G.E. Management Aren't The Only Crooks Not Paying Their Fair Share-- Bernie Sanders Exposed The 10 Worst Tax Cheats In America

That clip above is from a senatorial “Back Off Social Security" rally to rescue Social Security from the clutches of the deranged House Republicans. I liked what Bernie had to say-- as usual-- but other senators participating included Harry Reid, Al Franken, Tom Harkin and Richard Blumenthal. Obviously I wouldn't expect corporate shills like Ben Nelson, Mark Pryor or Joe Manchin at this kind of event but any Democrat who thinks he or she has a higher priority than saving Social Security ought to state what it is and exactly how it kept him or her from the rally. Paul Ryan's Wall Street proposal to begin dismantling Social Security through partial privatization would do exactly what Republicans are doing in every state they control-- wrecking the social safety net and disabling countervailing forces (be they government or unions, public media or even teachers) standing in the way of complete corporate domination of the nation-- a form of classic fascism, which is inevitably and always what right-wing ideology leads to.

As Bernie pointed out, just lift the unfair and ridiculous cap on payroll taxes so that the wealthy start paying the same as everyone else pays and Social Security is home free for eternity.

The day before the rally Bernie called on wealthy individuals and corporations to pay their fair share and called out the worst tax cheats by name, something few if any, other senators would ever even consider doing.

1) ExxonMobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. [Note: Our post last April reported that ExxonMobil was owed $46 million by the IRS.]

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. 

3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. 

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.

10) Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

This morning Russ Feingold, replaced by an outrageous corporate shill and no longer in the Senate but still fighting for ordinary working families, joined with MoveOn.org in demanding that GE's CEO step down as Obama's jobs chief.

It’s everything that’s wrong with corporate power today: News broke last week that General Electric, America’s largest corporation, made $14,200,000,000 in profits last year and paid $0 in taxes-- that’s right, zero dollars in taxes. At the same time, C.E.O. Jeffrey Immelt saw his compensation double. Now I hear that GE is expected to ask 15,000 of their unionized workers to make major concessions in wages and benefits.

But what really adds insult to injury is the prestigious and influential position Jeffrey Immelt holds as chair of President Obama’s Council on Jobs and Competitiveness. That’s wrong. Someone like Immelt, who has helped his company evade taxes on its huge profits-- and is now looking to workers to take major pay cuts after his compensation was doubled-- should not lead the administration’s effort to create jobs...

How can someone like Immelt be given the responsibility of heading a jobs creation task force when his company has been creating more jobs overseas while reducing its American workforce? And under Immelt’s direction, GE spends hundreds of millions of dollars hiring lawyers and lobbyists to evade taxes. All of this at a time when Fox News and the right wing are demonizing public workers, like teachers, as the cause of our economic problems.

It’s time for policymakers to stop coddling corporate interests, and get to work creating jobs and wealth for Main Street. We shouldn’t reward wealthy CEOs and Wall Street for behavior that undermines the nation’s economy.

Earlier this morning Joe Scarborough had his make-believe Democrat on to defend G.E. for not paying any taxes-- Harold Ford. Hopefully Ford isn't planning to move to Vermont, but let's make sure Bernie's campaign coffers will help him win his Senate seat next year-- or any other office he decides to run for. Remember, besides this real champion, the other night Jon Stewart reminded us about what also passes as our "champion"...

The Daily Show - I Give Up - Pay Anything...
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UPDATE: Think We Need An Investigation?

As Digby explained this morning, don't look to Republican House Investigator-in-Chief Darrell Issa, caught scamming earmarks for his own personal benefit, "is, and was, a crook. It's his defining characteristic. Why anyone thought it was good idea to put him in charge of an investigative committee is anyone's guess. (Maybe they just didn't have anyone better?)" Yeah, maybe... or maybe they just needed the most corrupt Member of Congress they could find for a job they hoped to turn into a McCarthy-like partisan goon squad that will ignore corporate power crushing the life out of America.

The president's new best bud Jeff Immelt knows the key to "jobs and competitiveness": Don't pay no stinkin' taxes!

Barack and his new best bud Jeff: Does the president know how to pick 'em or what?

"He understands what it takes for America to compete in the global economy."

-- President Obama about Jeffrey Immelt, in January,
on naming the GE CEO chairman of the President's
Council on Jobs and Competitivenss and the
administration's liaison to the buisness community

"The assortment of tax breaks G.E. has won in Washington has provided a significant short-term gain for the company’s executives and shareholders. . . . But critics say the use of so many shelters amounts to corporate welfare, allowing G.E. not just to avoid taxes on profitable overseas lending but also to amass tax credits and write-offs that can be used to reduce taxes on billions of dollars of profit from domestic manufacturing. They say that the assertive tax avoidance of multinationals like G.E. not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States."

-- from David Kocieniewski's NYT report,
"G.E.'s Strategies Let It Avoid Taxes Altogether"

by Ken

Can President Obama pick 'em or what? Lest someone think I'm suggesting that, as he sometimes does, he has stumbled across an insufficiently vetted individual who turns out to be wildly ill-suited to the job in question, let me quickly add that, while I don't think there's any question that GE's Jeffrey Immelt is indeed wildly ill-suited to the roles the president assigned him, I also don't think the choice was inadvertent. It would seem that the president's new best bud has all the qualities he's looking for in a liaison to the business community and his go-to guy on jobs and competitiveness -- a corporate supershark.

I just wanted to make sure everybody's seen this NYT report on the stellar work of GE's Tax Avoidance Division. Okay, that may not be the exact name of the department headed by the company's chief tax-nullifying strategist (again, possibly not his exact title), former Treasury Dept. official John Samuels. But that would be appear to describe its and his actual mission, and it appears that the mission could hardly be more satisfactorily accomplished.

G.E.'s Strategies Let It Avoid Taxes Altogether

By DAVID KOCIENIEWSKI
Published: March 24, 2011

General Electric, the nation's largest corporation, had a very good year in 2010.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.'s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world's best tax law firm. Indeed, the company's slogan "Imagination at Work" fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.

In a regulatory filing just a week before the Japanese disaster put a spotlight on the company's nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back.

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation's tax receipts -- from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

Yet many companies say the current level is so high it hobbles them in competing with foreign rivals. Even as the government faces a mounting budget deficit, the talk in Washington is about lower rates. President Obama has said he is considering an overhaul of the corporate tax system, with an eye to lowering the top rate, ending some tax subsidies and loopholes and generating the same amount of revenue. He has designated G.E.'s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President's Council on Jobs and Competitiveness, and it is expected to discuss corporate taxes.

"He understands what it takes for America to compete in the global economy," Mr. Obama said of Mr. Immelt, on his appointment in January, after touring a G.E. factory in upstate New York that makes turbines and generators for sale around the world.

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.

Company officials say that these measures are necessary for G.E. to compete against global rivals and that they are acting as responsible citizens. "G.E. is committed to acting with integrity in relation to our tax obligations," said Anne Eisele, a spokeswoman. "We are committed to complying with tax rules and paying all legally obliged taxes. At the same time, we have a responsibility to our shareholders to legally minimize our costs."

The assortment of tax breaks G.E. has won in Washington has provided a significant short-term gain for the company's executives and shareholders. While the financial crisis led G.E. to post a loss in the United States in 2009, regulatory filings show that in the last five years, G.E. has accumulated $26 billion in American profits, and received a net tax benefit from the I.R.S. of $4.1 billion.

But critics say the use of so many shelters amounts to corporate welfare, allowing G.E. not just to avoid taxes on profitable overseas lending but also to amass tax credits and write-offs that can be used to reduce taxes on billions of dollars of profit from domestic manufacturing. They say that the assertive tax avoidance of multinationals like G.E. not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States.

"In a rational system, a corporation's tax department would be there to make sure a company complied with the law," said Len Burman, a former Treasury official who now is a scholar at the nonpartisan Tax Policy Center. "But in our system, there are corporations that view their tax departments as a profit center, and the effects on public policy can be negative."

The shelters are so crucial to G.E.'s bottom line that when Congress threatened to let the most lucrative one expire in 2008, the company came out in full force. G.E. officials worked with dozens of financial companies to send letters to Congress and hired a bevy of outside lobbyists.

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. . . .

You really should read the whole NYT piece (and remember, even come Monday it won't cost you one of your precious 20 free post-units, since you'll be coming to it from an outside link), but let me just add that Congressman Rangel denies any connection between his change of heart and an announcement made by Jobs 'n' Competitiveness Jeff the following month:

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. Joel I. Klein, then the schools chancellor, and Mayor Michael R. Bloomberg, who presided, said it was the largest gift ever to the city’s schools.

G.E. officials say the donation was granted solely on the merit of the project. “The foundation goes to great lengths to ensure grant decisions are not influenced by company government relations or lobbying priorities,” Ms. Eisele said.

Mr. Rangel, who was censured by Congress last year for soliciting donations from corporations and executives with business before his committee, said this month that the donation was unrelated to his official actions.

Of course, as corruption goes, wangling $30M for your city's schools, even if it includes $11M for schools in your own CD, isn't exactly the stuff of which your average Abramoff-bribed Republicrook's dreams (or for that matter your average Lieberman-style Dem grifter's) are made.

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Hu's On First? Well... Obviously Not The American People; Maybe Jeffrey Immelt, A Self-Described "Nut" On China

Replacing the dumb bell with the smart guy hasn't changed much when it comes to trade

Vermont's Independent progressive Senator, Bernie Sanders, tends to vote with the Democrats. But he certainly feels no obligation to follow them down one of the roads to ruin the party hierarchy is currently traversing. That's why-- even with a Democrat in the White House-- Senator Sanders felt the need last week to issue a press release entitled "Hands Off Social Security! " Warning that Social Security faces new threats from the Republican-controlled House and newly-elected ultra-conservatives in the Senate, Bernie urged President Obama to keep his campaign promises to preserve the "strong and vibrant" system that serves more than 52 million Americans. Meanwhile, Bernie was joined by Sens. Whitehouse and Boxer in forming a congressional caucus to protect Social Security." On January 11 he sent an official letter to President Obama in the hope of snapping him back to reality: "there have been worrisome reports that you are considering supporting cuts in Social Security. I hope that information is wrong, and that you will stand by your campaign promises to strengthen Social Security, making sure that it remains strong and vibrant and able to pay out full benefits for our children and grandchildren."

The financial sector has lavishly financed Barack Obama's political career. Although he's only been in federal office for just over 4 years, he's taken in an astounding $42,285,749 in political "contributions" from the worst players in American politics, the kind of banksters and insurance sells who normally pump for Republicans. These same interests-- which would also include tellers, security guards and janitors working in banks, has given Bernie Sanders just $181,095, one of the smallest amounts any senator has ever gotten from the sector-- despite the fact that he's been a federal officeholder since 1990. Doubtful that it's just a coincidence that one of these men sticks up for Wall Street and one sticks up for American workers and consumers.

President Obama hosted a visit by President Hu Jintao of China last week. Washington insiders had a nice state banquet to gossip about. Presumably they talked about China's role on the Korean peninsula and in Iran's nuclear development and Obama had a few comments about human rights and currency manipulation. Do you think they discussed Boeing's lay off of 1,000 American workers in southern California the day after the much ballyhooed $19 billion deal with China? Dylan Ratigan made the point that Wall Street-dictated U.S. economic policies have been great for workers... in China.

A recent article in the Wall Street Journal showed that most of the people who lost jobs in this most recent recession found new ones at lower pay. Over a third of these people had to take pay cuts of at least 20%. Pay cuts. We haven’t real sustained pay cuts across a large swath of Americans since the 1930s.

But this isn’t just a tragedy; it is in fact a conspiracy. The people in charge aren’t just failing to prevent this from happening. They want it to happen. You see, pay cuts for workers mean that prices as a whole in the economy don’t rise. There’s less inflation, which means that banks and creditors make more money.

What do I mean by a conspiracy?  Well, you can read all about it.  It’s right in the transcripts of the Dec. 2005 Federal Open Market Committee, which is the committee of central bankers that run America (more on that below).  In that meeting, Dallas Fed President Richard Fisher is complaining about the enormous quantity of Chinese goods flowing into America.  He points out that this is creating ‘disinflation,’ ie. lowering prices and wages for Americans.

Only, he isn’t complaining that there are too many Chinese imports, he is frustrated there aren’t enough imports.  Even though China has built special export-only ports to ship goods out of China, he says, the ports at “Long Beach and Northwest” can’t absorb what China wants to sell us, because of work rules (ie. unions). This is a huge problem, Fisher continues, because it is blocking his CEO contacts from outsourcing as much work abroad as quickly as possible. They cannot “exploit China” fast enough.

...There were all sorts of excuses for why this was a good idea-- we would do the ‘high value add’ work in America, like research and development, while the ‘low quality work’ like manufacturing went abroad. And everyone would benefit-- sure you wouldn’t get a raise, but you’d get low prices at Walmart (Walmart shows up all the time in FOMC meeting transcripts). But basically this was a way of ensuring that banks and creditors could make a lot of money that would instead go to workers. It was known as ‘the great moderation,’ a term coined by Bernanke, and was considered a great success.

As late as 2005, Richard Fisher was celebrating this trend. In that same meeting where he complained about too few Chinese goods coming into the US, he bragged about the weakness of one of the most significant employers in the United States:  “My most delicious irony is the fact that similarly dated Vietnamese debt now trades on a price basis richer, and on a yield basis lower, than that of Ford Motor Company.  [Laughter]”

Just who is Richard Fisher working for, anyway?

This is a systemic problem, and it requires a systemic answer. Right now, China makes our goods, the Chinese workers get our jobs, and American workers get pay cuts. But, the Chinese also lend us our own money back to us, which we then give to JP Morgan, Citigroup, Goldman, and Bank of America so they can speculate with.  Pretty soon, China will have our entire industrial base, and we will be left with the socially destructive financial oligarchs that Charles Ferguson described in Inside Job.

This is not inevitable. We can fight back. The first thing to do is educate yourself on what is really going on, and on who makes the decisions in America. And who is that? It’s not just the people at the White House and in Congress.

Ratigan postulates it's the Fed. Yesterday Matt Stoller got even more specific and pointed to banksters JP Morgan and Goldman Sachs. And this week the Alliance for American Manufacturing wanted to know why there were no serious discussions of the Chinese currency manipulation that is making a wreckage of the American middle class. The meeting that took place in Boehner's office with Hu may have been "bipartisan" but there was little disagreement on so-called "free" trade, part of the right-wing, corporate orthodoxy that binds Ohio Republicans to Chinese Communists these days. The discussion was of human-rights violations, intellectual-property protections, and China's "one child" policy.

Unfortunately, there was no discussion of "longstanding complaints that the Chinese government keeps its currency low to dominate its trading relationship with the U.S."

The real question is why currency manipulation was never raised in the meeting.

As a diverse group of economists have pointed out, Beijing's ongoing policy of currency undervaluation is one of the key drivers of the growing U.S. trade deficit with China.  A recent EPI study finds that this massive bilateral trade deficit has cost more than 2.4 million jobs since 2001.

Why didn't the Congressional leadership raise the currency issue directly?  What's needed is a strong, consistent message in order to show Beijing that their currency peg, which is in violation of WTO law, must end. 

In the end the Alliance for American Manufacturing said Hu's visit was "very disappointing" and that it did "little to change the underlying dynamic of the dysfunctional U.S.-China economic relationship.  Business deals, while important, are no substitute for firm commitments from China to stop its currency manipulation and to end its illegal subsidies of industry. And they are no substitute for clearly defined consequences if China fails to make progress,: said AAM Executive Director Scott Paul. "I'm afraid that there is very little good news in this for American workers. China has received a bounty of good public relations while avoiding any repercussions for its mercantilism. Once again, China has called our bluff. It is a very disappointing result for workers and businesses that face unfair competition from China." 

But Hu wasn't the only bad news coming out of DC for American workers last week. Reagan devotee Jeffrey Immelt, CEO of General Electric-- which, incidentally has closed 26 factories in the United States since President Obama took office in January 2009-- was asked by Obama to chair his Council on Economic Competitiveness. Basically he's replacing someone who actually is concerned about ordinary American families, Paul Volcker, with another of his favorite corporate vultures.

His appointment adds another corporate insider to the White House orbit, underscoring the White House's efforts to build stronger ties to the business community. Earlier this month, Obama named former commerce secretary and JPMorgan Chase executive William Daley as chief of staff.

Funny enough, the Alliance for American Manufacturing didn't think this was a great idea either. Scott Paul went as far as to call it a "poor choice... There is no swifter way to alienate working class voters than to name an outsourcing CEO to lead your jobs strategy. Yet that's exactly what President Obama is doing." I wondered how Paul Krugman was looking at these developments and in his column yesterday, my suspicions were confirmed.

[I]t appears that President Obama is going to make “competitiveness” his main economic theme. To be fair, he could (and may well) do worse. But this is hackneyed stuff, and involves a fundamental misconception about the nature of our economic problems.

It’s OK to talk about competitiveness when you’re specifically asking whether a country’s exports and import-competing industries have low enough costs to sell stuff in competition with rivals in other countries; measures of relative costs and prices are, in fact, commonly-- and unobjectionably-- referred to as competitiveness indicators.

But the idea that broader economic performance is about being better than other countries at something or other-- that a company country is like a corporation-- is just wrong. I wrote about this at length a long time ago, and everything I said then still holds true.

The hopeful interpretation of Obama’s embrace of the idea that he’s the CEO of America Inc. is that it might help fend off right-wing attacks on government action as a whole, helping him sell the need for public investment of various kinds. On the other hand, as Robert Reich says, this could all too easily turn into a validation of the claim that what’s good for corporations is good for America, which is even less true now than it used to be.

All in all, it’s kind of sad. And the less said about Jeffrey Immelt’s vacuous op-ed, the better.

But, as much as I admire Krugman and Reich, let's give Bernie Sanders the last word and let him tie it all together for is:

“I hope [Immelt] changes his mind and focuses on rebuilding the manufacturing sector here in the United States, not in China, and in the process creates millions of good-paying jobs... For the sake of our manufacturing sector and the collapsing middle class, let’s hope that Mr. Immelt’s appointment by President Obama indicates a transformation in his thinking. It is time for GE and other large and profitable corporations to start investing in America again.”