How can it be that you pay more to the IRS than General Electric?
Key Excerpts from Article on Website of Forbes magazine
Posted: April 19th, 2010
Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do – that is, if they pay taxes at all. The most egregious example is General Electric. Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion. How did this happen? It's complicated. GE in effect consists of two divisions: General Electric Capital and everything else. The everything else – maker of engines, power plants, TV shows and the like – would have paid a 22% tax rate if it was a standalone company. It's GE Capital that keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain). Not only do the U.S. losses balance out the overseas gains, but GE can defer taxes on that overseas income indefinitely. It's the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us.
Note: Forbes later changed the title of this article to a more innocuous "What The Top U.S. Companies Pay In Taxes." Can you believe that GE not only pays no taxes, they actually get credit from the US government? They ship US jobs overseas and then reap huge tax benefits as a result. What's wrong with this picture? For a wealth of media news articles on the hidden manipulations of major financial corporations, click here.