Thursday, April 14, 2011

The Yes Men - Mimicking the Change We Want to See

Oh how I do love the Yes Men, and not only because one of them was a classmate of mine. Recently they punked a well-known corporate tax parasite with a fake news release that was picked up by several national publications. It read, in part:

Fairfield, CT, 13th April, 2011– GE CEO Jeffrey Immelt has informed the Obama administration that the company will be gifting its entire 2010 tax refund, worth $3.2 Billion, to the US Treasury on April 18, Tax Day, and will furthermore adopt a host of new policies that secure its position as a leader in corporate social responsibility.

“We want the public to know that we’ve heard them, and that we know many Americans are going through tough times,” said GE CEO Jeffrey Immelt. “GE will therefore give our 2010 tax refund back to the public and allow the public to decide how to spend it.”

Immelt acknowledged no wrongdoing. “All seven of our foreign tax havens are entirely legal,” Immelt noted. “But Americans have made it clear that they deplore laws that enable tax avoidance. While we owe it to our shareholders to use every legal loophole to maximize returns – we also owe something to the American people. We didn’t write the laws that let us legally avoid paying taxes. Congress did. But we benefit from those laws, and now we’d like to share those benefits. We are proud to be giving something back to America, and we are proud to set an example for all industry to follow.”
The actual management of GE has no such commitment to social responsibility so defined, and instead can be counted on to continue expending no small part of shareholder resources on gaining favors from Congress. Glibertarians use the term "rent-seeking" for this form of special pleading, before going on to explain that it isn't worth discussing as a distortion of the economy or a threat to justice unless relatively poor people or institutions happen to be trying it.

While some of the original reporting on GE's tax avoidance was overblown, the truth remains unclear, and even this too-balanced-by-half report from ProPublica implies that GE is doing quite well by its rent-seeking (emphasis mine):
After repeated conversations with GE -- remember, we've been working on this story too -- we can finally give you reasonably definitive answers.

The company says that it's not getting any refund for 2010 -- validating Outslay's analysis. Its 2010 tax situation? "We expect to have a small U.S. income tax liability for 2010," GE chief spokesman Gary Sheffer told us. How big is small? GE declined to say. The number is unlikely to ever be disclosed unless GE goes public with it, or is forced to do so.
I prefer the candor and message of the Yes Men as spokesmen for GE.

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