The nation’s largest corporation is also the best in the U.S. at skirting taxes. Despite profits of $14.2 billion in 2010, General Electric did not have to pay any U.S. taxes last year.
According to The New York Times, “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 chief executive, Jeffrey Immelt, is the leader of President Obama’s Council on Jobs and Competitiveness. “You can understand how ordinary workers might look at this cozy corporate-government arrangement and conclude that it is not fully committed to the best interests of working people,” opines Bob Herbert.
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.
Naturally, GE’s PR team denies the accuracy of the Times’ reporting.
GE pays what it owes under the law and is scrupulous about its compliance with tax obligations in all jurisdictions. We are committed to acting with integrity in relation to our tax obligations. At the same time, we have a responsibility to our shareholders to reduce our tax costs as the law allows.
I’m sorry, but acting within the law is not necessarily acting with integrity. And pointing out an obligation to shareholders is precisely what’s wrong with this picture. Shareholders get paid, meanwhile the U.S. Treasury is grossly underfunded.