If something is legal, does it make it right?
That's the question that lies at the bottom of this firestorm over General Electric's lack of paying any taxes, even though it made a $5.1 billion dollar profit last year.
This is a timely post for me personally, as I'm working on my taxes now. I'm having to research some of the things you can write off as a freelancer and blog site owner. I've dropped quite a bit of money on related things, not the least of which includes traveling to New York City twice, buying a new laptop and a tablet. But as I look over some of the things I can claim, I start to get squeamish. It just doesn't feel right to claim some of the things I could claim, so I'm just not going to.
Part of it is it just doesn't make sense that I should be able to write off some of these things, like every single meal when I was in New York City for the launch of No Labels, and part of it is me thinking that our deficits are huge and I should do my part, however small, to help.
Boy wouldn't that be nice if business owners did the same? Exploiting the loopholes that businesses have lobbied to get over the years is a giant industry, and reading about how some of these companies avoid paying taxes sounds like a strange mystery novel.
To be fair, GE Capital lost $32 billion last year, which wiped out their tax burden, but should then they be allowed to get a tax return that was almost as much as they made in profit this year? Does that really make sense to anyone?
GE's CEO, Jeffrey Immelt, has been in the news a lot since his speech at the Economic Club of Washington came days after this announcement that his company had gotten such a massive tax return. Publicly, he agrees that our corporate tax system is terribly flawed, says he favors closing loopholes and lowering the overall rate so it is competitive with other developed nations' corporate tax rates.
I, of course, agree with that general idea, but one can hardly take him at his word that he actually believes this when his company spends more on lobbying to keep it's taxes low than any other company in the United States. If Immelt and GE really believed this, they would put their lobbying power where their mouths are and push for closing the loopholes and lowering the overall rate. Actions speak much louder than words. In reality, they'd much rather get special deals rather than have to pay the same rate as everyone else.
One of the quotes I've seen the most this week, from Immelt's speech, was, “Like any American, we do like to keep our tax rate low. But we do it in a compliant way, and there are no exceptions." In a very limited way, this makes some sense, but the American people don't get the same kind of sweet deals that GE gets through all the loopholes they've pushed for over the years, and the American people don't have an army of lobbyists and tax geniuses looking for ways to get out of paying their fair share.
The American people also can't just shift their means of making money overseas, as GE has done for the vast majority of the products it sells, avoiding taxes while also avoiding creating American jobs for the people who buy so many of their products. Not to mention the American people don't have the money to donate to hundreds of sitting congresspersons... which I'm sure has nothing to do with their ability to get those tax loopholes they exploit so well, or that chair at the head of the table of Obama's Council on Jobs and Competitiveness.
One would think the chair of such a advisory board would consist of people who actually are creating more jobs here in the United States, while Immelt just builds more factories overseas, sees his pay double and asks his employees to accept pay cuts. This is also the CEO of the company pushing for a jet engine for the F-35 Joint Strike Fighter, even though the military doesn't want it.
This guy shouldn't just be let go from the President's Council, he should be kicked out and rhetorically tarred and feathered for being a classic example of what a patriotic corporation in the United States isn't.
Solomon Kleinsmith is a nonprofit worker, serial social entrepreneur and strident centrist independent blogger from Omaha, Nebraska. His website, Rise of the Center, is the fastest growing blog targeting centrist independents and moderates. He is currently collaborating with other centrist independent and moderate bloggers on a news aggregation and social networking site, and is always looking for ways to help the independent groundswell as more and more people become disaffected with the two major parties.