The New York Times reported today that General Electric's effective tax rate in 2010 was zero. Despite making $14.2 billion in profits, the company received $3.2 billion in tax benefits. GE is able to drive down its effective tax rate via "an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore."
The fact that hugely profitable companies receive billions in benefits from taxpayers clearly makes the case for ending giveaways in the corporate tax code and cracking down on companies that use tax havens to shelter income overseas. However, Sen. Ron Johnson (R-WI), when asked about GE's zero percent tax rate today on CNBC, replied that the real problem is the U.S. corporate tax rate is too high:
We have to be concerned about what the business environment is in the U.S. here. We can't afford to have the highest tax rate in the world…Those are individual companies. I think overall, we really can't be looking at a corporate tax rate much higher than 25 percent because that's the world average. So we're sitting up there at 35 percent, that's just the wrong signal.
Watch it:
rest at http://thinkprogress.org/2011/03/25/johnson-ge-reaction/
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