How to make $5.1 Billion (US) and not pay federal taxes

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SUMMARY

General Electric (GE) reported a profit of $5.1 billion in 2010 without paying federal taxes, raising concerns about corporate tax laws. Participants in the discussion argue that the current tax structure allows corporations to avoid double taxation, while suggesting a flat tax system could eliminate inequities. The conversation highlights the economic implications of corporate taxes, including their effect on production costs and job creation. Participants advocate for a shift towards taxing personal income only, which could simplify the tax system and potentially increase overall economic productivity.

PREREQUISITES
  • Understanding of corporate tax structures and implications
  • Knowledge of economic principles related to taxation and productivity
  • Familiarity with the concept of double taxation
  • Awareness of lobbying and its impact on legislation
NEXT STEPS
  • Research the implications of a flat tax system on corporate and personal income taxes
  • Examine case studies of companies utilizing tax loopholes and their economic impact
  • Explore the relationship between corporate taxes and production costs
  • Investigate lobbying practices and their influence on tax legislation
USEFUL FOR

Economists, tax policy analysts, corporate finance professionals, and anyone interested in understanding the complexities of corporate taxation and its effects on the economy.

  • #91
Amp1 said:
No, actually the assets are the corps. The BOD or upper level management can decide if it should be disbursed or reinvested back. The ones investors like disburse.

I'm not sure what your point is - the shareholders own the corporation that owns the assets. The board is accountable to the shareholders and the executive management is accountable to the board.
 
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  • #92
The def. I gave says a corp is a person to the law. Notwithstanding ownership by stakeholders, a corp doesn't have to give them yield on revenue.(am i wrong?)
 
  • #93
Amp1 said:
The def. I gave says a corp is a person to the law. Notwithstanding ownership by stakeholders, a corp doesn't have to give them yield on revenue.(am i wrong?)

Sometimes reinvestment or debt reduction might serve the corporation better than a dividend disbursement. Given that a corporation is an on-going entity - it's ability to survive should be a priority. The same could be said of a government - in order to survive it must control it's expenses and debt.:smile:
 
  • #94
Amp1 said:
No, actually the assets are the corps. The BOD or upper level management can decide if it should be disbursed or reinvested back. The ones investors like disburse.
Either way, the corp, and its assets are owned by the stockholders. The only difference is whether the value is reflected in a higher stock price or in dividends.
Amp1 said:
The def. I gave says a corp is a person to the law. Notwithstanding ownership by stakeholders, a corp doesn't have to give them yield on revenue.(am i wrong?)
A corporation doesn't have to "give" stockholders anything: they already have it. If a corporation re-invests all revenue instead of issuing dividends, it makes the stock of the corporation more valuable, since stock is ownership of the corporation as a whole, not just a claim on dividends.
 
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