Congress Works To Extend GE Loophole

From Testosterone Pit:

General Electric is famous for paying little or no income tax. Indeed, GE was one of 26 Fortune 500 companies that was consistently profitable for the five years 2008-2012, and yet paid no income tax across those years, according to this report from Citizens for Tax Justice (CTJ). In fact, across those years GE received more than a $3 billion net refund. While GE and the rest use multiple techniques to extract your tax dollars while keeping all their profits, one has informally taken its name.
The GE loophole is available to any company with financial income that it can claim was generated offshore, such as by a foreign banking subsidiary. The loophole rewards the American parent company for investing overseas by sheltering its profits from U.S. tax until the American parent brings the money home.
So GE can avoid the tax bill as long as it likes by keeping its profits invested in other countries. Not only does the loophole shortchange taxpayers, it also creates an incentive toinvest overseas instead of here at home.
Worse, the nature of financial income makes it relatively easy for companies to use the loophole to assign profits to subsidiaries in tax haven countries while assigning losses here at home.
In 2010, Forbes dryly observed that “Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain).”
Precisely because the nature of financial income is so easy to manipulate for tax advantage, the 1986 tax overhaul, achieved by President Reagan and a divided Congress, stopped it and required these profits be taxed immediately, regardless of where they were earned. In 1997, fierce lobbying culminated in persuading Congress to reinstate the loophole—known officially as the Active Financing Exception—for tax year 1998 only.
President Clinton tried to line-item veto it, but was blocked by the Supreme Court. After that, Congress has “extended” this loophole for a year or two at a time. The bill the Senate committee is working on today is the current effort to “extend”—really, re-enact, this and other loopholes.

Come on Republicans, follow in the Gipper's footsteps on this one. I'm pretty sure how this one will turn out, though.  It appears that bonus depreciation is also in the EXPIRE Act, so farmers will get a big tax break if we make money the next few years (so we'll get a tax break).