WASHINGTON, Aug. 12, 2008
Most Companies Pay No Federal Income Tax
GAO Study Also Finds 68% Of Foreign Companies In U.S. Avoid Corporate Taxes
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The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.
Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.
"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.
An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called "S" corporations pay taxes under individual tax codes.
"Half of all business income in the United States now ends up going through the individual tax code," Edwards said.
The GAO study did not investigate why corporations weren't paying federal income taxes or corporate taxes and it did not identify any corporations by name. It said companies may escape paying such taxes due to operating losses or because of tax credits.
More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.
The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S.
Dorgan and Levin have complained about companies abusing transfer prices - amounts charged on transactions between companies in a group, such as a parent and subsidiary. In some cases, multinational companies can manipulate transfer prices to shift income from higher to lower tax jurisdictions, cutting their tax liabilities. The GAO did not suggest which companies might be doing this.
"It's time for the big corporations to pay their fair share," Dorgan said.
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See all 94 CommentsTHis is pure ***! IT is time to start stringing up these ***-holes!!!!!
While he supports putting a trillion dollar war in Iraq on a credit card for our kids and grandkids to pay.
This is the party of "fiscal conservatism"?
The Repugs are only conservative when it''s about payments to help other people.
When it''s government payments to help themselves, they are very generous--with our money.
Look assclown....why don''t you read the rest of the story? Most corporations they are referring to are Sub S or LLC''s who pay taxes PERSONALLY!
So go change your diaper and quit whining.
The GAO study did not investigate why corporations weren''t paying federal income taxes or corporate taxes and it did not identify any corporations by name. It said companies may escape paying such taxes due to operating losses or because of tax credits.
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So much for the idiots who claim that corporations pay 95 percent of all taxes.
Do you work for free? Why should my husband? He owns his own business (a corporation). How are we supposed to pay our bills if we simply break even? Folks have businesses to make a living. They happen to employ people too, so they can make a living. We pay 38% tax! Now the democrats want to tax my retirement money, too! I am sacrificing to save part of my income and invest in for my future and for my family. I suggest you do the same.
Leona Helmsley
Oh yeah RIGHT! what does this idiot call PAYROLL TAX, state and local tax, inventory tax, real estate tax, corporate tax, and all the rest of the taxes businesses pay??? Let''s not forget the owners of the the business pay PERSONAL INCOME tax on top of all that.
"Half of all business income in the United States now ends up going through the individual tax code," Edwards said"
LOL what an idiot, that''s because probably if he checked he would find about that number of businesses are SMALL BUSINESSES- mom and pop operations not big enough to own a corporate headquarters or hire 30 employees, they may be working from their home office or have a tiny store- they pay INCOME tax.
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So, simplify the tax system and eliminate the opportunity for loopholes.
Eliminate *all* tax breaks and reduce the corporate tax rate. When it makes business sense to do business, people will. When it makes tax sense to do business, this is the problem.
No socialized medicine, no welfare, no social security and no public education. Privatize all education and let the parents of the kids attending pay 100% of the cost, I''m sick of paying for the education of other peoples kids through property taxes!!!
Just kidding...
Posted by newster1 at 09:28 AM : Aug 12, 2008
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You SEEM to have MISSED the point of the article!
But, you have the time to go HYPERTENSIVE on us!
Re-read it! What is it that two-thirds of U.S. corporations failed to do from 1998 to 2005?
GUESS?!
The GAO report showed that 61 percent of US corporations paid no federal income taxes from 1996 through 2000, a period of rapid economic growth and rising corporate profits.
An estimated 94 percent of US corporations reported tax liabilities amounting to less than 5 percent of their total income in 2000. The corporate income tax rate is ostensibly 35 percent, but companies are able to reduce their effective burden by claiming various deductions and credits.
US companies paid an average of $11.88 in corporate taxes for every $1,000 in gross receipts, the study said.
Small corporations were more likely to avoid taxation than large ones, it showed. About 38 percent of big companies (those with more than $250 million in assets or $50 million in revenues) paid no taxes during the five-year period.
Foreign-owned companies fared better in some respects than their US-based competitors. The report found that 71 percent of foreign-controlled corporations paid no taxes on their US income, while 89 percent had liabilities of less than 5 percent of their income.
Ho hum, the GAO periodically releases this story and neither side has an interest to act on it.
1910s: 17%, 1920s: 17%, 1930s: 14%, 1940s: 11%, 1950s: 9%, 1960s: 8%, 1970s: 8%, 1980s: 11%, 1990s: 13%, 2000s: 16%, current: 17.5%
Anyone old enough will recall: America was a truly GREAT country between the 1950s and 1980s. In the 1910s-1920s, it was setting itself up for the Great Depression, and we all know whats happened since the 1980s. I don''t think that reality is unrelated to the statistics above.
Taxes build societies. Tax breaks break them down again.
In 2001 McCain was against the Bush tax cuts, because it benefited the wealthy and corporations instead of the middle class! The Bush tax cuts gave corporations $132 billion in tax breaks! Now suddenly McCain is for extending those cuts!
If you are selling candy bars for $1 each and your cost is $.50, and tax increases your cost to $.75, guess what? The candy bar just went to $1.25.
You can''t increase the taxes without hurting the consumer or workers of that company.
I am more concerned with the greedy exec''s that want to shine by making the stock value look great while gutting a company.
"Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005"
"about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period."
This government has no shame.
I say that each corporation that uses the US Laws & Courts to protect their property must pay the cost of the protection.
I''ve had enough of these corporations getting something for nothing...
Posted by downtowner97
Or we could do like the Chinese and tell them that if they want to sell here they have to build here.
When was the last time you read the Constitution?
The majority of taxes were to be collected from individuals (corporations under current law) doing trade (business)
Corporations should NOT have to pay ANY income tax. The employers and employees should be the ones that pay taxes on their income. NOT THE CORPORATIONS!!! Businesses need reserves to carry them through the lean times. If they are taxed and can''t put money back, when times turn bad, they have nothing to fall back on. Also the corporations need reserves to buy new equipment and to do R&D. Yes the people that run the business should pay taxes and the people that work for the businesses should pay taxes BUT NOT THE CORPORATIONS!!!
If the corporations don''t pay taxes then we the people are paying the cost so they can make a profit.
You ever look at how many law suits are in the courts that were initiated by the same corporations that don''t pay taxes? Who is paying the court costs? WE ARE...
If I have to pay taxes on ever dime I earn, why shouldn''t the corporations?
I work, I earn money, I pay my bills, I also pay my taxes, but after all is said and done, I don''t have any profit left over...
To hear some people talk about not taxing corporations so they can have a profit and invest it into the business in a down time is crazy... Why can''t I do the same in my life?
I say a flat tax with NO loopholes. If you earn money in the USA your taxed at XX % no exceptions.
then we all could pay less in taxes because more would be paying taxes.
[Posted by pollroller1 at 11:13 AM : Aug 12, 2008]
if i can call myself (as an individual) a corporation, and deduct all the costs associated w/ being and sustaining as an individual (food, transportation, shelter, etc), then i''m all for it.
you can tax my income (as an individual), but why shouldn''t i have the ability to deduct the costs of being an indivual from the income that comes to me as an individual ... just like a corporation can do?
*********!
Business should IMO pay more in income taxes than citizens. Citizens should not be paying taxes that are then given to corps. Period! NO MORE CORPoRATE WELFARE!!!
Posted by diatreme at 11:22 AM : Aug 12, 2008
Do you pay taxes when you have no earnings?
Corporations are essentially owned by the shareholders. The profits go to the shareholders whom are taxed. The profits are taxed. When you try to increase taxes on a corportation, that money would be taken away from the profits (shareholders) and would cause a decrease in share value. This is when those lay-off notices begin to flow. The other option to offset taxes is to pass on the cost to the consumer. There is no other option.
Corporations are job providers (some very greedy). They are needed for the salaries that many would like.
Bottom line, Your only taxing yourself when you tax businesses.
Posted by tcandrews62
Yes, I pay taxes on everything I earn regardless if I can profit or not. The cost of my living slightly exceeds my income (due to inflation this year) and I can''t "Profit" (or save) a penny, but still I pay my fair share of income taxes...
Why shouldn''t a corporation pay the same as me???
Posted by jtdev1 at 01:03 PM : Aug 12, 2008
I understand what you are saying.
However, understand that a corporations profits would be equivelent to your netincome. Unfortunately, the tax system doesn''t allow personal expenses and utilities to be included in deductions.
I like the idea of all of us becoming or creating personal corporations. This might control large frivolous lawsuits as well.
Posted by pollroller1 at 12:00 PM : Aug 12, 2008
Well I know when I was growing up and while we were becoming the greatest economic superpower on the Planet... You remember those days? You know the days when we were a CREDITOR NATION?? Anyway they were always taxed and they should be taxed. WE''ve got to stop the Borrow mentality. We can''t just keep borrowing our kids future. My Dad, a member of the Greatest Generation, once told me. You give a Working stiff a Buck and he''ll spend it, thus creating a need for something. You create a need and someone will most certainly be greedy enough to fill it. Common Sense!! Sieg Heil McBush
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