Do you pay more taxes than GE?

26 03 2011

Would you be surprised if you paid more in taxes in 2009 than General Electric (GE) did?  I heard someone on TV say that, so I had to check it out.  Surely that cannot be possible!  GE is a huge company, and looking online at Forbes.com, GE generated $10.3 billion in pretax income (not revenue, which was $157 billion).  Do you want to know how much they paid in taxes to the U.S. government?  Are you sure you want to know?

The answer is disturbing.   Not only did they pay nothing, but they actually had a tax benefit / refund of $1.1 billion.  Apparently this is nothing new for GE — they usually pay well below the normal corporate tax rate.

If you’re curious how they pull this off, this article at Forbes.com explains it.  They do pay some taxes, but it’s to other countries, where the tax rate is much lower.

GE isn’t the only company that does this.  There’s a chart at this page which shows the taxes of the top 10 US companies (by sales).  Some have high tax rates, while some are low (like Ford Motor at 2%) and one other owes nothing (Bank of America).

It’s just inconceivable to me that a company with $157 billion in sales paid less taxes to the government than I did…  How is that allowed to happen?

I’m no expert on tax issues, but I’m fairly certain that ain’t right!

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One response

4 04 2011
TaxMan

it’s all in who you know. Because we are able to find loopholes in tax policy. Find yourself a top notch taxman and pay him millions of dollars in order to stick it to the man. Afterall, the man is definitely gonna stick it to you.

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