GE Will Repay Government $3.8 Billion Tax Break

rdowns · Apr 13, 2011, 09:49 AM

Quote:

Fairfield, CT, 13th April, 2011– GE CEO Jeffrey Immelt has informed the Obama administration that the company will be gifting its entire 2010 tax refund, worth $3.2 Billion, to the US Treasury on April 18, Tax Day, and will furthermore adopt a host of new policies that secure its position as a leader in corporate social responsibility.

“We want the public to know that we’ve heard them, and that we know many Americans are going through tough times,” said GE CEO Jeffrey Immelt. “GE will therefore give our 2010 tax refund back to the public and allow the public to decide how to spend it.”

Immelt acknowledged no wrongdoing. “All seven of our foreign tax havens are entirely legal,” Immelt noted. “But Americans have made it clear that they deplore laws that enable tax avoidance. While we owe it to our shareholders to use every legal loophole to maximize returns – we also owe something to the American people. We didn't write the laws that let us legally avoid paying taxes. Congress did. But we benefit from those laws, and now we'd like to share those benefits. We are proud to be giving something back to America, and we are proud to set an example for all industry to follow.”

Over the coming weeks, GE will conduct a nationwide survey to determine how the company's $3.2 billion returned refund is to be allocated. The survey will be conducted both online and offline, and will permit the public to weigh in on which of the recently-enacted budget cuts they would like to see reversed.

In tandem with the gift, the company is also announcing a host of new policies to restore public faith in the GE brand, including a commitment to keep American jobs in America, and to create one U.S. job for each new job created abroad. The ambitious plan will overhaul accounting systems to allow public transparency and phase out the use of tax havens in five years. “Given my recent appointment as President Obama’s Chairman of the Council on Jobs and Competitiveness, it is no longer appropriate for GE to engage in practices that, whether by fact or perception, are at odds with the greater good of the nation," Immelt said.

Immelt outlined several concrete steps he would take to push for modernized tax policies that reflect the realities of the global economy. "I will personally ask President Obama to work with Congress to require country-by-country reporting by multi-national corporations of the sales made, profits earned and taxes paid in every jurisdiction where an entity operates. Instead of moving money via “transfer pricing,” corporations ought to pay taxes in the jurisdictions where profits are actually made. If Congress is able to establish standard industry-wide solutions, GE will close our tax haven operations abroad, including our subsidiaries in Bermuda, Singapore and Luxembourg."

Further details on GE’s new policy will be released in the coming weeks.

About GE
GE (NYSE: GE) is an advanced technology, services and finance company taking on the world’s toughest challenges. Dedicated to innovation in energy, health, transportation and infrastructure, GE operates in more than 100 countries and employs about 300,000 people worldwide. For more information, visit the company's Web site at www.ge.com.

PRESS CONTACTS
Samuel Winnacker
GE Corporate, Assistant Director
Communications & Public Affairs
+1 615 375 6658
samuel.winnacker@ge.com

This is a fake press release that the AP published. How the hell can anyone take this seriously?

CalBoy · Apr 13, 2011, 10:04 AM

That's actually a good start, but it still doesn't address the fact that GE paid no taxes. They're just refunding their rebate, right?

And they're only doing this because of the public shaming they got. Can we go one by one with the richest 1% and get them to pay their taxes this way too? Maybe then we wouldn't need to spend 5 weeks arguing about condoms.

samiwas · Apr 13, 2011, 10:07 AM

As I suspected...

http://www.businessweek.com/news/201...ax-refund.html

Too bad. For about one second, I almost had faith in a multi-national corporation.

IntelliUser · Apr 13, 2011, 10:08 AM

Well that was fast.

AP_piano295 · Apr 13, 2011, 11:02 AM

Thank god for journalism.

It's time for big corporations to start paying their share of the taxes. It would go a long way towards solving the current budget problems.

EDIT: or not

rdowns · Apr 13, 2011, 11:14 AM

Seriously guys? Read my white text in my post.

Mac'nCheese · Apr 13, 2011, 11:18 AM

Quote:

Originally Posted by rdowns

Seriously guys? Read my white text in my post.

Why did you hide that part like it was a spoiler for a movie?

Capt Underpants · Apr 13, 2011, 11:22 AM

Quote:

Originally Posted by rdowns

Seriously guys? Read my white text in my post.

It sounded believable to me. I was really impressed with GE for a moment.

chrmjenkins · Apr 13, 2011, 11:29 AM

Fake press release in order to bring the issue into more awareness?

macquariumguy · Apr 13, 2011, 11:38 AM

Quote:

Originally Posted by rdowns

Seriously guys? Read my white text in my post.

Why would anyone suspect there was white text in the post?

Frigging kids...

samiwas · Apr 13, 2011, 11:48 AM

Quote:

Originally Posted by rdowns

Seriously guys? Read my white text in my post.

Ooooohhhh! RIGHT! The WHITE text! Why didn't I think to look at the white text on the white background? I almost always highlight the entire page looking for secret hidden missives.

IntelliUser · Apr 13, 2011, 12:01 PM

It's time this forum got spoiler tags.

chrismacguy · Apr 13, 2011, 12:16 PM

Quote:

Fairfield, CT, 13th April, 2011– GE CEO Jeffrey Immelt has informed the world that he is holding the US Government hostage for allowing the Press Release about GE returning their tax bonus to be made public. GE, as an all American corporation would like to state its intentions to never return to giving the government money, except in lobbying and campaign contributions, as required by GE internal law. In return for the US Governments release, GE is pleased to announce a new range of SCREW-US products, including a new $500,000 contract to supply the US Army with brand new SCREW-US Army boots, made 100% abroad, with no chance of the profit returning to American soil.

PRESS CONTACTS
Samuel Winnacker
GE Corporate, Assistant Director
Communications & Public Affairs
+1 615 375 6658
samuel.winnacker@ge.com

Now that's a recovery from GE

rdowns · Apr 13, 2011, 12:53 PM

Quote:

Originally Posted by Capt Underpants

It sounded believable to me. I was really impressed with GE for a moment.

Really?

Quote:

“All seven of our foreign tax havens are entirely legal,” Immelt noted.

Quote:

Over the coming weeks, GE will conduct a nationwide survey to determine how the company's $3.2 billion returned refund is to be allocated.

Quote:

"I will personally ask President Obama to work with Congress to require country-by-country reporting by multi-national corporations of the sales made, profits earned and taxes paid in every jurisdiction where an entity operates.

Quote:

If Congress is able to establish standard industry-wide solutions, GE will close our tax haven operations abroad, including our subsidiaries in Bermuda, Singapore and Luxembourg."

I guess my point was, like the AP, people don't read much beyond the headline and first paragraph.

How can anyone buy into the statements quoted above?

Quote:

Originally Posted by macquariumguy

Why would anyone suspect there was white text in the post?

Frigging kids...

They shouldn't. They should question the PR and its language.

AP_piano295 · Apr 13, 2011, 12:57 PM

Quote:

Originally Posted by rdowns

How can anyone buy into the statements quoted above?

We maintain an apparently worthless belief that people and corporations are theoretically capable of doing the right thing?

If you don't have some hope it all just gets depressing at some point.

Mac'nCheese · Apr 13, 2011, 01:03 PM

Quote:

Originally Posted by rdowns

Really?

I guess my point was, like the AP, people don't read much beyond the headline and first paragraph.

How can anyone buy into the statements quoted above?

They shouldn't. They should question the PR and its language.

Two people fell for this. Two. It was debunked in the third post (including yours) of this thread.

macquariumguy · Apr 13, 2011, 01:44 PM

Quote:

Originally Posted by rdowns

They shouldn't. They should question the PR and its language.

Or simply not trust anything you say from now on.

rhsgolfer33 · Apr 14, 2011, 02:15 AM

It's too bad the people that wrote the press release (and the entire NYT article that originated the GE stuff) don't understand that a deferred tax benefit =/= to a refund. Basically, a deferred tax benefit (or deferred tax asset) is a financial accounting concept - a deferred tax asset results from temporary differences in book (think financial statements) and tax accounting (think what goes on a tax return); if a company deducts something for financial accounting purposes, for instance, certain bad debts, but that deduction is not allowed for tax purposes today (and it will be in the future), a deferred tax asset will result (the company as basically prepaid taxes for financial accounting purposes). It is a concept that allows a company to accurately reflect future taxes - a deferred tax liability also exists.

Sure, GE paid no federal corporate income tax this year, but they did pay taxes - payroll taxes and sale/use taxes (see the argument that is usually brought up when someone says 47% of American's paid no taxes). What GE is doing is perfectly legit and pretty much every multinational does it (including Apple, Dell, Microsoft, Google, Merck, Pfizer, etc.). Personally, I'd be pretty mad if a corporation I was a shareholder in didn't minimize its tax liability to the lowest possible amount within the law and with substantial authority for all its tax positions.

If Americans deplore laws that enable tax avoidance, they should elect politicians that will change those laws - oh, that's right, the majority of politicians love tax avoidance and hire accountants to help them pay the least amount of tax legally required.

ender land · Apr 14, 2011, 08:00 AM

Quote:

Originally Posted by macquariumguy

Or simply not trust anything you say from now on.

This.

I have no interest in researching every article to verify it's actually a true story just because some people may play fun pranks and post fake articles without indicating they are such. And c'mon, so many legitimate articles are written just as poorly that article quality and consistency is a terrible way to evaluate an articles veracity.

samiwas · Apr 14, 2011, 10:32 AM

Quote:

Originally Posted by rhsgolfer33

Personally, I'd be pretty mad if a corporation I was a shareholder in didn't minimize its tax liability to the lowest possible amount within the law and with substantial authority for all its tax positions.

I *AM* a shareholder in GE (my worst performing stock in the past two years; and it was given as a gift in childhood, not bought by me). And I still think that avoiding all tax by using loopholes and other such accounting tricks is deplorable. But then again, I'm not the "my money my money my money" type as much. I try to vote for the people I want to change the rules, but somehow, those Republican legislators just keep getting in the way.

rhsgolfer33 · Apr 14, 2011, 03:55 PM

Quote:

Originally Posted by samiwas

I *AM* a shareholder in GE (my worst performing stock in the past two years; and it was given as a gift in childhood, not bought by me). And I still think that avoiding all tax by using loopholes and other such accounting tricks is deplorable. But then again, I'm not the "my money my money my money" type as much. I try to vote for the people I want to change the rules, but somehow, those Republican legislators just keep getting in the way.

What GE is using isn't really a loophole, it is widely popular, has been known about for ages by accountants and congress (hell, I have an entire class that focuses on the subject) and I really doubt that congress didn't know that corporations would keep foreign profits in foreign subs when they enacted the legislation. Some of GE's transfer pricing may be a little bit murkier, but the IRS has the authority to go in and change the pricing GE assigns to its transactions between controlled subs (see IRC section 482) - since the IRS hasn't done that, it is pretty likely GE is following the law in regards to the methods and pricing it uses (I mean, its not like the CEO of GE and Obama are buddy buddy - oh, wait).

Don't blame just the Republicans, congressmen on the left use tax avoidance techniques - John Kerry certainly didn't mind doing it with his yacht, that is, until he was exposed to his colleagues who think paying the minimum tax required by law is somehow morally reprehensible.

iJohnHenry · Apr 14, 2011, 05:56 PM

Of course members of Congress have all their investments in blind trusts.

AP_piano295 · Apr 14, 2011, 08:11 PM

Quote:

Originally Posted by rhsgolfer33

Don't blame just the Republicans, congressmen on the left use tax avoidance techniques - John Kerry certainly didn't mind doing it with his yacht, that is, until he was exposed to his colleagues who think paying the minimum tax required by law is somehow morally reprehensible.

Your right that we can't blame the republicans for this problem. It is certainly the fault of almost all of our politicians and the fact that they are undeniably in bed with big business in any number of ways.

-They worked together
-They received campaign donations
-They received free vacations
-They were in the same frat together

And I understand that what GE did was "legal" I still think it was wrong. Of course I doubt much is going to change. Note how little we've herd from congressmen/senators/our president about changing our system so these multi billion dollar corporations dont get off tax free. Its because both parties are beholden to these corporate entities

.

Sometimes it feels like the Democrats and Republicans are actually working together. The Democrats as rule fail to accomplish anything truly meaningful or progressive. The Republicans act so insane that they scare all the liberals into constantly voting for Democrats because were so scared of the alternative.

The end result is that the ruling class in both parties seems to do whatever they want and they're are basically zero consequences.

rhsgolfer33 · Apr 14, 2011, 11:58 PM

Quote:

Originally Posted by AP_piano295

Your right that we can't blame the republicans for this problem. It is certainly the fault of almost all of our politicians and the fact that they are undeniably in bed with big business in any number of ways.

-They worked together
-They received campaign donations
-They received free vacations
-They were in the same frat together

And I understand that what GE did was "legal" I still think it was wrong. Of course I doubt much is going to change. Note how little we've herd from congressmen/senators/our president about changing our system so these multi billion dollar corporations dont get off tax free. Its because both parties are beholden to these corporate entities

.

Sometimes it feels like the Democrats and Republicans are actually working together. The Democrats as rule fail to accomplish anything truly meaningful or progressive. The Republicans act so insane that they scare all the liberals into constantly voting for Democrats because were so scared of the alternative.

The end result is that the ruling class in both parties seems to do whatever they want and they're are basically zero consequences.

Good post and quite true.

I do think GE should pay taxes, but as a tax accountant, I also understand GE trying to minimize its taxes - there really isn't any reason you should pay more than legally obligated to and GE certainly doesn't. I think the law should be changed so that GE and other corporations pay a proper amount of tax, but until it is, I support what GE does in minimizing its liability.

I no longer vote for either party, I have no faith that either of them will accomplish any meaningful change when it comes to taxes and spending.

Apr 13, 2011, 11:02 AM	#5
AP_piano295 macrumors 6502a Join Date: Mar 2005	Thank god for journalism. It's time for big corporations to start paying their share of the taxes. It would go a long way towards solving the current budget problems. EDIT: or not __________________ Smile
	0

Apr 13, 2011, 11:14 AM	#6
rdowns Thread Starter macrumors Demi-God Join Date: Jul 2003	Seriously guys? Read my white text in my post. __________________ You do not need a parachute to skydive. You only need a parachute to skydive twice.
	0

Apr 13, 2011, 11:29 AM	#9
chrmjenkins macrumors 68030 Join Date: Oct 2007 Location: Hermosa Bch, CA	Fake press release in order to bring the issue into more awareness? __________________ Winter is coming.
	0

Apr 14, 2011, 05:56 PM	#22
iJohnHenry macrumors 603 Join Date: Mar 2008 Location: Hiding from the authorities.	Of course members of Congress have all their investments in blind trusts. __________________ "I beg of you, Monsieur, watch yourself. Be on guard. This place is full of vultures, vultures everywhere, everywhere."
	0

Apr 13, 2011, 10:04 AM	#2
CalBoy macrumors 601 Join Date: May 2007	That's actually a good start, but it still doesn't address the fact that GE paid no taxes. They're just refunding their rebate, right? And they're only doing this because of the public shaming they got. Can we go one by one with the richest 1% and get them to pay their taxes this way too? Maybe then we wouldn't need to spend 5 weeks arguing about condoms.
	0

Apr 13, 2011, 10:07 AM	#3
samiwas macrumors 6502a Join Date: Aug 2006 Location: Atlanta, GA	As I suspected... http://www.businessweek.com/news/201...ax-refund.html Too bad. For about one second, I almost had faith in a multi-national corporation.
	0

Apr 13, 2011, 10:08 AM	#4
IntelliUser macrumors 6502 Join Date: Nov 2009 Location: Why does it matter?	Well that was fast.
	0

Apr 13, 2011, 12:01 PM	#12
IntelliUser macrumors 6502 Join Date: Nov 2009 Location: Why does it matter?	It's time this forum got spoiler tags.
	0

Apr 14, 2011, 02:15 AM	#18
rhsgolfer33 macrumors 6502a Join Date: Jan 2006	It's too bad the people that wrote the press release (and the entire NYT article that originated the GE stuff) don't understand that a deferred tax benefit =/= to a refund. Basically, a deferred tax benefit (or deferred tax asset) is a financial accounting concept - a deferred tax asset results from temporary differences in book (think financial statements) and tax accounting (think what goes on a tax return); if a company deducts something for financial accounting purposes, for instance, certain bad debts, but that deduction is not allowed for tax purposes today (and it will be in the future), a deferred tax asset will result (the company as basically prepaid taxes for financial accounting purposes). It is a concept that allows a company to accurately reflect future taxes - a deferred tax liability also exists. Sure, GE paid no federal corporate income tax this year, but they did pay taxes - payroll taxes and sale/use taxes (see the argument that is usually brought up when someone says 47% of American's paid no taxes). What GE is doing is perfectly legit and pretty much every multinational does it (including Apple, Dell, Microsoft, Google, Merck, Pfizer, etc.). Personally, I'd be pretty mad if a corporation I was a shareholder in didn't minimize its tax liability to the lowest possible amount within the law and with substantial authority for all its tax positions. If Americans deplore laws that enable tax avoidance, they should elect politicians that will change those laws - oh, that's right, the majority of politicians love tax avoidance and hire accountants to help them pay the least amount of tax legally required.
	0


MacRumors Forums > Mac Community > Community Discussion > Politics, Religion, Social Issues