Larry Mendte: Tax loopholes for big corporations. GE paid no Federal income taxes.
General Electric, one of the biggest companies in the world, paid no corporate income taxes last year. Now that’s not to say that they didn’t spend any money on taxes. They spent a lot of money on taxes. For instance, they spent $21.5 million lobbying Congress: you know, to create loopholes in the tax code that they can take advantage of. And then they spent $150 million to pay 950 accountants to take advantage of those loopholes. All that money, and it’s still a bargain. Let me illustrate their big net tax savings.
Assume that they had to pay 35% taxes on the $5.1 billion that they made just in this country. That would have resulted in Federal income taxes of $1.785 billion. $0 is such a better number for GE. GE, they bring good things to life for themselves.
But it’s not just GE. Of the top 100 companies in America, all of which are supposed to pay 35%, they paid an average 6% in corporate income taxes.
And it’s not just companies. Individuals, especially wealthy individuals, used deductions to lower their tax rate in half, sometimes lower.
So all this talk in Washington about raising the tax rate for families making over $250,000 per year means nothing. What you have to do is reform the tax code and get rid of most of the loopholes and deductions.
Actually you could lower the tax rate into the teens for everybody and still balance the budget just with tax reform. But that’s never going to happen because there’s too much money involved. Just ask GE: “We bring good things to life.”
About William Brighenti
William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business.
Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission.
In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.