Rowyn (rowyn) wrote,

Corporate Welfare

So I'm reading this article in the NYT about how GE manages to have a net negative tax rate. (Profits of $14.2 billion, tax benefit of $3.2 billion, per the article.) In the 80s, I remember hearing that Reagan lowered marginal rates and also ended tax shelters/deductions/credits so that many individuals and business ended up paying more in taxes than when the (theoretical) rate was higher. And I keep wondering: "what happened? Did that never happen? Did they find new things to exploit that weren't shut down? What?"

In the mid-1980s, President Ronald Reagan overhauled the tax system after learning that G.E. — a company for which he had once worked as a commercial pitchman — was among dozens of corporations that had used accounting gamesmanship to avoid paying any taxes.

“I didn’t realize things had gotten that far out of line,” Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan’s 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent.

That pendulum began to swing back in the late 1990s.

Nope, Congress made new ones. ;_;
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