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David Kocieniewski

in
March, 2011
Why did you decide to look into G.E.?

My editors and I decided late last year that I should look into the general issue of corporate taxes. We became interested in it after seeing a bunch of statistics : IRS numbers indicating that corporations' share of federal revenues had dropped to single digits (down from 30 percent a few decades ago) ; and SEC figures indicating that US corporations have had to set aside a staggering amount of money for uncertain tax positions (accounting manuevers that their lawyers say are unlikely to withstand an audit if discovered by the IRS).

With so much concern over the budget deficit and spending - and corporate profits at record highs - it seemed as though people might want to take a closer look at what corporations actually pay.

When a source gave me a tip about Ways and Means Chairman Charles Rangel's district getting millions in donations from from G.E. at the same time his committee was being lobbied by the company for a tax break, I began looking into it. And when G.E.'s CEO Jeff Immelt was named to the White House Commission on Jobs and Competetiveness, it was clear that G.E. would provide the kind of vivid example that makes a complex story like the corporate tax code accessible to the general public.

What surprised you as you did your research?

That G.E. has spent more than $200 million on lobbying during the past decade; and that a single tax code change made in 2004 to benefit G.E. specifically (deferral of income on offshore leasing income) reduced the company's US federal income tax bill by more than $1.2 billion in the following three years.

What has the response been since you published it?

The response has been overwhelming. More than 1,000 emails; widespread follow-up by other media outlets around the world (Didn't think it was possible for Jon Stewart and Bill O'Reilly to be on the same side of ANY issue); Twitter and Facebook campaigns to pressure G.E. into paying more taxes and asking the company CEO to step down from the Presidential commision.

Is there something you wish you had room to include in the piece but could not?

I would have liked to show more detail about how G.E. accrued various tax credits and given a breakdown of the $3.2 billion in tax benefits the company claimed. But G.E. has been reluctant to give details. I'm still asking for more information in hopes of writing a follow-up.

What kind of effect do you think this piece could have on corporate taxes in the future?

It's helped put a spotlight on how lobbying and tax preferences have shaped the tax code in ways that favor some companies rather than others. The story also stimulated a discussion about how much corproations should contribute to federal revenues at a time when the debate over budget deficits - and how to address them - is profoundly reshaping how our government works. What democracy ultimately decides to do is anyone's guess.

I'll be writing lots more about the corporate tax system in the months to come.....

The New York Times

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