Friday, March 25, 2011

General Electric Paid No Federal Taxes in 2010

White House Takes Heat for GE CEO Jeffrey Immelt's Advisory Role

By JAKE TAPPER
ABC NEWS
THE WHITE HOUSE, March 25, 2011

The top tax bracket for U.S. corporations stands at
35 percent, one of the highest rates in the world. So h
ow is it possible that a giant of American business,
General Electric, paid nothing in federal taxes last
year, even as it made billions in profit?

And should the CEO of GE, Jeffrey Immelt, be advising
the president on business?

For two years, President Obama has been talking
about the need for corporate tax reform, declaring
that the system is too complicated and that companies
pay too much.

"Simplify, eliminate loopholes, treat everybody fairly,"
Obama said in February.

For those unaccustomed to the loopholes and
shelters of the corporate tax code, GE's success at
avoiding taxes is nothing short of extraordinary. The
company, led by Immelt, earned $14.2 billion in
profits in 2010, but it paid not a penny in taxes
because the bulk of those profits, some $9 billion,
were offshore. In fact, GE got a $3.2 billion tax
benefit.

Watch "World News with Diane Sawyer" for more
tonight on ABC.

"Two things are disconcerting. One is, there's
disproportionate amount of profits being reported
offshore. And then, even for the profits that are
reported onshore, they're paying less than 35
percent," said Martin Sullivan, a contributing editor
for Tax Analysts.

2010 was the second year in a row that GE recorded
billions in profits and paid no taxes.

During that same period, Immelt has been a close
advisor to the president on the business community,
a relationship that rubs some the wrong way. Immelt
serves as the chairman of Obama's Council on Jobs
and Competitiveness.

In a statement, General Electric said that it "pays what
it owes under the law and is scrupulous about its
compliance with tax obligations in all jurisdictions."
The company claims that its zero-dollar tax bill is
largely a result of losses at its financial arm, GE
Capital, due to the Wall Street meltdown.


White House: Immelt Advises on
Jobs, Not Taxes


Today, White House spokesman Jay Carney said that
the president is "bothered" by the idea that a U.S.
company could pay no taxes, but he wouldn't talk
about GE specifically. Carney was also quick to say
that Immelt's council advises the president on job
growth and not on tax policy.

"It is part of the problem of the corporate tax
structure that companies hire, you know, armies of
tax lawyers to understand how it works and to take
advantage of the various loopholes that exist, that are
legal in order to reduce their tax burden," Carney
said.

When President Obama announced his decision to
appoint Immelt to the unpaid advisory role on job
creation in January, some critics wondered whether
the move was appropriate. Under his leadership, GE
laid off 21,000 American workers and closed 20

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