We have a comment
Yesterday, I posted this:
GE moves key business group to China
Which opened with this comment:
General Electric � the company that pays no corporate income tax and whose CEO is bestest buddies with Obama...
Dick commented:
GE paid huge quarterly taxes and minimal year-end taxes last year. Don't repeat wrong stuff!
I did some digging -- from the
New York Times, March 14, 2011:
G.E.�s Strategies Let It Avoid Taxes Altogether
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.
One such example (there are lots in the longish article):
The shelters are so crucial to G.E.�s bottom line that when Congress threatened to let the most lucrative one expire in 2008, the company came out in full force. G.E. officials worked with dozens of financial companies to send letters to Congress and hired a bevy of outside lobbyists.
The head of its tax team, Mr. Samuels, met with Representative Charles B. Rangel, then chairman of the Ways and Means Committee, which would decide the fate of the tax break. As he sat with the committee�s staff members outside Mr. Rangel�s office, Mr. Samuels dropped to his knee and pretended to beg for the provision to be extended � a flourish made in jest, he said through a spokeswoman.
That day, Mr. Rangel reversed his opposition to the tax break, according to other Democrats on the committee.
The following month, Mr. Rangel and Mr. Immelt stood together at St. Nicholas Park in Harlem as G.E. announced that its foundation had awarded $30 million to New York City schools, including $11 million to benefit various schools in Mr. Rangel�s district. Joel I. Klein, then the schools chancellor, and Mayor Michael R. Bloomberg, who presided, said it was the largest gift ever to the city�s schools.
G.E. officials say the donation was granted solely on the merit of the project. �The foundation goes to great lengths to ensure grant decisions are not influenced by company government relations or lobbying priorities,� Ms. Eisele said.
From
ABC News - April 13, 2011:
The Associated Press Reports GE Tax Refund Hoax Spun by US Uncut, The Yes Men
Did General Electric CEO Jeffrey Immelt tell President Obama this morning that GE would be returning its entire 2010 tax refund, worth $3.2 billion, to the U.S. Treasury on April 18 -- Tax Day -- as The Associated Press reported?
Some Americans would welcome the news. Too bad it never happened.
Actually, the story originated from a press release sent out this morning by a group called US Uncut, supported by the Yes Men, a group well-known for its pranks on the rich and powerful.
The Associated Press took the bait, pushing it out to its thousands of clients before issuing a retraction.
More on US Uncut and GE
here
And finally, there is this story from
CNN/Money - April 16, 2011:
GE: 7,000 tax returns, $0 U.S. tax bill
General Electric filed more than 7,000 income tax returns in hundreds of global jurisdictions last year, but when push came to shove, the company owed the U.S. government a whopping bill of $0.
How'd it pull off that trick? By losing lots of money.
GE had plenty of earnings last year -- just not in the United States. For tax purposes, the company's U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.
That left GE with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of $1.1 billion back into its reported earnings.
The upshot is that I see a lot of wheeling and dealing, I see no end of year tax and I see no quarterly tax being paid.
Dick, if you have anything that contradicts this, please feel free to post it as a comment and I'll put it on the front page for people to see but for now, I stand by my statements.
Posted by DaveH at July 29, 2011 8:04 AM