Thursday, April 21, 2011

GE Profits Up 77%! But pays ZERO taxes.

President Obama "says" the rich should pay more
NYC, Apr 21, 2011. General Electric Corporation, one of President Barack Hussein Obama's, D-Kenya,  key corporate sponsors, has reported a 77% increase in first-quarter earnings.

This hefty increase in profits was sparked by an improvement at its GE Capital financing arm and gains at most of its industrial units.

Despite this, General Electric pays close to zero in Federal Income taxes. Last year GE paid no taxes on the $14 billion it earned in profits (including $5 billion from operations in the USA). 

How do they manage to get away with this? How did this happen?

Chairman and Chief Executive Jeff Immelt explains "Our environment continues to improve and get better,"  noting that the restructuring of GE Capital was ahead of plan while the quarter saw a record backlog of orders for its industrial products and services.

But there is a lot more to it. It's actually pretty complicated.

GE's tax return is the largest the IRS deals with each year... some 24,000 pages if printed out. Its annual report filed with the Securities and Exchange Commission weighs in at more than 700 pages.

Inside that report you will find that GE in effect consists of two divisions: General Electric Capital and everything else. The everything else - maker of engines, power plants, TV shows and the like would have paid a 22% tax rate if it was a standalone company. But they didn't pay any tax at all.

The real answer is "tax loopholes."

Large multinational corporations, especially those who sponsor President Obama and the Democrat Party, get to reap huge tax benefits because their lobbyists actually write their own tax laws and create all their own loopholes and exceptions.

They just hand their paid agents in Congress their "suggestions" and they are incorporated into the next bill they pass.

It doesn't even have to be a tax bill, they can insert their special tax avoidance schemes into any piece of legislation as an amendment.

They can insert them into the military budget, the transportation budget, even the education budget, just as long as they pass it into law.

It's important to remember that the Republicans will do this too, they just aren't as brazen about it. And this is why BOTH parties will aggressively slander the Tea Party Movement or any attempt to institute a fair or flat tax that eliminates special loopholes.

Politicians are up for sale to the highest bidder. 

For a few hundred thousand in campaign contributions they can buy literally millions (or even billions) of tax relief. And at the very same time they can demagogue the issue by ranting about how "the rich should pay more."

For the record, whenever a politician says "the rich must pay more" they really mean "the middle class," because the middle class pays almost all the income taxes in this country. The rich have their loopholes, and the poor don't earn enough to pay any tax, so there is only one revenue source left.... the Middle Class.

GE CEO Jeff Immelt explains why they pay no taxes
To a very large extent the Democrats can protect their middle class voters by paying huge salaries to government workers. 22 million people (roughly 16% of all people in the workforce) are employed by the Government.

These are the politicians, social workers, teachers, firemen, police, and sanitation workers.

Plus there is 12.4% of the workforce that belongs to large powerful unions like SEIU, the Steelworkers, the Teamsters or the UAW. The Democrats use your tax money to bail out their pensions and "save their jobs" when their employers are unprofitable.

Add those together and you have around 30 million hardcore Democrat Party voters and activists. Once you include their immediate families it is easy to see why the Democrats start with a base of 50 million guaranteed votes.

If you pay them enough they will always vote for Democrats, knowing full well that their higher taxes will be more than offset by even higher wages and benefits. This really isn't a question of "fairness" it's a question of greed. Government workers and members of large unions want the rest of you to pay more in taxes, so they can earn more for themselves.

The Democrats have absolutely NO desire to tax the rich. This is just political spin. Even Warren Buffett, (another Obama sponsor) openly brags about how his secretary pays a higher tax rate than he does.

If they truly wanted to "make the rich pay their fair share" then the solution is simple.... just take away all their loopholes.

Raising their tax rate accomplishes nothing as long as they have plenty of tax loopholes.

1 comment:

  1. So sad, but Oh so true. They can all be bought!

    ReplyDelete