Tweet wars

American multinational GE, usually ranked as the world’s largest company, has been deservedly duffed up in a tweet war over its tax affairs.

The story began just a week ago with the publication by the New York Times of this article on the company’s results for 2010 (h/t Tax Justice Network).  GE reported global profits of $14.2 billion of which £5.1 billion were said to be from its US operations yet its US tax bill was, err, none.  In fact it claimed a tax benefit of $3.2 billion.

The NYT says that GE’s 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.”  Predictably this all caused quite a fuss with GE taking to Twitter to criticize the NYT for “misleading” over its tax payments.

Business Insider set out to tweet the record straight resulting in a very entertaining exchange that left GE silenced and out of ammunition although, strictly speaking, the NYT was also wrong – GE did pay payroll, state and local taxes – just no federal income tax.

Although GE may be exceptionally good at avoiding tax, it is by no means unique.  In Britain also the trend has been for big companies to pay less by exploiting loopholes not available to ordinary mortals and smaller companies, in particular using transfer pricing where profits are “moved”  to tax havens by creative accounting.   This is the antithesis of a level playing field and can only worsen the budget deficit and increase the pressure on the squeezed middle.

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