Most Corporations Don't Pay Income Taxes
Submitted by Chip on Tue, 2008-08-12 23:03.
Most Corporations Don't Pay Income Taxes
by: Richard Rubin | Congressional Quarterly
Most corporations, including the vast majority of foreign companies doing business in the United States, pay no income taxes, according to a Government Accountability Office report released Tuesday.
During the eight-year period covered by the report, 72 percent of foreign-owned corporations went at least one year without owing taxes, and the same was true for 55 percent of domestic corporations.
Small companies were much more likely to pay no taxes than larger companies. Still, more than 3,500 large domestic corporations - with more than $250 million in assets or $50 million in gross receipts - did not pay taxes in 2005.
The report said about 80 percent of the companies studied paid no taxes because they didn't generate any profit after expenses. Money-losing companies can legitimately owe no tax, and others can use provisions of the tax code to lower or eliminate their liability.
But the lawmakers who sought the data seized on the report as proof of corporate gamesmanship.
"It's shameful that so many corporations make big profits and pay nothing to support our country," said Byron L. Dorgan , D-N.D., who requested the report along with Carl Levin , D-Mich. "The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls."
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