WE'LL BE BLAMED WHEN THE FAT CATS BUY THEMSELVES ANOTHER WIN
People who are rooting for big changes to the tax code as a way of dealing with America's deficit and debt tell us we should lower tax rates, but close tax loopholes for individuals and corporations.
Really? We're really going to close loopholes for big corporations?
General Electric, the nation's largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion....
Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. 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....
Yeah, as this article (from The New York Times) notes, GE's CEO, Jeff Immelt, is in tight with President Obama. But GE finagled big tax breaks from plenty of other people before Obama became president -- from the Bush administration, from Charlie Rangel in '08 when he was chair of the House Ways and Means Committee (that break was followed by a generous GE donation to New York City's schools, which was announced at a photo op with Rangel). And plenty of other big companies do pretty much what GE does.
Why does the smart set in the Beltway believe there could be a "grand bargain" on the budget someday that closes tax loopholes like this? It's not going to happen. These guys are too powerful.
And when it doesn't happen, who'll be blamed? We'll be blamed. Ordinary Americans -- because we were too greedy, and wouldn't give up our precious Medicare and Social Security benefits, and wouldn't sacrifice our mortgage interest deductions.
Actually, I can see three possibilities: (1) no grand bargain, (2) a grand bargain that eliminates our loopholes but leaves the corporations' loopholes intact, and (3) a vindictive closing of GE's loopholes once tjhe Republicans take over the federal government completely.
And yes, the Times article does note that the government actually did close some GE loopholes in the mid-1980s -- yes, under Reagan, a guy we thought at the time favored big business about as much as was humanly possible, and a guy who actually worked for GE once. But his self-designated ideological heir, George W., didn't follow suit, and in fact was quite generous to GE. The corporatization of America has just gotten worse and worse since Reagan. And teabaggery (as we see in various states with new teabag governors) is hardly reversing that trend.
Forget it. These tax breaks are permanent. And you and I will get to experience "shared sacrifice" in the future, while the bigwigs politely say, "We prefer not to."