This is a good link for info on what Corporations pay in Taxes. GE's profits are actually up since this article was published. And guess what? Even the Left's Boogeymen WalMart & Oil Companies paid Taxes...
Business In The Beltway
What The Top U.S. Companies Pay In Taxes
Christopher Helman, 04.13.11, 07:10 PM EDT
For all the outcry over GE, a number of corporate titans are paying much higher rates than the average citizen.
In Detail: What The Top 20 U.S. Companies Pay In Taxes
As many Americans finish up their personal tax returns over the next few days, they'll marvel with horror at how much hard-earned cash gets siphoned up by the government. At times like this, it's satisfying to have a corporate bogeyman to hate--like General Electric, which has faced a withering hail of criticism since The New York Times proclaimed last month that the conglomerate paid no federal taxes in 2010, despite $5 billion in U.S. profits. There goes corporate America again, always sticking it to the little guy.
But is there any real reason to believe that? Sure, GE has an army of accountants and lobbyists trying to reduce its tax burden, but wouldn't you if you had $150 billion in worldwide revenue and $14.2 billion in pretax income last year?
To see if GE was an aberration, we took a look at the 2010 annual reports of the 20 most profitable U.S. companies. Some of the results may surprise you. The average income tax rate within the group was 25.4%. America's three biggest oil companies, ExxonMobil ( XOM - news - people ), Chevron ( CVX - news - people ) and ConocoPhillips ( COP - news - people ), all endure income tax burdens of more than 40%--higher than the statutory U.S. rate of 35%. Exxon, with a 45% rate, tallied $21.6 billion in worldwide income taxes for 2010. Wal-Mart Stores ( WMT - news - people ) paid $7.1 billion (at a rate of 32.4%) in income taxes.
In Detail: What The Top 20 U.S. Companies Pay In Taxes
All these tax burdens are higher than the average citizen pays. So where does General Electric ( GE - news - people ) stand? Contrary to what many in the public seem to think, the conglomerate did pay taxes in 2010. It reported $2.7 billion in cash tax payments during the year, and on its income statement lists a provision for income taxes of $1.05 billion. Considering GE's pretax income of $14.2 billion, that makes for a tax rate of just 7.4%. The only one of the 20 corporate giants with a lower rate was AT&T ( T - news - people ), at -6.4%--but that was only because MaBell won a tax settlement with the IRS that reduced its tax liability by $8.3 billion.
So how to make sense of GE's taxes? The outcry seems to focus on the $5 billion in profits GE made in the U.S. Now if GE were to pay the 35% statutory federal corporate tax rate on that, it would come to $1.75 billion. Yet, as the Times trumpeted, GE has recorded a $3.25 billion tax benefit for the year on its U.S. operations. It's important to understand that this "benefit" is not a refund (which is why the Associated Press should be doubly embarrassed for being fooled Wednesday by a bogus GE press release concocted by the Yes Men that said the conglomerate intended to return its $3.2 billion tax "refund" to the U.S. Treasury). It just represents an amount GE will balance out against other tax obligations.
Corporations pay income taxes to other countries where the rate is less. The US tax rate is higher which is why they locate their factories in other countries.
Why does GE get this benefit? Simple: its finance arm, GE Capital, lost a lot of money during the financial meltdown (roughly $30 billion) and it's still carrying those losses forward and deducting them from current income. As GE spokesman Gary Sheffer wrote in his response to the Times story: "Without these financial crisis losses at GE Capital, GE's tax rate would have been near the average of other multinational corporations." He added, "In short, when you lose money, you don't pay taxes."
If GE's industrial side (maker of jet engines, light bulbs, turbines and such) were a standalone entity, its global tax rate would be 16.8%. It's only after consolidating its results with the GE Capital side that its rate drops down to 7.4%.
A lot of other mega-corporations suffered losses during the financial meltdown as well, but their tax rates aren't as low as GE's. So what's GE doing that they aren't? Yes, GE's lobbyists have helped get laws passed like those that grant federal tax credits for green energy investments like wind turbines. GE both builds such turbines and invests in wind farms and gets millions in such credits.
But the real tax benefits are gleaned overseas. The U.S. has higher corporate tax rates than nearly all the world's biggest economies, so it's only natural that GE would seek to generate as much of its profits overseas as possible. As long as those profits aren't repatriated to the U.S., GE doesn't owe U.S. tax rates on them.
http://www.forbes.com/2011/04/13/ge-exxon-walmart-apple-business-washington-corporate-taxes.html
