We’re sure there was no quid pro quo between Rangel and Immelt. That would be bribery, which is illegal [ “Ha,ha!” the author failed to add – Paco] And there is nothing illegal about lobbying or giving to charity. In fact, in our current system, it is hard for a capitalist to compete without “investing” in politics. The U.S. corporate tax rate is the highest in the world at 35 percent. If GE did not have a Washington office dedicated to lobbying for benefits from the government, over the last five years it would have had to pay somewhere around $9.1 billion in taxes on its $26 billion in American profits alone. Instead it got a $4.1 billion benefit. That is a $13.2 billion payoff on a $200 million lobbying investment. What kind of capitalist could say no to that kind of return on investment?Not to mention the absolute necessity of ridding ourselves of capitalist rope salesmen.
When once-great exemplars of capitalism like GE are profiting more by investing in lawyers and lobbyists in Washington instead of engineers and innovators, our system is clearly broken. We can start to fix these incentives by reducing the corporate tax rate. But much broader reform of our tax and regulatory system is needed.