I’m very likely the last blogger in the country, possibly on the planet, to chime in on this, but the recent news that General Electric (GE) — whose CEO, Jeffrey Immelt, was handpicked by President Obama to chair his Council on Jobs and Competitiveness — payed NO U.S. federal income taxes on their $14.2 billion in 2010 profits, and worse, actually earned $3.2 billion in tax benefits for the same year, well, it’s just too outrageous to stay quiet about.
All the more painful is that this news comes as I’m working on my own 2010 tax return, scraping around for every receipt I can find, double checking my figures in fear that I could get audited if I make a mistake, all the time knowing that I typically owe thousands of dollars each April 15th and haven’t seen a tax refund since I was fresh out of college.
This is beyond outrageous. It should be illegal and there should be severe consequences.
If my wife and I don’t pay any federal taxes at all (which is impossible, because, at the very least, I have federal tax automatically withheld from my pay as I earn it), we’re talking about a loss to the federal government measured in four digits. In other words, our hypothetical tax evasion wouldn’t, on its own, make much of a dent in the federal budget, but it would still be illegal and would carry penalties with it.
If GE doesn’t pay any federal income tax, it’s a different picture entirely:
GE’s federal tax rate: 35%
35% of GE’s $14.2 billion in profit: $4,970,000,000
For those counting at home, that’s 10 digits to my four, and currently it’s considered legal.
To put things into perspective, per the 2010 federal budget, that’s nearly the entire budget for the Corps of Engineers, and 50% of the budget for the Environmental Protection Agency.
And, GE isn’t alone in exploiting the same loopholes, particularly those involving offshore tax shelters. According to The New York Times, wealthy individuals and corporations are evading paying taxes on $100 billion per year in this manner.
35% of $100 billion: $35,000,000,000
That’s more than the entire budget, respectively, for the Department of Justice, the Department of Agriculture, and the Department of Energy.
Just imagine how many hungry people that could feed, how many homeless that could house, how many people could get adequate health care, how many veterans could get the care they need, how many retirees who paid their taxes all their lives could live comfortably with that kind of money.
Meanwhile, as GE was earning their $14.2 billion profit, though the dust is still settling from the Great Recession and there’s evidence that we are heading into a double-dip recession, Jeffrey Immelt’s compensation nearly tripled; from $5.6 million in 2009 to $15.2 million in 2010.
While I don’t agree with Jon Stewart, that this is reason to say I give up, I certainly empathize with his outrage.
It’s a disgrace, and I’d even argue, immoral. How Obama could keep Immelt as chair of his council, is beyond me, and I implore anyone who reads this to sign the petition calling for his dismissal from that position.