GE: corporate welfare at work
How much corporate tax did General Electric (GE) pay when the company reportedly earned $5.1 billion in profits from its U.S. operations in 2010? Apparently zero, according to a recent New York Times report.
That’s right. $5.1 billion in U.S. profits, $0 paid in federal corporate income tax, and GE received $3.2 billion in tax benefits.
What was GE’s response?
“At GE, we do like to keep our tax rate low, but we do it in a compliant way, and there are no exceptions,” said CEO Jeff Immelt according to CNN.
Not only did GE’s top executive admitted that his company exploited legal loopholes to avoid paying its full share of taxes, Immelt even called for tax reform, describing the current U.S. tax code as “old, complex and uncompetitive.”
(Is Immelt playing the victim and calling for “tax reform” to convince lawmakers to eliminate the federal corporate income tax altogether?)
It appears GE is doing just fine navigating the “old, complex and uncompetitive” tax system! After all, the American-based multinational conglomerate managed to circumvent its share of tax obligations on billions in profit made in the United States and receive billions in domestic tax benefits. Imagine how much brainpower, paperwork, time, and money GE had to devote to accomplish that feat!
Immelt’s response begs this question: Why is GE spending money to avoid taxes that subsidize the public infrastructures to make it possible for GE to run a business? For example, federal taxes pay for roads, railways, and seaports that GE uses to transport its products from wind turbines to aviation technologies to refrigerators. (The same transportation infrastructures are used by thousands of GE employees to get to and from work.) What about the taxpayer-subsidized public airwaves that broadcast networks like NBC to hundreds of millions of households around the country? Those public airwaves enable GE to earn millions for selling TV advertising.
When CEOs like Immelt whine about the high corporate tax rate in the United States and how that type of “burden” is bad for business, they’re essentially hustling for a handout. Corporate America would like nothing better than to shift most of the tax burden to workers and small businesses while reaping the benefits of publicly-subsidized infrastructure and services. When corporate giants like GE pay little or no tax on profits, isn’t this unfair to the small businesses that will pay between 13.3% to 26.9% federal income tax on April 15th? After all, someone has to pay to maintain the roads, the sewers, the bridges, the airports, the railways, the seaports, the public airwaves, the electric grid, and many more infrastructures that GE will continue to use to earn profits in aviation, appliances, energy, and various other sectors. GE and other corporate giants should to pay their fair share and stop demanding corporate welfare from taxpayers.
- NYTimes.com: G.E.’s strategies let it avoid taxes altogether
- CNNMoney.com: GE Chief defends company’s zero tax bill
- money.msn.com: GE’s corporate tax bill: zero
- ABCNews.com: General Electric paid no federal taxes in 2010
- Forbes.com: What the top U.S. companies pay in taxes: How can it be that you pay more to the IRS than General Electric?
- CNNMoney.com: The truth about GE’s tax bill
- USNews.com: How will GE not paying taxes help the economy?