And because of losses in the US, they paid no taxes for 2009.

"GE had plenty of earnings last year — just not in the United States. For tax purposes, the company’s U.S. operations lost 8 million, while its international businesses netted a .8 billion profit.

That left GE (GE, Fortune 500) with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of .1 billion back into its reported earnings."

http://money.cnn.com/2010/04/16/news/companies/ge_7000_tax_returns/index.htm?cnn=yes&hpt=T2

Regarding the GE Bailout: http://www.washingtonpost.com/wp-dyn/content/article/2009/06/28/AR2009062802955.html?hpid=topnews&sid=ST2009062803183

I keep reading these comments here that claim that Obama will raise taxes on corporations, which will cause companies to shut down, and people to get laid off etc..

So here is a little information from someone who is quasi-literate in such affairs. First of all Obama is not talking about raising corporate taxes, which are very different from income tax. Obama wants to raise income tax (not corporate tax or capital gains tax) on families that make more than 250 thousand dollars a year. So your boss, who probably makes more than that, would want to get paid a little more so he can offset the higher tax that he would have to pay. The increase will come from the PRE-TAX profit of the company that you are working for. More a company pays in salaries the less it pays in tax as the salary, being an expense, is tax deductable. So in other words that tax that would otherwise be paid by the company is now paid by the individual (your boss). So why the whole drama? The answer is actually simple. Corporations have found a lot of loop holes in tax laws and they never pay the taxes that they are supposed to pay. The individuals on the other hand have to pay straight forward taxes based on W2s which some deductions.

So raising your boss’s tax rate is not going to effect your job or the health of the company you work for. Just the tax system will become better and more stream-lined.

I have tried to explain this as simply as possible. I know some of you are going to ask for sources, but you are no websites that will tell it to you in one paragraph. It is common sense if you want to understand it.

Dr. Mcfee formed a medical corporation that had the following business expenses for the year:

Wages-,500
Utilities-,840
Interest-,000
Property taxes-49.00
Depreciation-,916.50
Other deductions- 00
Together they all equal out to be ,505.50

The corporations gross income for the year was 4,850. What is the federal corporate income tax for the year?

A. ,249.50
B. ,336.13
C. ,137.25
D. Not given.

Both McCain and Obama will have to raise taxes to pay for programs for which the public is clamoring, whether those programs are universal health insurance, expanding the military, trying to retire the national debt, or simply trying to balance the budget.

McCain proposes to increase your tax exemption for children by something like 5/year. That’s it, if you have children you get something, otherwise not. This will increase the deficit.

McCain proposes a 00-00 "refundable" tax credit for the purchase of health insurance while apparently proposing, as I understand it, eliminating the deduction for employer provided health insurance. This is a tax increase for business to pay for a tax benefit to the public. This is, ostensibly deficit neutral.

McCain will cut the corporate tax rate from 35% to 25%. This is proposed to keep American companies on shore and to stimulate the economy. This will not keep companies on shore because the 10% tax savings on profits is miniscule compared to the as much as 80% operating cost savings of exploitation of cheap foreign labor. And since most corporations do not pay any taxes due to loopholes it is ridiculous. All that will happen is that those that are paying taxes domestically will pay less and increase the deficit.

All of this tinkering with tax cuts will result in a net tax increase because a higher percentage of the operation of government will be placed on your credit card.

Obama’s plan, a tax cut for the middle class, should be offset by rolling back the Bush 43 tax cuts for the wealthy. Curtailing tax loopholes for companies operating offshore will have far reaching effects including reducing the deficit. As far as funding for new programs goes, there is little doubt that these, like universal healthcare or improving public education and tuition programs, will go on your nation’s credit card.

What’s in it for me? After all, I’m paying for it.

Your taxes are going to go up with either Obama or McCain. For whom you vote, if that is your issue, depends entirely on how much they will go up and/or what you will get in return

I have not seen this topic discussed by the IRS, corporations and any scholars for that matter. I am currently developing this idea into what i hope will be a Pulitzer submission.

As we all know by doing research – Tax laws were written primarily to tax those who owned land, and businesses. Most of the employees did not get taxed until later when the IRS and Government grew larger because of the services they provide to the public. Instead of keeping the same structure in tax laws – they changed them into two sets of standards. One for Business and one for Individuals. However they differ so much. Most laws are written to protect and benefit businesses especially in employment. The tax laws also are written to benefit businesses not individuals.

So why not demand corporations accept contracts by all individuals who work in the corporate arena as LLCs so they can benefit from the tax laws [ operating expense deductions , ie - fuel, mileage, rent, utilities, mortgage, food, etc,] as business do, since – people who work do have operating expenses which takes away from their NET just like business are able to write off their operating expenses which subtract from their NET..Those who work in the services industry, like fast food, restaurants, and other jobs would have to structure those positions which allow for LLC employees. Those considered laborers etc..would be covered under the company and all taxes etc…be paid as in the original tax code by the business…when it first started…

My primary reasoning for this is – Business complain they have to pay employee [ taxes, benefits, IRA's etc.] and it costs them too much money. They also use this to thwart paying you more money as an employee eventhough in the end they take a good majority off their taxes. If individuals worked as an LLC – this would reduce corporates expenditures, and increase employees pay. It would also allow indivisuals to claim the write off of operating expenses not provided by the Corporation thus decreasing their taxable income [NET] and give them more money in their pockets each year. People who work as an LLC will have specific employment contracts, will be protected by the laws of business – which in fact are written better than employment laws…and puts more faith and competetiveness back into the system. Sure there will be more paper work on the LLC – however, once you get everything you need automated on a PC its a peice of cake. But look at the operating expenses you can write off.

The IRS still gets their tax base, corporations reduce tax liabilities and expenses – employees become operators of business entities which are more intuned to the laws of corporations. It will allow them more protections, both ways for corporations and LLC..

This would exclude those who work in Public Sector employment as they are not private entities and the laws apply to those government entities much differently.
And to address those who have never operated as an LLC..I currently am an LLC single member business owner and I have worked as an employee then changed to an LLC while working for the same employer…Let me make this clear before some of you make the mistake of saying it doesnt change anything…

Yes it DOES change how you are paid [ the amount] and how you file taxes. Once i started a LLC i was able to negotiate higher pay, like ,000 dollars more, and also got the write offs. Operating as a sole proprietor is not an LLC…Sole proprietor offers you no protections under business law or personal law and exposes you as just an employee…There is no difference between working as an employee or sole proprietor as they are the same…

An LLC offers you protection while working personally as you are not using your social security number, you will use your business tax ID instead for all transactions…All accounts, bills, everything is done under a Business Tax ID not SS#…
I thnk people are missing the point here – I am not running a shabbing business LLC nor am i working loopholes to circumvent the tax laws. What i am saying it – working as an LLC not as an employee for a company DOES in fact offer you better protection under the law and provides you better tax advantages. 1. you have a contract with the company, 2. You can negotiate higher wages. 3. You can deduct expenses like mortgage, rent, {percentages of use for business} fuel, and or mileage depending on your contract, 4. You can deduct the benefits you pay out for yourself, etc. All of them legal under an LLC. 5. Yes your tax is more, but is done pass through and you can get unemployment benefits from the state because you pay into it…if you lose your contracts. Health insurance everything can be paid by the LCC and deducted. Eventhough your tax rate is higher – in the end you make more because of legal write offs. Your net is still better than if you were an employee under corporate law.
Also – concerning taxes Employee versus LLC…As an employee you are taxed based on your Gross income – in a business you are taxed based on your net after expenses…So there is a huge difference in taxes and money…Business deductions are greater and based on NET versus individual deductions which are less and based on GROSS…plus you dont have to pay taxes twice under an LLC…

Please dont confuse being a Sole Proprietor with any of this as it doesnt apply…Sole proprietor does nothing for you as a person, business etc..

Sure as an LLC you must separate personal versus business expenses – but thats not hard to do…Just keep logs, all receipts, etc…on the PC. using quickbooks or Microsoft Accounting…The latter is the better…

Also find yourself a good business accounting lawyer who can easily set up everything for you…

It crazy what people dont know about how business laws and taxes really work. I think everyone needs to go buy a book on LLCs and read it…

Right now we have one of the highest if not the highest taxes on corporations in the world. As a result jobs and companies are leaving at a high rate. Even smaller companies (like the one I work for) are looking to send the work they do outside of the USA. What can the US Government do to reverse this trend?

I’ve a novel plan that should satisfy almost everyone. Before you say it’s pure BS think about it. No corporate taxes at all. Over seas companies would be moving here, and in droves. And no federal taxes other than personal income taxes. I know your first thoughts are that can’t possible work. But it can. I’ll explain how.

Corporations are in business to make money period. If they don’t they don’t stay in business. But although they want to make money that also don’t want a lot of money lying around doing nothing. They want it working as well. So they put it to work. They renovate, renew, or rebuild their facilities. The purchase new equipment, update older equipment, retool, and other things like that. All these things means the money keeps moving. And when money moves someone makes a profit. Sooner or later all that money will end up with individuals in some shape, form, or fashion.

HERE is where the taxes come in. Any salary, wage, commision, or benefit given to an individual is subject to being taxed. And here’s where you start. If someone is living above the poverty line thay will pay some tax. How much will they pay depends on how far above the poverty line they are. No flat tax, but a graduated tax with no upper limit. It make no sense to tax someone making K at the same rate as someone who makes M a year. Democrats are always saying they ony want to increase taxes on the uber-rich while lowering the taxes on the lower and middle class people. Here’s their chance. I’ll leave it to the statisticians and mathmaticians to figure out how fast the percentage curve rises.

And here’s another thing that will make it work. All the loopholes in the present tax code will cease to exist. The only things you would be allowed to deduct would be for each member of the household(plus on additional deduction for special needs cases) and family health insurance. But other than that NO DEDUCTIONS.

This years US Budget was about Trillion (that’s 12 zeros) to provide for every man, woman, and child, legal and illegal (about 300M) living in the USA. You do the math, I could have made a mistake. But doesn’t that figure out to be about K each? I don’t know about you but I’m not sure I got my K worth of services out of the Federal Government. How much of that was eaten up in buracracy. But that is an whole ball of worms. Let individuals pay all the taxes. What’s wrong with that idea?
G-gal- If you ask me this is about as fair as tax can get. A flat tax or sales tax hits really hard on the people that can least afford it. 10% tax on someone just over the poverty line knocks them back below the poverty line. 10% tax on someone who makes millions or billions and they never even notice it.
E-smile. Under my idea there would be no advantage to play fast and loose with the companies books. Creative financing goes out the window. Companies only do that to avoid taxes.

OH, and under my system before anyone claims a loss they have to actually lose something. Paper loses don’t count!
To all of you who said it wouldn’t work. If’ I’ve replied to you via E-mail I hope I answered your questions. To all of those I didn’t reply to– Shame on you for not allowing the discussion to continue because YOU wouldn’t allow E-mail.

Dr. Mcfee formed a medical corporation that had the following business expenses for the year:

Wages-,500
Utilities-,840
Interest-,000
Property taxes-49.00
Depreciation-,916.50
Other deductions- 00
Together they all equal out to be ,505.50

The corporations gross income for the year was 4,850. What is the federal corporate income tax for the year?

A. ,249.50
B. ,336.13
C. ,137.25
D. Not given.

Conservatives often point out that our corporate tax rates are the second highest in the world. However what they omit is the large amount of deductions and loopholes in the government, the IRS itself concludes that a quarter of corporations in the US don’t pay any corporate taxes at all. In effect even though the tax rate is lower in Ireland corporations pay more due to fewer deductions. Also European countries afford lower corporate tax rates by having MUCH higher taxes on income as well as employer funded entitlements. So are conservatives just misinformed that is it is cheaper to do business in Germany, or are they cherry picking the facts to starve the federal government yet again(by cleverly omitting the other taxes in Europe) and skirt the federal guidelines that are tied to the deductions?

Take away all loopholes and deductions for people and corporations everybody pays 10% of what they make. My taxes go down and the businesses and rich goes up.