Protestors disrupted General Electric’s shareholders meeting outraged at the company for not paying more in taxes and for not compensating retirees for inflation. But the anger at the company was misdirected.
By Dennis Behreandt
General Electric, holding its shareholder’s meeting in Detroit, faced waves of protestors arguing that the company hasn’t paid its taxes and should do so immediately. Other protestors claimed the company should raise payments to retirees because of inflation. Both sets of protestors are targeting the wrong villain.
On the issue of taxes, GE chief Jeffrey Immelt said that the company does, in fact, pay its taxes.
“Tax rate was 29 percent last year,” Immelt told protestors, according to the Detroit News. The paper also reported: “GE spokesman Gary Sheffer has said the company paid a 25 percent income tax rate in the United States in 2011 — and a 29 percent rate globally. In total, GE paid $2.9 billion globally in income tax in 2011, Sheffer said.”
It shouldn’t come as a surprise that GE, like every other company, pays its taxes. As with individuals, corporations can’t get away without paying taxes, though, again like individuals, they will take whatever loopholes are available to reduce their tax burden. This is part of being responsible to their shareholders.
To those protestors who are followers of Marx, this won’t be good enough — they won’t be satisfied until the means of production are owned by the government rather than by pesky capitalists. In addition, a set of these protestors likely think big businesses, like GE, should be the victims of “A heavy progressive or graduated income tax” in order to pay off the federal deficit.
These people, perhaps comprising the majority of protestors, are pointing their ire at the wrong target. After all, it has been politicians in Congress and the White House who have engaged in years of massive deficit spending and costly war fighting abroad and who are therefore responsible for our current fiscal catastrophe. Complaining about GE or other corporations is to miss the point entirely.
A second group of protestors is similarly off-base in criticizing GE. According to the Detroit News, this “group of about 40 protesters walked peacefully back and forth holding signs reading ‘Fighting for Pension Fairness — GE.’”
One of these protestors explained why he was upset with the company.
“We’re trying to get a raise in our cost of living allocation,” Earl Hornung, a retired GE employee with 28 years of employment with the company, said according to Detroit News. “We have one fellow here who is 90 years old who retired 30 years ago. He’s hurting really bad due to inflation. I’ve been retired for 10 years and inflation is eating away at my pension, too.”
The implication is that GE should compensate these retirees for inflation.
But inflation is not GE’s fault. As I wrote on Wednesday, the Federal Reserve is solely responsible for causing inflation by increasing the money supply. These increases reduce the value of the dollar, and those on fixed incomes, as well as people inclined to try to save money, are disproportionately afflicted. In essence, the Fed is doing this in order to finance the $15 trillion debt. Meanwhile, the Obama administration continues to propose spending that exceeds revenues, adding to the debt and making things worse.
It is a safe bet that most of the protestors, maybe all of them, complaining about General Electric are supporters of the Democratic Party in general and President Obama in particular. Indirectly, therefore, they are themselves responsible for their own plight as a result of their support for big government, big spending politicians. Ironically, GE chief Immelt is also tied to Obama and is chair of the President’s corporatist “Jobs Council.”
If the protestors outside of the GE meeting really want to protect their own interests by ending fiscal insanity, corporate America should not be the target of their complaints. Instead, they should concentrate on getting the big spenders out of Washington.
And maybe, if they want to protest GE, they should be calling for Immelt to step down from his role as head of Jobs Council and get back to work full-time running a successful business and building wealth for workers and shareholders alike.
Image Credit: General Electric Company
Self-Educated American Associate Editor, Dennis Behreandt, is the Founder and Editor In Chief of the American Daily Herald. Mr. Behreandt has written hundreds of articles on subjects ranging from natural theology to history and from science and technology to philosophy. His research interests include the period of late antiquity in European history as well as Medieval and Renaissance history.