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Republican presidential candidate Newt Gingrich said Friday that General Electric's aggressive legal and accounting strategy, which led to zero corporate tax payments last year, was a clever and rational response to the nation's high tax rates.
In his first public speech since announcing his candidacy, the former House speaker said he wanted to slash an array of taxes and bureaucracies. He denounced President Barack Obama's foreign and domestic policies, and said the incumbent can't win in 2012 without using his office to coerce massive campaign donations from people.
Gingrich lived up to his combative, self-assured reputation at a Washington meeting of economic conservatives. He praised the author of the "Laffer Curve," a theory that says unless taxes are kept low, individuals and corporations will invest less and seek ways to avoid paying taxes.
Gingrich cited GE, which reported global profits of $14.2 billion last year, $5.1 billion of which came from U.S operations. Through innovative accounting and lobbying practices, GE paid no corporate taxes. Instead, it claimed a tax benefit of more than $3 billion.
Gingrich said the 35 percent corporate tax rate should drop to 12.5 percent. He cited GE's "remarkably rational behavior in recognizing the corporate tax rate is clearly past the Laffer curve point. And so 375 tax lawyers in the largest tax department in the world" devised "a very clever strategy which enabled General Electric to pay zero corporate taxes."
GE and others would pay more taxes at a 12.5 percent rate because they would consider it more fair and rational, Gingrich contended. He also urged eliminating the estate tax and extending President George W. Bush's income tax cuts for high earners beyond 2013.
Gingrich portrayed the federal government as a maze of anti-business bureaucrats who depress job creation. To Gingrich, the Environmental Protection Agency is "a centralized bureaucratic control mechanism that's anti-business, anti-local control, committed to an ideological vision of reorganizing America in a way that makes no sense." He would replace it with an "Environmental Solutions Agency" that's friendlier to business.
Obama, he said, aggressively raises campaign money because "he doesn't think he can win a fair election. This is Chicago machine politics: 'I will use the power of the presidency to coerce enough people to give me enough money to be able to buy the election.'"
Obama raised about $750 billion for his 2008, and no there were no findings of serious wrongdoings.
Gingrich said Obama was too concerned about multinational group's opinions in the NATO-led operations aiding rebels opposed to Libya's Moammar Gadhafi.
"The Arab League is a cluster of dictatorships, monarchies and various people who have no authority to tell us what they think," he said. "And the United Nations is an astonishingly corrupt institution."