Imagination At Work

I pay more taxes than General Electric. You pay more taxes than General Electric.

Technically, they pay more, just not to the United States Government.

For some reason, though the bulk of their business income comes from this country, they always seem to lose money here and make tremendous profits overseas. Why didn’t TurboTax do that for me?

General Electric’s slogan is “Imagination at Work.” That’s nice. It would be nicer if some of that imagination devoted to tax law was diverted to something their customers could use. A truly imaginative act would be to bring jobs and tax revenue back home.

GE is known to have the premier tax law firm in the country. It is an in-house law department consisting of about 900 lawyers. While making massive layoffs elsewhere, it appears that department is safe from cuts. This, of course doesn’t count their lobbyists giving congressmen pre-written tax law changes that some of those 900 have developed.

Where do they find these imaginative tax experts? The IRS. The Treasury. Every tax-writing committee in Congress. While they propagandize you to believe that government can’t find its rectum with both hands, they find it to be a recruiting goldmine. Is it possible our bureaucrats aren’t overpaid riders on a gravy train?

One of the services the government is supposed to render is to regulate and inspect nuclear power plants. It turns out they are very shorthanded. It has been years since some of the 104 plants in the US have been inspected. GE is the leading builder of nuclear power plants in the world. They even have them in far off exotic places, like Japan. I’m wondering if they might be shorthanded because they are insufficiently funded.

GE hasn’t forgotten its poor, bedraggled executives. It generously gives $14,000 to each one to pay the costs of having their individual returns done. This payout is deductible, of course.

How many times have you heard that lowering the taxes on corporations and the wealthy will allow them to create jobs? In 2009 GE reduced its workforce by 19,000. That is a little misleading. They actually eliminated 35,000 jobs. It doesn’t look quite as bad because they acquired 16,000 new employees when they purchased a Central American bank. I am unaware of a lot of their US employees relocating southward.

The following are some figures cribbed from Senator Sanders web site.

Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion bailout from the Federal Reserve and U.S. Treasury Department.

Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

Those are just the tip of the iceberg. A study covering 1998 to 2005 found more than three-quarters of major corporations paid no tax. Major appears to be defined as revenue of $250 million or more. That doesn’t seem so major with so many raking in the billions.

You often hear the tools proclaiming that the US has the highest business tax in the world. Not true. Japan leads in that category. If we count what is actually paid, rather than the published rate, we would find the US at the bottom.

Companies don’t move overseas because of taxes. They move to pay lower wages, avoid health and safety rules and to employ more compliant workers. Do you like that iPad that was made in China by what the international community has called slave labor and child labor?

Apple admitted their Chinese factories used child labor. However, they did get upset when an audit showed that even the lax Chinese labor laws were being violated and the children were being poisoned by having to handle some of the components without protective gear. Is it possible that Steve Jobs would have a billion or two less if he didn’t take advantage of these kids?

The governors of Wisconsin, Michigan, Ohio, Florida and, I feel certain, other states, quickly offered tax cuts to businesses. Then they try to compensate for the lost revenue by cutting education ($900 million in Wisconsin alone), police, firemen, unemployment compensation, parks, health and other services you might use.

Is the budget deficit a major problem? Yes. How are we going to deal with it? French fry fryers and Walmart greeters will just have to dig a little deeper. Personally, I think we can do it. I found a quarter on the sidewalk only yesterday.

In case you didn’t realize it, you are very generous to these corporations. Back in the 1950s, when our economic engine was hitting its best performance levels ever, the corporate share of the governments revenue was 30%. By 2009, their contribution had fallen to 6.6%.

Not only is a one-sided class war being waged against the people of this country, they are subsidizing the enemy.

I have never been eligible for the Alternative Minimum Tax. You may have noticed some mention of it. I was surprised to learn that there is also an AMT for businesses. It’s on the books but I find no evidence that it is being implemented. Enforcing that could go a long way towards making the deficit smaller.

How about putting our IRS ahead of tax collection entities of other countries? The law could easily be written to require a company that pays taxes to other countries to pay the full corporate tax rate on domestic income, without deductions, unless they pay the US tax, with deductions, on all income.

How could we justify taxing them on overseas revenues? How many billions do we spend defending and representing their interests around the world? How much do these other countries provide for them?

Unless the Congress makes changes of this nature that require corporations to share the burden, they should not be taken seriously, nor be considered our representatives.

President Obama is concerned about the economy. He recently appointed Jeffrey Immelt as his chief outside economic advisor. By the way, Jeff is the CEO of General Electric.

I understand GE is to be banned from Gitmo, for humanitarian reasons.

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