From Alex Tabarrok:
The NYTimes reported earlier this year that through an extraordinary use of tax breaks and clever accounting:
[General Electric] reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
The Times highlighted the skill of GEâ€™s dream team:
G.E.â€™s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the worldâ€™s best tax law firm. Indeed, the companyâ€™s slogan â€œImagination at Workâ€ fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.
More recently from The Weekly Standard we find what kind of effort it takes to pay no taxes on $14 billion in profits:
General Electric, one of the largest corporations in America, filed a whopping 57,000-page federal tax return earlier this year but didnâ€™t pay taxes on $14 billion in profits. The return, which was filed electronically, would have been 19 feet high if printed out and stacked.
(FYI, the length of GEâ€™s tax return has doubled since 2006 when it (first?) filed electronically at an equivalent of 24,000 pages.)
GEâ€™s tax bill illustrates both why our corporate tax rate is too high and too low. The nominal rate is too high which encourages a real rate which is too low.
Hat tip to Walter Olson.