5 ways GE plays the tax game

I found this article to be very interesting and yet made me question many things. General Electric is well known for their tax department inventing ways to pay Uncle Sam less, but yet everything they are doing seems to be legal. GE has been consistently at the top or near the top of Fortune’s Most Admired Companies. General Electric’s tax rate sometimes is even in the single digits when compared to the U.S. corporate rate of 35 percent. Jeff Immelt is the CEO of General Electric and on January 21st it was announced from the White House he would become the chief of the Council on Jobs and Competiveness. In Washington debates occur to make the tax system fairer and a question remains will Immelt’s new role help or hurt the tax advantages that General Electric has been taking full advantage of. The organization of General Electric is something quite interesting as they have structured much of their company it seems in order to reap better tax benefits. How convenient that GE’s tax department has almost 1,000 former government officials. Another factor that makes GE unusual is their practice of recruiting dozens of former tax officials from Washington’s official tax world. A significant tax benefit they reap the benefits of is the “active finance exemption” which allows the income of GE’s overseas lending to remain untaxed in the U.S. This tax benefit alone means hundreds of millions a year in savings and higher profits for GE, thus why they push the need for it to be renewed by Congress. Other tax benefits that GE focuses on to make their success is by moving jobs overseas, get a tax break. The organization of this company, where their business is conducted and the employees seems to be solely based on tax benefits and any breaks that could possibly benefit them. It seems as though GE has this down to a science, but what does that mean now that Jeff Immelt, CEO is chief of the Council on Jobs and Competitiveness? Will his decisions and arguments be based on the thought of how it would benefit General Electric?