It is not exactly news that General Electric (GE) is breaking laws and avoiding taxes while taking billions of dollars from the federal government. But, since GE’s CEO Jeffrey Immelt became President Obama’s “job czar,” the focus on this rehashed story has become ever-more personal for onlookers who can’t stomach White House complacency on the subject. Over the last ten years, GE has paid an effective tax rate of 2.3 percent while receiving a taxpayer-funded bailout. RJ Eskow of the Campaign for America’s Future recently wrote a piece detailing the depth and implications of the current relationship between GE and the U.S. Government:
As the Citizens for Tax Justice (CTJ) press release explains, the corporation paid 2.3 percent at most – and perhaps much less – over a ten-year period. It’s possible that GE paid no taxes at all. GE is one of this country’s many poster children for the unpleasant truth: Despite conservative yowling that the corporate tax rate is too high in this country, most of our biggest corporations use their lobbyists and tax lawyers to avoid paying their fair share.
That’s especially unjust when the country’s struggling through hard times and corporations aren’t. But it’s never more unjust than when the tax evader is a company like GE, which owes its government so much – for the juicy government contracts, for the slaps on the wrist (and no prosecutions) for repeated criminal fraud, and for bending the rules so that it could reap billions in giveaways from the same government it so gladly stiffs at tax time.
In fact, GE paid no taxes at all in 2010. Think about it: CEO Jeffrey Immelt and his senior executives mismanaged their company so badly that it would have crashed and burned without the estimated $85 billion in loans it received from the US government. Those loans reaped billions for GE – and cost the rest of us just as much – because they were issued at no-interest or low-interest rates.
If General Electric is not purposefully trying to avoid paying taxes then the alternative reality would be that it is grossly mismanaged, making Obama’s appointment of Immelt as “job czar” equally suspect. What is worse, Eskow argues, is that despite the company’s questionable past the appointment of Immelt sends a mixed message about the direction corporations will take in Obama’s second term:
That’s not just a prestigious, high-visibility nod to Jeffrey Immelt. It’s also great for GE’s business. It tells all of GE’s potential business partners – here at home and, far more importantly, overseas – that the company’s wired at the highest levels. It also tells them that GE executives are even more untouchable than other Wall Street types.
That kind of protection can be seen as quite valuable in some circles.
Unsurprisingly, one of that Council’s few concrete “recommendations” has been to create more corporate tax breaks. But the best way that Jeffrey Immelt’s GE could create US jobs is by paying its taxes. If it had paid its taxes at a modest 29 percent rate, that would have raised an additional $21.7 billion in tax revenues.
At an average cost of $50,000 per employee for salary and benefits, the $21.7 billion in taxes that GE didn’t pay could have employed more than four hundred thousand people for a year to rebuild our bridges, roads, and schools. That would have stimulated growth and helped the economy get moving again.
400,000 infrastructure jobs. That is the number to focus on. Congress alleges to be unable to find enough money to fund a new infrastructure bill, but in every corner of the nation’s spreadhseet there is a corporation hoarding enough tax cash to reverse the employment trend in one fell swoop. There’s dope on the tax table, but Jeffrey Immelt is not the kind of czar that goes after bad guys. Changing the current state of corporate power to battle joblessness is not part of his platform, if his company is any indication…