It is not uncommon for firms and families to avoid paying taxes, is it? Everyone looks for the loopholes, credits, and other activities to reduce the tax burden. So why is this a surprise? The sections of the piece that explain G.E.’s strategies are a distraction from the real problem.
This is the logical result of the political goal of so-called “partnerships” between government and industry, aka corporatism. It ain’t free markets, that’s for sure. In theory it sounds so smart, enlightened politicians directing resources to the “best” interest of the country, blah, blah, blah. In reality, people and capital are misallocated because the decisions are based on making the politics look good instead of serving customers. Firms spend resources, sometimes significant as you can see from the article on G.E., on avoiding taxes. Avoiding taxes is one way to make money for the firm.
Taxes in a free market would be simple, low, transparent, and with few special breaks.