GE Prefers Higher Tax Rates

The US-based conglomerate has been in bed with politicians for years. Due to that coziness, it now feels perfectly content to weigh in on a proposal by the British opposition to reduce the country's corporate tax rate from 28% to 25% (by comparison, the US corporate tax rate is 35%).

"General Electric, the infrastructure, finance and media conglomerate, spoke out against plans for a swift 3 percentage point cut in the headline rate, funded by reducing investment incentives, saying it would be a “real own goal” for manufacturers and big inward investors. Will Morris, senior international tax counsel at GE, defended the existing 28 per cent corporate tax rate as “actually pretty competitive”.

This has all the making of an Onion article, but alas it's not.

It's not entirely clear why GE is opposed to the proposal to cut tax rates, other than perhaps a cynical attempt to curry favor with politicians already in office that aren't the ones proposing this plan.

As a matter of clarification, the comments by the GE spokesman are not correct. Just within Europe alone, Ireland, Switzerland and many Eastern European countries have much lower corporate tax rates than the UK.

Most British companies can be expected to support this plan, which means that if it ultimately becomes law, GE should feel free to continue paying corporate tax at the higher rate.