Tax Phobia

I had some requests to write an entry about this New York Times (NYT) article discussing how General Electric (G.E.) paid no taxes in 2010. It’s hard to imagine how a company did not pay any federal taxes after making $5.1 billion in the U.S.–maybe it’s some type of paying taxes phobia. Is the NYT article mistaken or did G.E., in fact, pay $0 in taxes for the year 2010?

Henry Blodget with Business Insider tried to get to the bottom of it. Of course, G.E.’s PR department came out in full force via Twitter but remained strangely quiet for long periods of time while thinking of ways to spin, I mean provide answers to Mr. Blodget’s questions.

If the NYT is true, it’s not a surprise considering G.E. is “the nation’s largest corporation.” I think the maxim of Thucydides which states, “The strong do as they can, while the weak suffer what they must” is appropriate in this case. G.E. can choose to pay or not pay taxes because it is very powerful–975 employees in their tax department and billions of dollars available for lobbying purposes. As for the rest of us? Well, we have to pay our taxes because we must.

For more, and probably better, insight into this issue, I’m going to provide a link–I can’t find a way to embed the video–to a clip from The Daily Show.

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