GE Supports Tax Reform!

GE’s CEO, Jeffrey Immelt, and GE spokesperson Andrew Williams have recently commented that they would support tax reform that makes the U.S. more competitive and which would also assure that “everyone pays their fair share.”  See:“GE tax issue still rages on,” Rob Varnon, April 25, 2011, newstimes.com

“’GE supports enactment of a tax system that is consistent with global norms and allows American companies to compete on a level playing field with their foreign competitors,’ Andrew Williams, a spokesman for GE, said Monday . ‘We support tax policies that are consistent with policies encouraging U.S. exports. Our global competitors have tax systems with each of these core principles. The United States cannot afford to be an outlier, as it is now.’

GE Chairman and Chief Executive Officer Jeffrey Immelt said in a speech in March the U.S. tax system is ‘old, complex and uncompetitive. The purpose of a tax code should be that everyone pays their fair share, including GE. But it should also promote jobs and competitiveness and does the opposite.’  He said the nation must close loopholes and lower corporate tax rates to put it ‘in line with every other developed country in the world.’”

While stopping short of mentioning a value added tax, these comments from GE make all the basic arguments for a VAT: encourage exports, level the playing field by taxing imports, harmonize taxes for global competitiveness, eliminate a competitive disadvantage to the U.S., end complexity, assure that “everyone pays their fair share, including GE,” promote jobs, eliminate loopholes, and lower corporate tax rates.

The VAT we have often noted is a political hot potato, and Treasury Secretary Geithner recently affirmed there is “no enthusiasm” for a VAT.  Perhaps Jeffrey Immelt, if he is willing to directly endorse a VAT, could convince the President that this is the measure we should take, i.e., as Laura Tyson has recommended, cut the corporate rate and simultaneously implement a value added tax.