Just ridculous ! Pay enough lobbyists to do the job and you get your way. I thought the tax rate for corporations was 35%,what happened? The biggest complaint companies have is the tax rate is to high. Maybe if companies paid more to lobbyists they could get a great deal like GE?
GE's corporate tax bill: Zero
271You recommend this68%You don't recommend this32%Shared 2065 timesThe company didn't pay any US taxes in 2010. In fact, it got a tax benefit of $3.2 billion. With video updates.
By Kim Peterson on Fri, Mar 25, 2011 1:02 PM
Slogging through your taxes right now? Maybe you could hire someone from General Electric (GE) to help.
The company has beaten Uncle Sam. It paid no U.S. taxes for 2010, The New York Times reported. In fact, it received a tax benefit of $3.2 billion.
It's not that GE can claim poverty. The company rang up $14.2 billion in profits last year, including $5.1 billion from U.S. operations.
How did GE do it? Through what the Times describes as "innovative accounting" and fierce lobbying, GE has been cutting its tax bill for years. In a stroke of genius, it hired a former Treasury official to lead its tax department and filled its team with former IRS employees and Congressional tax specialists.
The top corporate tax rate is supposed to be 35% -- one of the highest in the world. But few companies actually pay that rate, since there are myriad loopholes and other ways to get breaks. Now, the Times reports, only 6.6% of Uncle Sam's tax revenue comes from corporations (down from 30% in the 1950s).
It's no coincidence that President Barack Obama installed GE's chief executive as the head of his new Council on Jobs and Competitiveness. One key subject the council is expected to address is taxes.
Post continues after this video about GE and the presidential council:
The Times reports that GE is especially good at lobbying for and winning corporate tax breaks and has spent tens of millions on lobbyist fees. It benefits from green-energy credits on its wind turbines, for example, and it gets a nice break on the the rate its jet engines depreciate.
While GE might be celebrating, critics call its tax benefits unfair. It's one thing to seek out a few loopholes here and there, but it's another thing entirely to try to profit from the system. "In our system, there are corporations that view their tax departments as a profit center," one former Treasury official told the Times.
Even former President Ronald Reagan was annoyed by GE's tax shenanigans. Reagan overhauled the tax system after learning that GE was avoiding taxes with its aggressive accounting, the Times reports.
"I didn't realize things had gotten that far out of line," Reagan told his Treasury secretary. He agreed with closing some tax loopholes and requiring GE to pay a rate that went as high as 32.5%.
But with the kind of lobbying big guns that GE has, it didn't take long for the company to begin seeking ways out of that tax rate.