GE's corporate tax bill: Zero

The 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 Mar 25, 2011 2:02PM
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.

Image: Taxes (© Thinkstock/SuperStock)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.

356Comments
Mar 25, 2011 5:04PM
avatar

Get rid of lobbyists and you solve a huge part of the problem in our government.

 

NO LOBBYIST = LESS CORRUPTION!

Mar 25, 2011 4:03PM
avatar
Crap like this aggravates me to no end.  I worked and received a good salary and paid my taxes on my earnings and now I am paying taxes on my retirement and Social Security too!  GE pays zilch and I owe an extra $211 to the IRS!  Flat tax is the only way!  Lobbying is a crime!  If all congress men and women and all senators died simultaneously...I would send black roses!
Mar 25, 2011 3:11PM
avatar
That just makes me sick.....I can't believe the US gov't lets companies like GE get away with literally cheating  US out of their share of taxes.  Yet our gov't goes after and jails the little people for evading taxes.  Someone please explain???????
Mar 25, 2011 3:42PM
avatar

It sickens me to no end that they allow this to happen.  It's also deplorable when they let actors and celebrities off the hook and not make them pay the millions they actually owe the IRS.

 

Yet, the little guy gets hounded, wages garnished, penalties added and jail time if they don't pay taxes.  No wonder that guy bombed the IRS, no wonder people commit suicide.

 

We are being abused, robbed and raped by our own government.

Mar 25, 2011 3:49PM
avatar

If there was ever an argument for making the lobbying process illegal, this is it. I wonder how much in taxes the executives pay. Want to bet they use those same former IRS and Congressional employees to knock their personal tax bills down to practically nothing. It's vulgar and disgusting and all congressmen and senators who have taken GE campaign funds should be held accountable and impeached.

Make the lobby process illegal!! It is nothing more than legal bribery!!!

Mar 25, 2011 3:23PM
avatar
This country was founded on a tax revolution, maybe it's time for another.
Mar 25, 2011 3:24PM
avatar
If they legally did it, it's not their fault. They are in fact legally obligated to make the best profit for shareholders (including the many Americans who have GE stock in their savings/retirement).

If this is wrong, it is the Federal Government's fault for making the tax code this way.

We need a simpler tax code.
Mar 25, 2011 3:54PM
avatar
If our politicians weren't so easy to buy maybe we wouldn't have this kind of robbery. I have seen prostitutes hold out longer than politicians.Change the way campaigns are financed and term limits we would have a bigger chance to change.
Mar 25, 2011 3:12PM
avatar
The fact that General Electric paid no taxes and got money back , only enforces the fact that taxes are so unfair, and need overhauled.. I paid taxes when i worked out of my paycheck..  General electric should pay too. No wonder this country has money problems.. The rich and powerful control everything and our senators do not do the business for all people just a few....
Mar 25, 2011 4:11PM
avatar

Gee, Mary Jane, tell me AGAIN why the US is FREAKIN BROKE....

 

They GIVE THREE BILLION DOLLARS TO GE, and the rest of the citizens get ****.......

 

TELL ME AGAIN WHY WE'RE BROKE????

Mar 26, 2011 1:28AM
avatar
Republicans and Democrats are the same people. One pretends to care about small business and one pretends to care about the unions. None of them care about you! The name of the game is raising funds for campaigning. The rich, the corporations, the trial lawyers, the unions, all pay way more to BOTH parties than the average working man/woman. So why would they care about you? No more handouts. Tax equally. No more pork. Downsize the government, stop giving trillions of dollars to other countries, if need be, downsize the military. When I can't pay all of my bills I need to cut something, that's what our government needs to learn.
Mar 25, 2011 4:50PM
avatar
WTF!!!!  This is exactly what is wrong with our government and tax system.  There should be no loopholes, but as long as there is lawyers there will be loopholes and someone to manipulate them in a great reduction or lack of ethics along the way.
Mar 25, 2011 5:33PM
avatar

To really stir the pot and rally support for a grass roots uprising, gather the tax data for all the big corporations, along with their contributions to politicians, giving their names and the amount of money they received AND the amount of money the corporations spent in their political battles, and publish that.  

 

You want to balance the budget, close the loopholes! 

Mar 25, 2011 4:06PM
avatar
What's funny to me is that so many people whine that you can't tax the corporations because they will ship jobs oversees.  Well guess what, they are already shipping jobs abroad and they pay nothing in taxes (in this case even a rebate of $3.2 Billion dollars).  So, what would it hurt if a corporation paid a tax dollar or two.  Corporations own the land in a capitalist society; let them shoulder some of the burdens.
Mar 25, 2011 4:17PM
avatar

Our tax system is so contorted it has to be administered by a 7,000 page document. If you want to know how GE has managed this ask yourself this question: how many people will actually take the time to read this document? That being said, what are the chances that politicians who are well aware that people will not read this document could add things to this document to help their buddies escape paying Federal taxes?

 

The government's lack of revenue is not due to a corporate tax rate that is not high enough. It is due to the fact that corporations can lobby and have loopholes made for them by politicians who are corrupt enough to cooperate.

In all honesty if we closed the loopholes and cut the corporate tax to 15% the government would recieve more revenue than they do now with a 35% corporate tax rate that is full of holes!

Mar 25, 2011 7:30PM
avatar
The IRS needs to be dismantled and completely gotten rid of.  The tax laws are so complex that things like this are allowed and even promoted into happening.  A simple flat percentage rate should be imposed on every single American and business owner.  This percentage rate should remain the same and never go up or down.  The government then needs to live within the means of its tax revenue like the rest of us tax payers have to.  Oh yeah, and lobbying should be deemed as an illegal activity because its just bribery with a more "politically correct" name....  -and I could go on and on about how being "politically correct" is just another way for the liberal and progressive sheep to put bans on speech that would make them look as ignorant as they really are....
Mar 26, 2011 12:00AM
avatar
Wake up America... ! G.E. is not the only corporation. I know of a large private corporation that changes its' name every 5 years for tax breaks.  DOVE International became M&M/Mars, which then became Masterfoods, US, which became MARS snackfoods, which became MARS chocolate, North America....  WE NEED TO CLOSE ALL OF THESE LOOPHOLES
Mar 25, 2011 4:51PM
avatar
Two words: Flat Tax.  Get rid of the loopholes and the cunning accounting.  The government would get more money this way, and 97% of the people would actually pay less in taxes. 
Mar 25, 2011 7:02PM
avatar

Gee I just can't understand why our country is 14 trillion in debt? Lets cut funding to education and any programs that help the poor and elderly so corporations who make billions can get money back from uncle Sam instead of paying taxes. 

 

 I have and idea that will create jobs and reduce the debt. First close these ridiculous loopholes and then give taxbreaks to companies who manufacture in the US and raise taxes on companies who send jobs overseas. It'll never happen though because of our corrupt political system and the influence corporate $$$ has on elections. We need to elect 3rd party candidates who aren't addicted to corporate $$ if there is ever going to be anything done to save our country. Sickening corporate greed- send jobs overseas and pay no taxes! 

Mar 25, 2011 5:19PM
avatar

Geeeee..................Thanks GE!  Another indignity thrown on the middle class.  May Wal Mart acquire you and put y'all at minimum wage with no benefits with crappy hours.

 

Where is the outrage??????????!!!!!!!!!!!!!!!!!!!!!!

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
265
265 rated 2
429
429 rated 3
612
612 rated 4
499
499 rated 5
525
525 rated 6
701
701 rated 7
533
533 rated 8
337
337 rated 9
131
131 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
COPCONOCOPHILLIPS9
TAT&T Inc9
DVNDEVON ENERGY CORPORATION9
EOGEOG RESOURCES Inc9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.