Friday, March 25, 2011

Of Taxes (Not Paid), GE and the Obama Plan

If this story in the New York Times this morning doesn't fire up your righteous indignation, then you're probably wringing your hands considering how your company might join General Electric in screwing the tax-payers of the United States.

The premise as simple as GE's goal of reducing its taxes. GE says the U.S. owes the huge multi-national $3.1 billion, even though GE had overall profits of $14.1 billion last year ($3.2 billion of that in the U.S.). This was accomplished in the traditional American way: hire the right lobbyists, rig the system, buy yourself a few legislators and reap the benefits. Then get your CEO appointed by the U.S. president as his "liaison to the business community" and chairman of a council on corporate taxes. It's what a GE official calls "acting with integrity."

Pissed off yet?

The bright light of the press is looking into this right now not so much because it is tax season, not because this is just wrong, not because our government is totally out of sync, but because GE built the reactor that is causing so much trouble in Japan. Everything Japanese is getting a rectal exam these days and GE just happens to fall into that category.

Even as big companies like GE bitch about huge corporate taxes, the Times says, their share dropped "from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009" and they want it to go even lower. Obama agrees. This is the "liberal" president we elected two years ago. Obama says that GE's CEO “understands what it takes for America to compete in the global economy.” Obama didn't mention corporate responsibility, apparently.

A woman speaking for GE says, “G.E. is committed to acting with integrity in relation to our tax obligations. We are committed to complying with tax rules and paying all legally obliged taxes. At the same time, we have a responsibility to our shareholders to legally minimize our costs.” Easy to say that when you write the laws.

According to The Coffee Party (no, I'm not making this up) the original intent of corporations has been severely distorted:  "They were prohibited from attempting to influence elections, public policy, and other realms of civic society. The states imposed conditions such as limited lifespans for corporate charters (renewable by the legislature), prompt revocation if the corporation broke a law, limiting them to activities necessary to fulfill their chartered purpose, not allowing them to own stock in other corporations or own property not needed for their chartered purpose, terminating them if they exceeded their authority or caused public harm, making owners and managers responsible for crimes committed on the job, banning them from making any political or charitable contributions, and banning them from spending money to influence law making. These restrictions persisted for the first 100 years" of U.S. existence. 

Perhaps it is time we revisited those strictures. A minimum corporate tax for companies making a profit wouldn't hurt, either, and that tax should double if the company is found hiding its obligations overseas.

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