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April 7th, 2010 By | News | Posted In: Business, Financial Crisis, Bailout

GE, Exxon Paid No Taxes in '09

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With the federal income tax deadline looming next week, people can expect Tea Partiers and others to moan and shout about giving some of their money for the common good. If those tax protestors really wanted to make an impact, though, they’d focus on making sure large corporations pay their fair share.

Forbes magazine reported last week that General Electric had $10.3 billion in pre-tax income last year but ended up paying nothing in federal income tax. Instead, it recorded a tax benefit of $1.1 billion.

Meanwhile, ExxonMobil had a record-breaking $45.2 billion in profits last year, but paid no taxes to the federal government. Of the $15 billion it owed in taxes, all of it was legally channeled to corporate tax shelters in nations overseas.

As expected, corporate shills defend the practice. They allege if companies are forced to pay more, they will either pass the cost along to consumers or eliminate some jobs.

No economic system is perfect but the mere discussion of capitalism’s wretched excesses and possibly changing them makes many Americans squeamish, showing just how indoctrinated we are by Big Business.

As part of its “Day of Dialogue” program, the Interfaith Justice and Peace Center (IJPC) will hold a screening of Michael Moore’s latest film, Capitalism: A Love Story, on May 1, followed by an audience discussion. Also, attendees will be able to enjoy a chili dinner and hear news about the local job market from the AFL-CIO, the AMOS Project and the Interfaith Worker Center.

The event, which is free and open to the public, runs from 6-8:30 p.m. It will be held at the Laborer’s International Union Hall, 3457 Montgomery Road, in Evanston.

With rampant unemployment due to the reckless behavior of Wall Street bankers and their lack of proper oversight, the economy is at the forefront of everyone’s minds.

The net result of Ronald Reagan’s unproven theory of “trickle down economics,” combined with George W. Bush’s tax cuts for the wealthy, has led to disastrous results that threaten to shred society’s social contract.

Statistics show that the top 1 percent of U.S. society has more wealth than the bottom 95 percent combined, while the annual incomes of the top 20 percent equal the total of the bottom 80 percent. Any system that promotes such radical and destabilizing inequality needs fixing.

Moore has his weaknesses as a filmmaker – unnecessary bombast and a tendency to inject himself into the subject matter -- but one of his strengths is as a provocateur, someone willing to broach topics that others won’t. His film ends with several interesting quotes interspersed among the closing credits. Here are two that stood out in my mind.

“I sincerely believe that banking institutions are more dangerous than standing armies.” – Thomas Jefferson

“All the property that is necessary to a man, for the conservation of the individual and the propagation of the species, is his natural right, which none can justly deprive him of; but all property superfluous to such purposes is the property of the publick who, by their laws, have created it, and who may therefore by other laws dispose of it, whenever the welfare of the publick shall demand such disposition.” – Benjamin Franklin

If the Founding Fathers were willing to question our economic system, why have we become so afraid to do so?

 
 
04.07.2010 at 12:41 Reply
This is Alan Jeffers from ExxonMobil. The Forbes story is incorrect when it says ExxonMobil paid no U.S. federal income tax in 2009. ExxonMobil applied an overpayment from our 2008 taxes to our 2009 tax bill and the remaining overpayment was refunded to us. The Forbes reporter incorrectly thought the refund, which was recorded on our books, was an indication that we paid no U.S. federal income taxes in 2009. Not true. We had a signfiicant tax liability and paid it just like all other taxpayers.

 

04.07.2010 at 04:28
Hey Alan, did you guys ever pay for that massive oil spill in Alaska? The fact is most corporations don't pay their taxes and haven't for years. http://www.reuters.com/article/idUSN1249465620080812

 

04.07.2010 at 01:03 Reply
Anne Eisele from GE here. It -- GE's U.S. tax expense reflects the fact that we had losses in our financial services business in 2009, which resulted in tax benefits. Because we file a consolidated tax return, we could use these tax benefits to offset income earned by our U.S. industrial businesses. - Our Industrial business had a 21% tax rate in 2009, down slightly from 2008. But when combined with the losses and tax benefits associated with GE Capital’s global operations, we end up with the negative rate. Like many other financial institutions, GE Capital incurred a pre-tax loss in 2009 during the worst economic crisis since the Great Depression. In contrast to the 2009 results, GE’s cumulative U.S. current tax provision from 2000-2009 totaled almost $7.4 billion. GE paid almost $23 billion of taxes to governments around the world from 2000-2009, making it one of the highest payers of corporate income taxes.

 

04.07.2010 at 05:22 Reply
Nitpick all you want. It's a fact that Exxon and GE and other large corporations do not pay their fare share of taxes. I'm in a higher tax bracket than both those companies. It's shameful, really. But some how they always find a way to justify their dispicable behavior. Ain't America great!

 

04.08.2010 at 12:50 Reply
The New York Times has reported -- In 2008, the Government Accountability Office found that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”

 

04.08.2010 at 03:59 Reply
cd4
The accounting textbooks that I've seen in business school use a general corporate tax rate of around 35%. Any corporation that trumpets 21% is still likely using tax shelters (or worse) to dodge paying the tax rate that they should. Who's picking up the slack?

 

 
 
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