Business

Report: It Looks Like GE Will Pay Taxes for 2010 After All

It was a popular story last month: General Electric, whose CEO Jeffrey Immelt serves as an adviser to President Obama, would not be paying any taxes for 2010. “None” was the exact word the Times used. And to add to the outrage, the Times also reported GE would be getting a $3.2 billion “tax benefit.” Everyone from Fox, to NBC, to Jon Stewart’s Daily Show (and The Blaze) covered it. But now, some are saying it’s not true.

ProPublica reports (via Fortune) that GE will in fact pay taxes, won’t be getting the suggested benefit, and that the New York Times messed up on its story:

The Times, of course, made GE and its tax gamesmanship a national issue with its agenda-setting piece on March 25. (By the way, they beat us on the story; we’d been working on it for months.) Unfortunately, for all its good work, the Times story has created at least one major misperception — that GE paid no U.S. income taxes last year and is actually getting a $3.2 billion refund from the Treasury.

The Times’ own headline writers got that impression too. “GE Turns the Tax Man Away Empty-Handed,” read the headline on early editions, including the Times’ Washington edition, the version that politicians and the DC-based news media and commentariat see. “GE’s Strategies Let It Avoid Taxes Altogether,” was the original head on nytimes.com, the version the blogosphere reads.

Those headlines are based on the story’s third paragraph, which discusses GE’s 2010 financial results. “Its American tax bill? None. In fact, GE claimed a tax benefit of $3.2 billion.” That seems to say that GE (GE) is getting a tax refund for 2010 — but the words “tax benefit” are so ambiguous that it’s not clear what they mean, and the article never explains them, or mentions them again.

By the time a revised (and accurate) headline got slapped on the later-edition print issues — “At GE on Tax Day, Billions of Reasons to Smile” — the idea that the Times was saying that GE paid no U.S. income taxes and was getting a big refund was firmly implanted.

Over at Hot Air, Ed Morrissey explains the new findings in layman’s terms, and uses it to remind readers about the ridiculous tax code:

In fact, GE did not get a $3.2 billion refund.  They also paid estimated taxes during the course of the year, as all companies do, and they’re pretty sure they’re not getting a refund, either.  They will probably end up with a “small tax liability” for 2010, which means they have to write a check to the IRS on the 15th, like many Americans will do.

So how did the Times get the story so wrong?  Well, thanks to a ludicrous American tax code, it’s extremely complicated to analyze any company’s tax liabilities even from the inside, let alone from the outside.  The Times apparently got confused by a report showing a $3.2 billion “tax benefit” in 2010, which they mistook for an after-profit credit.  The term actually refers to estimated pre-profit deductions and credits, which lower the eventual taxable income number on which GE gets billed by the IRS.  It’s roughly analogous to mistaking personal itemized deductions on a tax return for a refund figure.

Read more from ProPublica and Fortune, who explain the financial details in-depth.

Comments (69)

1 2
  • righthanddrive
    Posted on April 4, 2011 at 4:26pm

    Another reason to stop reading The New York Times. How could the reporter get it so wrong -ignorance of financial reporting? Political biases? The NYT assigning the fiction editor to a financial story?

    Report Post »  
  • Marylou7
    Posted on April 4, 2011 at 4:08pm

    Sorry, I believe the first story. Reason being is that GE has been forced on all retailers that carried GE in the past to the point of isolating other manufacturers. Walmart is one that comes to mind and also Lowes. Lowes credit card is now through GE. I stopped shopping there. Walmart is not only carrying more GE (an overload really) but as long as Nancy Pelosi was Speaker they only carried Star Kist tuna, they did not even carry their own brand (how’s that for butt kissing.) Now, however, they carry several brands of tuna. Needless to say I DO NOT BUY STAR KIST.

    Report Post » Marylou7  
  • civilman43
    Posted on April 4, 2011 at 4:05pm

    Boycott GE I have been doing it for years with Immelt as CEO. I just recently bought new appliances and told the guy anything but GE. He said I was the forth guy that week that made that comment.So everyone what are you waiting for boycott GE and help get rid of the liberal puke running the Co. and ripping off the taxpayers.

    Report Post »  
  • caprica
    Posted on April 4, 2011 at 3:49pm

    we must clean the corruption ! it began with obama and his adminstration …..judges, unions, acorn , george sorros – van jones……and the rest of the rats

    Report Post »  
    • Eblaze44
      Posted on April 4, 2011 at 4:42pm

      This “corruption” did NOT begin with Obama nor his administration. it began more than a hundred years ago. both parties.

      Report Post » Eblaze44  
  • leary1
    Posted on April 4, 2011 at 3:35pm

    How about G.E. cough up the other bailout money they got to offset obama care costs. After all they did make a HUGE PROFIT, that money was meant for businesses in need and G.E. isn`t in need. If they think they are in need perhaps they could cut some of the UNION payroll or lay some UNION WORKERS OFF.

    Report Post »  
  • GrumpyCat
    Posted on April 4, 2011 at 3:32pm

    Even if GE didn’t pay any taxes in cash, they paid by giving up freedom. That rather than utilize their resources to further capitalistic goals a significant portion was diverted to follow the government’s bidding so as to collect tax credits to cover profits. Pay attention, if the left has their way this will be the only way one will be allowed to do business.

    Report Post »  
  • GulfPeg
    Posted on April 4, 2011 at 3:10pm

    This is just for Obama’s re-election campaign. He will let them know of other loopholes to use.

    Report Post »  
  • historypaper
    Posted on April 4, 2011 at 3:07pm

    Obama told him to write a check or get out. The things that the New York Times won’t write about is amazing. Obama is forcing a payment. He made BP do it.

    Report Post » historypaper  
    • karenjerry
      Posted on April 5, 2011 at 1:12am

      Anyone know someone who collected any of the 20 billion dollar shakedown from B/P?

      Report Post »  
  • harumph
    Posted on April 4, 2011 at 2:59pm

    Pay no attention to the man behind the curtain.

    Report Post » harumph  
  • matt708
    Posted on April 4, 2011 at 2:49pm

    it;s again smoke and mirroes, throw them all out impeach impeach impeach

    Report Post »  
  • JohnnyJT South Philly
    Posted on April 4, 2011 at 2:48pm

    Tax Them To DEATH

    Report Post » South Philly Boy  
  • ldpeters
    Posted on April 4, 2011 at 2:47pm

    Golly Beav! Where ever will they get the money??

    Report Post »  
  • Gypsy123
    Posted on April 4, 2011 at 2:46pm

    Caught! But some how the administration will turn around and give it back to them just wait and see.

    Report Post » Gypsy123  
  • chatmandu002
    Posted on April 4, 2011 at 2:29pm

    I think you all forget that businesses and corporations don’t pay taxes. The customers pay the taxes, the businesses collect the taxes for the government.

    Report Post » chatmandu002  
    • Eblaze44
      Posted on April 4, 2011 at 4:40pm

      essentially true. the consumer is always the one who pays all of the taxes. it’s the cost of doing business. we have to pay for everything from the raw material to the finished product. even the taxes on the money they “make” is money we gave them in return for the goods. It is always the “people” that pay taxes which is why the “income tax” is so egregiously wrong.

      This might be funny if it weren’t so true.
      Be sure to read all the way to the end:

      Tax his land,
      Tax his bed,
      Tax the table,
      At which he’s fed.

      Tax his tractor,
      Tax his mule,
      Teach him taxes
      Are the rule.

      Tax his work,
      Tax his pay,
      He works for
      peanuts anyway!

      Tax his cow,
      Tax his goat,
      Tax his pants,
      Tax his coat..

      Tax his ties,
      Tax his shirt,
      Tax his work,
      Tax his dirt.

      Tax his tobacco,
      Tax his drink,
      Tax him if he
      Tries to think.

      Tax his cigars,
      Tax his beers,
      If he cries
      Tax his tears.

      Tax his car,
      Tax his gas,
      Find other ways
      To tax his ass.

      Tax all he has
      Then let him know
      That you won’t be done
      Till he has no dough.

      When he screams and hollers;
      Then tax him some more,
      Tax him till
      He’s good and sore.

      Then tax his coffin,
      Tax his grave,
      Tax the sod in
      Which he’s laid…

      Put these words
      Upon his tomb,
      ‘Taxes drove me
      to my doom…’

      When he’s gone,
      Do not relax,
      Its time to apply
      The inheritance tax.

      Accounts Receivable Tax
      Building Permit Tax
      CDL license Tax
      Cigarette Tax
      Corporate Income Tax
      Dog License Tax
      Excise Taxes
      Federal Income Tax
      Federal Unemployment Tax (FUTA)
      Fishing License Tax
      Food License Tax
      Fuel Permit Tax
      Gasoline Tax (currently 44.75 cents per gallon)
      Gross Receipts Tax
      Hunting License Tax
      Inheritance Tax
      Inventory Tax
      IRS Interest Charges IRS Penalties (tax on top of tax)
      Liquor Tax
      Luxury Taxes
      Marriage License Tax
      Medicare Tax
      Personal Property Tax
      Property Tax
      Real Estate Tax
      Service Charge Tax
      Social Security Tax
      Road Usage Tax
      Recreational Vehicle Tax
      Sales Tax
      School Tax
      State Income Tax
      State Unemployment Tax (SUTA)
      Telephone Federal Excise Tax
      Telephone Federal Universal Service Fee Tax
      Telephone Federal, State and Local Surcharge Taxes
      Telephone Minimum Usage Surcharge Tax
      Telephone Recurring and Nonrecurring Charges Tax
      Telephone State and Local Tax
      Telephone Usage Charge Tax
      Utility Taxes
      Vehicle License Registration Tax
      Vehicle Sales Tax
      Watercraft Registration Tax
      Well Permit Tax
      Workers Compensation Tax

      STILL THINK THIS IS FUNNY?

      Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world.
      We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids.

      Report Post » Eblaze44  
    • ADNIL
      Posted on April 4, 2011 at 6:27pm

      I’m not laughing.

      Report Post »  
    • alina.bolero
      Posted on April 5, 2011 at 1:51pm

      Progressive brilliance! Tax production and subsidize consumption. Truly a master plan for economic growth and prosperity!

      Report Post » alina.bolero  
  • MemphisViking
    Posted on April 4, 2011 at 2:22pm

    “So how did the Times get the story so wrong?” Because it’s the New York Times. That’s what they do.

    Report Post »  
  • redneck hickabilly
    Posted on April 4, 2011 at 2:19pm

    since corporations are concidered basically humans “people” and they use it
    they should have the same tax rate as anyone else….
    simple

    Report Post »  
  • EqualJustice
    Posted on April 4, 2011 at 2:12pm

    OOPS, decided it made BO look bad for re-elction? Don’t worry… he STILL looks BAD! :)

    Report Post » EqualJustice  
  • 123gone
    Posted on April 4, 2011 at 1:56pm

    Glad the NY Times got it straightened out.
    NOW, what about Bank of America? Did the Unions get it wrong also?

    Report Post »  
  • rightwingheroes
    Posted on April 4, 2011 at 1:56pm

    Gotta spin it so they can keep the money flowing to the Obama Campaign.

    Report Post »  
  • awiderview
    Posted on April 4, 2011 at 1:55pm

    THEBLAZE discussing corporate taxes…almost as funny as them discussing world politics.

    This is probably not where you’ll find the people to make the US “exceptional.”

     
    • Jaycen
      Posted on April 4, 2011 at 2:30pm

      Do you have a point, or did you just drop in to leave an insult?

      Try substance.

      Report Post » Jaycen  
  • sWampy
    Posted on April 4, 2011 at 1:54pm

    I bet the original story is closer to the truth, and this “revised” story was created to protect the guilty.

    Report Post »  
    • sleazyhippo
      Posted on April 4, 2011 at 2:14pm

      Hey as long as Taxes get collected – what’s not to like. This room was very critical of GE (possibly because they used to control NBC) but has not said much about Rupert Murdoch or Oil companies hiding from US taxes by placing their US earnings in overseas corporations.

      Report Post » MONICNE  
    • abc
      Posted on April 4, 2011 at 2:42pm

      The really important story is not the tax filings of a single company, albeit a very large one. The really important story is the fact that corporate tax receipts as a percentage of total GDP have fallen from 6% to less than 2% over the last 35 years. There has been no commensurate pick up in other tax receipts to make up for this loss of tax revenue, and it explains a very large piece of the structural deficit. Either corporations need to pay higher effective tax rates–and before anyone argues otherwise, few major companies pay anywhere near the statutory rate of 35%, although Fox News constantly points to this rate to claim that companies need tax cuts–or other tax rates (e.g., personal income taxes) need to rise. No one can find enough tax cuts to close the structural deficit, so rates need to rise. And the corporate share of taxes likely is one area that must increase. While corporations might be able to raise prices in some cases, in many others, they’ll need to settle for thinner margins and lower stock option payouts. And even to the extent that they pass through the cost, it will be a consumption tax that perhaps prompts Americans to spend less and save more. Not the most progressive solution, but better than running a protracted deficit or trying to balance it on the backs of the most needy in society.

      Report Post »  
    • Soldiers_Son
      Posted on April 4, 2011 at 6:18pm

      @ABC,

      “The really important story is the fact that corporate tax receipts as a percentage of total GDP have fallen from 6% to less than 2% over the last 35 years. There has been no commensurate pick up in other tax receipts to make up for this loss of tax revenue, and it explains a very large piece of the structural deficit”

      ———————————-

      I think the better solution is to find out why corporate tax has dropped from 6% to only 2% of the GDP and find a solution to that instead of the knee jerk reaction of taxing the people more.

      So, why has it dropped? Could it be due to corporations taking their business over seas where they do not pay U.S. taxes? Maybe it is because government has killed off small businesses so there are less taxes being collected. Or could it be due to the fact that now more people work for government jobs instead of in the public sector? How about the fact that we, as a nation, have moved from industry to services (we no longer produce anything)? Or that we now pay farmers not to farm their land so they are not selling anything which results in less taxes? Or that the tax code has been re-written so many times to allow loop holes for big political doners?

      I, of course, do not know the full reason for the decline, but I am certain that the answer is not to tax the people more. The answer is to find ways to promote business, bring industry back to America, and build an environment that is friendly to small business and encourages hiring and new jobs. The tax code also need to be reverted back so there are less loop holes and ways to avoid taxes in addition to lowering the taxes so there is not as much incentive or need for the loop holes.

      Or, you know, the government could just spend less and get rid of all the non-essential “services” that they provide and return all those jobs back to the private sector. They would then require less taxes and the drop from 6% to 2% would not be so bad. And in the end, the best way to get out of a deficit is to spend less not tax the people more.

      Report Post »  
    • abc
      Posted on April 5, 2011 at 5:37pm

      Son,

      This is the problem with your logic and others like you: “I, of course, do not know the full reason for the decline, but I am certain that the answer is not to tax the people more…” You do not know, but you are certain of what the answers are anyway. Now, how is that possible? The right answer is: ” I do not know, but I will listen to the person who does, and I will not prejudge what the correct answer is that such expert prescribes.” This is what you do when you entrust yourself to other experts, from medical doctors to tax accountants to trust attorneys. It should be no different for budget economics.

      To answer your question, the reason why it has dropped from about 6% to below 2% has nothing to do with offshoring. The percentages given are of GDP, not GNP, which means that only domestic production is included. It also cannot be explained by a shift from private sector to public sector employment, since private sector employment has not shrunk to one-third the size it was during the Reagan administration. These are obvious, but apparently some people do not even get the basics…

      The reason it has fallen is because companies have lobbied for a ton of tax loopholes that they are exploiting to characterize domestic production as tax exempt. These loopholes need to be closed, but because corporations lobby for changes in the tax code more effectively than small businesses or individuals, corporate tax burdens have fallen, while those of the middle class have risen. These are the facts, and smarter folks than me (e.g., Warren Buffett) have loudly called for tax reform.

      The problem is that the average voter doesn’t know this, watches Fox News so he doesn’t hear about it, and is already wedded to wrong-headed ideas that prevent him from doing what common sense dictates. Companies are skipping out on their tax bills, and those hurt by this, middle class folks like you, not only let them do it, but insist without learning about the problem that the solution can never entail requiring them to pay their share in accordance to the normal historical levels that they have paid in the past. This makes no sense and reflects how dumb the average voter is. No wonder the corporations continue to dupe you.

      Report Post »  
  • Snowleopard {gallery of cat folks}
    Posted on April 4, 2011 at 1:48pm

    Of course they will not have to pay taxes…we have members of congress and the administration who have failed to pay for them over many years, and nothing gets done.

    Report Post » Snowleopard {gallery of cat folks}  
  • 13th Imam
    Posted on April 4, 2011 at 1:47pm

    The New Jork Slimes made an error?? The highbrows at the Slimes, can‘t figure out Barry’s simple tax code??? What did you make in 2010.? What do you have left ?? Send it in.

    Report Post » 13th Imam  
  • Stoic one
    Posted on April 4, 2011 at 1:46pm

    companies and corporations do not pay taxes the end user does; just like sales tax!

    Report Post » Stoic one  
    • Showtime
      Posted on April 4, 2011 at 2:30pm

      Corporations are simply tax collectors for the government.

      Report Post » Showtime  
    • abc
      Posted on April 4, 2011 at 2:34pm

      That is true, that corporations will pass along costs to reach a market-dictated return on investment. But the idea that larger companies, with more resources, getting lower tax rates than smaller companies is totally unjust and inefficient. Also, if corporations’ share of taxes (measured as a % of GDP) has declined from 6% to less than 2% over the last 35 years, then the individual income taxes must go up to cover that loss in revenue. There is no free lunch. You cannot deliver the same or more public services and not make up for the 4% shortfall, which corresponds to roughly half of the structural deficit.

      Report Post »  
  • Snowleopard {gallery of cat folks}
    Posted on April 4, 2011 at 1:44pm

    Why are they now paying taxes….everyone at the Blaze…

    THEY GOT CAUGHT!!!

    Report Post » Snowleopard {gallery of cat folks}  
    • CatB
      Posted on April 4, 2011 at 1:49pm

      How about the PAYOFF they and GM and AT&T and others are getting in OBAMACARE … are they going to give that back too?!!!! I pay for my own insurance and all these PAYOFFS and WAIVERS are really ticking (insert real word) me off!

      Report Post »  
    • Showtime
      Posted on April 4, 2011 at 1:51pm

      Bad political strategy — GM not paying taxes. Boycott feared? I would have boycotted everything I could find that GE had a finger in.

      Report Post » Showtime  
    • Snowleopard {gallery of cat folks}
      Posted on April 4, 2011 at 1:51pm

      Speaking for the manner of taxes and health care; McDonalds is hiring 50k new employees, or hopes to on the 19th; anyone want to figure the waiver they got for the Obama care law has something to do with it?

      Also, anyone wish to guess if the SEIU will soon become the union of the golden arches?

      Report Post » Snowleopard {gallery of cat folks}  
    • thegrassroots
      Posted on April 4, 2011 at 2:02pm

      Blame’n The Times! Tsk! Tsk!

      I Agree! GE Got Caught!

      Report Post »  
    • sleazyhippo
      Posted on April 4, 2011 at 2:09pm

      Ha Ha Ha hah haaaaaaaaaaa! We are going to get taxes from a giant corporation who hides money overseas! All becuase of the Blaze! Now lets ruin Mobil Exxon’s taxpayer rip off! I am glad to see the Blazers are Pro-TAX! Thank You! Thank You! Don’t stop till we get a Trillion!

      Report Post » MONICNE  
    • 1TrueOne55
      Posted on April 4, 2011 at 2:10pm

      Well as soon as my GE appliances fail in my home they will be replaced with better Korean Made products maybe LG or Samsung… etc And I will be looking into buying a KIA Soul in the future for my MPG vehicle and replacing my Honda Odysee Van with a newer one when I can afford it… No GM SHOCKER in this garage…

      Report Post » 1TrueOne55  
    • ozchambers
      Posted on April 4, 2011 at 2:11pm

      Thank you BLAZE for being truthful and putting up this story correcting the previous report. But dont expect to get credit for being objective from the left.

      GE had better pony up there 1,255.68, and PRONTO!

      Report Post » ozchambers  
    • hersey10
      Posted on April 4, 2011 at 2:32pm

      How convenient .

      Report Post » hersey10  
    • not funny
      Posted on April 4, 2011 at 2:36pm

      I’m still going to boycott GE–they are part of the machine.

      Report Post »  
    • kindling
      Posted on April 4, 2011 at 4:36pm

      I am still not buying anything from GE ever again, not because they are a big business, but because they are part of the man caused global fraud being pushed on us.

      Report Post » kindling  
    • independentvoteril
      Posted on April 4, 2011 at 6:57pm

      I already refuse to buy anything GE makes.. it stems from all the @$$ kissing that they do so they can handle carbon credits.. their CEO going to the OBAMA administration to help make regulations etc..

      Report Post » independentvoteril  
    • avenger
      Posted on April 4, 2011 at 7:57pm

      no they won’t …all smoke & mirrors…

      Report Post »  
    • Longshot35
      Posted on April 4, 2011 at 9:56pm

      Don’t let gross ignorance take over people. They were all ready paying taxes and have all ready paid taxes. It was false reporting by the NY Times that GE was not paying any taxes. That report simply was not true. Go lookup GE’s financial statements yourselves folks. I tried to correct this misconception when the report was first made.

      The fact of the matter is that GE gets out of paying a lot of taxes by reporting their income as foreign income.

      Report Post »  
    • MIBUGNU2
      Posted on April 5, 2011 at 1:39pm

      OOOP’s , Got a little HOT in the kitchen ??

      Report Post » MIBUGNU2  
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