As President Obama proposes to lower corporate taxes while closing many of the accounting gimmicks used to avoid them currently — a plan doomed to fail in Congress — Citizens for Tax Justice reports that General Electric, one of the most richest companies in the country, had an effective tax rate of less than 3% for the past decade.
General Electric’s (GE) annual SEC 10-K filing for 2011 (filed February 24, 2012) reveals that the company paid at most 2.3 percent of its $81.2 billion in U.S. pretax profits in federal income taxes over the last 10 years.
Following revelations in March 2011 that GE paid no federal income taxes in 2010 and in fact enjoyed $3 billion in net tax benefits, GE told AFP (3/29/2011), “GE did not pay US federal taxes last year because we did not owe any.” But don’t worry, GE told Dow Jones Newswires (3/28/2011), “our 2011 tax rate is slated to return to more normal levels with GE Capital’s recovery.”As it turns out, however, in 2011 GE’s effective federal income tax rate was only 11.3 percent, less than a third the official 35 percent corporate tax rate…
GE is one of 280 profitable Fortune 500 companies profiled in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010.” The report shows GE is one of 30 major U.S. corporations that paid zero – or less – in federal income taxes in the last three years.
We hear conservatives claim constantly that American corporate taxes are higher than the rest of the world, but that is only if you look at marginal rates, which are irrelevant. The only thing that matters is the effective rate, the actual taxes they pay. In reality, the United States has the second lowest real corporate tax rate of all the OECD countries, and the third lowest total corporate tax revenue as a percentage of GDP.