The New York Times reported a few days ago that GE managed to pay no corporate income taxes in 2010. You can see the Times story here. In fairness, here’s GE’s side of the story. In interest of full disclosure, I am a retiree of GE. I would like to address this issue here, but I will not be analyzing whether GE paid any taxes or whether the taxes it paid was fair. What I would like to do is to explore whether there is a problem here and what that problem is.
So, what is the problem with the taxes GE paid (or not paid)?
I come right to the conclusion. There is definitely a problem, but the problem is not with the behavior of corporations, like GE, that hire hundreds of smart of lawyers and accountants to make sure of two things:
1. That they are paying their taxes according to the laws without paying unnecessarily too much.
2. That they lobby and make clear to whoever makes the tax laws what the tax laws should be, or what exemptions they should enjoy.
I do not blame corporations for doing this. Why not? Here we have a legislature that establishes laws for all of us, including corporations and at the same time invites all of us to lobby them about what we want. But our representatives are partial to those who lobby them and at the same time make large campaign contributions to them. This is the problem that I see.
If this is not corruption, I don’t know what it is, and I don’t know what corruption is.
The problem is the fully legal corruption inherent in our political system.
If you do not accept that this is a corrupt process, you might as well stop reading. But if you do think something is wrong here, you will need to move to the next question: How do we eliminate this corruption?
The only way this system will change is through campaign finance laws. As a democracy, we need to invest in the democratic process to assure that every single citizen will have a fair voice, but not a limited voice based on what they can afford. There is no place in the Constitution that promises more favorable treatment to those who throw money at political campaigns. This is purely a capitalistic invention to make money the currency of political action and power.
The root of the problem is with the undue influence of money in our political process.
So, what are we to do about this problem? Well, there are many things we could do. I have been an active promoter of public funding of campaigns, also known as Voter-Owned Elections. The basic philosophy is that once we have a legitimate candidate who has significant enough public support, public funds should be available for the candidate’s campaign.
Another thing we could do is to allow access to free media for political purposes. I don’t mean oodles of political commercials the way we see them today. I do mean informative programs that allow the candidates to express their ideas and answer citizens’ questions. We have learned how to do such programs in a way that they are informative and non-partisan.
All voters need to own their elections, not only those who spend a lot of money.
Obviously, this will be an uphill battle because people who are enjoying the privileges of the current system, including most legislators do not want to change it. It is up to you, yes YOU, to insist that change be made. This will be a lot more fruitful than complaining about GE or any other company and the lawyers, accountants and lobbyists who work for them. We need to change the rules. Behavior will follow.
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