It’s Bad News When Government Picks Winners and Losers

The Weekly Standard published a story with the headline: GE Filed 57,000-Page Tax Return, Paid No Taxes on $14 Billion in Profits

The article, written by John McCormick, focused on the reaction to this report from Congressman Paul Ryan (R-Wisconsin) who chairs the House Budget Committee. An excerpt from the story:

Ryan used the data point to underscore the irrationality of the corporate income tax code. He also contrasted GE with UPS to make the point that the corporate income tax code doesn’t make sense. “UPS paid a 34 percent effective tax rate,” while its biggest foreign competitor, DHL, paid a 24 percent tax rate, Ryan said.

The problems with the corporate taxes occur because “Republicans and Democrats, both parties, sit in Congress and they’re picking winners and losers,” Ryan said.

This is another classic example of government taking a piecemeal approach to economic and financial matters that results in dubious consequences.