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Why Didn't GE Pay Any Taxes Despite Making $5 Billion in Profit?

This is a RUSH transcript from "The O'Reilly Factor," March 25, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Lou's the Boss" segment tonight: This is unbelievable. Ready? Last year, General Electric made $14 billion in profit worldwide, including $5 billion in profit in the USA. Yet General Electric paid zero -- nothing -- in taxes to the feds. As you may know, GE boss Jeffrey Immelt is a big supporter of President Obama and vice versa.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: We want an economy that is fueled by what we invent and what we build. Now, nobody understands this better than Jeff Immelt. He understands what it takes for America to compete in the global economy. As he mentioned, I've appreciated his wisdom during these past two years.

(END VIDEO CLIP)

O'REILLY: So the question: How could GE pay absolutely nothing to the government? And how can I get that deal?

Joining us from the New York studio, Fox Business anchor Lou Dobbs. Now Dobbs, you got, I mean, just explain it so I can understand it. I'm doing my taxes as we speak.

LOU DOBBS, FOX BUSINESS NETWORK ANCHOR: OK.

O'REILLY: I'm trying to get everything together. And it's a big hit. It's a big hit.

DOBBS: Well…

O'REILLY: All right. I'm going to pay millions of dollars to the federal government this year. Millions, OK? And GE pays nothing. Tell me, tell me.

DOBBS: You've got to spend more, not only on finding tax loopholes, Bill. You've got to do what GE does; you've got to spend a small fortune creating those loopholes. It's what I call non-taxation through extraordinary aggressive representation that has to be bought.

And by the way, corporate America, Bill, buys, with $4 billion a year, representation that you and me and our fellow citizens can't buy in Washington. And the result is a tax system that permits GE to book its profits and leave them offshore and not, what's called repatriate, bring them back to the United States no matter where the profits are made. And that's what's happening here. They bought the loophole. They are using the loophole, and they're going to continue to do just that.

O'REILLY: All right. So they make $5 billion. They make $5 billion with "b."

DOBBS: Right.

O'REILLY: $5 billion here in the United States, profit.

DOBBS: Right.

O'REILLY: And they are shipping it out someplace else? They ship the money someplace else so they don't have to pay taxes?

DOBBS: That's right. They're -- they're…

O'REILLY: But I'd be put in jail if I did that. I would be put in jail if I got an offshore haven and threw my money in there and didn't do the withholding and all of that business. They would throw me in jail for that.

DOBBS: Well, that's why it's important for you to buy some loopholes so that you don't go to jail. And by the way, this is being done across -- all across the country by major corporations. There is an estimated trillion dollars sitting out there in unrepatriated profits.

O'REILLY: All right, when you say, I don't know what unrepatriated means, all right.

DOBBS: That's money that they've made that they're not bringing back into the United States. They're leaving in the bank accounts overseas.

O'REILLY: All right. They keep it in bank accounts overseas.

DOBBS: Yes.

O'REILLY: But they -- they have to bring it back to pay their stockholders, don't they? With this money?

DOBBS: Not at all. And you don't want me to get into what the tax treatments of debt in all of this would be. But remember this: GE is as much a manufacturing conglomerate. It is every bit as much a lease and lending and finance company. This is one of the world's biggest.

O'REILLY: All right. So they have this money overseas in the Isle of Wight of wherever they have it, OK.

DOBBS: Yes.

O'REILLY: And how does it do Jeffrey Immelt any good over there? What does he do with that money? It's sitting in the bank and what does he do with it?

DOBBS: Because he is still booking the profits, still reporting those profits on GE's bottom line and that is earnings and those earnings drive the price of GE stock, which by the way, has been struggling for some years now but is now beginning to move.

O'REILLY: Yes, even all this money, they don't buy the stock.

DOBBS: Right.

O'REILLY: OK, let's turn political now.

DOBBS: OK.

O'REILLY: How can Barack Obama say to me, I want to tax the rich and that means you, O'Reilly, to the max, but I'm going to allow my buddy, Jeffrey Immelt and General Electric, who actively supported my election campaign by the way…

DOBBS: Right.

O'REILLY: …as aggressively as any media company because at that time GE owned NBC has ever done in the history of this country, ever. GE was the most aggressive in supporting a presidential candidate ever. So and then Obama appoints Immelt to a bunch of -- and turns around and says I'm going to tax you but I'm not going to tax him. I'm not going after these big corporate guys…

DOBBS: Right.

O'REILLY: …who bought the loopholes. So isn't that just hollow crap?

DOBBS: I don't think that you could attach any better words to describe precisely what that is. You've got a president who is saying that he wants to lower tax rates. He wants to also end tax loopholes, of which there are an immense number of them. This is all rhetoric. This is all -- we are now focused on 2012, Bill. And this is part of the deal. He is going to curry favor with corporations and Wall Street, just like he did in 2008.

O'REILLY: OK, but shouldn't President Obama, if he's an honest man, try to close these loopholes? Now, I -- the Republicans are probably…

DOBBS: Yes.

O'REILLY: …would be against it because they are pro-business guys, I guess.

DOBBS: Right.

O'REILLY: But I'm not against it. I want GE to pay their fair share and every other company that's doing this.

DOBBS: Right, and the argument, Bill, here is from the Republican side, at least some of the Republican side as well as the Democrats, you know, corporations shouldn't even be taxed at all some suggest. They are saying that you know because they hire Americans, those taxes are being paid.

O'REILLY: Were almost bankrupt, Lou.

DOBBS: Absolutely.

O'REILLY: Let them pay 20 percent, a flat tax on it. I don't care where it is. You make $5 billion, you pay your 20 percent. I want to lower it. I don't want to tax them to death because they'll pass it on to us but they've got to pay something. This is outrageous and it's so hypocritical.

DOBBS: They…

O'REILLY: I can't -- I'm just beside myself. I'll give you the last word.

DOBBS: Well, very simply, neither party has the guts to stand up and say -- you know, back in the 1950s, the marginal tax rate, the top rate was 90 percent. Corporations were contributing 30 percent of the tax receipts. Today, those marginal tax rates have declined corporations effectively. The big 150, let's say, are basically adding very little if anything to the tax receipts.

O'REILLY: All right. Lou, thanks very much.

DOBBS: Thank you.

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