You know, I like Jon Stewart. He's a funny guy. And I don't generally mind him poking fun at politicians and policies I support. What I do mind is when he breaks the illusion of somewhat legitimate comedy-news by repeating lies straight out of the talking points of the political left, letting himself be used as their late-night pointman, mainstreaming those lies into the public debate out of the mouths of the many people who get their only news from his show.
Last week, Stewart went on repeatedly about how General Electric reaped huge profits of $149 billion yet paid not a penny in taxes. It's a great argument to make at a time when everyone is paying their own taxes and easy to drive to outrage over a huge corporation not paying their fair share. The problem is that it's a lie. It takes advantage of the ignorance of too much of the public about what is meant by profits. Yes, GE's corporate revenue was $149 billion in 2010. However, that is not the same as profit.
After subtracting all of the costs of operating their business, their actual Net Profit was less than $11 billion. That's the money they had left over to actually spend after paying all of their bills. That's a far cry from the huge profit number which anti-corporatists have been promoting. It's actually a relatively low profit margin of only 7.4%. What's more, it's not really their profit, because every cent of it gets payed out to stockholders who also pay taxes on it.
There are also a couple of other problems in this criticism of GE. First, they actually did pay taxes. Not a huge amount, but their income statement clearly shows that they paid total taxes of $1.05 billion to the federal government. That's just under 10% in taxes on their Net Profit. Second, there's the issue of what they did with their profits. Those profits went to the people who own stock in the company, which actually included me up until fairly recently. Almost all of those profits were divided up and then individual stockholders also paid taxes on their share of profits, likely at the capital gains rate of 15%, so in actuality the profits were taxed twice, adding up to a total rate of about 24.5%.