General Electric reported that its first-quarter earnings have increased by 77 percent compared to the fourth-quarter of 2010. This comes as the New York Times reported that GE paid zilch on their taxes, while raking in over $14 billion in profits in 2010. Even worse, GE actually received $3.2 billion in tax benefits.
“Our environment continues to improve and get better,” said Chairman and Chief Executive Jeff Immelt. Indeed, GE benefits immensely from Obama administration initiatives aimed at having government pick winners and losers in the economy.
GE was major contributor to President Obama’s 2008 campaign and certainly has reaped the rewards of Obama administration economic policy. Immediately, GE invested $ 200 million in lobbying on Capitol Hill and top tax lawyers, who contrived ways to shelter their money from our byzantine tax code. GE has invested heavily in President Obama’s pipe dream “green” energy technology, which has remained stagnant despite all the subsidies and platitudes designed to ramp up demand for otherwise unwanted and inefficient energy sources.
The reason GE has been investing in these “green” energy sources, despite the lack of a thriving market, is because the stimulus package contained a loophole in the tax code that allowed for politically connected big business and ingenious freeloaders to make profits through government handouts. This is all at the expense of taxpayers, of course.
Shortly after his appointment to President Obama’s Economic Advisory Board, CEO Jeffrey Immelt announced that GE would purchase 50,000 government motors produced Chevy Volts. The Volt’s sales have continued to decrease, so why would GE want to purchase these increasingly unpopular cars? Simple, the government incentivizes its purchase through a $7,500 tax credit. So, GE got a reduction of $350,000 on its purchase through the government imposed generosity of American taxpayers.
Legendary economist Milton Friedman proclaimed that he supported “free enterprise and not big business”. President Obama subsidizes big business at the expense of free enterprise, repackaging it as “winning the future”. One thing is for certain, with these policies and ridiculous tax code in place, General Electric knows it will win the future.