If you feel like the only sucker in the world who pays taxes, you’re not alone — in your feeling, or in your taxpaying. Friend, I too pay taxes. That makes you and me. There are probably a few more of us out there. Enough to form a small, wan cocktail party, perhaps. (BYOB!)
General Electric, they pay no taxes. Not a dime. Not even on profits of $14.2 billion, $5.1 billion of it domestically.
Not only do they pay no taxes, they get a refund on what they haven’t paid. (Although you can’t really call it a refund then, can you?) Srsly:
In fact, G.E. claimed a tax benefit of $3.2 billion.
You are paying taxes, in part, to pay General Electric’s tax benefit. Feel better now?
It so happens I’ve had taxes on the brain of late. The slow-motion catastrophe of the real-estate collapse will send aftershocks through our local and state governments for years, thanks to the gutting of tax receipts, affecting services, schools and, oh yeah, those richly compensated, lavishly benefitted state and local employees. The governor’s proposed budget slashes state aid to those schools, which will suffer greatly. And, of course, April 15 is right around the corner.
It’s contemporary GOP religion — thanks, Ronald Reagan! — that Americans labor under a crushing tax burden, which simple number-crunching shows to be untrue. But if it’s not true for American individuals, it’s ridiculously untrue for corporations with the right people doing the lobbying and calculations. If you’ll permit me a larger-than-usual excerpt, I think this gets to the point:
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.
While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.
Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.
Yet many companies say the current level is so high it hobbles them in competing with foreign rivals. Even as the government faces a mounting budget deficit, the talk in Washington is about lower rates. President Obama has said he is considering an overhaul of the corporate tax system, with an eye to lowering the top rate, ending some tax subsidies and loopholes and generating the same amount of revenue. He has designated G.E.’s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President’s Council on Jobs and Competitiveness, and it is expected to discuss corporate taxes.
Doesn’t that make you feel better? They pay hardly anything, but they simply cannot compete with foreign companies. Because then, y’know, they might not be able to pay Jack Welch’s dues at three different country clubs. And who do you think Jeffrey Immelt is looking out for in this arrangement?
Oh, I don’t have time or stomach for this today. Let’s move on to something cheerier. Like many of you, I frequently have no idea what Prospero is talking about in the comments, but I liked this video he posted yesterday. I know exactly how these cows feel. This is the time of year when, after a long winter of couch-sitting and casserole consumption, I feel positively bovine myself.
Or we could discuss the grimly amusing case of Carlos Lam, the second Hoosier public servant to lose his job after he let his enthusiasm for Wisconsin Gov. Scott Walker’s union busting get the better of him:
Carlos F. Lam submitted his resignation shortly before the Center published a story quoting his Feb. 19 email, which praised Walker for standing up to unions but went on to say that the chaos in Wisconsin presented “a good opportunity for what’s called a ‘false flag’ operation.”
“If you could employ an associate who pretends to be sympathetic to the unions’ cause to physically attack you (or even use a firearm against you), you could discredit the unions,” the email said.
“Currently, the media is painting the union protest as a democratic uprising and failing to mention the role of the DNC and umbrella union organizations in the protest. Employing a false flag operation would assist in undercutting any support that the media may be creating in favor of the unions. God bless, Carlos F. Lam.”
God bless, Carlos. Sorry you’re losing your health care. By the way, I was trying to find this guy in the Indiana Bar Association directory, with no luck. Based on the mugshot in this story, I’ve narrowed down his probable undergrad alma mater to Butler, Wabash or — and this would make me especially happy to be such a shameless dealer in cultural stereotypes — Hillsdale. Anyone in the Hoosier state have info on the guy?
By the way, his first response to being found out? “That’s not me. My identity was stolen.” Laaaaame.
OK, time to get to work. Let’s leave on a weekend-y sort of note: Jim Griffoen on yet another of his crackbrain old-timey enthusiasms, in this case, Grandpa’s Wonder Pine Tar Soap.