Citing a New York Times piece, I wrote in my column on the fiscal cliff tax breaks: “Perhaps the biggest patron of the active financing exception is Obama-friendly GE. When the company paid $0 in U.S. corporate income tax on $5.1 billion in U.S. profits in 2011, this exception was a major reason.”
GE sent me an email objecting to the way I wrote things. I don’t think I got anything wrong, and GE still doesn’t say if it had U.S. corporate income tax liability for tax year 2010, but for the sake of thoroughness, here’s GE’s email:
Tim,
Re your article today: you write “When the company paid $0 in U.S. corporate income tax on $5.1 billion in U.S. profits in 2011” . I know you’re referring to the NYT article from 2011. First, that article was talking about taxes paid on 2010 profits, not 2011. More importantly, as we’ve said many times before, GE in fact paid $1 billion in federal, state and local taxes in the U.S. for 2010. GE’s tax rate for 2010 was low because we lost $32 billion in our financial business during the global financial crisis. That tax rate increased to 29% in 2011 as our financial business recovered.
Finally, the active financing exemption has broad bi-partisan support, and is not a “loophole.” Lawmakers and respected third-party experts agree that these rules should be a permanent feature of the tax code. Without these rules US financial services companies would face a significant competitive disadvantage in overseas markets. Also these rules enable US manufacturers to make more products and create more US jobs by allowing for competitive financing of US exports.
Regards,
Seth
