This is really nothing short of disgusting….
You know how we’ve been covering the efforts of U.S. Uncut, the growing campaign to stop corporate tax dodgers from exploiting overseas tax havens? Well here’s an excellent example of why such efforts are desperately needed, from the front page of the New York Times:
General Electric, the nation’s largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
How can that be, you ask?
The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.
Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm….The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.
If that doesn’t make your blood boil, I don’t know what would.
Corporations argue that the U.S.’s top corporate tax rate of 35% is prohibitively high and puts them at a disadvantage against foreign companies. But even if you buy that argument (and I do not, because I think corporations should be responsible for paying taxes in countries in which they reap huge profits), it’s hard to swallow when the corporation in question — and not just any corporation, but the biggest in the world — is claiming a tax benefit. Not only did GE not pay any taxes in the U.S. last year, it effectively got money back from the U.S. government.