Ever since Barack Obama burst onto the national political scene one of the central themes upon which he harps on a consistent basis is that in order for America to recover from this deep economic downturn, big oil companies must be forced to give up their 'tax breaks.' The Obama Plan for Recovery, thus, is almost identical to that of Herbert Hoover, who, in the late 20s and early 30s responded to the great economic downturn by raising taxes, especially on 'the rich' and U.S. businesses. The result was that the problem worsened until by 1933, under Franklin Roosevelt who continued Hoover's policies on taxation, the nation was stuck in a downward spiral from which it never recovered until after World War II.
The Cato Institute published an in-depth analysis of the Hoover-Roosevelt plan of taxation and the devastating impact it had on the economy.
Fast-forward to 2011. Enter GE's CEO Jeffrey Immelt.
Immelt has been an ardent supporter of Barack Obama from the start. He recently lectured businesses on the issues of jobs and big government, stating that business is partly responsible for our current woes due to its failure to hire. He further opined that blaming big government misses the point.
Time for a serious reality-check.
General Electric was in the midst of financial woes in 2008 so severe that the company was in danger of going under. Immelt cut a deal with Obama which entailed his giving his full support to Obama's election bid in exchange for a promise that his company would be 'bailed out.'
Immelt did exactly that, and indeed, GE received a mega-truckload of taxpayer funds in the federal government's bailout of the fat cats on Wall Street and other large corporations. The result was a dramatic turn-around for the company, and profits skyrocketed into the multi-billions. Yet GE pays no taxes at all--ZERO--zilch. And Immelt would be so brazen as to blame companies that did not receive such breaks for the nation's current financial woes. Businesses do not hire for one reason alone--they are frightened and uncertain about the future as a direct result of Obama Administration policies. But if your company happens to be one of the lucky 'chosen ones' by the Great One in the White House, you will get plenty of money from the taxpayers to hire workers.
And herein lies the hypocrisy. GE is not the only Obama-preferred corporation that pays no taxes. GM, another recipient of the Obama bailout, pays no taxes and is not expected to pay its fair share for years to come, in spite of the multi-billions it received from taxpayers.
Yet Obama routinely demonizes the oil companies for their supposed 'tax breaks,' although in actuality they pay roughly 40% of their profits in federal taxes.
In addition, other major Obama-preferred companies not only pay no taxes but receive billions in direct cash subsidies from the federal government, such as so-called 'green industries' that the government wishes to promote in the name of developing 'alternative energy sources.'
Many confuse the term 'subsidy' with 'tax deductions.' Tax deductions are afforded to every company and corporation in America--the same opportunity afforded to individual taxpayers. Subsidies, on the other hand, are direct federal grants. The government actually pays cash to certain select companies it wishes to underwrite and promote. Oil companies do not get subsidies. Green industries do.
Without the tax deductions the oil companies receive like everyone else, the 40% of the profits they already pay in taxes will rise significantly, thus further driving up the price of gasoline at the pump. Americans will pay a heavy price for the policies promoted by Obama and the Democrats, and Jeffrey Immelt, hypocrites extraordinaire.
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