Speaking of corporate taxes, there’s a nice article in the New York Times today detailing how General Electric managed to get its tax liability down to ... zero.
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. ...
[L]ow 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.
So patriotic! It really explains why President Obama tapped Jeffrey Immelt, GE’s CEO, to lead the President’s Council on Jobs and Competitiveness. If this isn’t the sort of corporate behavior America needs more of, what is?
Update: Andrew Williams, who works in GE’s media affairs office, e-mails:
The Times' story missed the most important part of the story, and I wanted to make sure you have all the facts. The reality is that within the context of the 2008 financial crisis, GE Capital suffered significant losses, which impacted taxes. Take out GECapital, and GE's effective corporate tax rate would be 21%.