GE Has Made A Lot Of Everybody Else’s Money

If there is one company that exploits the rules encouraging crony capitalism better than anyone, it appears GE would be the one. General Electric seemingly can’t make a lot of money on its own, so it relies on everyone else’s to stay afloat.
GE sues to get a refund
Remember the “GE pays no taxes” scandal? To recap, one of the wealthiest corporations in the world, General Electric, paid no taxes whatsoever in 2010, according to the New York Times.  It gets better. Recently, according to Forbes magazine, GE SUED the IRS to get a $658 million refund. In 2003, the company sold a subsidiary off for $151 million and claimed a $2.2 billion loss, which the IRS kai-boshed in 2010 and GE had to cough up $439 million in taxes plus another $219 million in fees and interest. (The company didn’t pay taxes on what it earned in 2010; this was separate.)
GE claims the IRS is wrong and that because of restructuring it was engaging in, they could claim the loss and that the government owes them money.
Definitely working for them
GE has some incredibly talented people working for it regarding how to skip the tax bill. For instance, the company’s tax department consisted of almost 1,000 people by 1990, and by 2007, employees in that department were encouraged to spend half their efforts on compliance and focus on avoiding paying taxes in the other half.
Regardless of what one feels about paying taxes, the fact is that loopholes cost everyone – ever wonder how we get deficits?
Anyhow, part of GE’s strategy is to hold profits overseas indefinitely, since US tax law holds that taxes only apply to profits made overseas once they reach the United States. GE, Apple and many other corporations do so to pay low tax rates despite high profits. GE held $108 billion in profits overseas as of 2013, according to the Huffington Post, despite an effective tax rate of 1.8 percent from 2001 to 2011.
Avoidance strategies
The New York Times also found GE was heavily involved in regulatory capture, making sure that an army of lobbyists and interest groups keep Congress from passing regulations against GE’s interests. One such action was $11 million in donations to schools in Representative Charlie Rangel of New York’s district in 2008 – Rangel, if some remember, was censured for soliciting donations – right before a key tax loophole was set to expire and cost the company a lot in taxes. Rangel, then chair of the House Ways and Means Committee, voted to extend said loophole. Part of how Rangel got caught was soliciting GE’s $30 million donation to New York City schools using Congressional stationary.  So sure, GE light bulbs and dishwashers may be great, but how much has to be put up with for light bulbs and dishwashers?

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