WASHINGTON, Feb 27 (Reuters) - General Electric Co’s effective tax rate for 2011 was about 11 percent, well below the top 35 percent U.S. corporate tax rate, according to a report released on Monday by a tax group.
GE, the largest U.S. conglomerate, reported about $1.03 billion in taxes on $9.16 billion in pretax profits last year, according to the Center for Tax Justice report.
“That’s their current tax declared to shareholders. And their actual payments to the IRS were almost certainly less,” said Bob McIntyre, president of the tax advocacy group.
GE called the report “biased and inaccurate.”
“GE’s 2011 tax rate in the U.S. was 25 percent. GE’s global rate was 29 percent in 2011, up from 7 percent in 2010,” said GE spokeswoman Deirdre Latour, in an e-mail responding to the report. She said GE’s higher 2011 rate reflected increased GE Capital earnings and taxes on a deal involving NBC-Universal.
Company tax returns are private, so it is unknown exactly how much money GE paid the government in taxes.
The discrepancy between the company’s and the think tank’s figures could stem, in part, from differing ways to estimate effective tax rates.
The center said GE likely cuts its tax rate by using a legal deduction letting companies defer taxes on foreign profits.
Last year, GE came under fire for its low 2010 tax rate, which it said resulted from the recession’s heavy toll on GE Capital. GE Chief Executive Jeff Immelt - a top adviser to President Barack Obama on jobs and the economy - has repeatedly said the nation needs to reform its corporate tax code.
Citizens for Tax Justice produced a report in the 1980s that helped lead to Republican President Ronald Reagan’s landmark 1986 tax reforms. Since then, the tax code has become riddled with exemptions, deferral and other special breaks.