Best Buddies: President Obama and Jeffrey Immelt, CEO of G.E. tax excempt corpration - photo c-span)
From Reuters: The President, Barack Obama has been heavily vested in a nine –day Asian economic tour, during which time, he brokered a deal between and Indonesian Airline and Boeing.
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"This is an example of how we are going to achieve the long-term goals I set of doubling our exports over the next several years," Obama said after executives from Boeing and Lion Air, Indonesia's largest private carrier, signed a commitment for the jet orders.
Their provisional agreement for the sale of 230 short-haul 737 jets, worth $21.7 billion at list prices, sets up the largest commercial order in Boeing's history, toppling a previous record set just days ago as the industry taps into relentless demand in emerging economies.
It is unclear by the article, if the President also brokered deals for General Electric and United Technologies Research Centers (Sikorsky Air), two major corporations that will be selling jet engines and black hawk helicopters to Indonesia and Brunei respectively, as credit is not specifically given to the President, rather they are mentioned.
Understanding that ours is a global economy, one would hope that our corporations would be manufacturing inside the U.S., and exporting goods. Trade agreements are the job of the President; however, one might recoil a bit when one reads of individual deals brokered by the President for individual companies.
This due to the rising tide of businesses given loans by the Federal Government which are tied directly to a campaign donation to the Obama camping (Granted Green Industries).
What one has to wonder is if the G.E. deal will result in increased tax revenue for the United States, however, that is doubtful. Consider that General Electric Corporation, headed by Jeffery Immelt (Adviser to President Obama) paid zero taxes on 14 Billion dollars in profit in 2010. If Immelt had managed to avoid the loopholes and participated in the “spread the wealth” plan put forth by Obama, the administration would have collected (under the corporate tax rate which is roughly 27 percent, and one of, if not the highest globally (Tax Foundation) 3.8 Billion in taxes (sans loopholes), that’s in Federal Taxes. In the case that GE’s corporate offices are located in Fairfield CT, they are also subject to Connecticut Taxes. According to the (The Tax Foundation) Connecticut Corporate tax at a measly 7.5% on income. If, playing devil’s advocate, General Electric’s State Tax Liability was based on taxable net profits (after Federal Taxes were paid), then they would have given the very needy state of Connecticut an addition eight million plus in revenue.
Therefore, one has to ponder, while our President is out brokering deals on behalf of U.S. companies, why certain companies (specifically G.E.) are not paying one dime of taxes to the U.S.?
Understanding this is an election year, and regardless, that the President should be working on job creation, brokering trade agreements are one way to go about that business, but more broad based, and less specific to companies that are virtually on the Obama campaign donor list. (See Open Secrets.org). To be fair to Immelt, he personally gave to both political parties - full disclosure here Open Secrets.org.
Although the words “crony capitalism” are bandied about the capital and those states holding early Republican primaries, and has grown a bit old – none-the –less, it is apparent that an atmosphere of extreme moral economic chicanery exists between the administration and corporate friends of the administration, be they so called “green start-ups” that go belly-up, or Corporate Giants that evade paying taxes (though what one must assume are perfectly legal tax loopholes). What is most astonishing is that those who sit on the helm of the largest Corporations and are most vocal about Corporations paying more in taxes, end up paying none at all (See Buffett particularly). There is a reason why these corporations, specifically GE, who owns MSNBC, and NBC, are not purloined daily in the press (which, in most common terms, is seen to be “in the tank” for the president), rather held up as examples for the President’s accomplishments in an attempt at job creation.
Simply put, Obama should gather around his corporate buddies, cut a few deals for them (again, said deal cutting for individual companies rather than a competitive arena, where companies are invited to bid after a trade agreement is reached), in exchange for these titans of industry ponying up taxes sans loopholes –given the sheer number of corporate donors to the Presidents campaign, one can well imagine these revenues would go a long way towards mending the deficit.
Just a thought, as one gathers all their receipts, and insures all is in order In preparation of paying income taxes for 2011 – on earnings that are not excessive, but below the “free pass” level on paying taxes and are wildly cramming every available dollar in accounts in order to meet tax obligations due on the 15th of April 2011, might just resent the fact that certain corporations tied to a certain administration pay nothing in taxes, similar to say, those taking an earned income credit. Those would be the middle class, or what is left of the middle class. In addition, one might think the same for all small businesses, as well as corporations who may have not been as generous to a certain campaign, are faced with paying exorbitant taxes, or in the case of Gibson Guitar, completely decimated by a federal raid and shutdown. (See Gibson under travesty of justice). The aforementioned create jobs on U.S. Soil and pay taxes, while…others, not so much. This is why a fair tax, flat tax, 9-9-9 tax, or any equitable tax plan and permanent overhaul of the system needs to be instituted.
Caveat: It is not to say that these types of corporate tax “incentives” have not taken place in other administrations (although not as blatantly), it is to say that tax reform is necessary – across the board.
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