Despite what the talking heads in the news media may be trying to tell us, the economy is still in the dumps:
Single Monthly Decline Since 1962
Real Unemployment Hits 10.3% in February – Gallup Research
On the other hand, isn’t it nice to know that during such hard times, a few folks are still raking in money hand over fist? Or maybe not so nice …
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.
That may be hard to fathom for the millions of American business owners
and households now preparing their own returns, but low taxes are
nothing new for G.E. 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.
Of course this is no accident. G.E. has spend hundreds of millions during the last few years on massive lobbying efforts, particularly those involving green energy initiatives. This has resulted in G.E. being first in line for billions of dollars worth of grants, rebates, tax credits, and other government largess more commonly known as “corporate welfare.”
In his annual Letter To Shareholders from G.E.’s 2008 annual financial statement, which was published shortly after the inauguration of Barack Obama, G.E. CEO Jeff Immelt wrote:
[W]e are going through more than a cycle. The global economy, and
capitalism, will be ‘reset’ in several important ways. The interaction
between government and business will change forever. In a reset economy,
the government will be a regulator; and also an industry policy
champion, a financier, and a key partner.
If you believe in entrepreneurship and the free market, that ought to scare the living hell out of you. Because what this means is that any company wanting to business on a scale beyond the local level will have to deal with a bought-and-paid-for Federal Government — and its cadre of highly subsidized, too-big-to-fail corporate cronies — as its single biggest competitor.
The next time you hear a liberal bashing Wal-Mart or a health insurance company, ask them why it is fair for G.E. to pay zero corporate income tax while the government is struggling through the worst period for tax revenue collections during the last 50 years. I’m sure their responses will be very entertaining.
Oh, and one other thought. A few years back there was another other billion dollar corporation specializing in energy-related business innovations that became a D.C. darling. It had a rock star CEO and deep financial ties to a friendly Democratic presidential administration. Each year it was the recipient of hundreds of millions of dollars worth of tax breaks and government-underwritten sweetheart deals. Its lobbyists pushed for (and got) major changes in federal laws governing energy trading. And year after year it posted billions in profits, yet payed zero Federal income taxes.
The name of this company? You may have heard of it — ENRON.