Did you perchance read the front-page piece in the Friday New York Times about GE’s taxes? It’s very long, exhaustive and a masterful piece of reporting by David Kocieniewski that must’ve taken months. I highly commend the full read if you have an hour, but if not, the main point is made in the first three short paragraphs:
“General Electric, the nation’s largest corporation, had a very good year in 2010.
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.”
The rest of it explained that GE had invested heavily in “an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.”
Whatever GE is spending on lobbyists and tax accountants, it is obviously working for GE, its executives and shareholders.
Kocieniewski spends most of the piece explaining how GE did it. But in an era in which our national fiscal discussion is nearly dominated by the insistence that high taxes are destroying the ability of American companies to compete, the main point of the piece is barely mentioned. The whole “job-killing tax” mantra is rubbish. Every time that mantra is chanted, someone should ask about GE (and, without wanting to engage overmuch in group guilt, I feel comfortable assuming that GE is not the only big profitable company that has figured out how to make all their tax liability go away).
In fact, the Times’ GE is the first in a series called “But Nobody Pays That.” According to the shirt-tail under that title, it says: “Articles in this series will examine efforts by businesses to lower their taxes and the debate over how to improve the tax system.” I look forward to future installments.
I agree with Michele Bachmann. The U.S. tax code is a scandal. It needs to be radically simplified.