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General Electric: King of the Tax Dodgers
Congressional Republicans are about to cut the Tsunami Warning System from the National Weather Service budget. But if General Electric paid their fair share of taxes, we could reverse this and billions in additional budget cuts.
GE — best known for its light bulbs, refrigerators — and lately, its nuclear reactors — is one of the country's biggest tax dodgers.
Recent filings show that in 2010, General Electric reported global profits of $14.2 billion, claiming $5.1 billion from U.S. operations.
How much did it pay in U.S. corporate taxes? Zero. Actually, less than zero. We taxpayers paid G.E. $3.2 billion.
As David Kocieniewski reports in The New York Times, G.E. "has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than most multinational companies."
According to Citizens for Tax Justice, between 2006 and 2010, General Electric reported $26.3 billion in pretax profits to its shareholders but paid no U.S. taxes. In fact, they received $4.2 billion in refunds from Uncle Sam for an effective tax rate of negative 15.8 percent over these five years.
General Electric accomplishes this feat by using is political muscle in Congress and lobbying for special tax treatment and corporate welfare. It also aggressively moves is profits to offshore tax havens including Bermuda, Singapore, and Luxembourg.
While several divisions of GE have struggled over the last decade, GE's accountants think of themselves as a profit center. The company¹s 975-member tax division includes many former Treasury and IRS officials who never a met a loophole they didn¹t love.
Why do we tolerate the behavior of companies like General Electric? These Benedict Arnold corporations reap all the benefits of doing business in the U.S. yet avoid their responsibilities for paying. Next time they have a fire at one of their plants, they should call the Fire Department in Bermuda.
GE will only pay its fair share when enough citizens wake up and demand that our politicians crack down on tax dodgers. No politician should be allowed to propose a budget cut or moan about austerity until they crack down on the scofflaws such as General Electric.
See also, Chuck's recent column, Corporate Tax Dodgers, Pay Up and his Talking Points on Corporate Tax Dodging.
41 Comments so far
Show All"Why do we tolerate it??" You've got to be kidding me. The American people tolerate it because their "representatives" in government are 100% paid-for whores of the Corporations. Duh. What a stupid, redundant question this writer asks.
Anyone who hasn't figured out we don't have a representative democracy in this country is smoking some serious ganja. We live in a fascist oligarchy. If you doubt this, look up the words at dictionary.com. Then start looking for a country to move to. Things are only going to get worse here in the twilight of this shitty fucking country.
Why take a shot at a writer trying to air the truth?
Plenty of ganja smokers have figured it out.
Otherwise, I'm hearing you.
Think about looking for that new country in your backyard.
http://www.counterpunch.com/naylor03242011.html
I apologize for lashing out at the writer, I must admit that I am becoming more and more dejected over time as I watch fascism rising more and more every day in this country. You are correct - at least he is trying, unlike the vast majority of the MSM on this "3rd rail" in America: never EVER criticize corporations!
Thanks for the link - very good information!
"I must admit that I am becoming more and more dejected over time as I watch fascism rising more and more every day in this country."
Yup same here. I read more of this stuff than I probably should, and as an individual one feels very helpless against the corporate monsters running the show.
NC-Tom,
We all feel the same, I am already out of the country and now waiting for my wife to join me after my kid graduate.
demon: don't be too hard on yourself - your instincts are right on the money
when pointing out the obvious, as you did, becomes over reaching then we are all in trouble
the sad fact is that many folks here and other allegedly enlightened sites are not that enlightened - this author is doing basic ed
i for one wish that left writers would speak to bigger and more serious aspects of the news and let the abc's get researched on their own
This is the second-most-viewed and second-most-emailed story on the New York Times web page this morning. So it's not like nobody is noticing.
The question is: what are we going to do about it?
Somehow, I'm not counting on the Tea Partiers to rise up in righteous indignation over this outrage. (Although lord knows they should, and would ... if they were anything other than useful puppets for the Koch Brothers regime.)
For me the question has been rephrased from "what are we going to do about it?" to "what can we do about it?"
Yeah. Just like them segregated blackies in Mississippi and Alabama should have concluded back in the 1940's and 1950's: ain't nothing dey CAN do about their sorry-ass situation, 'cause the WHITE MAN hold all da cards and dey might as well just GIVE UP and settles for whatever's given to 'em.
Suck it up and challenge the system, dude. You already have a head-start that 90% of the people in the world don't have (and 99% of the African-Americans in the deep south in the 1950s didn't have): education, access to media, a national network of similar-thinking people, and a court system that will normally protect your rights.
I don't buy this throw-in-the-towel crap. That's the refuge of punks.
Correction (eight hours later): this is now the MOST-viewed and MOST-emailed story on the NY Times web page ... you know, that newspaper that most CDers dismiss as just another pathetic liberal rag that's a puppet of the corporate media and that won't tell Americans the REAL socialist truth.
Whatever. Read a few of the "most recommended" posts on this NYT article, and see whether you don't find yourself agreeing with the sentiments.
There's plenty of outrage out there, is my point. Plenty. The question is how to channel it into real action.
Posting snarky blogs on Common Dreams doesn't count. That's easy, but ultimately is simply a wasted exercise in preaching to the choir.
The one thing Tea Partiers have figured out that apparently most of the left hasn't, yet: that 90% of success is just showing up for work.
We can bitch, or we can DO something. I vote for the latter ...
Nevertheless, I like posting snarky blogs on Common Dreams. If people find a way to successfully attack the establishment I shall cheer.
That's what the protests breaking out all over the country ostensibly are about. I hope they get the coverage they deserve from broadcasters other than Ed Schultz and Rachel Maddow. More and more people are seeing through the corporate plutocrats' plans to use the Republicans to turn the clock back to 1890, and they have decided to protest--and not all of them are intellectual progressives.
Boycott GE.
See also, GE dumping tons of PCBs in the Housatonic and Hudson rivers. Oh, and GE's great work designing and maintaining nuclear reactors.
How does one go about boycotting GE exactly? You would no longer be able to use lights in your home, if you live in California chances are you can't turn on any electricity at all, so if I was boycotting GE I wouldn't be able to type this, wash your clothes in a washing machine, get on a plane and fly anywhere, put gas in your car, go to a hospital for medical treatment, etc., etc.
Don't get me wrong, I'm not opposed to a boycott of GE, I just don't think it's humanly possible.
Yes, because of all the mergers and acquisitions since Reagan. I'm pretty sure GE wouldn't pass the anti-monopoly smell test. "Small is Beautiful" is a classic book, by the way, by E.F. Schumacher arguing against corporatism and aggregation.
==GE will only pay its fair share when enough citizens wake up and demand that our politicians crack down on tax dodgers. ==
And then we'll live happily ever after.
Trylon - having coffee at his policy institute
This is why Uncle Sam takes 20% out of my Social Security that I am eeking by on.
Didn't "greatest generation" Tom Brokaw lie for these thieves?
right, and didn't barry recently annoint, oops, appoint, jeffrey immelt to head his jobs initiative program? recommendation, ship more jobs overseas, increase general electric's bottom line and his own mega million dollar salary.
I know I'm preaching to the choir, re this, but anyone who still thinks Obama is a progressive and not a neoliberal "free" trade corporatist needs medication.
Again, it all started with Ronald Reagan who said, 'Corporations don't pay taxes people do'.
But now corporations are 'people' too, therefore, they should pay taxes just like we little people do.
Corporations are people. Corporations are Plutocrats hiding behind a corporate veil. The two tenths of one percentile who rule the world are the largest stockholders in companies like GE.
Warren Buffett invested heavily in GE stock after the 2008 crash. Warren knew that GE pays no income tax and that Obama was going to take care of his friends at Exelon, who would in turn buy reactors from GE.
Your retirement funds are his stop-loss program. The 'Perfect Storms' that hit Wall Street never swamp old Warren. Your retirement accounts are the biggest losers. Money is not made on Wall Street, it just changes hands.
The Pope recently said, "The Aristocracy of the temple" killed Jesus. It is time to once again throw the money changes out of our temple.
Excellent! They (CEOs) should also serve prison time for the laws that they break.
GE may "bring good things to life" but one of them isn't the economy. The executives are no doubt doing well, though.
If Ronald Reagan were alive today we could tell him that, according to the law, corporations now ARE people, sort of provisional people with all the free speech rights (and the money to back them up) with few of the responsibilities. Reagan and his ilk wouldn't listen.
What is needed is a New Law, applicable to companies with Sales greater than $1 B/y, which requires on each Consumer Product, an estimate the amount of Federal Taxes that would be added to (or subtracted from) the US Treasury by purchase of said product. These would be based on (GE) tax statements, filed with the IRS, for the previous year.
If corporations have been determined to be "people" by the Supremes, can't we at least force them to pay the Alternative Minimum Tax?
I'm willing to give GE the $4,000 standard deduction.
Not to worry. Jeffrey Immelt, General Electric’s CEO, has been hired by President Obama to lead his "Outside Panel of Economic Advisers". Surely, Immelt will notice that GE has swindled the US taxpayers out of a lot of money, and will advise the President to make GE return all of it.
drdulkamara,
Have you forgotten that Bill Daley is Obama's Chief of Staff? And he was the former President of AT&T. Obama is in good company and making the right moves to screw us even harder than the Repug.
It reminds me of Dubya saying "Brownie, you did a heck of a good job". Democrats, Union, Progressive and Independent you did a heck of a good job putting Obama in the WH.
GE gets $16 billion government bailout in 2008-09:
http://www.cpa-connecticut.com/blog/?tag=ge-receives-16-billion-in-bailout
Pray tell, under what policy did GE get $4.2 billion from the taxpayers?
"In 2004, Congress enacted the “American Jobs Creation Act,” which added more than $200 billion in new corporate tax subsidies over 10 years. It was a bill that the General Electric Company helped write and in which GE gained billions of dollars in new subsidies, particularly for its offshore activities. GE promised, of course, that these new subsidies would be good for our economy and U.S. jobs. But six years later, GE had cut its American workforce by 32,000 jobs, a 19 percent drop, while increasing its foreign jobs by 8.5 percent. In 2004, 54 percent of GE employees were in the United States. By 2010, that had dropped to only 46 percent."
http://www.ctj.org/pdf/mcintyretestimony03092011.pdf
But 30 Rock and GE are...are just so cool! Com'on now! Its the home of Tina. Old patriotic Tom. Jimmy and SNL And not to forget, home to GE's new crappy light bulbs that we're being MADE to replace all of our good working ones with that actually work. And they finance all kinds of cool crap, too!
While GE is representative of the general malaise of kleptocracy and corpocracy that has swallowed up the country and all common sense, they are, the least of our problems in the grand scheme of things. There are so many things and at such deep level that going after GE seems futile. It would be like putting a Band Aid over a brain tumor. The entire political and economic system has to be uprooted first before anything can change.
Today, I was reading an article on Al Jazeera about Pakistan. As the article - and some of the commenters - described it, Pakistan is a country teetering on the edge of anarchy due to corruption, social and political division, economic stagnation and absolutely lack of direction. Yet, Pakistan is, by the West's standard, a model of democracy because they have open, democratic elections and new leaders are voted in by the people at regular intervals if simply out of habit. Reading the article, I couldn't help but think, "gee, sounds just like where the US is headed." The article was the within the context of a revolution in Pakistan but the problem posed is that there would be no one to revolt against. Ha! In that, the US is not like Pakistan. We've got plenty to revolt against and plenty to change. We just need the resolute to do it. But as the ME has shown, it has taken them decades of cronyism and kleptocracy to reach the boiling point. I rather fear that it will take another 50 years here before people see the need to take matters into their own hands.
I don't know that the answer is necessarily taxing corporations more, though closing some loopholes is certainly in order. Raising taxes on corporations will mean 1) higher prices to the customer and 2) more profits being funneled to shareholders and executives.
If anything, all this corporate tax-dodging is a sound argument for raising the top marginal tax rates and the rates on capital gains and dividends.
A little corruption goes a long way.
GE modern refrigerators have a small evaporator coil at the base of the refrigerator with a fan blowing air on the coils at intervals of appox. every 40 minutes causing noise and inefficiency. The complete setup has a compressor, the fan on the evaporator plus usually a fan in the freezer.
Old refrigerators had an expansion coil extending up the entire back of the refrigerator and had no fans were quiet and efficient running completely off of the compressor.
GE was so profitable that they bought up Hotpoint and modernized their refrigerators to the new standards.
This does not seem very good to someone who has seen better.
Quantity (profit in the form of bonuses for execs and shareholder return) replaced quality (even the idea of plowing profit back into developing higher quality products) somewhere back in the Reagan era and got a turbocharge with Clinton's free trade policies. (See "Zen and the Art of Motorcycle Maintenance" for a brilliant parable about quality vs. quantity.
"No politician should be allowed to propose a budget cut or moan about austerity until they crack down on the scofflaws such as General Electric"
Professional politicians are a class of their own. They say what it takes to get into office and then when they get there, they work for top dollar which isn't your average worker citizen's $, but they Will take those too. They have Billionaire backing. Budget cuts and austerity aren't about the money. It's about fascist crowd control. These politicians cannot stop. Obama was traveling with his personal GE advisor selling weapons and nukes last week while starting an undeclared war of non self defense and a nuclear meltdown was blowing its way towards America!
What we need is a tax revolt. No one pays taxes until GE and their ilk pony up their fair share. Since they take out taxes in advance, one could say they were exempt or falsely claim more exemptions that they were actually entitled to. Presuming that this doesn't catch up with you until you actually file your taxes, you can avoid being taxed or at least taxed at a lower rate than you actually should be. of course you could be audited, but if a mass of people refused to pay taxes, the IRS simply couldn't cope with pursuing every tax dodger. Why should average citizens pay taxes when the corporations don't?
Wonderfual and thrilled that this finally got some attention after thirty years.
GE uses our tax dollars to buy influence, does not get any better then that.
Now, can we discuss the 5000 other MEGA corporations doing exactly the same thing????
Take a look at the government contractors list on the White House web site. Can anyone say Corporate whores. I know I will never look at Boeing the same way.
Where are the story's about Xe, formerly Blackwater, where are there IRS contributions.