investments of those profits that improve profitability and competitiveness (eg: new manufacturing equipment) and gain tax revenue through taxes on dividends and quick profits made by stock speculation. Also, low personal income taxes and a VAT on consumption would go a ways to encourage personal saving as well.
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