General Electric is a company that has long been known for innovation going back to the days of founder Thomas Alva Edison, but now some of its greatest innovations may be in the way it avoids paying corporate income taxes.
The corporate behemoth’s creative use of tax deferral strategies, shifting much of its reported income to foreign subsidiaries, has shed new light on how multinational corporations oftentimes pay little to no taxes. GE not only paid no federal income taxes on its $14.2 billion in profits last year, but even claimed $3.2 billion in tax benefits. A New York Times article last week pointed out that GE employs a 975-employee tax department run by a former Treasury Department official, John Samuels. The department is sometimes known as the world’s best tax law firm, and also includes former officials from the IRS and congressional tax-writing committees.
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