See update below.
The next time you hear some lefty whining that the rich aren’t paying their fair share, tell him to tell it to Jeffrey Immelt, one of President Obama’s favorite crony capitalists. Immelt’s company, General Electric, is so good at avoiding taxes, they’re actually getting a check from Uncle Sam, according to the New York Times.
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.
That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low 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.
I’ll remember this when we write our tax check this year, and I’ll add it to the list of reasons I never buy GE products.
Update: Thanks to reader Kevin for reminding me about the sweet tax breaks given to
Government General Motors. If only their investors got such special treatment. The Wall Street Journal reported last year that GM could be free from taxes – for years! CNN did a follow up report last month. It’s gross.
The U.S. Treasury is giving up $14 billion in tax revenue because of a sweetheart deal it’s giving General Motors.
The automaker is expected to post its first profitable year since 2004 when it reports fourth-quarter results on Thursday. But GM won’t have to worry about being hit with a big tax bill because billions in previous losses will provide shelter for years to come.
That break will reduce GM’s U.S. tax bill by an estimated $14 billion in the coming years, and its global taxes by close to $19 billion, according to a company filing.
Companies typically get a break on future taxes because of past losses. But in most cases they lose that tax break during bankruptcy, because the losses are offset by the “income” the company receives from shedding its debt.
Read the whole thing and try not to puke. Our government is picking the winners, and deciding who is exempt from paying the taxes they impose on the rest of us. It’s disgusting.