Tuesday, April 5, 2011

Joe Nocera's "Who Could Blame G.E.?": Where Is This Leading?

In his lead-off op-ed for The New York Times entitled "Excuses,Excuses, Excuses" (http://www.nytimes.com/2011/04/02/opinion/02nocera.html?hp), Joe Nocera seemed to want to take Warren Buffet to task for the purchase of Lubrizol shares by a deputy at Berkshire Hathaway, yet ultimately, toward the end of the op-ed, he acknowledged:

"No one is suggesting that Buffett himself did anything wrong."

Today, in a new op-ed entitled "Who Could Blame G.E.?" (http://www.nytimes.com/2011/04/05/opinion/05nocera.html?hp), Nocera appears upset that G.E. has minimized its income tax for 2010, yet again observes:

"There is nothing illegal or even unethical about any of this."

Nocera concludes this latest op-ed by stating:

"The bonuses should be pretty good this year in the G.E. tax department."

My observations:

• Tax avoidance, as opposed to tax evasion, is entirely legal and ethical.
• Were G.E. not to seek to minimize its taxes, its shareholders might sue its management for breach of fiduciary duty.
• If G.E. distributes the money it saves in the form of bonuses to employees, this will be subject to income tax.
• If G.E. distributes the money it saves in the form of dividends to shareholders, this will also be subject to income tax.

From his pulpit at The New York Times, is Nocera launching a crusade on behalf of little people in their epic struggle against the nastiness of Big Business, where many little people are employed and receive salaries, bonuses and pensions? What fundamental changes involving the American economic system is Nocera advocating?

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