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GE hit on “tax dodging,” Durbin on budget cuts

A dozen community and faith groups will protest “tax dodging” by General Electric and call on Senator Dick Durbin to lead the charge for corporate tax reform to fund social programs in related actions tomorrow.

Protestors will deliver a giant “cease and desist” letter calling on GE to “stop dodging taxes while lobbying for cuts to Social Security” at GE’s Chicago headquarters, 500 W. Monroe, at 12 noon on Thursday, August 22.  They will demonstrate outside Durbin’s office at 230 S. Dearborn at 12:40 p.m.

It’s part of a national week of action “outing” corporate tax dodgers across the country by Chicago-based National Peoples Action.

Tax-free profits

From 2002 to 2012, GE paid $2.1 billion in federal income taxes while earning $88 billion in profits — a tax rate of 2.4 percent, far below the official rate of 35 percent — according to Americans for Tax Fairness.

In four of those years GE reported $22.5 billion in profits but paid no taxes — and received $4.8 billion in tax rebates, according to the group.

One way it accomplished this was by investing U.S. profits overseas, according to Huffington Post.

GE’s shifting of jobs overseas came under criticism when President Obama appointed GE CEO Jeffrey Immelt to head his jobs council.  Under Immelt, GE has shed 34,000 jobs in the U.S. while adding 25,000 overseas, according to HuffPost.

The company has also spent hundreds of millions of dollars lobbying for favorable tax treatment.  One study found GE was one of 30 large corporations that paid more for lobbying than for federal income tax.

Immelt is a key leader — and GE is a major funder — of the corporate Fix The Debt campaign which calls for reducing corporate taxes while cutting Social Security benefits and raising the retirement age.

Immelt has a $15 million retirement account himself, according to reports.

“Revenue neutral” reforms challenged

Protestors including ONE Northside, IIRON, SOUL, Northside POWER, and the Jane Addams Senior Caucus want Durbin to come out against “revenue neutral” corporate tax reform — and to oppose cuts to Social Security, Medicare, and other social programs.

The Obama administration has previously backed “revenue neutral” corporate tax reform — eliminating loopholes but lowering the tax rate — but the president recently proposed using some new revenues to fund infrastructure and education.

As a leader of the Senate “Gang of Six,” Durbin supported an essentially revenue-neutral corporate tax reform scheme.

Such an approach makes little sense given federal budget needs, with corporate profits at all-time highs, while corporate taxes are now half what they were in 1960  as a proportion of profits or of GDP, according to Jared Bernstein of the Economic Policy Institute.

Durbin has repeatedly come under fire for his support for reducing Social Security benefits and raising the retirement age.

Congress will consider measures to fund the federal government for Fiscal Year 2014 in coming weeks — and after that must once again address the issue of raising the debt ceiling.

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Category: federal budget

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