You know how we’ve been covering the efforts of U.S. Uncut, the growing campaign to stop corporate tax dodgers from exploiting overseas tax havens? Well here’s an excellent example of why such efforts are desperately needed, from the front page of the New York Times:
General Electric, the nation’s largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
How can that be, you ask?
The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.
Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm….The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.
If that doesn\’t make your blood boil, I don\’t know what would.
Corporations argue that the U.S.\’s top corporate tax rate of 35% is prohibitively high and puts them at a disadvantage against foreign companies. But even if you buy that argument (and I do not, because I think corporations should be responsible for paying taxes in countries in which they reap huge profits), it\’s hard to swallow when the corporation in question — and not just any corporation, but the biggest in the world — is claiming a tax benefit. Not only did GE not pay any taxes in the U.S. last year, it effectively got money back from the U.S. government.
But wait, there\’s more! ThinkProgress dug up a speech given by GE CEO Jeffery Immelt at West Point in 2009. Titled “Renewing American Leadership,” the speech contains a rather ironic take-down of corporate greed:
Few of us will ever do what many of you will do for duty, honor and country. But America doesn’t expect heroism from all of us. […] Wherever our talents lie, and whenever our conscience requires, we must all, to the best of our abilities, help keep America the great face for good it has long been. We are trying to do that at GE. […]
I think we are at the end of a difficult generation of business leadership, and maybe leadership in general. Tough-mindedness, a good trait – was replaced by meanness and greed – both terrible traits. Rewards became perverted. The richest people made the most mistakes with the least accountability.
And Immelt dared give that speech to the nation\’s future military leaders — a group that knows a thing or two about true sacrifice.