About one year later, McConnell told reporters he opposed paying for the costs of the extenders bill in the budget, meaning the revenue loss would be added to the deficit. Clearly for Senator McConnell, talking about balancing the budget is easy, but fighting the tax extenders that would isolate him from his big business friends is simply too hard.
Companies like Goldman Sachs and General Electric have made significant campaign donations to McConnell over his long career, $108,000 and $104,000 respectively. Understandably, they are desperate to keep their special tax loopholes to keep investors happy and their executive compensation flowing.
The proposed tax extender bill also includes $10.4 billion for an active financing provision, which is crucial for companies that evade taxes on overseas financial transactions. This tax benefit is so important to crooked corporations like General Electric (GE) that the company goes so far as to list the possible loss of this tax loophole as a financial risk factor to its investors in its 10-K filing.
GE warns investors, “If this provision is not extended, we expect our effective tax rate to increase significantly after 2014.” Apparently scare tactics work, as GE’s lobbying operation has become so effective that the corporation paid little or no federal tax in some years. The company also benefits from other provisions in the extender bill, including the wind production tax credit.
Meanwhile, in an appalling display of hypocrisy, General Electric CEO Jeff Immelt talks about reducing government spending, and sits as a member of the “Fix the Debt” campaign to encourage fiscal reforms to lower the country’s debt and deficit.
There is no doubt that the Washington political establishment has been very generous to GE over the years. In addition to tax breaks, the company received about $20 million in grants from the Department of Energy in 2013, and about $100 million from Obama’s stimulus plan.
While the average taxpayer would be livid over giving grant money to a profitable, dividend-paying company like GE, that sense of outrage does not translate to Republican leadership. In fact, the opposite is true.
Threats to end corporate handouts and reform spending have enraged the establishment political class, who built their careers on making deals and exchanging favors with big business. It’s why the U.S. Chamber of Commerce and lobbyist Steve LaTourette’s Main Street Advocacy organizations attack pro-freedom primary candidates. They recognize that their careers of collusion end when the money stops flowing to the corporate coffers.
The best way to reduce the size of government and preserve America’s economic strength is to stop big-spending Republicans from doling out handouts to corporations. When K Street is weak, American families and small businesses are strong.