Despite running on and representing different ideals than his predecessor, George W. Bush junior, President Obama is doing one thing the same as him, treating General Electric with kid gloves, despite the fact that they earned a massive $14 billion profit in 2010, they don’t pay any taxes, and even received over $3 billion in tax benefits; that’s tax payer’s money.
To cap this off, Obama has recently appointed their CEO Jeffrey R. Immelt as head of a jobs panel which will help decide how corporate tax is handled from now on. This will give the firm even more power in maintaining or improving their current tax situation.
The Wall Street Journal laid out most of the details about the firm’s discrempancies when they first reported on it. However, they also said that the company had spent many decades working their taxes down to the point where they actually get paid during tax season. Despite the 35% corporation tax that is in place, GE are able to avoid it and benefit from it by utilising offshore banking institutions and moving money around in a rather clever fashion; this is down to the hiring of many ex IRS employees during the 80s and 90s.
Ronald Reagen attempted to put a stop to actions such as this, but unfortunately at the time of his bill being passed it was undermined and had the wind taken out of it by certain senators, who many believe were in the pocket of General Electric. Over the past few presidencies Reagen’s bill has gradually been wittled away at, until we reached the state we’re in today.
While Obama isn’t doing anything to improve the breaks for the company, the fact that they’ll now help decide future policy isn’t exactly a slap in the face for General Electric.