GE's 2.3 Percent Tax Rate Over 10 Years Shows Corporate Taxes Aren't Too High

Conservatives, including Republican presidential candidates, frequently claim that American corporations pay tax rates that are so high they harm businesses and cost jobs. They also claim that the U.S. corporate tax rate is among the highest in

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Conservatives, including Republican presidential candidates, frequently claim that American corporations pay tax rates that are so high they harm businesses and cost jobs. They also claim that the U.S. corporate tax rate is among the highest in the world and that it is a vital economic imperative that the rates be cut.

These claims don't stand up to closer scrutiny, though, as a recent report from Citizens for Tax Justice shows. Because of subsidies and tax breaks, many corporations pay little or no taxes at all:

30 Companies average less than zero tax bill in the last three Years, 78 had at least one no-tax year.

Financial services received the largest share of all federal tax subsidies over the last three years. More than half the tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.

U.S. corporations with significant foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.

General Electric is a prime example of this trend. Despite being highly profitable and subject to a theoretical tax rate of 35 percent, GE paid only a 11.3 percent tax rate in 2011. And that number was the most they paid in more than a decade. In 2010, they actually paid no taxes and got a net tax benefit of $3 billion. For the 10 year period prior to that, their effective average tax rate was 2.3 percent.

Paying a much lower tax rate than their employees didn't stop GE from laying off those workers, either, despite having billions of dollars in profits during that same time.

About Kenneth Quinnell

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