Does GE really pay its 'fair share' of taxes?

April 24, 2012 at 1:07 pm
GE CEO defends tax rate after protesters disrupt speech
By David Shepardson
Detroit News Washington Bureau

Detroit— General Electric CEO Jeff Immelt defended the company's payment of income taxes after protesters interrupted his speech here at the SAE World Congress.

"Tax rate was 29 percent last year," Immelt told a couple protesters at Cobo Center as they chanted "pay your fair share" a few feet from where he was speaking.

About 20 protesters scuffled with Detroit Police before they were escorted out of the building. The protestors blew whistles and attempted to enter the SAE exhibition hall, but were forcibly blocked from doing so.

GE spokesman Gary Sheffer said the company paid a 25 percent income tax rate in the United States in 2011 — and a 29 percent rate globally.

In total, GE paid $2.9 billion globally in income tax in 2011, Sheffer said.

GE said it paid a 7 percent U.S. tax rate in 2010 because it had lost $32 billion in its financial services unit and because of other tax breaks, Sheffer said. "We paid income taxes and we paid another $1 billion in taxes across the U.S. — state, local federal."

"The folks that are protesting here are unfortunately protesting based on misinformation. We did pay taxes. Our rate was lower," Sheffer said.

Protesters said they had tried to present Immelt with a tax bill for $26.5 billion for what they asserted GE owed in back federal income taxes under the 35 percent statutory tax rate.

"Mr. Immelt, when are you going to pay the $26 billion in taxes," asked Shyquetta McElroy, a mother of two who traveled from Milwaukee. "I pay my taxes year after year — why doesn't GE?"

Few, if any, U.S. companies pay the statutory tax rate because of various tax breaks and incentives in the tax code.

The protesters asserted that GE has become "the poster child of American corporate tax-dodging" and argued it has been paying only a 2.3 percent effective rate over the last 10 years.

Immelt joked that the protesters had given him some "good practice" for GE's annual meeting in Detroit on Thursday. The United Auto Workers union has said it is considering protesting at the meeting.