GE pays no taxes, receives tax bonuses, ships jobs overseas, and its CEO is into job creation

[Kuya]

In last night's show, Jon Stewart ripped GE for paying no federal taxes in 2010 on its $14 billion profit, while canning American employees and hiring overseas; and Obama for punishing the company by...naming GE CEO Jeffery Immelt to chair his Council on Jobs and Competitiveness! (Announcing Immelt's new side gig, Obama exulted that "GE has something to teach American businesses.")

http://www.rollingstone.com/politics...break-20110329

http://digbysblog.blogspot.com/2011/...yers-cant.html

Anyone have any official sources for those numbers?

[Ragnus]

http://en.wikipedia.org/wiki/Oligarchy

^This

[Yugl]

Mexicans come in. Careers go out. There's never a moment of miscommunication.

[Kuya]

This NY Times article mentions it too:

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

Yet many companies say the current level is so high it hobbles them in competing with foreign rivals. Even as the government faces a mounting budget deficit, the talk in Washington is about lower rates. President Obama has said he is considering an overhaul of the corporate tax system, with an eye to lowering the top rate, ending some tax subsidies and loopholes and generating the same amount of revenue. He has designated G.E.’s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President’s Council on Jobs and Competitiveness, and it is expected to discuss corporate taxes.

Company officials say that these measures are necessary for G.E. to compete against global rivals and that they are acting as responsible citizens. “G.E. is committed to acting with integrity in relation to our tax obligations,” said Anne Eisele, a spokeswoman. “We are committed to complying with tax rules and paying all legally obliged taxes. At the same time, we have a responsibility to our shareholders to legally minimize our costs.”

http://www.nytimes.com/2011/03/25/bu...5tax.html?_r=1

This is an atrocity.

[Kuya]

The head of its tax team, Mr. Samuels, met with Representative Charles B. Rangel, then chairman of the Ways and Means Committee, which would decide the fate of the tax break. As he sat with the committee’s staff members outside Mr. Rangel’s office, Mr. Samuels dropped to his knee and pretended to beg for the provision to be extended — a flourish made in jest, he said through a spokeswoman.

That day, Mr. Rangel reversed his opposition to the tax break, according to other Democrats on the committee.

The following month, Mr. Rangel and Mr. Immelt stood together at St. Nicholas Park in Harlem as G.E. announced that its foundation had awarded $30 million to New York City schools, including $11 million to benefit various schools in Mr. Rangel’s district. Joel I. Klein, then the schools chancellor, and Mayor Michael R. Bloomberg, who presided, said it was the largest gift ever to the city’s schools.

G.E. officials say the donation was granted solely on the merit of the project. “The foundation goes to great lengths to ensure grant decisions are not influenced by company government relations or lobbying priorities,” Ms. Eisele said.

Mr. Rangel, who was censured by Congress last year for soliciting donations from corporations and executives with business before his committee, said this month that the donation was unrelated to his official actions.

Because its lending division, GE Capital, has provided more than half of the company’s profit in some recent years, many Wall Street analysts view G.E. not as a manufacturer but as an unregulated lender that also makes dishwashers and M.R.I. machines.

As it has evolved, the company has used, and in some cases pioneered, aggressive strategies to lower its tax bill. In the mid-1980s, President Ronald Reagan overhauled the tax system after learning that G.E. — a company for which he had once worked as a commercial pitchman — was among dozens of corporations that had used accounting gamesmanship to avoid paying any taxes.

“I didn’t realize things had gotten that far out of line,” Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan’s 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent.

That pendulum began to swing back in the late 1990s. G.E. and other financial services firms won a change in tax law that would allow multinationals to avoid taxes on some kinds of banking and insurance income. The change meant that if G.E. financed the sale of a jet engine or generator in Ireland, for example, the company would no longer have to pay American tax on the interest income as long as the profits remained offshore.

Known as active financing, the tax break proved to be beneficial for investment banks, brokerage firms, auto and farm equipment companies, and lenders like GE Capital. This tax break allowed G.E. to avoid taxes on lending income from abroad, and permitted the company to amass tax credits, write-offs and depreciation. Those benefits are then used to offset taxes on its American manufacturing profits.

http://www.nytimes.com/2011/03/25/bu...ewanted=3&_r=1

[Kuya]

“We believe that winning in markets outside the United States increases U.S. exports and jobs,” Mr. Samuels said through a spokeswoman. “If U.S. companies aren’t competitive outside of their home market, it will mean fewer, not more, jobs in the United States, as the business will go to a non-U.S. competitor.”

At a tax symposium in 2007, a G.E. tax official said the department’s “mission statement” consisted of 19 rules and urged employees to divide their time evenly between ensuring compliance with the law and “looking to exploit opportunities to reduce tax.”

By the time the measure — the American Jobs Creation Act — was signed into law by President George W. Bush in 2004, it contained more than $13 billion a year in tax breaks for corporations, many very beneficial to G.E. One provision allowed companies to defer taxes on overseas profits from leasing planes to airlines. It was so generous — and so tailored to G.E. and a handful of other companies — that staff members on the House Ways and Means Committee publicly complained that G.E. would reap “an overwhelming percentage” of the estimated $100 million in annual tax savings.

By 2008, however, concern over the growing cost of overseas tax loopholes put G.E. and other corporations on the defensive. With Democrats in control of both houses of Congress, momentum was building to let the active financing exception expire. Mr. Rangel of the Ways and Means Committee indicated that he favored letting it end and directing the new revenue — an estimated $4 billion a year — to other priorities.

G.E. pushed back. In addition to the $18 million allocated to its in-house lobbying department, the company spent more than $3 million in 2008 on lobbying firms assigned to the task.

Mr. Rangel dropped his opposition to the tax break. Representative Joseph Crowley, Democrat of New York, said he had helped sway Mr. Rangel by arguing that the tax break would help Citigroup, a major employer in Mr. Crowley’s district.

http://www.nytimes.com/2011/03/25/bu...ewanted=3&_r=1

[Kuya]

While G.E.’s declining tax rates have bolstered profits and helped the company continue paying dividends to shareholders during the economic downturn, some tax experts question what taxpayers are getting in return. Since 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment. In that time, G.E.’s accumulated offshore profits have risen to $92 billion from $15 billion.

“We are a diverse company, so there are a lot of issues that the government considers, that Congress considers, that affect our shareholders,” said Gary Sheffer, a G.E. spokesman. “So we want to be sure our voice is heard.”

Loud and clear.

http://www.nytimes.com/2011/03/25/bu...ewanted=4&_r=1

[aurik]

Corporations should pay no tax, but as long as the rich aren't shouldering their fair share of the tax burden someone's gotta pay the bills..so...
BURN THEM!

[tyven]

CHARLIE RANGEL LOL

[kyod]

The rage shouldn't be directed at GE but more at our tax code for allowing this to happen. If there was a loophole that allowed me to not pay federal taxes, you bet your sweet ass I'd take it.

[Mazmaz]

The rage shouldn't be directed at GE but more at our tax code for allowing this to happen. If there was a loophole that allowed me to not pay federal taxes, you bet your sweet ass I'd take it.

Don't be an idiot. It's GE's massive lobbying that's allowed the said tax codes to be put in place as they are. That's the whole point. They're creating their own loopholes to exploit.

[kuronosan]

The rage shouldn't be directed at GE but more at our tax code for allowing this to happen. If there was a loophole that allowed me to not pay federal taxes, you bet your sweet ass I'd take it.

I'd say that not only makes you irresponsible, it makes you part of the fucking problem. Which means, of course, the rage should most definitely be aimed at people like you until the government changes the shit.

[Salodin]

Business is in it to make money =\ blame the government for letting it happen.

[kyod]

Don't be an idiot. It's GE's massive lobbying that's allowed the said tax codes to be put in place as they are. That's the whole point. They're creating their own loopholes to exploit.

That's the point of lobbying, to get laws passed favorable to your cause/organization. Welcome to Washington.

Get pissed at the government and Congress for caving to the lobby. Direct your rage where it actually has some potential to cause change.

Don't hate the player, hate the game.

[Rhinox]

Business is in it to make money =\ blame the government for letting it happen.

That's the point of lobbying, to get laws passed favorable to your cause/organization. Welcome to Washington.

Get pissed at the government and Congress for caving to the lobby. Direct your rage where it actually has some potential to cause change.

Don't hate the player, hate the game.

Bank Robbers are in it too make money. Society has made it so you need money in order to succeed don't hate the player hate the game.

and Yes I'm equating a Felony to Tax Dodging.

[kyod]

Bank Robbers are in it too make money. Society has made it so you need money in order to succeed don't hate the player hate the game.

and Yes I'm equating a Felony to Tax Dodging.

Bank robbers are committing a crime. GE is obeying all laws (otherwise, you know, they'd be getting Enron'd). How is that a valid comparison?

On a personal note, I find what GE is doing to be completely reprehensible, but it's legal.

[Angelsin]

^ that's when you realize the laws in your country are bullshit (at least tax ones)

[Rhinox]

Bank robbers are committing a crime. GE is obeying all laws (otherwise, you know, they'd be getting Enron'd). How is that a valid comparison?

On a personal note, I find what GE is doing to be completely reprehensible, but it's legal.

Because Corporations are inherited evil Both are morally corrupt sole purpose of both is to make as much profit as it can human safety be damned. Just so long as the risk/reward ratio is the in the green they don't care how they make their money or who they hurt in the process..


only difference? One is illegal and the other is required by law to Rob/cheat/steal if it makes the company money.

[Rhinox]

I heard about this a couple days ago, I think it was also reported on NPR when Obama assigned the CEO to the position after his company paid no taxes. It's not the single worst, most disheartening thing I've ever heard, but it's really in strong contention.

Why were you surprised? This is nothing new with Obama the guy appoints the absolute worst head of committees as you possibly can. See:Alan Simpson Debt commission.


I've said this before and I'll say it again. The guy will do everything possible to be viewed as Bipartisan going as far as appointing critics to federal positions and board of advisors.

[Pikarya]

GE is Focused on Building A Better Tomorrow, Today. Don't you guys know?