EDITORIAL: Tax Dodgers
April 2, 2011 (The Philadelphia Inquirer) The April 15 deadline to file income-tax returns is fast approaching. Many hardworking Americans will be sending a check to the Internal Revenue Service. But not General Electric.
The nation's largest corporation reported profits of $14.2 billion worldwide last year, including $5.2 billion made in the United States. But its tax bill was zero.
Even better, GE claimed a tax benefit of $3.2 billion.
The corporate tax rate in the United States is 35 percent, one of the highest in the world. But more and more frequently, GE uses tax shelters, credits, and subsidies to reduce its tax burden.
GE is not alone. A number of large corporations do the same thing. Google reduced its tax burden by $3.1 billion last year. Boeing hasn't paid any federal corporate income taxes the last three years.
Many large U.S.-based pharmaceutical companies, including Pfizer, dodge income taxes at home by recording profits overseas. A 2008 Government Accountability Office study found that 57 percent of U.S. companies paid no federal income taxes in at least one year between 1998 and 2005.
Instead, companies like GE spend millions on lobbying and hiring tax experts from the IRS. As a result, the corporate share of the nation's tax receipts collected by the IRS has gone from 30 percent in the 1950s to 6.6 percent in 2009. Thanks, Uncle Sam.