The results of GE’s tight relationship with the Obama administration are starting to show.

The company’s CEO, Jeffrey Immelt, went from being an Obama ally on green energy to being one of his top outside advisers on the economy in the last two years.n the process, The New York Times reports, GE had one of its best years in 2010, in part by getting a huge tax benefit from Uncle Sam.

Last year, the company paid nothing to the government. Instead, the government paid GE $3.2 billion in tax breaks.

“Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore,” according to The Times.
Some combination of aggressive lobbying for green energy tax incentives — for which the administration had pushed aggressively in the Recovery Act and in President Obama’s budgets to Congress over the last two year — and strategies run out of its in-house tax department have made GE one of the leading companies in reducing its corporate tax burden.

When Immelt was named the chairman of Obama’s Council on Jobs and Competitiveness in January, he acknowledged that his company has a reputation for running most of its business overseas, the result of more than three decades of reducing its domestic operations to minimize costs.

“I know that despite the fact that 60 percent of GE’s revenues are outside of the United States, I personally and this company share in the responsibly and the accountability to make sure that this is the most competitive and productive country in the world,” Immelt said in January.

But he neglected to mention that GE’s offshore operation also allows it to avoid paying most of its taxes to the federal government. GE’s spokesman told the Times that reducing its tax burden is part of the company’s “responsibility” to its shareholders.

But it also appears to run contrary to Obama’s rhetoric about slowing the rapid offshoring of American jobs.
source: www.politico.com