GE Pays No Taxes; Charen Responds By Complaining Corporate Tax Rate Is Too High

[Almira]

Posted: 3/30/11 at 12:44pm

Bizarro World: GE Pays No Taxes; Charen Responds By Complaining Corporate Tax Rate Is Too High

When the New York Times reported that General Electric paid no federal taxes -- and in fact claimed a $3 million tax benefit -- on $14.2 billion in worldwide profits, $5.1 billion of which came from operations in the U.S., I figured some conservatives would defend GE’s ability to avoid paying taxes on billions of dollars in profits. But I must confess some surprise at one response to the story: Mona Charen’s argument that GE’s tax-free billions somehow demonstrate that corporate taxes in the U.S. are too high.

""a responsible company will seek to minimize costs and maximize profits. That's how companies are able to provide jobs. The corporate rate in the U.S. is 35 percent, among the highest in the industrialized world. Even "spread the wealth around" Barack Obama has recommended reducing it so that some of those dollars (and jobs) currently hiding out abroad can be repatriated.""

It takes an impressive amount of audacity to use a column about GE paying no federal income taxes as an opportunity to complain that the corporate tax rate is too high. A more honest column would have noted that the effective corporate tax rate in America is much lower -- after all, Charen was writing about a company that paid no taxes on more than $5 billion in US profits.

Even when Charen grudgingly concedes that there may be reason to be dismayed at GE’s ability to avoid taxes, she doesn’t seem to think there’s any problem, in and of itself, with GE not paying taxes:

The Times is clearly scandalized -- and perhaps it should be. After all, at least some of the tax breaks GE has been able to take advantage of were the result of aggressive lobbying.

This is like complaining that burglars pried open a window, rather than that they stole everything in the house.

http://mediamatters.org/blog/201103290021

Updated On: 3/30/11 at 12:44 PM

Posted: 3/30/11 at 1:45pm

They claim low tax rates allow businesses to hire more employees, and invest in expansion, boosting the economy. The only little flaw in this theory is it's never happened that way. Ever. The biggest growth in payrolls and the best economy has always taken place under higher taxes.

[ErikJ972]

Posted: 3/30/11 at 3:05pm

Not to mention all the jobs GE has shipped overseas in the past years.

[Almira]

Posted: 3/30/11 at 7:14pm

Nightly News stays mum on GE’s $0 tax bill

As the New Yorker's former press critic, A.J. Liebling, famously said, "Freedom of the press is guaranteed only to those who own one." Perhaps that quotation is framed somewhere in a boardroom at the General Electric Corp., which owns NBC News.

In spite of robust profits of $14.2 billion worldwide, GE has calculated a corporate tax bill for 2010 that adds up to zero, via a creative series of tax referrals and revenue shifts. (This was, indeed, the second year running that the company—which has an enormous, and famously nimble, 975-employee tax division, led by former Treasury official John Samuels—paid nothing in U.S. taxes; indeed by claiming a series of losses and deductions, GE came up with a negative tax of 10.5 percent in the admittedly dismal business year of 2009, and realized a $1.5 billion "tax benefit.")

The curious thing about this year's tax story is that it turned up in many major news outlets, with one key exception: NBC News. As the Washington Post's Paul Farhi notes, the network's "Nightly News" broadcast, hosted by Brian Williams, has not mentioned anything about its corporate parent's resourceful accounting, even though the story has been in wide circulation in the business and general-interest press for nearly a week. "This was a straightforward news decision, the kind we make daily around here" network spokeswoman Lauren Kapp told the Post.

http://news.yahoo.com/s/yblog_thecutline/nightly-news-stays-mum-on-ges-0-tax-bill