Are You Paying More in Taxes Than GE?

By Beacon Staff

Like many others, I love the character of Jack Donaghy on the NBC show, “30 Rock,” where he plays a Reagan-worshiping GE executive with a heart of gold. He’s the most lovable conservative on a network sitcom since Alex P. Keaton. And, in what I’m sure is no coincidence, Donaghy, played by Alec Baldwin, has come to signify GE in many ways. Which is why – along with the fact that I am in the process of doing my taxes – it was discouraging/infuriating to read this in the March 24 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.

Oh no. This story has it all. The current, supposedly “anti-business” president who recently hired the head of GE as his liason with corporate America:

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.

This piece also features the already-proven-to-be-corrupt congressman, Rep. Charles Rangel, Democrat of New York, who switches his vote on corporate tax rates after an oddly-timed gift:

That day, Mr. Rangel reversed his opposition to the tax break, according to other Democrats on the committee.

The following month, Mr. Rangel and Mr. Immelt stood together at St. Nicholas Park in Harlem as G.E. announced that its foundation had awarded $30 million to New York City schools, including $11 million to benefit various schools in Mr. Rangel’s district.

The piece also reaches back into ancient history to point out when a president now deified as an exemplar of conservative principles raised taxes dramatically on GE and similar corporations because he clearly saw the prevailing situation as deeply unfair.

In the mid-1980s, President Ronald Reagan overhauled the tax system after learning that G.E. — a company for which he had once worked as a commercial pitchman — was among dozens of corporations that had used accounting gamesmanship to avoid paying any taxes.

“I didn’t realize things had gotten that far out of line,” Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan’s 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent.

There’s so much in this story worth reading that, at once, turns certain things you may have presumed on their head while also confirming the most depressing things you already know about our elected officials and their, um, relationship to corporations. (This guy may be onto something.) Now, I’ve never been one to demonize corporations or people for operating in their own self-interest, and this article puts GE’s actions in their proper context. Nor is this a rant begrudging anyone wealth, and it should be duly noted GE employs many, many people. But at a time when the U.S. faces such crippling financial problems, and the bulk of the national – and local – conversation revolves primarily around the retirement plans of public workers, it’s hard not to read a story like this and think our priorities may be due reassessment. Now if you’ll excuse me, I’ve got to write some large checks (by my standards) to the state and federal departments of revenue.

Photo via Flickr