Elizabeth Warren’s new ad takes a shot at the cozy relationship between Washington and corporate America.
“Washington lets big corporations like GE pay nothing,” she says.
A Warren critic, however, emails to note that the auto bailout — some of it run through the Troubled Asset Relief Program that she oversaw — included extensive use of the tax code to prop up a different group of companies.
General Motors, in particular, paid less than zero taxes of 2011. And when the Administration brags that GM reported a $7.6 billion profit in 2011, conservatives are quick to note the profits include roughly $100 million in the form of a tax benefit document in GM’s annual report (p. 51) — and, thus, massive untaxed profits.
The outcome: GM paid a negative tax rate, around -1.5%, because of a decision allowing some of the bailout recipients, GM, AIG, and Citi, to avoid actual losses, but to still claim those losses for tax purposes.
The Administration defend the move after what was, after all, an undisguised bailout aimed at getting a giant employer back on its feet. Conservatives point to it as a sign of picking favorites: GM, the favored child, pays negative taxes and wins praise for its profits; GE get blasted for paying low taxes on large profits. Warren, meanwhile, was a sharp critic of the financial industry bailout and criticized the tax benefits extended to AIG — but was silent on their use for GM.
Warren spokesman Alethea Harney responded to an inquiry about the two different reactions with a statement:
Elizabeth believes we need to reform the tax system to create a level playing field and make sure that big profitable corporations are paying their fair share.