NEW YORK (TheStreet) -- General Electric (GE) says it advocates closing all tax loopholes, an event that would almost certainly result in the company paying more taxes, according to a pair of tax experts.
General Electric has a reputation as one of the most effective U.S. companies at minimizing its tax bill. The company's tax strategies attracted widespread attention in March, when they became the subject of a front page story in The New York Times that, among other highlights, pointed out that GE paid no federal taxes in 2010 despite earning $14.2 billion, including $5.1 billion in the U.S. In fact, the story notes, GE got a tax benefit of $3.2 billion last year.
That now-notorious GE tax return is back in the news thanks to Rep. Paul Ryan, who told attendees at a recent townhall meeting that, if printed out, it would total some 57,000 pages.
Ryan called attention to the size of the return to underscore the need for corporate tax reform, as a bipartisan 12-member Congressional "super-committee" charged with addressing the deficit nears a deadline next week. If they fail to reach a deal before the deadline, a series of drastic cuts are set to kick in.Asked about Ryan's comments, a General Electric spokesman sent a statement to TheStreet that read: "We agree with Congressman Ryan that the U.S. tax system needs to be reformed and all loopholes should be closed. Furthermore, Congress needs to lower the corporate rate and provide the US a territorial system like every other major country in the world." Under a territorial system, U.S. companies operating abroad would only be taxed on foreign profits in the countries where those profits were booked. Currently, U.S. companies also pay U.S. taxes on foreign profits, though they receive credits on taxes they paid to other governments. Rebecca Wilkins, senior counsel with the nonprofit Citizens for Tax Justice, regarded GE's statement with suspicion. "You've got to wonder why GE would want the system to be changed. I mean how much more negative would they like their rate to go? They are hugely benefitting from the current system," she says.
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