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Mark Shields: General Electric and the Death of American Outrage

There was a time when news of gaping tax disparities would spur our leaders into action

By Mark Shields |

If there was a funeral notice, I missed it. No obituary appeared in any of my daily papers. But make no mistake about it: In the spring of 2011 in the United States of America, our collective sense of moral outrage must now be officially dead.

You want proof? On March 25, The New York Times ran David Kocieniewski’s front-page story disclosing that General Electric — which had corporate profits of $14.2 billion last year, including $5.1 billion in this country — did not pay one dime of federal taxes to the U.S. Treasury. That is the same GE the CEO of which, Jeffrey Immelt, was chosen personally by President Barack Obama to head Obama’s Council on Jobs and Competitiveness.

Where did the outrage go? Every one of us can know for sure that every firefighter, every special-education teacher, every hospice nurse we run into, each of them will individually on April 15 pay more in federal taxes than will General Electric. And more as well than ExxonMobil, Citigroup and Bank of America paid Uncle Sam last year.

There was a time, barely a quarter-century ago, when news like that did engage an American president and lead to a rewriting and reform of the nation’s loophole-heavy tax law. When then-Treasury Secretary Donald Regan told President Ronald Reagan that 60 American corporations would pay less that year in federal taxes than would Reagan’s personal secretary, Kathleen Osbourne, Reagan, according to Regan, responded, “I just didn’t realize that things had gotten that far out of line.”

More important, the Gipper, after being re-elected in a landslide, threw his political support squarely behind the tax-reform effort, initiated by Sen. Bill Bradley, D-N.J., which would eventually triumph in law as the Tax Reform Act of 1986.

Shepherded expertly through Congress by Rep. Dan Rostenkowski, D-Ill., chairman of the House Ways & Means Committee, and Sen. Bob Packwood, R-Ore., chairman of the Senate Finance Committee, the reform law was inspired by the straightforward principles that people of equal incomes should pay equal taxes and that the tax code should elevate simplicity and, as to the degree possible, eliminate complexity.

In the past 25 years, presidents and Congresses have compromised — make that sold out — those principles, and we end up with the current statutory snarl and its corporate welfare, when the corporate share of all U.S. taxes paid has dropped from 30 percent of the total in the mid-1950s to just 6.6 percent in 2009.

While all of this takes place, the newly empowered House Republican majority makes it clear that their new lean, federal budget will include cuts of $1.3 billion from community health centers across the nation, which could mean denying access to medical care for 11 million people. Add to those, cuts to Head Start of $1.1 billion, which would translate into dropping 200,000 children from the proven preschool program.

I forgot to mention that GE, according to The Times piece, also claimed it was owed a tax benefit from the Treasury of $3.2 billion on its 2010 taxes.

All of this brings to mind the sworn testimony in a New York courtroom of Elizabeth Baum. Baum, a housekeeper, quoted her multimillionaire employer, on trial for income-tax evasion, as telling her: “We don’t pay taxes. Only the little people pay taxes.” After that, Leona Helmsley became an enduring object of public scorn. Of course, that was when outrage was still alive in this land.

Mark Shields is one of the most widely recognized political commentators in the United States. The former Washington Post editorial columnist appears regularly on CNN, on public television and on radio. Click here to contact him.

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