On its front page this morning, the New York Times reported that General Electric — the world’s largest company — made $14.2 billion in profits ($5.1 billion in America) and managed to not pay a dime in federal taxes. In fact, the company actually received “a tax benefit of $3.2 billion.”
The mega corporation’s tax dodging flies in the face of the rhetoric of its CEO Jeffery Immelt — also the head of President Obama’s Council on Jobs and Competitiveness — who sought to portray his company as one that values fairness in a speech at West Point in 2009.
In that speech, titled “Renewing American Leadership,” Immelt stood before hundreds of military cadets — who enlisted in the military and were willing to sacrifice everything for their country — and complimented the military audience for its heroism while blasting the greedy culture of big business:
Few of us will ever do what many of you will do for duty, honor and country. But America doesn’t expect heroism from all of us. […] Wherever our talents lie, and whenever our conscience requires, we must all, to the best of our abilities, help keep America the great face for good it has long been. We are trying to do that at GE. […]
I think we are at the end of a difficult generation of business leadership, and maybe leadership in general. Tough-mindedness, a good trait – was replaced by meanness and greed – both terrible traits. Rewards became perverted. The richest people made the most mistakes with the least accountability.
At the same time, ethically, leaders do share a common responsibility to narrow the gap between the weak and the strong. […] What I can bring … what GE can bring … are investments, training and operating approaches to help everyone win.
Immelt won wide praise for his speech at the time. The Huffington Post wrote that he “has come clean about the financial crisis” in a “remarkably candid” speech. The Financial Times said that it was “one of the strongest criticisms” yet made by a major US CEO of business practices.
It appears that Immelt has fallen short of his lofty rhetoric during the West Point speech. Far from making the sort of sacrifices he was honoring at that speech, GE appears to be exploiting loopholes in the tax code to shirk its responsibilities — one of which would be paying its taxes to maintain the military the cadets in the audience were a part of. The behavior of his company matches that of Bank of America, Citigroup, ExxonMobil, and other companies that have gone quarters or entire years while not paying a penny in federal corporate income taxes.