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Thread: Welfare Case Companies #3 - General Electric

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    Default Welfare Case Companies #3 - General Electric

    (snip)"Last month, the Obama EPA began enforcing new rules regulating the greenhouse gas emissions from any new or expanded power plants.

    This week, the EPA issued its first exemption, Environment & Energy News reports:

    The Obama administration will spare a stalled power plant project in California from the newest federal limits on greenhouse gases and conventional air pollution, U.S. EPA says in a new court filing that marks a policy shift in the face of industry groups and Republicans accusing the agency of holding up construction of large industrial facilities.

    According to a declaration by air chief Gina McCarthy, officials reviewed EPA policies and decided it was appropriate to "grandfather" projects such as the Avenal Power Center, a proposed 600-megawatt power plant in the San Joaquin Valley, so they are exempted from rules such as new air quality standards for smog-forming nitrogen dioxide (NO2).

    There's something interesting about the Avenal Power Center:

    The proposed Avenal Energy project will be a combined-cycle generating plant consisting of two natural gas-fired General Electric 7FA Gas Turbines with Heat Recovery Steam Generators (HRSG) and one General Electric Steam Turbine.

    Maybe GE CEO Jeff Immelt's closeness to President Obama, and his broad support for Obama's agenda, had nothing to do with this exemption. But we have no way of knowing that, and given the administration's record of regularly misleading Americans regarding lobbyists, frankly, I wouldn't trust the White House if they told me there was no connection."(snip)

    from


    I would also point out that, in addition to this latest special 'exemption' for GE turbines, General Electric is one of the biggest recipients of TARP funds ( Ally Bank former GMAC ), and one of the biggest beneficiaries of green energy grant money and tax credits. In fact, thanks at least in part to those gov't grants and tax credits, as well as adopting the foreign earnings 'shell game' pioneered by Microsoft etc., GE as a corporation paid less than 4% in corporate income taxes last year ( as opposed to most sizeable US corporations paying something above 25% ).

    While the 2010 GE earnings and taxes figures are just being posted, older links report that GE's tax ( avoidance ) situation isn't much different than 2009 ...


    (snip)GE had plenty of earnings last year -- just not in the United States. For tax purposes, the company's U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.

    That left GE (GE, Fortune 500) with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of $1.1 billion back into its reported earnings.

    "This is the first time in at least decades that GE has reported negative U.S. pretax income and it reflects the worst economy since the Great Depression," Anne Eisele, GE's director of financial communications, said via e-mail.

    But what about the $10.8 billion profit overseas? GE is "indefinitely" deferring income tax payments on those profits, Eisele said.

    It may seem like accounting magic, but it's completely legit. "(snip)

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    God/dess Zofia's Avatar
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    Default Re: Welfare Case Companies #3 - General Electric

    It says a lot about you that you criticize GE for doing exactly what you claim to be doing.

    Z

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    Default Re: Welfare Case Companies #3 - General Electric

    ^^^ I assume that you're referring to my ex-pat status. There is a HUGE difference between my own minimization of US taxes via living offshore ... and thus no longer benefitting from US gov't services, versus GE's minimization of US taxes while still 'living' in the US ... and still directly financially benefitting from US gov't 'green energy' grants / exemptions to environmental regulations / zero interest TARP loans etc.

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    God/dess Zofia's Avatar
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    Default Re: Welfare Case Companies #3 - General Electric

    You don't carry a passport? Drivers License? You never go to the embassy? The country you live in doesn't benefit from a mutual defense pact? You don't ever check the weather beyond looking out the window? Of course if a hurricane strikes you won't be expecting a ride out? No, you don't benefit at all from your US citizenship. However, you don't contribute even one single job to the US. GE directly provides tens of thousands of jobs and indirectly many tens of thousands more.

    Z

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    Default Re: Welfare Case Companies #3 - General Electric

    Also, if I remember correctly, Melonie owns a house in the US.

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    Banned Melonie's Avatar
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    Default Re: Welfare Case Companies #3 - General Electric

    You don't carry a passport? Drivers License? You never go to the embassy? The country you live in doesn't benefit from a mutual defense pact? You don't ever check the weather beyond looking out the window? Of course if a hurricane strikes you won't be expecting a ride out? No, you don't benefit at all from your US citizenship. However, you don't contribute even one single job to the US.
    While this is tangential to the point, to answer your questions ...

    Yes on passport ... at least until I can achieve citizenship in my 'adopted' country
    Yes on NY driver's license ... but I also have one from my 'adopted' country
    Yes I had to go to the US embassy on two occasions ... for purely bureaucratic reasons
    No re mutual defense pact with my 'adopted' country
    No on US emergency transportation in a hurricane scenario ... not enough concentration of US ex-pats in my 'adopted' country to ever make this a probability.
    Yes on still owning a house in NY ( and still paying major property tax )

    ... I'm not sure what point you're driving at, but at present the total dollars in taxes that I still pay to the US / NY far exceeds the dollar value of any 'benefits' I receive in return.

    I would also argue that the US taxes on my 'foreign' income that I still have to pay despite my ex-pat residence in fact ( help to ) fund a US job at GE !

    There is a BIG difference between private industry profits funding self-sustaining US jobs, and US taxpayer money being channeled through subsidy dependent industry to fund non-self-sustaining US jobs. GE is arguably increasingly involved in the latter - for it's remaining US operations at least !

    ~
    Last edited by Melonie; 02-06-2011 at 04:23 AM.

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    Default Re: Welfare Case Companies #3 - General Electric

    is this predictable or what ?

    from

    (snip)President Barack Obama will ask Congress next week to approve a six-year, $53 billion program for construction of a national high-speed and intercity rail network, Vice President Joe Biden said.

    “There are key places where we cannot afford to sacrifice as a nation -- one of which is infrastructure,” Biden said in a speech today at 30th Street Station in Philadelphia. Obama submits his fiscal 2012 budget to Congress on Feb. 14. (snip)

    (snip)The six-year, $53 billion request comes on top of a $10.5 billion down payment toward a high-speed rail system, $8 billion of which was funded through the stimulus program.

    Manufacturing Jobs

    GE Transportation President and Chief Executive Officer Lorenzo Simonelli, whose company is the leading manufacturer of diesel-electric locomotives, welcomed Biden’s announcement.

    “The investment could help GE Transportation sustain or create high-tech manufacturing jobs in the U.S. as we build the next generation of higher-speed passenger locomotives and high- speed trains serving America’s rail traveling public,” Simonelli said in an e-mailed statement. GE Transportation is headquartered in Erie, Pennsylvania.

    Biden also said the administration will consolidate the Transportation Department’s rail loan and grant programs for cities and states into two accounts.

    The first $4 billion account would help fund network development, building new infrastructure, stations and equipment. A second account, also funded at $4 billion, would be earmarked for system preservation and renewal, including maintenance and repair on Amtrak and other publicly-owned assets. (snip)


    Naturally, federal stimulus spending US content requirements will 'lock out' european and japanese or even canadian sources of high speed trains, thus handing billions in US taxpayer money to GE on a proverbial silver platter !

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    Default Re: Welfare Case Companies #3 - General Electric

    Quote Originally Posted by Melonie View Post
    While this is tangential to the point, to answer your questions ...
    Because you claim no benefit of US taxes. And I would point out that you have a great many benefits, including your US passport and citizenship, you US drivers license. Which, unless your adopted country made you take drivers training all over allowed you to obtain a foreign drivers license there. In all probability your money earned while working in the US payed the way for your residence to your "adopted country." Of course you never use the internet, built by the U.S. government. Excuse me if I just don't believe you when you say that you don't get any benefit from your U.S. taxes. That claim just doesn't ring true.

    There is a BIG difference between private industry profits funding self-sustaining US jobs, and US taxpayer money being channeled through subsidy dependent industry to fund non-self-sustaining US jobs. GE is arguably increasingly involved in the latter - for it's remaining US operations at least !~
    And that claim is simply outrageously in the realm of fantasy. So, I challenge you to back it up. Prove that every GE job in the US is simply dependent on government financing. You can't but feel free to try.

    Z

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    Default Re: Welfare Case Companies #3 - General Electric

    What I said was that the 'value' of the services I now receive as a result of US citizenship is far lower than the amount of US tax dollars I still pay on my 'foreign' income. I never said that I received zero 'value' ... only that I'm being exorbitantly 'charged' for the minimal services that are still provided.

    Where G.E. is concerned, obviously this cannot be accurately accounted for or proven. Just as obviously, the US gov't and G.E. structured it that way for a reason. However, G.E. is officially on record that they had zero US profits in 2009, and minimal profits in 2010. Additionally, the US gov't is on record as having paid out X billions in TARP funds, Y dollars in research grants etc. directly to US divisions of G.E. Gov't money in but no profits out are a pretty good indicator that, in the absence of the gov't money, G.E.'s domestic operations would have operated at a loss. The corrolary involved of course is that on a current cash flow basis some gov't money ( i.e. my US tax money ) was used, at least in part, to pay the salaries of US G.E. employees.

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    Default Re: Welfare Case Companies #3 - General Electric

    And, Mel, I said you are guilty of exactly what you claim GE is doing. Offshoring your income to avoid paying taxes on it. The difference is you provide no jobs, no research, no development and very little in the way of tax revenue while still benefiting from those taxes and US citizenship. So, if GE is guilty of being a welfare corporation, they you are guilty of being a welfare citizen.

    Z

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    Default Re: Welfare Case Companies #3 - General Electric

    yup OK ... I'm here in a foreign country sending tax money on my foreign earnings back to the USA, while receiving zero cash and very limited services from the US gov't in exchange. G.E. operations in foreign countries are sending zero tax money on their foreign earnings back to the USA, while G.E's US operations are receiving billions in cash from the US taxpayer plus gov't intervention which provides G.E. with de-facto protection from competitors ( re high speed trains ).

    However, there IS one similarity between my situation and G.E.'s situation. We have both been in a hurry to move our assets and profitable business activities offshore !!! However, under US tax law, G.E. makes out far better than I do ( since their US taxes due on foreign earnings can be deferred forever while mine can't be deferred at all ).

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    Default Re: Welfare Case Companies #3 - General Electric

    Quote Originally Posted by Melonie View Post
    yup OK ... I'm here in a foreign country sending tax money on my foreign earnings back to the USA, while receiving zero cash and very limited services from the US gov't in exchange. G.E. operations in foreign countries are sending zero tax money on their foreign earnings back to the USA, while G.E's US operations are receiving billions in cash from the US taxpayer plus gov't intervention which provides G.E. with de-facto protection from competitors ( re high speed trains ).
    Right, zero tax dollars....not. Try a billion in the last twelve months on net income of about 11 billion. Not counting the tens of thousands of US jobs directly created by GE and many more indirectly created.

    Z

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    Default Re: Welfare Case Companies #3 - General Electric

    ^^^ zero tax dollars paid to the US gov't on foreign sources of income is what I said, and in G.E.'s case this is in fact true. It's also true for many other US corporations like Microsoft, Google etc. While 2010 taxes haven't been filed yet, CNN provides 2009 tax facts about G.E. ...

    (snip)NEW YORK (CNNMoney.com) -- General Electric filed more than 7,000 income tax returns in hundreds of global jurisdictions last year, but when push came to shove, the company owed the U.S. government a whopping bill of $0. (snip)

    (snip)Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of $1.1 billion back into its reported earnings.(snip)

    (snip)But what about the $10.8 billion profit overseas? GE is "indefinitely" deferring income tax payments on those profits, Eisele said.(snip)

    Granted that G.E. will show some US profits for 2010 and will ( probably ) pay some US taxes on those US profits. However, the actual tax rate on those US profits is expected to be in the single digits, with the perpetual deferral of US income taxes on G.E's foreign profits expected to be repeated.

    ~
    Last edited by Melonie; 02-11-2011 at 04:12 AM.

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