Will GE Open a Plant In Goffstown?
General Electric (GE) is a company that is very familiar to most Americans. It manufactures light bulbs, refrigerators and very large components such as electric locomotives. GE is also one of the 30 companies that make up the Dow Jones Industrial Average. In fact it is the nation’s largest corporation. Perhaps they will expand their operations into one of Goffstown’s industrial parks.
The fact that GE doesn’t pay any U.S. income taxes shouldn’t be a problem for Goffstown.
The fact that GE really doesn’t manufacture so much anymore in the US could be a problem.
The graphic to the left implies a GE that is “melting down.” Perhaps nothing could be farther from the truth. According to David Kocieniewski in an article titled, “ GE’s Strategies Let It Avoid Taxes Altogether,” in http://www.truth-out.org/print/68742, GE had a very good year in 2010.
The fact that GE doesn’t pay any taxes shouldn’t come as a surprise since 2/3rds of U.S. corporations don’t pay income taxes according to an Allison Kilkenny article, “2/3rds of U.S. Corporations Pay Zero Federal Taxes: U.S. Uncut Movement Builds to Make Them Pay Up,” in Alternet.org.
It may be a good thing that many U.S. corporations don’t pay any income taxes and it may not be such a good thing. However, it would be helpful if they were really U.S. corporations.
If the bulk of a large multi-national corporation’s sales and manufacturing are in another country, are they in fact a U.S corporation? Maybe they are.
If a large multi-national corporation’s headquarters are in the Cayman Islands to avoid U.S. federal taxes, are they in fact a U.S. corporation? Perhaps they are not.
What if they are they are headquartered in the Cayman Islands and sell and manufacture outside the U.S.? How many large multi-national corporations does this describe?
The other interesting thing about GE is that a major portion of their corporate income comes from financial engineering of all types. They are now less of a manufacturing company and more into other more complex ways to make money such as lending and investing in bonds.
This shouldn’t come as a surprise since the entire U.S. has shifted from a primarily manufacturing based country to a service based economy. These services are heavily into the so-called FIRE Economy (finance, insurance and real estate.) How is that going these days? Yes, I understand, judging from the salaries and bonuses, that that industry is again doing extremely well these days.
Maybe some day when wages around the world are about the same, large multi-national manufacturing firms will return to the U.S. Want to discuss the subject of wages? I think not!
The U.S. will end up where it is headed and we will all get an education. What will we do then?