White House defends embrace of G.E. CEO despite report company didn't owe taxes in 2010

In January, President Obama named General Electric CEO Jeffrey Immelt to head the President's Council on Jobs and Competitiveness, an economic advisory board focused on job creation.

In his State of the Union address that same month, meanwhile, he called for the closure of corporate tax loopholes in conjunction with a lowering of the corporate tax rate, which stands at 35 percent.

"Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries," he said. "Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense. It has to change."

Mr. Obama's choice of Immelt came under scrutiny Friday in the wake of a front-page story in the New York Times reporting that despite $14.2 billion in worldwide profits - including more than $5 billion from U.S. operations - GE did not owe taxes in 2010.

In fact, the story said, G.E. claimed a tax benefit of $3.2 billion.

GE CEO Jeffrey Immelt applauds at right during President Barack Obama's visit to the birthplace of the General Electric Co., to showcase a new GE deal with India and to announce a restructured presidential advisor, Friday, Jan. 21, 2011, in Schenectady, N.Y.

/ AP

G.E. subsequently pointed out what it says is a significant flaw in the story: That the Times did not take into account the impact of its GE Capital losses in the financial crisis. G.E. said that if you exclude GE Capital its tax rate has been about 21 percent.

At his press briefing Friday afternoon, White House press secretary Jay Carney was asked to square Mr. Obama's call for corporate tax reform with his embrace of Immelt. Asked if the story bothered the president, Carney responded that "he is bothered by what I think you're getting at, which is that Americans, I'm sure, who read that story or heard about it are wondering, you know -- you know, how this could be."

Carney went on to make the case for corporate tax reform, noting that companies pay "armies of tax lawyers to understand how it works and to take advantage of the various loopholes that exist."

He stressed, however, that he was "not addressing this specific company because I don't know independently about that." (According to the Times, "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.")

Carney was asked why, if the president wants corporate tax reform, he appointed "to the head of the Competitiveness and Jobs Council a person who is now the poster child for abusing the system to get out of paying taxes."

"The jobs and competitiveness council is designed for just that," Carney responded. "And he has brought together a lot of voices on that. And he wants to hear the opinions of every member of that council. And we have said, with regard to questions about other members who have been appointed, that the president obviously doesn't want a council of people who agree with him on every issue; he wants to hear diversity of opinion."

"In the end, the decisions that are made about which policy to pursue on corporate tax reform will be the president's decision and his policy," he added.

Carney said later that Mr. Obama continues to have faith in Immelt to run the council.

Overall, the Times notes, the share of U.S. taxes paid by corporations has fallen from 30 percent of federal revenue in the 1950s to 6.6 percent in 2009.

BNET: GE's Scandalous Tax Breaks Are Rooted in Politics

[controlsguy314]

I don't have an opinion either way on peter orszag, but that Website says nothing. It sounds like a political website. Are you related to him?

[Tiffiny_W]

It seems that people are quick to judge everyone else and instead sometimes we need to do more research. Peter Orszag's page helped with knowing more about him and what he is working on. (peter-orszag.org) maybe people should the CEO a chance.

[miami_don]

Mr. Obama's choice of Immelt came under scrutiny Friday in the wake of a front-page story in the New York Times reporting that despite $14.2 billion in worldwide profits - including more than $5 billion from U.S. operations - GE did not owe taxes in 2010.

======

I am not sure how to defend Obama - nor would I. Obama sometimes is the best Republican president we have had in a long time.

For all the right-wingers swarming on this like stink on sh*t: A Republican controlled congress set-up these tax loop holes and continue to be the ones that allow these scum bags to do not pay their share.

Hopefully next time someone is talking about how the top 2.5% pay more than their share of taxes they will have developed a broader sense about the truth. Tax loop holes have to be closed and as a nation we cannot just keep patting the fat cats on the butt and expect the middleclass to pick up the slack.

[noloyalisti]

You have to bow down to your corporate masters. Otherwise they will lower the fascism on you. And put you in the gulag along with the others.

[infantryman1968]

LOL!

G.E. supports Obama. Go cry to him about it.

[cepe10-2009]

Im sure they use loop holes to get tax breaks on profits but when they have a tax loss to use as a credit those same loop holes don;t apply in the reverse situation.

[ChicagoBobT]

And chabge obama for Cheney and you would have wall to wall 24x7 soundbites declaring all the evil and lack of doing anything about it. The press has been aweful. No better than pravda.

[Tess_Comments]

The reason GE does not have to pay taxes is because all of the GE Workers pay the taxes. GE feels they are contributing by giving them pay checks and taking out taxes (that way) for the government.

[miami_don]

by cbsnacilbuper March 28, 2011 1:20 PM EDT
Huh, I wonder what would happen if ALL business did that. Care to tell us?

====

In answer to your question: Taxes can be gauged not by how much money is made or lost but how good your CPA & Attorney are.

When you have economist on both sides of the isle saying the problem of Wall Street give aways and tax loop holes are destroying the economy don't you think it would be a good idea to listen.

However, the Republican Party is so influenced by the lobbyist and polital money they continue down the same road sounding like the straw-man from the Wizard of Oz singing If I Only Had a Brain.

[EliminateCIT]

GE's responsibilities are to its customers, employees and shareholders.
We should not be upset at GE for hiring the best tax team and using legal methods to lower its tax rate. By doing so, they have lowered the prices of our light bulbs, paid higher wages and given jobs to our friends/family and have been able to earn more and pay higher dividends to the underfunded defined benefit pension plans that will provide retirement to our school teachers, police officers and State employees. If anything, the NYTimes article showed all the reasons to eliminate the US corporate income tax entirely so all US companies could have the same benefits that GE gives its customers, employees and shareholders.

Let's fix the US economy and kill the corporate income tax at the State and Federal level. www.EliminateCorporateIncomeTax.com

[skepticalJM]

They paid 21% taxes; yet middle class workers are paying 25-30%.
We are no longer a democracy!

[PushBack317]

Are you kidding me? This is disgusting. I am sure as we are all aware this has been going on for decades. This is not a partisanship problem, this is a government problem. This also is not a GE problem it is a corporation problem.

Corporations have, hire or obtain the most qualified ex-government officials they can. Or they contribute/donate to the ones they can not hire. They spend tens of millions doing so. Then they spend tens of millions hiring the best attorneys, from the government if possible. Then they promise/extend 6-7 figure salaried jobs(revolving door) for politicians who fell through the net.

These corporations are not people. But, they are owned by individuals. Individuals who control more wealth than any other group in the world. They influence laws, policy, standards & regulations with money.

GE owns MSNBC(and CBS? I think). KOCH "owns" the tea party. Again this IS NOT a partisan issue. Millions of people have known about this for decades, it is odd that it came out now? Hopefully we will command action.

If it is not clear it ought to be now. Laws which protect corporation are not done in your best interest. They are not done to create jobs. They are not done for "X" reason. They are done so the richest 1% of the rich can get 100% richer.

261 + of our current elected officials are multi- millionaires. Typically more than 50% has always been this rich(I believe).

Most likely next week everyone will forget about this. We will watch the TV and be screaming that we have a ground war in Libya. We will be blaming each other.... The republicans, the democrats... Obama.... Bush... Palin...

Mature up.... While we are busy playing the game they force us into: 'my party is bestest!' we are so busy playing they are profiting.

400 richest in the USA control more wealth than 155,000,000(There are about 229,000,000 adults). No! Success should not be punished. You are missing the point if that talk point crossed your lips or mind.

Factcheck
politifact
Sourcewatch
Opensecrets

The truth is republican or democrat.... The talk points you have been force fed are BS.