A competitiveness model based on aggressive tax-dodging and offshoring
CEO compensation: $15.2 million
U.S. federal income taxes: $3.3 billion refund
If there were an Olympics for tax dodging, General Electric would sweep the gold. Last year alone, the firm reaped $3.3 billion in federal income tax refunds, despite more than $5 billion in U.S. profits.
A New York Times expose has credited GE’s “extraordinary success” in lowering its tax bill to “an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.” The most lucrative of GE’s tax breaks, according to the newspaper, allow the firm to operate a vast leasing and lending business in foreign low-tax jurisdictions. The company pays no U.S. taxes on these profits as long as the money remains overseas.
The company’s 14 tax haven subsidiaries, including three in Bermuda and four each in Singapore and Luxembourg, helped General Electric’s unrepatriated profits grow to $94 billion in 2010, up from $84 billion in 2009.
GE, the most profitable firm on our list of companies that paid their CEOs more last year than Uncle Sam, ranked 14th nationwide in 2010 profitability, with $11.6 billion in net earnings. The company also ranks first on our list for lobbying and political campaign spending. The company’s total investment in political influence last year: $41.8 million.
President Obama rankled many last year when he appointed GE CEO Jeff Immelt as the chairman of his Council on Jobs and Competitiveness. Since 2008, the company has shut down 31 plants in the United States and reduced its U.S. workforce by 19,000 over the last two years.
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