General Electric GE pays no tax in U.S. moves plants to China
CHANGE
YOU CAN COUNT ON IN ONE HAND FOR THE AVERAGE TAXPAYER.
 General Electric (GE) reported profits of $14.2 billion.
Its American tax bill? None. After 2012, the traditional light bulbs you've
been using will no longer be available. GE ramped up operations in China for
your new lighting needs and to save on tax.
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. The GE tax team includes former officials
not just from the Treasury, but also from the I.R.S. and virtually all the
tax-writing committees in Congress. Active Financing Example - G.E. finances
the sale of a jet engine outside the U.S., the company would
not have to pay U.S. tax on the interest income as long as the profits
remain offshore. Tax Analysts, said that booking such a large
percentage of its profits in low-tax countries has allowed G.E. to bring its
U.S. effective tax rate to rock-bottom levels. News Info -
MSNBC and NBC are owned and operated by General Electric.
Obama wants to overhaul the corporate tax system and he designated G.E.’s
chief executive, Jeffrey R. Immelt, as his liaison to the business community
and as the chairman of the President’s Council on Jobs and Competitiveness.
Guess what company will benefit?
Harlem Democrat Charles Rangel, chairman of the Ways and Means
Committee, reversed his opposition to the tax breaks for GE. The tax
shelters were crucial to G.E.’s bottom line and Congress threatened to let
the most lucrative one expire in 2008. The following month, Mr. Rangel and
GE's Mr. Immelt stood together at St. Nicholas Park in Harlem as G.E. announced
that its foundation had awarded $30 million to New York City schools,
including $11 million to benefit various schools in Mr. Rangel’s district.
It was the largest gift ever to the city’s schools. Rangel, who was censured
by Congress in 2010 for soliciting donations from corporations and
executives with business before his committee, said that the GE donations were
unrelated to his official actions. The only identifiable contact was made in late 2007,
a company spokesman said, when Mr. Immelt called to inform Mr. Rangel that
the foundation was giving money to schools in his district. But in 2008,
when Mr. Rangel was criticized for using Congressional stationery to solicit
donations for a City College of New York school being built in his honor,
Mr. Rangel said he had appealed to G.E. executives to make the $30 million
donation to New York City schools. Rangel denies what he previously said -
In a recent inquiry, Rangel was asked to explain the discrepancies between
his accounts, Mr. Rangel replied, “I have no idea.”
 LED
bulbs that are bright enough to replace energy-guzzling 100-watt light bulbs
set to disappear from stores in January about $50 each
WINCHESTER, VA--“Government did us in,” says Dwayne Madigan, whose job will
terminate when General Electric closes its factory next July.
Madigan makes a product that will soon be illegal to sell in the U.S. - a
regular incandescent bulb. Two years ago, his employer, GE, lobbied in favor
of the law that will outlaw the bulbs.
Madigan’s colleagues, waiting for their evening shift to begin, all know
that GE is replacing the incandescents for now with compact fluorescents
bulbs, which GE manufactures in China.
Last month, GE announced it will close the Winchester Bulb Plant 80 miles
west of D.C. As a result, 200 men and women will lose their jobs. GE is also
shuttering incandescent factories in Ohio and Kentucky, axing another 200
jobs.
GE blamed environmental regulations for the closing. The first paragraph of
the company’s July 23 press release explained:
“A variety of energy regulations that establish lighting efficiency
standards are being implemented in the U.S. and other countries, in some
cases this year, and will soon make the familiar lighting products produced
at the Winchester Plant obsolete.”
The U.S. legislation in question was a provision in the 2007 energy bill
that required all bulbs sold in the U.S.—beginning in 2012 for some
wattages—to meet high efficiency standards.
Given the steady death of U.S. manufacturing, this factory was going to
close sooner or later, anyway. Workers tell me they were happy when they
heard in June that the factory was staying open at least through mid-2011—a
plan GE abandoned the next month.
But the light bulb law is clearly the main driver in closing this factory.
After all, the product they make here will be contraband by 2014.
“That was the nail in the coffin,” Madigan says.
These men, waiting in the shade in front of the employees’ entrance to the
plant on a hot afternoon, all know another pertinent fact about the
light-bulb law that is killing their jobs: GE lobbied in favor of it.
Why did GE, founded by Thomas Edison, support a bill that killed the
traditional incandescent light bulb?
The company said in 2007 it wanted to make sure it was working under a
single federal efficiency standard, rather than a patchwork of state
regulations. GE also touts its compact fluorescents as one of the green
products in its “eco-magination” initiative.
The workers don’t buy the green arguments, pointing to the mercury gas
that’s in the fluorescents. “It’s illegal to dump mercury in the river, but
not in the landfill,” two of them say in unison—it’s become a dark joke at
the factory.
Robert Pifer, who will also be laid off in July if he doesn’t find a new job
by then, has an explanation for GE’s support of the light-bulb law and its
shift to the more expensive fluorescents. “Are they not just trying to
force-feed people stuff they don’t want to buy?”
So, GE gets environmentalist brownie points for selling “clean” light bulbs,
and they also get to charge more for their bulbs. But there’s another
advantage—they save on labor with fluorescents, because they make the
fluorescents in China.
Not only are wages lower there, but so are the regulatory burdens, both
environmental and labor. The Times of London recently reported, “Large
numbers of Chinese workers have been poisoned by mercury, which forms part
of the compact fluorescent lightbulbs.”
CFLs, however, are probably not the light bulb of the future. Right before
it started lobbying for a federal light bulb law, GE announced that it would
start making high-efficiency incandescent by 2010. GE doesn’t say where it
will manufacturer its high-efficiency incandescent bulb, but all signs
suggest it won’t be here in Winchester.
GE spokesman Peter O’Toole responded by pointing out GE has relocated its
manufacturing of Hybrid Electric Heat Pump Water Heaters to Kentucky, from
China. They promise 400 new “green-collar” jobs, offsetting the loss of the
light-bulb jobs—but not in Winchester.
I ask the men what they plan to do when the factory closes down. Some say
they’ll retire. Others can only shrug their shoulders. Pifer says he’ll just
have to take a job at less than half of what he currently makes.
“I live paycheck to paycheck,” Pifer tells me. He has a son, and he owns a
house nearby, he says. “So what am I going to do when I’m earning $11 an
hour?” These men are the victims of the green revolution—a revolution their
employer is leading.
Read more at the
Washington Examiner:
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 After 2012, you’ll find that the regular light bulbs you have been using
will no longer be available.
GE Lighting Web Site for Understanding the 2012 Lighting Legislation
Made in China - General Electric has closed its last major factory
making incandescent light bulbs in the United States, a victim of a 2007 law
banning sale of the light bulbs by 2014. Environmental activist groups
promised the restrictions would create green jobs, but workers at GE’s
Winchester, Virginia plant are finding the law is merely creating red jobs
overseas in China. China will build the bulbs with toxic mercury. (remember
the pet food from China that killed thousands of U.S. pets - what about the
lead in toys they sent over here or the toxic drywall?) Will the media ask
GE?
Cheaper in China - The 2007 law imposed energy efficiency
requirements that cannot be met by traditional incandescent light bulbs.
Compact fluorescent lights (CFLs), which are much more expensive than
incandescent light bulbs, are the least expensive alternative. The
manufacture of CFLs, however, is labor-intensive and too expensive to be
done at U.S. wage rates.
GE could retrofit its Winchester plant to produce CFLs, but GE CFLs would be
50 percent more expensive than bulbs made in China with the benefit of cheap
labor. Realizing it could not compete with such a cost disadvantage, GE is
closing down its Winchester factory.
GE Plant Closed in U.S. and Opened in China
CFL's compact fluorescent lamps contain about 5 milligrams (mg) of
mercury, a toxic heavy metal that can interfere with the development of
children and unborn fetuses and may cause a wide range of health issues in
adults, including brain, kidney and liver damage. Compact fluorescent lamps
used in homes are not legally classified as hazardous waste. But they may be
so designated with the stroke of an EPA or Obama pen. What about a recycling
tax added to the cost of the bulb to be paid to the government?
CFL Mercury Hazards Report to the Government - “Not later than 1 year after
the date of enactment of this Act, the Secretary, in cooperation with the
Administrator of the EPA, shall submit to Congress a report describing
recommendations relating to the means by which the Federal Government may
reduce or prevent the release of mercury during the manufacture,
transportation, storage, or disposal of light bulbs.”
EPA note about China - It is also important to note that the quality
controls on many fluorescents and CFLs are limited due to the fact that many
of these products are manufactured in other countries like China. Thus,
where U.S. companies like General Electric were held to strict manufacturing
standards, foreign countries that manufacture and import these products to
the U.S. are not held to these same manufacturing and consumer protection
standards.
Your area may require recycling. Some states and local jurisdictions have
more stringent regulations than U.S. EPA does, and may require that you
recycle CFLs and other mercury-containing light bulbs. California, Maine,
New Hampshire, Minnesota, Vermont and Massachusetts, for example, all
prohibit mercury-containing lamps from being discarded into landfills.
Contact your local waste collection agency, which can tell you if such
requirement exists in your state or locality.
Obama and Democrats claim that opposition to tax increases is support for
sending jobs to China and India
Democrats in Congress continue to promote measures that keep jobs overseas
by keeping corporate taxes high. American companies have over $1 trillion
dollars in foreign assets overseas, and that money could easily be
repatriated into the United States to invest in jobs, research, and assets
here. However, there is a significant burden; America’s 35% federal
corporations tax. This means that American companies have a serious
disincentive to invest their cash domestically. American companies simply do
not want to spend their foreign-held money in our country because of this
prohibitive tax liability.
No other major country treats its domestic corporations’ foreign earnings so
poorly
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