GE, World's Largest Corporation, Paid Zero Dollars in U.S. Taxes Last Year

[one...two...tree 2,762]

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."

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.

more....

http://www.nytimes.c...ner=rss&emc=rss

[JohnSmith2007 353]

Obama Picks Jeffrey Immelt, GE CEO, To Run New Jobs-Focused Panel As GE Sends Jobs Overseas, Pays Little In Taxes

Jeffrey R. Immelt, the chairman and chief executive of General Electric Co. tapped by President Barack Obama as his next top outside economic adviser, will be asked to guide the White House as it attempts to jump-start lackluster job creation and spur a muddled recovery.

Immelt's firm stands as Exhibit A of a successful and profitable corporate America standing at the forefront of the recovery. It also represents the archetypal company that's hoarding cash, sending jobs overseas, relying on taxpayer bailouts and paying less taxes than envisioned.

The move is the latest salvo in the White House's continued aggressive and very public outreach to corporate America. Earlier this month, Obama appointed a top executive at JPMorgan Chase as his chief of staff, and this week he granted a longtime wish of business interests by promising to review federal regulations perceived as onerous.

Immelt's appointment raises fresh questions about Obama's courtship and future policy proposals. Firms like GE say good jobs will come from lower taxes and less regulation. Immelt told analysts Friday that he'll focus on tax policy and regulation, among other topics.

"A clear problem in the recovery is that it's been a much stronger recovery for business in terms of their profit and earnings than for those folks who work and earn a living in the U.S.," said Gary Burtless, a former Labor Department economist and now a fellow at the Brookings Institution, a research and policy organization in Washington.

Burtless said Immelt was likely hired to reassure corporate America. Political opponents have cast the Obama administration as unfriendly to business interests, and the administration has had difficulty rebutting that theme. Immelt's hiring was yet another step in that direction.

"It's a significant piece of outreach to the business community," said Douglas Holtz-Eakin, a former director of the Congressional Budget Office and top economic adviser to Sen. John McCain's 2008 presidential campaign. The appointment could mean business has a "genuine liaison" at the White House, Holtz-Eakin said.

http://www.huffingtonpost.com/2011/01/21/obama-picks-jeffrey-immel-ge-jobs-overseas_n_812502.html

[Hilarious Clinton 452]

Lobbying pays.

[웃 910]

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.

[Ban Hammer 13,395]

it's obama's fault!

[Gary and Alla 3,694]

Good. When we make it so NO corporation pays ANY tax we will have -0- unemployment. We will all need to work 3 jobs to cover all the work that needs to be done here.

Corporations do not and CAN not pay tax. They can only collect tax. the funds come from customers, stockholders, or employees. There is NO WHERE ELSE the money can come from.

[ready4ONE 5,400]

No corporate taxes... LMMFAO!!!!! Yah, their profit is theirs and their shareholders, but it doesn't exist for tax purposes. What a freaking load of garbage! (pronounced gar-bahj)

[JohnSmith2007 353]

No corporate taxes... LMMFAO!!!!! Yah, their profit is theirs and their shareholders, but it doesn't exist for tax purposes. What a freaking load of garbage! (pronounced gar-bahj)

I don't think you understood his point. Corporations may pay taxes but it does not come out of their pockets. They just raise the price of their goods to offset the cost. The people that buy the goods pay the taxes levied on companies.

[Pooky 3,804]

No corporate taxes... LMMFAO!!!!! Yah, their profit is theirs and their shareholders, but it doesn't exist for tax purposes. What a freaking load of garbage! (pronounced gar-bahj)

Not only that ... they claimed a tax benefit of $3.2bn.

[ready4ONE 5,400]

I don't think you understood his point. Corporations may pay taxes but it does not come out of their pockets. They just raise the price of their goods to offset the cost. The people that buy the goods pay the taxes levied on companies.

Profit isn't income. I guess it's a theory...

[lostinblue 1,989]

it's obama's fault!

Obama made it clear that he believes GE is a “model” for American companies when he appointed Immelt to lead his jobs council, a position that effectively brings him in closer contact with the president than other panel members。

[lostinblue 1,989]

http://www.foxnews.com/opinion/2011/03/24/john-stossel-ge-obama-cozy-government-business-handing-favors-folks-connections/#

JOHN STOSSEL: G.E., Obama and the Cozy Government Business of Handing Out Favors to Folks With Connections

General Electric CEO Jeffrey R. Immelt is super-close to President Obama. The president named Immelt chairman of his Council on Jobs and Competitiveness. Before that, Immelt was on Obama's Economic Recovery Advisory Board. He's a regular companion when Obama travels abroad to hawk American exports. (Why does business need government to do that?)

"Jeff Immelt is perhaps the CEO who is most cozy with President Obama," says journalist Tim Carney, who will be a guest on my new Fox News special on freeloading this weekend. "General Electric is structuring their business around where government is going ... high-speed rail, solar, wind. GE is lining up to get what government is handing out."

Businesses love to have government as their partner. There's safety in it. Why take chances in a marketplace full of fickle consumers and investors, when you can get secure money and favors from the taxpayers? It's an old story, and free-market advocates as far back as Adam Smith warned against it.

Unfortunately, too many people think "free market" means pro-business. It doesn't. Free market means laissez faire -- prohibit force and fraud, but otherwise leave the marketplace alone. No subsidies, no privileges, no arbitrary regulations. Competition is the most effective regulator.

Left-wingers criticize corporate welfare until it's for something they like -- for example, "green technology."

[rika60607 215]

Are you saying that if there was no tax imposed on corporations, they would lower prices and thus earn less profit? (Since no part of that profit needs to go to taxes anymore?)

I don't think you understood his point. Corporations may pay taxes but it does not come out of their pockets. They just raise the price of their goods to offset the cost. The people that buy the goods pay the taxes levied on companies.

[Pooky 3,804]

Are you saying that if there was no tax imposed on corporations, they would lower prices and thus earn less profit? (Since no part of that profit needs to go to taxes anymore?)

Apparently less gross profit, but as much net profit.

Except in the case of GE, where they don't pay tax anyway.

[rika60607 215]

Dubious. Corporations are in the business of making as much profit as they can, not in business of making fare and reasonable profit. Thus there is a tax level that would make them give up on particular products/services as they become unprofitable. But no tax will never make them lower the prices... of course no tax could bring more corporations and their operations to the US. However, US work force is expensive, so it probably would not be labor intensive operations.

Apparently less gross profit, but as much net profit.

Except in the case of GE, where they don't pay tax anyway.