Plenty of people have written about GE's $0 federal corporate income tax bill for 2010, reported on in this NY Times piece. GE folks tell me the piece is misleading (for instance, the $3.2 billion "tax benefit" GE reported is an accounting matter -- it's not a tax rebate). GE also argues that the Times piece doesn't mention all of GE Capital's losses, which caused 2010 taxes to be so low.
But GE isn't the story here. If I had my way, every company would pay $0 in corporate income taxes every year.
My problem is what GE reflects. Here's the most upsetting part of the NYT piece:
Minimizing taxes is so important at G.E. that Mr. Samuels has placed tax strategists in decision-making positions in many major manufacturing facilities and businesses around the globe. Mr. Samuels, a graduate of Vanderbilt University and the University of Chicago Law School, declined to be interviewed for this article. Company officials acknowledged that the tax department had expanded since he joined the company in 1988, and said it now had 975 employees.
GE allocates hundreds of talented minds to attempts at lowering taxes. I don't blame GE for that. It's probably worth it -- which is exactly the problem.
In a world with a simpler tax code -- or better yet, with no corporate income tax -- GE would spend those resources creating something of value. Again, this is a case where government creates a chasm between what's profitable (gaming tax law) and what's valuable for society.
Also, this story demonstrates once again how Big Government hurts small business much more than it affects Big Business, which can afford to figure out a way around taxes.