JaxPolitix

Reading time – 88 seconds  .  .  . 

Perhaps you’ve seen some of the General Electric (GE) television ads with a lovely feel-good messages .  .  .

 

.  .  .  like the cute little girl who tells us that her mom makes trains that are friends with trees.

 

 

 

 

 

.  .  .  and the software engineer who won’t work on trains, but who will write software so that planes, trains and even hospitals can work better.

 

 

 

 

.  .  .  and that same software engineer whose dad challenges him to pick up his grandfather’s sledge hammer and he doesn’t and maybe he can’t, but his mom says it’s okay because he’s going to change the world.

 

GE is spending a lot of money to air those commercials, yet they aren’t trying to sell you anything. Not a microwave oven, nor a ballistic submarine nor a nuclear power plant or any of the many things that GE makes. Why would they spend that money?

Perhaps the target market is young, talented people they want to hire. That makes sense in light of the fierce competition for smart, creative people, especially in the high tech sector.

Or perhaps it’s to burnish GE’s public image, as it has taken a bit of a beating over the past few years due to its avoidance of paying income taxes and its pitifully small share of tax paid as an American company. Just take a look at this chart (right – full article here) from the Citizens for Tax Justice.

From 2002 – 2011 GE made a cumulative profit of over $80 billion and paid just $1.467 billion in Federal income tax. Business lobbying groups like to say that America can’t compete in the global market place with our 35% top corporate rate, but GE has paid an effective rate of just 1.8% on its $80 billion in profit. Note, too, that the figures in red on the chart indicate years when GE got tax rebates from prior years’ taxes, even though they made billions in profit in those years. Got a problem with that?

Here’s the thing: GE is playing by the rules. No one appears to be suggesting that the people running GE have broken any law with their tax avoidance schemes; they’ve just gamed the system. That system was created by our legislators – it’s only administered by the IRS – which is to say that our legislators made a system that GE could game to its very lucrative benefit and to the detriment of our country.

In a well-referenced 2013 article, the Huffington Post reported that GE had $108 billion in profit squirreled away offshore specifically for the purpose of avoiding paying Federal income tax on that money. Of course, they aren’t alone, as HuffPost reports,

“Sixty big U.S. companies analyzed by the Wall Street Journal kept on average more than 40 percent of their annual profits overseas last year.”

That kind of thing is made possible by corporate lobbying. Again singling out GE about their lobbying activity:

According to the report, GE lobbyists made contact with lawmakers or their staffs at least 863 times over a two-year period between 2011 and 2013 to argue for the loophole, known as the “active financing exemption.” [emphasis added}

Estimates are that there is a cumulative $2 trillion of un-taxed American companies’ profit hidden offshore and that’s pretty ugly stuff to those of us who pay all of our taxes (meaning just about all of we non-corporate entities – i.e. small businesses and individuals).

Note, too, that GE gave over $1.8 million to politicians in campaign contributions in the 2014 election cycle. Do you suppose that might help GE get additional legislation that allows them to game the system more and pay even less tax?

As this kind of information arrives in public view it’s a black eye for corporations like GE, so those companies have to launch PR campaigns so that we won’t think they’re the creeps they really are.

Clearly, the message is that you will need hundreds of lobbyists to twist the arms of legislators and the cash for very large campaign contributions so that you, too, can pay almost no Federal income tax. You say you don’t have the millions of dollars that would cost, the almost limitless wells of cash that the big corporations have? Too bad for you.

On the other hand, as you watch those television commercials, don’t you just feel all warm and fuzzy about GE? Maybe not anymore.

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Ed. note: There is much in America that needs fixing and we are on a path to continually fail to make things better. It is my goal to make a difference – perhaps to be a catalyst for things to get better. That is the reason for these posts. To accomplish the goal requires reaching many thousands of people and a robust dialogue.

ACTION STEP: Please offer your comments below and pass this along to three people, encouraging them to subscribe.  Thanks!  JA

Copyright 2026 by Jack Altschuler
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