UPDATE, APRIL 10, 2015: Nearly four years to the day later, another unbelievable headline showed up: GE is voluntarily repatriating offshore profits and paying full taxes on them. This time it’s true, and doesn’t come out of the goodness of GE’s heart, but rather in anticipation of new financial reform legislation that will make offshoring harder.
As this NY Times article notes: “The company will pay about $6 billion in taxes on earnings it brings back from overseas. Many American corporations continue to hold significant sums of money overseas — Apple, for example, holds roughly $158 billion in foreign subsidiaries — in hopes of a change to United States tax laws. But G.E., which has been criticized in the past for its tax avoidance strategies, said it had chosen to move quickly. ‘We decided not to wait for tax reform,’ said Keith S. Sherin, the chairman and chief executive of GE Capital.”
This is a huge victory for anti-tax dodging groups, like those who carried off this project!
When GE announced that the company would return its illegitimate (but legal) $3.2 billion tax refund, and that they would lobby to close the sort of corporate tax loopholes that had allowed them to skip taxes in the first place, it seemed too good to be true.
When was the last time a major American corporation took such a leadership role in times of budget stress and record joblessness?
Several major media outlets, including USA Today, jumped on the story, and in the period the hoax was take at face value, GE’s stock plunged by .6% (far more than the value of the supposed return), with GE stockholders punishing the company for its out-of-character commitment to paying its fair share of taxes.
None of this lasted long, and it was soon revealed that the press had been duped by a faux GE press release and website put out by the Yes Lab and US Uncut, a grassroots movement opposed to corporate tax cheats. When the smoke cleared, the hoax was covered on CNN’s Situation Room and in countless other media, giving journalists a good opportunity to ask why GE, like many major American corporations, is paying no taxes at a time when local, State and Federal governments slashing critical education, health and public safety services nationwide due to dramatic budget cutbacks.
“GE’s tax avoidance is unpatriotic, it’s undemocratic, it’s unfair,” Andrew Boyd, a US Uncut Spokesperson, told CNN. “It might be legal, but that’s only because GE has used its money and lobbying influence to buy the loopholes they’re now taking advantage of.”
- CNN’s Situation Room: General Electric Hoax
- Columbia Journalism Review: The Most Amazing Corporate Press Release in History