GE paid an effective global tax rate of 7 percent in 2010, counting money paid “to the IRS and foreign counterparts” in other nations. That rate was particularly low, Williams said, because the company lost $32 billion in its financial business during the global financial crisis.
According to the company release, GE’s effective tax rate jumped to 29 percent in 2011. The company paid $2.9 billion in worldwide corporate income tax in 2011, and another $1 billion in other U.S. taxes that year, the release states.
We asked Williams how much of the $2.9 billion in worldwide corporate taxes was paid to the U.S. government, and how much the company paid in U.S. corporate income taxes in 2010. “Like virtually all other companies, we do not break out tax data on a country by country basis,” Williams said. “Instead, we disclose our worldwide payments and rates. However, we did pay federal income taxes.”
(2011) GE wasn't taxed on $5 billion in U.S. profits because it utilized numerous deductions and tax credits, including tax breaks for investments in low-income housing, green energy, research and development, as well as depreciation of property.
Sixty of the country’s largest nonfinancial corporations kept $166 billion in cash outside of the U.S. last year, shielding more than 40 percent of their profits from taxes, according to a report in Monday’s Wall Street Journal. And that’s from total overseas earnings of $1.3 trillion, up 15 percent from 2011.
Another Update on GE and Taxes
April 17, 2012
Today is tax day in the U.S. and you may hear or read something about GE’s corporate income taxes. Several groups have latched on to hearsay and faulty analysis to support their point of view on how the U.S. tax system should be reformed. Some inaccurately claim that GE pays “zero” in U.S. taxes.
GE, in fact, paid taxes to the IRS in both 2011 and 2010. As shown in GE’s financial statements, GE’s global tax rate was 29 percent in 2011, up from 7 percent in the year before. GE paid $2.9 billion in income taxes to the IRS and its foreign counterparts. In addition, GE paid more than $1 billion in other state, local and federal taxes in the U.S.
GE’s overall income tax rate for the past few years was lower than usual because of significant losses at GE Capital – $32 billion – due to the global financial crisis. GE also invests in energy-efficient products, U.S. manufacturing, research and development and renewable energy. Congress encourages these investments because they are good for the U.S. economy and help create jobs. Because of this, it created tax credits and deductions for companies like GE that make these investments.
I take every deduction I can find and would expect every individual and company out there to do the same.
Full disclosure - I DO NOT hold a position in GE.