This is why we can’t have nice things

Corporate welfare at GE. $18 BBBBillion in sales. $619 in earnings. Tax bill? Practically zero.

As Bloomberg first reported last week, Whirlpool has stockpiled more than $500 million in tax credits for making energy-saving “energy star” appliances—washers, dryers, refrigerators and so on. The firm gets a production tax credit of up to $200 per refrigerator, $75 per dishwasher, and $225 per washer and dryer. General Electric has also collected about $200 million of these credits.

But, what about Teh Children™?

These appliance credits are in addition to $300 million the feds gave to states as part of the 2009 stimulus to pay rebates to consumers for buying these same goods. So there’s one subsidy to make the machines and another to buy them. The Department of Energy says these appliances save families money by reducing energy use by more than half. If that’s true, why does the government have to bribe people to make these purchases?

The government picks the winners and losers. The winners back the government. The losers? Lose.

Special favors like these also create a business constituency against tax reform that would benefit the overall economy. Whirlpool carries its $500 million of unused tax credits as an asset on its balance sheet, so cutting tax rates shrinks the book value of that asset. “This is why so many companies actually oppose lowering tax rates,” says Scott Hodge, president of the Tax Foundation.

Folks that take advantage of tax welfare don’t want the gravy train to stop. WSJ:

In his State of the Union address, Mr. Obama said he wanted to lower the corporate tax rate, now at 35%, “without adding to our deficit.” That means offsetting any cut in the overall rate by ending scores of broad tax deductions, the impact of which would be distributed unevenly across corporate America. The president didn’t offer specifics.

Of course he didn’t. He has appointed a commission on jobs and shit, which will meet for months and months, and then Obama will do nothing.

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