The Elitist Tax Edge: Billions in Profits Zero in Taxes

Alex Tabarrok at Marginal Revolution has the details:

The NYTimes reported earlier this year that through an extraordinary use of tax breaks and clever accounting:

[General Electric] reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

The Times highlighted the skill of GE’s dream team:

G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

Bottom line:  When laws become many and complex, they are for the little people. The elitists will always find ways around them. There are few arguments as to why we need less government as powerful as the simple fact that the elitists will always get the break, regardless of the law or regulation, while the rest of us are suffocated and prevented from advancing.