Again, that $2.7 billion is what GE paid to government all around the world, not to the U.S. The Times didn’t say or imply that GE paid no taxes around the world. Blodget then wrote an account of how GE almost tricked him into believing they were right and the Times was wrong. Then he reversed course after the Eisele comment and reversed course again when the Times pointed out her previous statement that contradicted her comment. That’s not Blodget’s fault and he was quick to update when he found new information and to explain where the uncertainty lied.
THE TRUTH ABOUT THE NYT-GE TAX SPAT: They’re Both Full Of Crap!
That’s false equivalence and Blodget of all people—after getting the runaround and eventually radio silence from GE—should know that. Here’s what he says about the Times:
The New York Times is full of crap. Although we haven’t yet determined for certain that GE’s US federal income tax bill will be more than zero (neither has GE), the NYT’s statement that GE’s “American” tax bill in 2010 was “none” is, at best, highly misleading. GE paid loads of American taxes in 2010, even before you get to the federal income tax question. A reasonable New York Times reader would have no idea that the phrase “American tax bill” was supposed to mean only “federal income taxes” and this reader would therefore be surprised to learn that GE actually paid lots of local, state, and payroll taxes. We assume the New York Times aspires to be more accurate than “highly misleading,” so we think the paper should issue a correction.
I disagree. The NYT’s “American tax bill” language is clearly referring to federal taxes, not state and local ones. The Times would have been better to have said “American income tax bill,” but that’s a minor point; a technicality at best. The story was very clearly about GE’s U.S. federal corporate-income taxes. I doubt anyone misunderstood that. And even if you accept that GE’s $1 billion-plus in payroll, state, and local taxes should count as “American taxes” there, that still leaves the company net negative. As the Times says, GE claimed a net U.S. tax benefit of $3.2 billion for 2010 in its securities filings.
But Blodget deserves applause for dogging this story and trying to get to the bottom of it. I particularly like that he published his email back and forth with GE (see the relevant ones of mine below).
As for GE, the bottom line is that its efforts to contain the damage from the Times story ended up making the company look deceptive. That’s given this story a bit more life than it would have had otherwise.
Hey, silver lining.
— Here’s my latest email to GE and its reply:
Anne, et al—I’ve still not heard from anyone on this. I’m going to run a post out in the morning regardless of whether I hear back, and as it stands now it’s not going to be favorable for you guys.
Questions again + 1 more:
— Was the Times wrong in reporting that you paid/will pay no net U.S. corporate income tax in 2010? You told the AFP that you paid none and owed none, after all. If that’s wrong, why?
— You use effective tax rates, but your real rates are actually lower because of deferred taxes on profits left overseas, right?
— And those tax rates you use are global tax rates, not just what you paid in the U.S., right?
— You guys repeatedly pointed out that GE paid $2.7 billion in cash taxes last year. On Twitter you said specifically at one point that that $2.7B went to the U.S. But that number is a total global figure for the company, right? And if that’s right, what’s the point of using the global number when the story was about U.S. taxes?