Today is tax day in the U.S. and you may hear or read something about GE’s corporate income taxes. Several groups have latched on to hearsay and faulty analysis to support their point of view on how the U.S. tax system should be reformed. Some inaccurately claim that GE pays “zero” in U.S. taxes.
GE, in fact, paid taxes to the IRS in both 2011 and 2010. As shown in GE’s financial statements, GE’s global tax rate was 29 percent in 2011, up from 7 percent in the year before. GE paid $2.9 billion in income taxes to the IRS and its foreign counterparts. In addition, GE paid more than $1 billion in other state, local and federal taxes in the U.S.
GE’s overall income tax rate for the past few years was lower than usual because of significant losses at GE Capital – $32 billion – due to the global financial crisis. GE also invests in energy-efficient products, U.S. manufacturing, research and development and renewable energy. Congress encourages these investments because they are good for the U.S. economy and help create jobs. Because of this, it created tax credits and deductions for companies like GE that make these investments.
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We have tried to simplify GE’s taxes in the graphic above.
Like most Americans, GE would prefer a simpler tax code. In order for U.S. businesses to remain competitive, the U.S. corporate tax system must be overhauled. The company supports a lower statutory corporate tax rate, closing loopholes and adoption of territorial tax system even if it means higher taxes for companies like GE. We believe a fundamental reform would increase domestic investment, create high-quality jobs and encourage U.S. multinationals to reinvest more overseas earnings in the U.S.
Tax system overhaul does not happen overnight and there’s little time to lose to boost American employment. That’s why since 2009, GE has created more than 13,800 jobs and is building 16 new factories in the United States. These high-value manufacturing jobs will produce appliances, jet engines, advanced battery technologies and turbines. GE is also investing in a software center of excellence in California, creating 400 jobs.
GE’s role in the American economy is significant. For every 10 direct GE jobs, GE supports an additional 52 jobs in the U.S. Added up, GE is indirectly supporting one out of every 208 jobs in the country. With demand for our products rising around the world, our global GE customer base makes it possible to create jobs in the U.S. to help us meet that demand.
Adding what these jobs mean in terms of spending – funding our operations, the spending of our direct employees, and those employed as a result of what we do through our suppliers, GE helps generate $1 out of every $87 in the U.S. economy. That amounts to more than $166 billion per year in total economic impact.
