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GAO report: Majority of U.S. corporations paid no federal income taxes '98-'05
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WASHINGTON — Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.
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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On the Net:
Government Accountability Office: http://www.gao.gov
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Typical outcome, socialism for the rich, social darwinism for every one else.
Bring on the Guillotines!
#1 Posted by greathornedlizard on August 12, 2008 at 8:21 a.m. (Suggest removal)
Watch this story disappear as quick as yesterdays story about "Port Sugar" in the Everglades..
#2 Posted by greathornedlizard on August 12, 2008 at 8:27 a.m. (Suggest removal)
Republicans... giving their buddies a free ride.
VOTE DEMOCRAT!!
#3 Posted by Lemme on August 12, 2008 at 8:51 a.m. (Suggest removal)
What an outrage! And the tax burden continues on the backs of the less fortunate. Lemme, your response is typical of the ignorant and uninformed masses. The Republicans are not entirely to blame nor are the Democrats. They both share the blame equally and it's up to both parties to fix it.
#4 Posted by FloodGate on August 12, 2008 at 9 a.m. (Suggest removal)
This explains my tax bill!!
;-)
#5 Posted by Optipess on August 12, 2008 at 9:19 a.m. (Suggest removal)
Lemme: get a clue. It's been happening for years. Even under your prescious Bill clinton administration...
#6 Posted by Philly on August 12, 2008 at 10:39 a.m. (Suggest removal)
1.2 million big corporations?? There are not that many in this country. Most of us are small S corporations that pay our fair tax burden through personal filing, so technically we do not pay corporate federal income tax. These leaders do not know business from the proverbial hole in the ground.
#7 Posted by wmjstc on August 12, 2008 at 10:46 a.m. (Suggest removal)
Pay no Taxes.......no big deal
Pay no dividends.........WE NEED AN INVESTIGATION!!!!
;-)
#8 Posted by Optipess on August 12, 2008 at 11:01 a.m. (Suggest removal)
Does that mean if the ally gets leased out to a foreign company that they don't pay taxes either?
Well no wonder they want to come over here and in vest in America. They get to keep more money that way.
Any one of you bussiness people care to answer my question.
#9 Posted by chincieone on August 12, 2008 at 12:02 p.m. (Suggest removal)
This is a dumb, misleading story. Most US corporations are S corporations, whose shareholders certainly do pay taxes on the corporations' income.
Shame on you AP, NDN!
#10 Posted by ex31539er on August 12, 2008 at 1:39 p.m. (Suggest removal)
So the Bush Administration wasn't a complete catastrophe, at least the crooks and friends of DUBYA (what a moronic nickname) all seem to have made it out alive and well while the majority of the country will be suffering from this mental midget and his merry band of thieves for a decade.
If you see one of those idiot republicans with a W bumper sticker; pull over and stay out of their way because those idiots are so delusional they are worse than drunk drivers.
#11 Posted by kneejerk on August 12, 2008 at 1:59 p.m. (Suggest removal)
The Bush Administrations new slogan; "Like Russians only our leader can't speak English"
#12 Posted by kneejerk on August 12, 2008 at 2 p.m. (Suggest removal)
Clinton Admin - 01/1993 - 01/2001
Bush Admin - 01/2001 - 01/2009
The article says from '98 - 2005.
But for those of you who'd make stupid generalizations....they don't legislate law.
And who of you don't go to your accountants, looking for loopholes, breaks, etc.? And who of you do, when you can?
And who of you can say your reps, don't vote the way of their constituants?
These corps. are just working within the laws you've all voted for. And if you don't vote...shame on you.
#13 Posted by Parkmom on August 12, 2008 at 2:20 p.m. (Suggest removal)
Ah, the uneducated tax propetionals are out today.
Just do some research on the Federal Reserve/income tax/IRS and you will get the picture of whats going on.
There is nothing federal about the Federal Reserve Bank<------It is 12 privatly owned banks that have the power to print US dollars. And our hovernment pays them to do it. But the law says only Congress has that power<---still searching for an answer on why this is. I only get emails from lawmakers saying that I am not in thier district and the ones that are never email me back or return my calls!
The Federal reserve is the only for profit or non-profit US Corporation that doesn't get audited or has to pay taxes<----smells like lowtide to me!
#14 Posted by PHINFAN on August 12, 2008 at 3:53 p.m. (Suggest removal)
Didn't you get the Obituary?
The middle class died a few years back.
#15 Posted by Optipess on August 12, 2008 at 5:32 p.m. (Suggest removal)
From 1998 to 2005, a Republican lead congress.
#16 Posted by bossman1 on August 12, 2008 at 7:26 p.m. (Suggest removal)
Completely misleading and moot article designed to ruffle feathers. (And it's apparently getting the intended results.)
#17 Posted by almasonlybar on August 12, 2008 at 9:43 p.m. (Suggest removal)
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