- The U.S. has one of the highest corporation tax rates in the world at 39%
- Immelt says the current U.S. tax policies are having a "hugely" negative impact on GDP
- The public debt of the U.S. currently stands at $11.3 trillion, according to the U.S. Treasury
High U.S. taxes and political indecision are hindering the country's economic recovery, the head of General Electric has told CNN.
In an exclusive interview, Jeff Immelt, chief executive of one of the country's largest companies, said he wanted the tax structure streamlined.
The Fairfield, Connecticut-based company has a market capitalization of $240 billion and has faced criticism over its tax payments. But Immelt told CNN the U.S. should reform its system to match those of competing economies.
The U.S. needs to "allow this territorial system [excusing repatriated profits from being subject to domestic taxes] so that companies can repatriate their earning back to the United States. That's the way Germany does it. That's the way Japan does it. That's the way the UK does it," Immelt said.
Taxes should be paid based on where profits are made, Immelt added. "We will sell more gas turbines in the next ten years in the Kingdom of Saudi Arabia than the United States by far." he said.
"I would rather sell all my gas turbines in Chicago. It's easier, right? We don't go there because tax dodgers or anything like that. That's where the business is. That creates American jobs."
The U.S. corporation tax rate, based on where a company is headquartered, sits at 39% compared with the UK at 24%, Singapore at 17% and Ireland at 12.5%.
Immelt, who is also chair of General Electric, said he believed the tax rate should be around 25%, and that ultimately "we just would like to have the same tax policy as every other country in the world."
The existing tax structure is having a " hugely negative impact " on the country's economy as does the lack of fiscal clarity, he said. "People need certainty, and I think it does not help when you're sitting here in October; and you've got a fiscal cliff at the end of the year."
There is a "disconnect" between the U.S. people and public policy, he said. "If you walk through a factory in Ohio, people know what they want. They're not divided. If you walk through a factory in Illinois, people know what they want. They're not divided."
Politicians have "got to get decisions made" to bring down the national deficit, he said. The public debt of the world's largest economy currently stands at $11.3 trillion, according to the U.S. Department of Treasury.
However, the U.S. is "more competitive today than anytime," Immelt said. "Labor is very competitive, the companies are relatively strong on a global basis, and our exports are growing. I think there is a lot in the U.S. and the entrepreneurial spirit is still there."
The country is also making strides in gas, Immelt noted. "Gas has become plentiful. I mean the gas finds are amazing," he said. Oil will, however, remain the fuel of choice for powering cars and other consumer products in the foreseeable future, he added.
And as a burgeoning middle class emerges in developing nations, particularly in Asia and Latin America, Immelt says the price of oil is likely to remain at current levels with crude oil at around $90 a barrel. "Oil tends to be harder to find today and therefore I think oil pricing could stay relatively high," he said. It's likely to say at "historic highs versus gas for a period of time," he added.