GE Paid No Taxes - New York Times

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This is a global phenomenon. In the North, it defunds educational services. In the South, it defunds hospitals, and people die, because there are no tax revenues to fund basic services like healthcare, education and roads.

GE Paid No Taxes in 2010
Mar 25, 2011, 14:20 by Greg Stacy

General Electric (GE) employed a combination of "innovative accounting" and fierce lobbying to lower its tax bill in recent years, paying no U.S. taxes for 2010 and actually receiving a tax benefit of $3.2 billion last year.

General Electric is a multi-national company known for a dizzying variety of products, everything from light bulbs to TV networks to nuclear reactors. The company made $14.2 billion in profits for 2010, including $5.1 billion from operations in the US.

The top tax rate for corporations in the US is supposed to be 35%, one of the highest on Earth. But few corporations really pay that rate, the New York Times reports, since there are many possible loopholes that companies can use to get tax breaks. While 30% of Uncle Sam's revenue came from corporations in the 1950s, today it's down to just 6.6%.

According to the Times, GE is particularly adept at lobbying for and winning corporate tax breaks, spending tens of millions on lobbyist fees. For instance, the company benefits from green-energy credits on wind turbines, while getting a break on the the rate its jet engines depreciate.

GE has hired former IRS employees and Congressional tax specialists, and now employs an ex Treasury official to lead its tax department, while President Barack Obama has installed GE's chief executive as head of the new Council on Jobs and Competitiveness.

Even former President Ronald Reagan, well-known for his administration's corporate-friendly policies, took issue with GE's tax schemes. Reagan changed the tax system when he learned that GE was avoiding taxes, the Times reports.

"I didn't realize things had gotten that far out of line," Reagan told his Treasury secretary.

In the years since, GE has figured out new ways to get around paying taxes.

"In our system, there are corporations that view their tax departments as a profit center," one former Treasury official told the Times.

Source: NY Times

MrK's picture
MrK
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Jul. 31, 2007 4:01 pm

Comments

Yeah, our tax system is a complete and total mess. On that conservative and progressive folks can agree :)

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Mr.Burns
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Dec. 1, 2010 12:48 pm

Too bad we cannot agree about the nature of the mess and its cure. Defending the Bush tax cuts for the rich or the whole Reagan tax cut failed experiment ought to be embarrassing. Regaining the revenue required for a healthy democracy by getting rid of the military overhead and the authoritarian economic supply chains of empire only requires getting rid of the principalities and powers of this world.

I have yet to find a fiscal conservative who is not a progressive. It is not just about being cheap. It is about knowing what investment means compared to spending.

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DRC
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Jul. 31, 2007 4:01 pm
Quote DRC: It is about knowing what investment means compared to spending.

Very true. Conservatives believe that government spending programs tend to be more oriented towards political needs instead of economic needs. A new bridge that makes transportation of goods more efficient is an investment. Murtha's airport, ethanol subsidies and yes, a good chunk of the military budget, is just spending that provides less value then was used to create it.

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Mr.Burns
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Dec. 1, 2010 12:48 pm

Bus Drivers Shouldn't Pay More Taxes Than Millionaires

Way back in 1985, President Ronald Reagan outlined a very simple principle of tax fairness during a speech at Northside High School in Atlanta, Georgia.

Loopholes that allowed millionaires to pay less in taxes in bus drivers, he said, were crazy

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