GE Paid No Taxes in 2010
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.
by Greg Stacy
Source: NY Times
Friday, March 25, 2011
Subscribe to:
Posts (Atom)