GE says we all got its tax wrong.
So I'll link their correction, here.
As they say:
GE pays what it owes under the law and is scrupulous about its compliance with tax obligations in all jurisdictions
No one ever said otherwise. We said you lobby to change those obligations.
And they say:
The Times erroneously suggests GE makes use of tax “loopholes” or “innovative accounting.” Our accounting and tax positions fully comply with all applicable rules and regulations and are based on sound public policy.
Again, no one ever said otherwise.
We just said you spend a lot of money make sure sound public policy accords with GE's view of what sound public policy should be.
And we questioned the ethics of that.
And the fact it meant you paid no tax in the US in 2010.
And the article utterly fails to address those lobbying issues.
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And this part?
Significant losses at GE Capital during the financial crisis, largely in the United States, reduced GE’s overall tax rate below historic levels the past few years. Those losses and the subsequent reduction in taxes owed is not a “tax avoidance” strategy. Taking out GE Capital makes GE’s effective tax rate 21% over the past several years. GE’s consolidated (or overall) effective tax rate prior to the financial crisis was in the teens to more than 20%.
@kimbjo
ah, so we bail out their losses as states and then give them double tax relief
I get it….
Now how did that come about?
Let’s be clear – there is no double tax relief here. There is relief for losses allowed under tax law and there are government loans which are, I presume, to be paid back with interest. There is no double relief going on here.
@Richard Howells
I’m not sure why Richard Murphy is throwing the baby out with the bathwater. Unless he’s suggesting relief for losses should not be allowed at all?
Richard (Murphy), this seems like GE is onside, but you’re just attacking for no purpose. there are better ways to oppose tax avoidance than picking a company that had 1 bad year followed by one good year and restated earnings.
@kimbjo
I do believe banks should not be allowed losses carried forward to extent covered by state subsidy at some time (even if repaid)
And you entirely miss the point for picking on GE – which is all about its lobbying to ensure it does not pay tax
Bailout? GE paid a premium for their TARP insurance. That was the deal they cut with the US government, not some retrospective change in their tax treatment.
As already pointed out in an earlier post. GE paid not tax because they had some losses brought forward but also because even though they had a net Federal tax liability in 2010, they also received a very large refund after settlement of a dispute with the IRS of a multi-year tax liability. That should be the end of the story.
@MarkT
So utterly wrong
You make no reference at all to GE’s lobbying
Now why is that?
IMHO, the ETR for an American corporation in a profit-making year should be 35% or above (due to non-deductible expenses etc.) So where do 20% come from? 🙄