The wealthy real estate magnate Leona Helmsley once said, "Only the little people pay taxes." She was dubbed "the Queen of Mean" and went to prison for tax evasion.
What a coincidence. Turns out General Electric, which had $14.2 billion in profits last year, pays no taxes, either, according to a news report. But no one is calling CEO Jeffrey R. Immelt names. And he won’t be doing time in a cell: President Obama made him a liaison to the business community and appointed him to lead the president’s council on jobs and competitiveness.
How’d that happen? As always, it’s who you know and what you know. And GE has excelled at drawing the best and brightest to protect its profits: A million-dollar lobbying team that includes former Treasury and IRS officials, and the savviest ex-Congressional staffers around.
The company now makes most of its money from lending abroad, not from appliances and light bulbs, all the better for its bottom line: As long as those profits stay off U.S. shores, the IRS has no claim. And the $5 billion in U.S. profits? Only a very dim bulb would pay anything on those gains. GE finessed a series of tax breaks and write-offs, and charmed powerful legislators with well-timed donations to their districts to keep gaping loopholes in place.
GE will likely crank up a million-dollar public relations campaign in the days ahead, trumpeting its philanthropy to counteract the nasty smell that now clings to its corporate image. That shouldn’t sway anybody.
The corporate giant gets to thumb its nose at the little people, at a time when the U.S. Treasury could use every last dime it can scrounge. Programs for children and families are being sacrificed on the altar of a trillion-dollar deficit, and the remnants of the union movement are vilified for trying to hang on to some semblance of a middle-class existence for their members.
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