Tax Loopholes and the GE Hoax

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, Andrew Boyd, member of the National Coordinating Group for US Uncut, and Chuck Collins, co-founder of US Uncut, senior scholar at the Institute for Policy and director of the Program on Inequality and the Common Good, talked about US Uncut's efforts to advocate against the tax loopholes for large corporations and last week's GE hoax.

Today is tax day, and while you're thinking about what you might have to pay, know that GE will not be returning a $3.2 billion tax refund to the U.S. Treasury as the Associated Press reported last week. GE is the latest corporate victim of a hoax by US Uncut (in collaboration with Yes Men), a group that takes action against corporate tax evaders. GE has become a symbol for tax evasion since they didn't pay their taxes in 2010.

The prank by US Uncut made headlines, and it's not the first time.

What is US Uncut?

The group has been called the group the "Tea Party of the left" and its co-founder, Chuck Collins said he can see the connection.

I think we are the next evolution of the tax protests effort. The last two years have been pretty much dominated by the Tea party's grievances of the tax system and we're adding another frame to that. 

Collins said the key is one simple message and that message is riling people up.

We don't have to be making these huge budget cuts, whether they're at the federal level or in our communities, we don't have to be laying off teachers. We should be making these corporate tax dodgers pay up and that's what struck a simple nerve. The facts of corporate tax avoidance have been around for a while but what's happening is people are saying, wait a second, I'm personally paying more taxes than GE and Verizon and Boeing? And at the same time we're having to be in this kind of false austerity in terms of our local and state and federal budgets.

Why target GE?

Andrew Boyd, a member of the national coordinating group for US Uncut, said GE was the best target because they're the "poster child for corporate tax avoidance," and the timing around tax day couldn't have been better for the prank. They cloned GE's website, studied their press releases, captured their language and even came up with an near identical url to make the trick believable.

We wrote a press release...in Jeffrey Immelt's voice, quoting him extensively, saying that GE wanted to be a leader in corporate social responsibility, that he'd heard the problems that the public had had with GE's practice, that they wanted to reclaim their brand, that they didn't want to off shore jobs anymore, that in his position as chairman of Obama's Council on Jobs and Competitiveness that it was too hypocritical for GE to have an unpatriotic tax policy, etc. And so we pushed out the press release...and then it was off to the races.

It worked. Both the Associated Press and USA Today picked up the press release which "massively" exceeded Boyd's expectations for the prank. As for choosing GE as a target, Chuck Collins said they're embedded with Congress as far as law-making goes.

When GE says they're just obeying the law, we have to all remember they helped write the law. They have so much political clout. Part of the reason why we are focusing on the companies is because they're using their incredible vast resources. There were 12 companies that spent a billion dollars lobbying over the last ten years for special tax treatment. That's not just sitting back and letting Congress write the rules.

Collins said it's a "political will" problem too, and US Uncut is helping to connect the dots between the players.

Andrew Boyd said, they also wanted the hoax to raise the bar for GE and other companies.

We wanted to create a happy headline. We wanted to, in a sense, hold GE accountable to a possible future, to doing the right thing. If they're not going to really do it, for a short period of time, maybe 40 minutes or whatever, the world thinks that GE is going to do the right thing, so this ups the bar for them.

Who's paying attention?

Not the President, said co-founder Chuck Collins.

He has been silent on this...I think it's a huge embarrassment that the chair of his Council on Competitiveness is a tax dodger. As a candidate, Obama was very outspoken against off shore tax havens and he was a co-sponsor of the Stop Tax Haven Abuse legislation but he's been completely silent when it comes to General Electric.

Is closing loopholes a policy challenge?

Collins said if there's political will, it could be less of a challenge. Rep. Paul Ryan and the President have both talked about closing loopholes in the budget and deficit debates and Collins is hopeful that this means corporate tax reform too.

Paul Ryan would like to cut the tax rate while keeping many of these loopholes and off shoring system in place so the real litmus test is will the off shore system stay in place and I think Obama understands how destructive it is.