A reporting from New York Times states General Electric, a multi-billion-dollar firm, had paid zero taxes to the US government in 2010 because the tax department base financials decision on tax deductions and loopholes.  General Electric, however, has overlooked on how much is actually saved from these decisions because millions of dollars is spent on how to avoid taxes when this can be spent on improving the overall value proposition of the company, such as products development.  Marginal Revolution, an external blog, points out that the New York Times based their calculations of profits according to GAAP instead of IRS which then casts doubts on its analysis of General Electric.

The blog user explains difficult concepts and business terms thoroughly which I thought was useful when understanding the situation.  This is an interesting blog post because it is surprising what kind of actions a multi-billion dollar company take on just to dodge away from paying taxes.

As a consumer point of view, even if the New York Times calculates according to IRS, the negative news about General Electric avoiding taxes may consequently lose customer loyalty on its brand because one may question on the business’ ethics.