Tuesday, April 19, 2011

General Electric (GE) is not the problem

Sorry, second rant of the day…..

I graduated (somehow) with a degree in “accounting” and, during my time in college, took several courses in “income tax” (tax law, tax accounting, preparation of tax returns, etc.) I distinctly remember, even today, some 40+ years later, hearing the remark that one of our accounting professors made about “income tax.” He said, “tax ‘evasion’ is illegal. On the other hand, tax ‘avoidance’ is not only perfectly legal, it is, once you are out in the business world dealing with clients, what you must do for your clients; to do anything less would be tantamount to you not doing the best job you can for your clients.

So, keeping that in mind, I’ve lately been reading “letters to the editors” [of the two newspapers I normally read (St Pete Times and New York Times)] and comments posted on various news-sites on the Internet , where “my fellow citizens” have been lambasting General Electric (GE) for not paying any federal income tax.

To lambast GE for practicing tax avoidance is utterly, flat-out, ignorant.

I read somewhere that GE has hundreds of accountants working in its corporate tax department. (I don’t recall the exact number; it was less than 1,000, but more than 500.) The “job” of those people is to legally avoid income tax …. and to do that to the maximum extent they can. Any “individual” would be totally stupid not to take the same approach. What, those who are criticizing GE are paying more in income tax than they actually have to? I think not. (And, if they are, they are stupid.)

The point being that ……… it’s not GE that should be taking the heat. Our Senators and Congressman (the current ones and their predecessors) are the ones that should be taking the heat, for it is they who created our income tax laws. And, while I’ve just said that, let me go one step further. Since our government is “of the people, by the people and for the people”, it is “we” who should share the heat, for we are the ones who elected the Senators and Congressman who voted the income tax laws into existence.

Therefore, if you don’t like GE not paying taxes (and don’t like it that other “corporations” pay little or no taxes), then, in subsequent elections, get off your ass and go to the polls and vote into office Senators and Congressmen who have the guts and fortitude to change the income tax laws. As it stands right now, our income tax laws, regulations, forms, publications, worksheets (blah, blah, blah) are mind-numbing – we must have the most ridiculous tax system in the world; it is totally out of control. Nevertheless, I doubt we’ll see any significant changes in my lifetime. Why? Well, chalk that up to voter apathy. We whine and complain … but what do we really do about the problem? Nothing.

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