Trades on smart companies that pay minimal taxes
Profit from Savvy Tax Departments
That sounds pretty logical to options trading investors.News that General Electric (NYSE: GE) will likely have zero corporate tax liability for the prior year caused a kerfuffle among the fairness police. The populist outrage here is certainly understandable, as it comes at a time when Americans are writing checks to the U.S. Treasury for their own tax liabilities. Yet an insightful op-ed in the New York Times by Joe Nocera points out that a multinational corporation like G.E. has a fiduciary duty to shareholders to maximize profits. One way to do this is to minimize taxes. As Nocera puts it, “If I were a G.E. shareholder, I would be thrilled to learn that its vaunted 1,000-person tax department is viewed within the company as a profit center.”
Of course, G.E. isn’t the only company with a staff of smart people dedicated to minimizing tax liability. Many firms do just that, and many of them are extremely successful. As options traders, we can take advantage of the circumstances by betting on the low tax culpability of these fiscally savvy corporate names. Here are five options trades on companies paying tiny taxes.
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