Last week, the New York Times dropped quite a news bomb, reporting that General Electric, the country’s biggest corporation – the CEO of which heads President Obama’s Council on Jobs and Competitiveness – paid nothing in U.S. taxes last year. Its worldwide profits were $14.2 billion, $5.1 billion of which came from its U.S. operations.
Reported the piece:
That [news] may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.
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. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.
GE now says that the New York Times piece was “misleading,” and it is trying to fight back via Twitter. But it’s getting punched square in the face. The reason: lack of crystal-clear specificity (the company appears to be parsing what it’s saying) and an alarming inability to react in real-time.
To wit, the company has already spent more than two hours this morning and afternoon avoiding the direct (and seemingly simple) questions of several journalists looking to write-follow-on pieces about its taxes, including the formidable founder of Business Insider, Henry Blodget, who alone has 30,000 followers. (No doubt his followers include other journalists, public relations pros, and corporate executives, all of whom who are watching and reading with slack-jawed astonishment as he repeatedly asks the company to clarify its statements, to no avail.)
You can see Blodget’s role in the affair, as well as GE’s, in the tweets below.
No matter what the outcome of this argument, I have a feeling the exchange is going to have a wide-ranging impact on the way that companies approach their use of Twitter. Certainly, if a company is going to engage on the platform, especially to counter what it’s calling misinformation, it had better be much better prepared than GE to respond to every question and accusation. And it had better do it through more than static corporate links.
From @hdblodget (his most recent Tweets, dating backwards):
And, @gepublicaffairs, I will confess that you almost had me with the “we paid significant US fed income taxes”. VERY clever wording
@gepublicaffairs… Silence still deafening after simple questions. Hard not conclude that NYT right and you’re just @GEspinmeisters 6 minutes ago via TweetDeck
Oh, @GEpublicaffairs, you’ve gone silent again. These are simple questions. Either NYT wrong or you’re full of crap. Please solve mystery
@GEpublicaffairs… I’m writing headline now. Should it be “GE: NYT Lied About Our Taxes” or “How GE Tried To Mislead Everyone On Twitter”?
ahem, @GEpublic affairs… If by “paid significant US income tax” you mean “payments,” not net-after-refunds, you are going to be skewered
Ah, that’s another good question. Are you merely referring to fed income tax PAYMENTS, not net after refunds? RT @sj660: @gepublicaffairs
@gepublicaffairs… When you say “GE paid significant fed income tax,” you are referring to CORPORATE tax, not exec’s personal taxes?
@gepublicaffairs… Forgive me, but before I blast NYT for being wrong about your US taxes, I need to ask one more question…
@khivi Right, but GE says they paid fed income tax, too about
Hey, @nytkeller, you just said NYT believes in “verification not assertion.” But GE says your story about them paying no taxes is a lie
If I’m not mistaken, GE has now said that the NYT story saying it paid no US taxes last year is flat-out wrong. @gepublicaffairs @nytkeller
So, NYT is wrong? NYT said “none” RT @GEpublicaffairs: GE paid significant U.S. fed income tax in 2010
@hankwilliams Interestingly, they specifically say “paid significant US income tax” in their release blasting NY Times. http://bit.ly/goMKB9
@gepublicaffairs, you say “GE paid significant U.S. income tax in 2010” in your press release blasting NYT. Is that a lie? Or is NYT wrong?
For more information on questions concerning GE’s tax payments, Please visit http://www.gereports.com/more-on-ge-and-taxes
@khivi They are separate. Of $2.7B income tax paid, signf portion was US fed. GE also paid $1B+ in payroll, state & local use & property tax
$2.7B includes significant U.S. fed income tax payments RT @khivi: @Gepublicaffairs tweets confirm @nytimes that GE paid $0 corporate tax
@hblodget @hankwilliams @ocelotmf @thinkprogress GE paid significant U.S. fed income tax in 2010, along w/ $1B+ in payroll, state & local
@ceejayoz GE doesnt not make use of tax “loopholes” http://bit.ly/goMKB9
Well, GE paid U.S. $2.7B in cash taxes in 2010 RT @hblodget: @GEpublicaffairs Is this NYT quote wrong? “Its American tax bill? None.”
@MichaelMaiello It was all to the U.S. Please read @GEReports’ response for more info http://bit.ly/goMKB9
@ZaidJilani No, it was a typo. Too used to hashtagging I guess.
To the U.S. RT @Carla_Zilka: To Whom? NYT says $0 @GEpublicaffairs #GE paid #2.7B in cash taxes alone in 2010
#GE paid #2.7B in cash taxes alone in 2010 RT @Carla_Zilka: Thats zero. Yes, GE pays $0 taxes. @GEpublicaffairs what do you say to this?
@Jwesty5 Claiming that GE’s American tax bill is “none” is simply not true. GE pays payroll, property, sales use & value added taxes, etc. about
@hblodget Consolidated tax rate last few yrs is lower than historical avg & statutory rate, but @NYTimes grossly oversimplified the facts
@BusinessInsider – Stop the misleading attacks. No Taxes?? GE paid $2.7 billion in cash taxes alone in 2010. http://bit.ly/goMKB9
@NYTimes story is misleading. #GE paid $2.7B in cash taxes in 2010 & doesnt use “loopholes.” GE pays what it owes. http://bit.ly/goMKB9