GE’s Crony Capitalism: The Saga Continues
The other week, I blogged here about G.E.’s crony capitalism tactics that take advantage of tax code loopholes and other special treatment for big corporations by big government. FreedomWorks has long been beating the drum against rent-seekers like GE and Duke Energy, so it was a little surprising that yesterday’s New York Times article, “G.E.’s Strategies Let It Avoid Taxes Altogether,” on the preferential tax treatment GE receives read like a Kibbe op-ed.
A review of company filings and Congressional records shows that one of the most striking advantages of General Electric is its ability to lobby for, win and take advantage of tax breaks.
Over the last decade, G.E. has spent tens of millions of dollars to push for changes in tax law, from more generous depreciation schedules on jet engines to “green energy” credits for its wind turbines. But the most lucrative of these measures allows G.E. to operate a vast leasing and lending business abroad with profits that face little foreign taxes and no American taxes as long as the money remains overseas.
In addition to detailing the numerous ways G.E. takes advantage of our unweildy and biased tax code, the article does a great job at illustrating the relationship between big business and the Congressmen who love donations them.
The head of its tax team, Mr. Samuels, met with Representative Charles B. Rangel, then chairman of the Ways and Means Committee, which would decide the fate of the tax break. As he sat with the committee’s staff members outside Mr. Rangel’s office, Mr. Samuels dropped to his knee and pretended to beg for the provision to be extended — a flourish made in jest, he said through a spokeswoman.
That day, Mr. Rangel reversed his opposition to the tax break, according to other Democrats on the committee.
The following month, Mr. Rangel and Mr. Immelt stood together at St. Nicholas Park in Harlem as G.E. announced that its foundation had awarded $30 million to New York City schools, including $11 million to benefit various schools in Mr. Rangel’s district.
And when I say this piece reads like a Kibbe op-ed, this is definitely not “a flourish made in jest.” The heading of the next section entitled “Defying Reagan’s Legacy” picks up on the same dissonance between G.E.’s rent-seeking actions and it’s former spokesman, Ronald Reagan, that FreedomWorks President Matt Kibbe expounded on in this February 8 Daily Caller piece, “G.E.’s Reagan Revisionism.”
Over at Reason, John Stossel also takes aim at G.E.’s freeloading.
General Electric CEO Jeffrey R. Immelt is super-close to President Obama. The president named Immelt chairman of his Council on Jobs and Competitiveness. Before that, Immelt was on Obama’s Economic Recovery Advisory Board. He’s a regular companion when Obama travels abroad to hawk American exports. (Why does business need government to do that?)
“Jeff Immelt is perhaps the CEO who is most cozy with President Obama,” says journalist Tim Carney. “General Electric is structuring their business around where government is going … high-speed rail, solar, wind. GE is lining up to get what government is handing out.”
Stossel will also be reporting on our national freeloaders – and the big government that encourages crony capitalist behavior – tonight at 10pm on Fox Business.
It’s clear that rent-seeking is a two-way street. Of course big business takes advantage of any tax breaks possible. Of course G.E. lobbies for subsidies and cap and trade to its advantage – because these institutions are there to be exploited. It will take serious reforms like a fairer, flatter tax code, to rid the system of these percieved advantages and put big business in its place.