You know lately I have been hearing a lot of complaints about large corporations that pay little or no state or federal income tax.  Now that really doesn’t make any sense to me.  At all.

What allows them to do this?  GAAP  Generally Accepted Accounting Principles!

We love these principles because they allow companies to tell the IRS one set of numbers and shareholders a completely different set of numbers.  So companies are, by law, allowed to tell the IRS they lost money and at the same time tell investors, through annual shareholder reports, that they made a TON of money.

For example— in 2010 GE claimed $14 billion dollars in income and paid 0 in income tax…and even got a $3.2 billion dollar refund.

Give the boys in accounting and legal a huge bonus for that one.!

Of course the $88 million dollars they spent on lobbying and the millions of dollars a year they pump into campaign coffers for Senators and Congressmen can’t hurt in their efforts to make sure that the IRS only pay attention and enforce one set of accounting reports and not the ones they give to the shareholders!

So what doesn’t make any sense to me at all about this?  The complaints.

Look we made these rules and now, we are just following them!