Bizarre, Congress, Politics, Society

General Electric Profits Up 77% But Company Avoids Paying a Penny in Taxes

President Barack Obama has been unabashed in his close association with General Electric CEO Jeffrey R. Immelt, including naming him to head the President’s Council on Jobs and Competitiveness. Obama has continued to shower such honors and attention on Immelt despite the fact that GE has avoided paying ANY taxes. Indeed, GE has demanded a tax benefit of $3.2 billion. Now, GE has posted a 77% increase in profits while paying less taxes than any of its factory workers.

Investors are doing well even if the taxpayers are getting killed. The company increased its quarterly dividend for the third time in the past year.

Immelt took the opportunity to declare “GE has emerged from the recession a stronger, more competitive company.” Of course, GE takes a different tact in avoiding any taxes.

GE is able to avoid paying any taxes by using its army of lobbyists to get tax breaks from Congress, which has proven again to be in the pocket of corporate interests. This is a bipartisan sellout as both parties have caved to such demands. The company also has used “creative” accounting that enables it to concentrate its profits offshore.

Yet, Obama still embraces Immelt as a model CEO and repeatedly invites him to the White House to advise him and other companies on how to economic and business issues. Imagine the response of liberal members and commentators if George Bush relied so heavily on such a corporate figure. There were many such controversies and the press and commentators were outraged. Yet, once again, Obama is not viewed as a corporate shill or tool where Bush was denounced in the very same terms.

It should be a national scandal that a CEO who avoids any taxes should be given such a high-ranking position. Indeed, there should be hearings on how a company can get away with windfall profits while paying less in taxes than a waitress at a truck stop in I-95.

Source: WSJ

Jonathan Turley

110 thoughts on “General Electric Profits Up 77% But Company Avoids Paying a Penny in Taxes”

  1. Politicians are chosen at the community level. The money doesn’t come until they have been elected to congress. The problem is not greedy assholes but stupid voters.

    It is democrats voting for democrats and republicans voting for republicans and not paying attention to what is happening in DC. We get and deserve the government we are worthy of.

    But because of our tax system, people do not have money to donate to politicians or to give to charity. So corporations pick up the tab for elections and government picks up the tab for charity in the form of social programs.

    No matter how you slice it, the problem goes back to government in one form or another.

    In fact you could almost say that government creates itself through its unholy alliance with big business. You are right about the greedy assholes but neglect to include bureaucrats and politicians in your opprobrium.

  2. “Government has no place in the market and vice versa. The only proper function of government is to objectively adjudicate conflicts through the court system and to protect individuals from foreign and domestic force” said the guy with a vested interest in no regulation.

    “Section 8 – Powers of Congress

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    To borrow money on the credit of the United States;

    To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;”

    Seems the Constitution disagrees with both of you about what the proper function of government is.

    Regulation of business is not only a proper function of government, it is a power specifically reserved to Congress and a necessary function given the history of business and the associated abuses of people and the environment.

    A necessary function that has been broken by corporate graft.

    Why?

    For their private profit motive.

    Thus simply proving the point that profit motives break the incentive to provide just and equitable services to the public as required by the Constitution.

  3. Why are you posting about business writing laws? Both Puzzling and I are probably more against a government/business partnership than you are.

    I cant speak for Puzzling based on only reading a few of his/her posts but I would say he/she is decidedly against business intervention in government and vice versa. I know I am. The separation of business and government is a good idea. I have no desire to live in a fascist corporate state or a socialist state for that matter no matter how benign. We are currently seeing the results of years of that philosophy.

    Government has no place in the market and vice versa. The only proper function of government is to objectively adjudicate conflicts through the court system and to protect individuals from foreign and domestic force.

  5. Who paid for the ad campaigns to elect those who vote for the laws? When you pay for compliant scumbags, why wouldn’t lobbyists expect to write the laws?

    Government isn’t the problem.

    Greedy assholes are the problem.

  6. who votes on the laws the lobbyists write? And why is congress allowing lobbying firms to write laws?

    Government is the problem. Just say no to lobbyists, it is actually pretty simple. A simple law stating that members of congress have to write any bill presented for enactment. No staffers, no lobbyists, no special interests. And the law is put on the books without interpretation from the Ag Department, HUD, HHS, EPA, Energy, etc. Let the courts figure out what it means and not government bureaucrats.

  7. Once is an accident.

    Twice is a coincidence.

    Three time is a pattern.

    I could have given even more examples of why business should not be allowed to write law and why profit motives are inappropriate for the provision of governmental services, but 10 is a nice round psychologically satisfying number.

    It’s also a helluva lot more than three.

  10. More Evidence that Insurance Lobbyists are Writing Florida’s Insurance Laws: http://www.propertyinsurancecoveragelaw.com/2011/03/articles/florida-insurers/more-evidence-that-insurance-lobbyists-are-writing-floridas-insurance-laws/

    Lobbyists can help write law, EPA says / Probe finds rule benefiting GOP ally was legally drawn: http://articles.sfgate.com/2005-10-09/news/17394852_1_hazardous-waste-environmental-protection-agency-s-inspector-epa

  13. “The “free market” brand gets blamed, but the market these firms are operating in is rigged by the only entity with the power to do so: the government.

    The regulatory state is not the antidote for concentrated economic power, it is the cause of it.”

    Totally ignoring the problem that causes government regulation to fail: corporate graft in the form of campaign contribution.

    Regulation works just fine as long as people who are actually interested in the general welfare actually write it instead of allowing some lobbyist with a vested interest to do so.

  14. It’s All Good,

    I think libertarian types are more far outraged than progressives at the level of corporatism we see today because it makes private industry look like an adversary. The “free market” brand gets blamed, but the market these firms are operating in is rigged by the only entity with the power to do so: the government.

    The regulatory state is not the antidote for concentrated economic power, it is the cause of it.

    Look at the latest Food Safety and Modernization Act, designed to crush small farmers under costly regulation. No doubt many of these farmers will be forced to sell out to global agribusinesses that conspired with government to create these regulations, just as ADM did some years ago with ethanol. These powers must be stripped from government. Until that happens, no amount of campaign finance reform or other regulatory construct is going to solve the underlying problem.

  15. NO! We can’t tax our great Gaultian overlords! Why who would create jobs if they had to pay one penny in tax? Certainly not the Masters Of the Universe like those that run GE.

    And with their 0% tax rate? Well son, they have created thousands of jobs . . . every god damned one of them is overseas, they actually REDUCED employment in the US. Thats right Mr Greenspan & Ms. Rand – despite paying NO US taxes GE reduced employment in the US and hired overseas.

    Maybe if the government GAVE THEM money they would create jobs here. Nope, we tried that & it had the exact same impacted – fewer jobs in America & more in their overseas branches.

    So what IS the answer? Well, start with wages – once you are willing to work for the same money people in India and China do (having just worked with a company hiring in India about 20% of current US wage levels) some jobs will filter back here. Of course you have to give up any benefits – and worker safety is right out. Once we do away with all those needless environmental laws and useless work rules like child labor, 40 hour weeks, 8 hour days. There will e jobs here in the US too.

  16. “Profit motives are simply inappropriate for the vast majority of civil public services.”

    Completely false. Just because a couple of judges were corrupt does not mean it is a bad idea. Throw the judges in jail and repeal the corporate charter of the company. Or better yet legalize drugs, prostitution and other victimless crimes engaged in by consenting adults.

    Government causes artificial disturbances in any market in which they engage. Either through picking winners by preventing competition or by restricting access as the current administration has done with oil and gas drilling.

    Allow oil drilling on our continental shelf and allow a couple of new refineries to be constructed and the price of gasoline will drop to around $2/gallon in 6 months maybe less. But that isn’t going to happen because “green” is being forced on us by this administration regardless of market signals to the contrary. Government is picking green as a winner and must inflate the price of oil by restricting supply to make “green” attractive.

    Huge amounts of money are being artificially redirected toward “green” technology and will cause future disruptions and shortages in the supply of oil and natural gas. Money that could have been used in oil and gas exploration and technology improvement will instead go to the government created “green” market.

  17. Puzzling:

    good post. But most will think it is industry and not government which is at fault.

    I think the grantor of the favor has far more culpability.

    Do you have any idea why people think industry causes the problem? Most of the time they are trying to gain competitive advantage or offset the burden of regulations.

  18. The corporations are spending millions to try to write the regs that puzzling claims creates monopolies. So who is creating those monopolies?

    Government has the power to create these monopolies and cartels. Big business favors high regulation and contracts assigned by government because it creates the “high barriers to entry” that Gyges talks about. Can’t win in the marketplace on price and quality? Get government protection.

    How many cable companies does your city or town allow you to choose from at your house?

    In the financial sector, how many NSRSO “ratings agencies” did government recognize in the years leading up to the 2008 crisis? 5. How many of these warned of the problems with subprime mortgage securitization? 0. Why does government create this cartel? Because these firms “rate” government debt and these firms have captured their regulator.

    How many victimless crimes does government keep on the books to grow the prison-industrial complex?

    How many wars goes government incite to grow the military-industrial complex and national security state?

    Constraining the power of government to pick winners and losers in the first place is the most fundamental way to deal with these problems. Instead, too many seem to believe that the problems created by too much regulation must be solved by ever-more regulation, and ever-more government.

  19. Jim,
    You keep ranting about the “unearned income credit,” but, as an educator, you should know that there is no such thing. I assume you intend to rant about the earned income tax credit (EITC or EIC), which, in fact, was and is designed to encourage people to work. As you are an educator, I am sure you can do the necessary research to educate yourself about it, so I won’t waste my time trying to teach it to you.

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