GE paid a grand total of....zero dollars in taxes in 2010

[Guest Durant4MVP]

http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=2

 

General Electric, the nation’s largest corporation, had a very good year in 2010.

 

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

 

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

 

That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

 

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work†fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

 

While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.

 

In a regulatory filing just a week before the Japanese disaster put a spotlight on the company’s nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back.

 

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

 

Yet many companies say the current level is so high it hobbles them in competing with foreign rivals. Even as the government faces a mounting budget deficit, the talk in Washington is about lower rates. President Obama has said he is considering an overhaul of the corporate tax system, with an eye to lowering the top rate, ending some tax subsidies and loopholes and generating the same amount of revenue. He has designated G.E.’s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President’s Council on Jobs and Competitiveness, and it is expected to discuss corporate taxes.

 

“He understands what it takes for America to compete in the global economy,†Mr. Obama said of Mr. Immelt, on his appointment in January, after touring a G.E. factory in upstate New York that makes turbines and generators for sale around the world.

 

A review of company filings and Congressional records shows that one of the most striking advantages of General Electric is its ability to lobby for, win and take advantage of tax breaks.

 

Over the last decade, G.E. has spent tens of millions of dollars to push for changes in tax law, from more generous depreciation schedules on jet engines to “green energy†credits for its wind turbines. But the most lucrative of these measures allows G.E. to operate a vast leasing and lending business abroad with profits that face little foreign taxes and no American taxes as long as the money remains overseas.

 

Company officials say that these measures are necessary for G.E. to compete against global rivals and that they are acting as responsible citizens. “G.E. is committed to acting with integrity in relation to our tax obligations,†said Anne Eisele, a spokeswoman. “We are committed to complying with tax rules and paying all legally obliged taxes. At the same time, we have a responsibility to our shareholders to legally minimize our costs.â€

 

The assortment of tax breaks G.E. has won in Washington has provided a significant short-term gain for the company’s executives and shareholders. While the financial crisis led G.E. to post a loss in the United States in 2009, regulatory filings show that in the last five years, G.E. has accumulated $26 billion in American profits, and received a net tax benefit from the I.R.S. of $4.1 billion.

 

But critics say the use of so many shelters amounts to corporate welfare, allowing G.E. not just to avoid taxes on profitable overseas lending but also to amass tax credits and write-offs that can be used to reduce taxes on billions of dollars of profit from domestic manufacturing. They say that the assertive tax avoidance of multinationals like G.E. not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States.

 

The quoted text is only page one of four. Click the link if you're interested in reading the rest.

 

It's great that our politicians want to cut benefits and social programs from the middle/lower class because "it costs too much" when shit like this is going on. GE didn't technically do anything illegal but the corruption is absurd.

[RazorStar 4,025]

woo, tax breaks for the win. See how the money gets stifled when rich people don't pay taxes?

[Krawnka 282]

I thought the rich were gonna get taxed heavier?

[Favre4Ever+ 4,476]

Lol... how awesome is it when a tax accounting company uses the slogan "Imagination at Work". That's pretty epic. haha

[Guest Durant4MVP]

I thought the rich were gonna get taxed heavier?

 

Not when your have the best lobbying team in the world.

 

What GE is doing is abusing a poorly written tax structure. Obama talked recently about overhauling the tax structure to solve problems like this and I sincerely hope he does.

[seanbrock 1,684]

Not when your have the best lobbying team in the world.

 

What GE is doing is abusing a poorly written tax structure. Obama talked recently about overhauling the tax structure to solve problems like this and I sincerely hope he does.

If you think Obama gives anymore of a fuck than the Senators and congressmen who let this happen then you're kidding yourself.

[Krawnka 282]

Obama is more concerned about being the first president in decades to get rid of Khadaffi...even if it means putting Al Qaeda in power over Libya....and all the while Cartels kill along our own borders...

 

Apparently Khadaffi trumps border security, and struggling economy, come election time.

Edited March 31, 2011 by Krawnka

[CARDINAL 205]

If you think Obama gives anymore of a fuck than the Senators and congressmen who let this happen then you're kidding yourself.

 

It's really disappointing that the elected officials at the federal and state level can't get there act together and start doing their jobs in reforming corrupt and very inefficient tax system that screws that average hard working american while rich assholes get tax breaks and don't even invest in jobs in America....true definition of a grave economic and moral injustice IMO.

Edited April 2, 2011 by CARDINALOFWISDOM

[BwareDWare94 723]

See, this is the real problem with our tax system. It's not that the wealthy get taxed more than everybody else, as the Republicans claim. It's that the middle class, who is doing all the work, pays the good majority of the taxes. We don't need to take care of the wealthy because we already are. It's time we restructured our tax system so that it actually does tax the wealthy the most. They can take the damn hit.

[Krawnka 282]

I personally know "well off" people that have payed more in taxes, than my gross income. I'd like to see them get rid of the income tax "cap". Apparently after something like 50k they're done for the year, until Apr 15 of the following year? They should have to pay the entire year, like the rest of us.

 

My beef is with the entitlement programs that give "middle caste" tax money away to people who don't earn it, especially to those that milk the system.

 

I'm tired of busting my ass to pay for people who just sit on theirs.