There’s a fatal flaw in conservatives’ mission to spur the economy by giving tax breaks to business and to the wealthy: what does one do about General Electric?
The corporate behemoth had worldwide profits of $14.2 billion last year--$5.1 billion of which came from its operations in the United States. That’s a remarkable accomplishment, considering that it happened during a year when the country was struggling out of a crippling recession.
Federal officials and governors and mayors like it when a company does well, since it means higher tax revenues for them. Except that GE, which the New York Times reported this week has an ace internal tax law team, didn’t pay any federal taxes last year. In fact, the Times reported, the corporate giant had a tax benefit of $3.2 billion. [See political cartoons about the economy.]
(Oh--and if you want to keep abreast of GE’s brilliant schemes to avoid paying taxes, don’t watch NBC. The network, which is owned by GE, didn’t bother to report on the company’s taxless status.)
That’s a lot of money. What could a company do with that kind of cash? Well, they could hire people, nudging along the recovery by putting some cash in the hands of consumers. Maybe they will. But this week, GE announced that it has spent $3.2 billion to buy a 90 percent interest in Converteam, a Massey, France-based company. The move is expected to help GE expand its global markets. Whether it will expand jobs or economic growth here in the United States is another question.