Perdido 03

Perdido 03

Friday, March 25, 2011

NY Times: General Electric Pays No Taxes

The meme on Fox News is that the U.S. has one of the highest corporate tax rates in the world and that's why the economy is so poor.

Heck, I've heard that same meme from Republican-lite Dems like Little Andy Cuomo and Barack Obama who claim that business is so overburdened with taxes that the first thing government must do is lighten that burden.

I don't believe that meme.

I know that corporations use all kinds of loopholes and havens to avoid paying taxes

When I read articles like this in the Times, I see just how right I am:

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.

Just another example of the New Feudal Order - taxes are for the little people, not for General Electric or Bloomberg LP.

Oh, and notice the connection between Chancellor Klein, Charlie Rangel, Harlem, Bloomberg, charter schools and a $30 million dollar GE grant to NYC schools.

Pay your cronies off a little bit, reap billions in tax rewards, and promote union-busting charter schools at the same time.

That's bringing good things to life, all right.

1 comment:

  1. Lets not forget Jack Welch the GE ceo who was the first person Klein picked to start the principals leadership academy. God only knows what Welch taught the new education leaders about how to improve data. Also the nuclear reactors in Japan are the result of GE investments and materials. These folks should be under arrest for multiple crimes against humanity.