GE Files 7,000 Tax Returns Globally, Ends Up With A $0 U.S. Tax Bill

General ElectricAnnalyn Censky writes on CNNMoney:

General Electric filed more than 7,000 income tax returns in hundreds of global jurisdictions last year, but when push came to shove, the company owed the U.S. government a whopping bill of $0.

How’d it pull off that trick? By losing lots of money.

GE had plenty of earnings last year — just not in the United States. For tax purposes, the company’s U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.

That left GE with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a “tax benefit” of $1.1 billion back into its reported earnings.

“This is the first time in at least decades that GE has reported negative U.S. pretax income and it reflects the worst economy since the Great Depression,” Anne Eisele, GE’s director of financial communications, said via e-mail.

Read More: CNNMoney

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  • 5by5

    Disgustingly, this little tax dodge is typical among the mega-corps. 90% of the Fortune 500 pay ZERO in taxes. Many actually get refunds.

    By contrast, until the recent Obama tax cuts for regular people, most people's individual tax burdens have increased steadily over the past 30 years. Reagan alone raised American's taxes 6 times.

    The problem isn't “taxes” broadly (though the code certainly needs to be simplified), the problem is that taxes are too regressive, targeting those for whom the burden is less bearable. Which is why every time I hear some Neocon spew about a national sales tax, or flat tax, it's utterly laughable, because both such things disproportionally hurt the poor. There is a categorical difference in the impact of a 5% tax on an income of $40k (the national average) and a 5% tax on an income of $5 million. You lop off 5% of $5 million, and that person is still living more than comfortably. But take away an extra 5% from a $40k income, and it could mean having to choose between rent and food, or rent and medical care.

    In general we shouldn't even be entertaining the notion of raising individual's taxes at all (save for the top 1% – Warren Buffet's secretary shouldn't be paying more taxes than he does) we should rather be demanding that these corporations who benefit off of the freedoms this culture provides, pay their fair share, or else we'll simply revoke their incorporation, seize their assets, and auction them off to the public. I personally hold no stock in the “too big to fail” idea. I rather think that if you become big enough to threaten democracy, you're too big to exist.

    These companies only exist at our pleasure in the first place, and if they don't give back to the culture that birthed them, then the life we gave them, we can take away as well.

    We have to put an end to this relentless corporate welfare though. It's gotten beyond ridiculous.

  • dwinkle

    The US is a poor place to invest money, so they invest in other nations like Brazil and Australia. Were it not for crooked tax laws, the US would have received those billions of dollars. @5by5: You couldn't be wrong on more levels. First of all, GWB lowered taxes for ordinary Americans by a far greater level than Obama, on anyone making under $160,000 a year. Secondly, these corporations have as much right to exist as you do, not at your “pleasure”. They have not broken a single law doing this. Thirdly, the richest 10% pay 90% of the taxes, where as the poorest 50% pay no taxes at all. Most importantly, you're ignoring the fact that every single shareholder and employee in that company paid tens of thousands, if not millions of dollars in taxes, which is where our tax money comes from in the first place. Do some research next time.