# GE not paying its fair share. True or false **URL:** \ **Category:** Great Debates\ **Created:** [April 24, 2012, 8:15pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836 "2012-04-24T20:15:22Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![IntelliQ](https://avatars.discourse-cdn.com/v4/letter/i/e99b99/32.png) [@IntelliQ](https://boards.straightdope.com/u/IntelliQ)\ **Post date:** [April 24, 2012, 8:15pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/1 "2012-04-24T20:15:22Z")
Has GE paid their fair share compared to our small-to-medium sized manufacturing plants who produce widgets here inside the US? How about against their direct competitors like Sylvania and Philips? I’m curious if they have an unfair advantage, or if their tax breaks are a necessity to competitively survive. What would happen to GE and it’s stockholders if all the doors on tax breaks were slammed shut in 2013? I was just wondering about these things after reading this article: [http://www.detroitnews.com/article/20120424/BIZ/204240397/GE-CEO-defends-tax-rate-after-protesters-disrupt-speech?odyssey=tab|topnews|text|FRONTPAGE](http://www.detroitnews.com/article/20120424/BIZ/204240397/GE-CEO-defends-tax-rate-after-protesters-disrupt-speech?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE) ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [April 24, 2012, 8:37pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/2 "2012-04-24T20:37:04Z")
Unless someone can show that GE lobbied for a particular piece of tax legislation and it was passed so that they could disproportionately take advantage of it over other tax payers, these so called “tax breaks” that the OP and protesters talk about are the tax law and available to all tax payers, like deducting losses. GE doesn’t have specific tax breaks that they alone get so they can remain competitive. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [April 24, 2012, 9:00pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/3 "2012-04-24T21:00:29Z")
According to this NYT piece from over a year ago (last tax season, of course) GE does precisely that, **Omar**. In particular they cite lobbied-for breaks for wind turbines and foreign leasing arrangements. Money quote: > [@](#): > > The shelters are so crucial to G.E.’s bottom line that when Congress threatened to let the most lucrative one expire in 2008, the company came out in full force. G.E. officials worked with dozens of financial companies to send letters to Congress and hired a bevy of outside lobbyists. > > The head of its tax team, Mr. Samuels, met with Representative Charles B. Rangel, then chairman of the Ways and Means Committee, which would decide the fate of the tax break. As he sat with the committee’s staff members outside Mr. Rangel’s office, Mr. Samuels dropped to his knee and pretended to beg for the provision to be extended — a flourish made in jest, he said through a spokeswoman. > > That day, Mr. Rangel reversed his opposition to the tax break, according to other Democrats on the committee. > **[G.E.’s Strategies Let It Avoid Taxes Altogether (Published 2011)](https://www.nytimes.com/2011/03/25/business/economy/25tax.html?pagewanted=all)** > > General Electric is skilled at avoiding taxes, lately to the extent that the Treasury owes the company money. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [April 24, 2012, 9:02pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/4 "2012-04-24T21:02:39Z")
Here’s a slightly more technical take on GE’s 2010 tax situation: [http://features.blogs.fortune.cnn.com/2011/04/04/the-truth-about-ges-tax-bill/](http://features.blogs.fortune.cnn.com/2011/04/04/the-truth-about-ges-tax-bill/) The upshot is that GE paid something around 7% as an effective corporate tax rate that year. They claim that is abnormally low and will go up in future years. We shall see, I suppose. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [April 24, 2012, 9:05pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/5 "2012-04-24T21:05:05Z")
You don’t get as big and powerful as GE is by paying your “fair share”. Our tax code is a corporation’s dream come true. While the official tax rate is something like 35%, making it one of the highest in the world, the average tax rate is somewhere south of 10%. They all play the game, and they all get away with it. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [April 24, 2012, 9:06pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/6 "2012-04-24T21:06:06Z")
Sounds like the beef lies at Rangel’s feet. We shouldn’t allow government officials to play favorites and decide the winners from the losers. Or in his case, trade legislative favors for contributions to schools in his district. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [April 24, 2012, 9:10pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/7 "2012-04-24T21:10:50Z")
Absolutely. GE has so much money to throw around that $30 million for schools is an easy call. Another quote from the NYT piece: > [@](#): > > By the time the measure — the American Jobs Creation Act — was signed into law by President George W. Bush in 2004, it contained more than $13 billion a year in tax breaks for corporations, many very beneficial to G.E. One provision allowed companies to defer taxes on overseas profits from leasing planes to airlines. It was so generous — and so tailored to G.E. and a handful of other companies — that staff members on the House Ways and Means Committee publicly complained that G.E. would reap “an overwhelming percentage” of the estimated $100 million in annual tax savings. > > According to its 2007 regulatory filing, the company saved more than $1 billion in American taxes because of that law in the three years after it was enacted. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [April 25, 2012, 6:25pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/8 "2012-04-25T18:25:24Z")
Has anybody ever calculated how much resources are wasted by firms like GE, in avoiding taxation? GE’s 2011 tax return ran to 57,000 pages-surely this represents a huge waste of manpower. Granted, GE is following the (immensely complicated) US Tax Code…but would it not be better to have a low, fixed rate tax? ---
**Author:** ![Joey\_P](https://avatars.discourse-cdn.com/v4/letter/j/919ad9/32.png) [@Joey\_P](https://boards.straightdope.com/u/Joey_P)\ **Post date:** [April 25, 2012, 6:34pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/9 "2012-04-25T18:34:16Z")
> [@ralph124c](#): > > Has anybody ever calculated how much resources are wasted by firms like GE, in avoiding taxation? GE’s 2011 tax return ran to 57,000 pages-surely this represents a huge waste of manpower. Granted, GE is following the (immensely complicated) US Tax Code..but would it not be better to have a low, fixed rate tax? The entire quote is "“I asked the GE tax officer, ‘How long was your tax form?’” Ryan said. “He said, ‘Well, we file electronically, we don’t measure in pages.’” Ryan asked for an estimate, which came back at a stunning 57,000 pages. When Ryan relayed the story at the townhall meeting in Janesville, there were audible gasps from the crowd. " They didn’t actually mail in 57,000 pieces of paper. ---
**Author:** ![Kearsen](https://avatars.discourse-cdn.com/v4/letter/k/82dd89/32.png) [@Kearsen](https://boards.straightdope.com/u/Kearsen)\ **Post date:** [April 25, 2012, 6:40pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/10 "2012-04-25T18:40:36Z")
Will stories like these actually help some folks who are entirely sure that raising the tax burden will effectively help us climb out of debt or will they now agree that closing these loops holes would serve us much better. (I am well aware of how generic all that is) You know, so Warren Buffet actually pays more tax than his secretary. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [April 25, 2012, 6:46pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/11 "2012-04-25T18:46:44Z")
> [@Kearsen](#): > > Will stories like these actually help some folks who are entirely sure that raising the tax burden will effectively help us climb out of debt or will they now agree that closing these loops holes would serve us much better. (I am well aware of how generic all that is) Why can’t we want to do it both ways, like the late Earl Warren? ---
**Author:** ![Kearsen](https://avatars.discourse-cdn.com/v4/letter/k/82dd89/32.png) [@Kearsen](https://boards.straightdope.com/u/Kearsen)\ **Post date:** [April 25, 2012, 6:50pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/12 "2012-04-25T18:50:40Z")
> [@Ludovic](#): > > Why can’t we want to do it both ways, like the late Earl Warren? I guess the question then becomes one of “how much is enough”? It really does seem to be an easy fix (at least in the early stages), I mean who would not want to do it? ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [April 25, 2012, 7:08pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/13 "2012-04-25T19:08:05Z")
> [@John\_Mace](#): > > You don’t get as big and powerful as GE is by paying your “fair share”. Our tax code is a corporation’s dream come true. While the official tax rate is something like 35%, making it one of the highest in the world, the average tax rate is somewhere south of 10%. They all play the game, and they all get away with it. Do you have a cite for that? According to the [NYT](http://www.nytimes.com/2011/05/03/business/economy/03rates.html) > [@](#): > > Not all American companies are willing or able to reduce their taxes drastically. Taxes vary more by industry here than abroad, according to a study released in February by Kevin S. Markle of Dartmouth and Douglas A. Shackelford of the University of North Carolina. At the high end, American retailers paid 31 percent in total income taxes, construction 30 percent and manufacturers 26 percent. Financial services companies paid an average of 20 percent, real estate 19 percent and mining 6 percent. > [@](#): > > Because some companies are so effective at minimizing taxes, the average works out to far less than the official rate. United States companies pay about a quarter of their profits in federal income taxes, a few percentage points higher than the rate paid by companies in most other major industrial countries, according to a number of studies and tax experts. ---
**Author:** ![JQPublic](https://avatars.discourse-cdn.com/v4/letter/j/ac8455/32.png) [@JQPublic](https://boards.straightdope.com/u/JQPublic)\ **Post date:** [April 25, 2012, 7:41pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/14 "2012-04-25T19:41:24Z")
Did GE play by the rules, sure. But… The system is designed by lawyers for lawyers and the bottom line is the company with the most lawyers win. And worse yet you have the lawyers who the laws are supposed to affect influencing the lawyers writing the laws. They bury so many loop wholes that the average Joe will never find so he ends up footing the bill. There should be one deduction. 30K for a single, 60K for couples, 250K for LLCs, 500K for corporations. Anything you make over that you pay. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [April 25, 2012, 10:37pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/15 "2012-04-25T22:37:53Z")
> [@Omar\_Little](#): > > Unless someone can show that GE lobbied for a particular piece of tax legislation and it was passed so that they could disproportionately take advantage of it over other tax payers, these so called “tax breaks” that the OP and protesters talk about are the tax law and available to all tax payers, like deducting losses. “The tax code, in its majestic equality, allows the rich as well as the poor to take advantage of the Specified Gulf Opportunity Zone Extension Property Accelerated Depreciation Schedules (see Notice 2007-36 on page 1000 of the Internal Revenue Bulletin 2007-17)” ---
**Author:** ![Mgalindo13](https://avatars.discourse-cdn.com/v4/letter/m/ea5d25/32.png) [@Mgalindo13](https://boards.straightdope.com/u/Mgalindo13)\ **Post date:** [April 27, 2012, 4:25pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/16 "2012-04-27T16:25:09Z")
> [@Kearsen](#): > > You know, so Warren Buffet actually pays more tax than his secretary. It’s really annoying when people say this because it’s flat out wrong. He doesn’t pay less tax than his secretary, he pays a lower overall tax rate. Saying it that way would be akin to saying that Warren buffet pays less for a cheeseburger at McDonald’s than you do because it’s a lower percentage of his net worth. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [April 27, 2012, 4:29pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/17 "2012-04-27T16:29:29Z")
> [@JQPublic](#): > > Did GE play by the rules, sure. But.. > The system is designed by lawyers for lawyers and the bottom line is the company with the most lawyers win. And worse yet you have the lawyers who the laws are supposed to affect influencing the lawyers writing the laws. They bury so many loop wholes that the average Joe will never find so he ends up footing the bill. > There should be one deduction. 30K for a single, 60K for couples, 250K for LLCs, 500K for corporations. Anything you make over that you pay. Why do LLCs get less favorable treatment than other corporations under your plan? 😕 ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [April 27, 2012, 4:46pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/18 "2012-04-27T16:46:41Z")
It;s not like the tax system is based on fairness in the first place. Who does pay their fair share of taxes? ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [April 27, 2012, 4:51pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/19 "2012-04-27T16:51:31Z")
Warren Buffett’s secretary. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [April 27, 2012, 4:51pm UTC](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836/20 "2012-04-27T16:51:44Z")
> [@Mgalindo13](#): > > It’s really annoying when people say this because it’s flat out wrong. He doesn’t pay less tax than his secretary, he pays a lower overall tax rate. However, GE paid less tax than Warren Buffett’s secretary. [Next page](https://boards.straightdope.com/t/ge-not-paying-its-fair-share-true-or-false/619836.md?page=2)