GE’s 2010 tax bill: $3.2 billion, a $3.2 billion benefit that is [New]
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.
And guess who President Obama appointed chairman of the President’s Council on Jobs and Competitiveness, a board to get Americans back to work and strengthen our economy? GE’s CEO and Chairman, Jeff Immelt.
That was another episode of the critically acclaimed series The wolves are guarding the henhouse.
What Do You Think?
9 Responses to 'GE’s 2010 tax bill: $3.2 billion, a $3.2 billion benefit that is'
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David [New]
Saturday, 26 Mar, 2011 at 6:31 am
Austerity isn’t just an ineffective way to address the deficit (or worse, the state of the economy). Rather it’s an effective way to transform society, by eliminating all elements of social democracy and social insurance and replacing them with the Predator State.
This movie has played before, as American and European corporations (largely in the financial sector) created crises in places like Asia and Latin America and then used those crises to force through so called austerity measures that allowed them to speculate more freely and buy up firms in those countries for rock bottom prices (while busting unions and neutering political opposition).
The elements are all quite similar, down to the language used to describe and justify it. I consider this more evidence of the central idea for progressives – we are all in this together.
This assault is happening on many fronts, yet there has been only limited efforts to draw on those people who provide us a framework for making sense of it all (in the world, I mean, not here).
William Timberman [New]
Saturday, 26 Mar, 2011 at 10:24 am
I’ve just been reading Marx’s account of the English Factory Acts of the 1830′s-40′s, and the clever ways around them thought up by the plutocrats of the day. Dickens is usually who we think of when we think about such things, if we think about such things. We even make charming musicals out of his stories of starving waifs.
The reality was far, far worse. If these assholes want to take us all the way back there — and it does appear that they do — then the furies they unleash will consume pretty much everything and everyone they know, including their own smug selves. (This has been today’s episode of Santayana’s curse. Unfortunately, it looks as though there’ll be many, many more episodes to come.)
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David [New]
Saturday, 26 Mar, 2011 at 10:30 am
Yes, I think it’s important to point out that even if this is in their short term interests, their long term interests will likely suffer past a certain point.
Of course, there are too many people today that think that public opinion on its own will move policy. It’s worth remembering that our move away from Hooverism was a product of a confrontational mass mobilization, as expansions were a product of organized political action, not simply because of what people thought.
William Timberman [New]
Saturday, 26 Mar, 2011 at 10:45 am
Yeah, that was kinda my point. As though another 150 years of class war is really what anybody needs…. But you’re right. They think that the war’s over and they won. It’s up to us to convince them that it’s only just begun.
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Tim [New]
Saturday, 26 Mar, 2011 at 11:33 am
In the past few months, I happened to read Elizabeth Gaskell’s Mary Barton and North and South, having earlier read Disraeli’s Sybil. They make for enlightening reading about the state of economic thinking of factory owners at the time and the conditions of factory workers.
While they are works of fiction and, therefore, subject to exaggerations, they do capture the class bound us-versus-them quality of that era. People truly were economic slaves, as much by low wages and poverty as by deference to authority based on wealth and family. And factory owners, the good ones at least, lacked the concepts and language needed to create trade unions on the European model (you know, somewhat equal partners in the government and economy, unlike here). The bad factory owners were simply evil.
BTW, these books and more are easily available online through Project Gutenberg and the free Stanza phone app. There’s no excuse not to be eddicated.
Also, to the point of this article, it includes a lot of telling detail about how GE’s tax dodging in the 1980s raised the wrath of St. Ronnie Reagan, to the point he helped push for higher corporate tax rates. A telling detail how far we’ve come. Even Obama, a Democrat in name only, does not object to corporate tax cheats.
David [New]
Saturday, 26 Mar, 2011 at 11:42 am
I didn’t know that – and given Reagan’s long history at GE, it really is surprising.
Tim [New]
Saturday, 26 Mar, 2011 at 12:00 pm
And given how the Right has bastardized the few reasonable aspects to Reagan’s policies and personality, it is even more surprising the journalist did their homework well and their editor let these details survive to publication.
Saturday, 26 Mar, 2011 at 5:30 pm
surprising and sad. from the ny times article:
an actual 32.5% corporate tax rate? sign me up…
Monday, 28 Mar, 2011 at 11:45 am
and thanks for adding all the tags to the post. adding tags is a bit easy to forget…