General Electric’s ten year tax rate only 2.3 percenton March 1st, 2012 at 8:00 am
General Electric paid only 2.3 percent Federal Income Tax rate over 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.
“I don’t think most Americans would consider 11.3 percent, not to mention GE’s long-term effective rate of 2.3 percent, to be ‘normal,’ ” said Bob McIntyre, director of Citizens for Tax Justice. “But for GE, taxes are something to be avoided rather than paid.”
Citizens for Tax Justice’s summary of GE’s federal income taxes over the past decade shows that:
O From 2006 to 2011, GE’s net federal income taxes have been negative $2.7 billion, despite $39.2 billion in pretax U.S. profits over the six years.
O Over the past decade, GE’s effective federal income tax rate on its $81.2 billion in pretax U.S. profits has been at most 2.3 percent.
McIntyre noted that GE has yet to pay even that paltry 2.3 percent. In fact, at the end of 2011, GE reports that it has claimed $3.9 billion in cumulative income tax reductions on its tax returns over the years that it has not reported in its shareholder reports — because it expects the IRS will not approve these “uncertain” tax breaks, and GE will have to give the money back.
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. The full report is a joint project of Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Page 24 of the report explains “uncertain” tax breaks.
Editor’s note: In response to CTJ’s recent finding that GE had an effective federal corporate income tax rate of just 2.3 percent over ten years, GE’s press office issued a short statement designed to divert attention from its tax-avoiding ways. GE has nothing to say to contradict the figures we cite from its own annual reports. Read CTJ’s report and GE’s objection.