Most U.S. Corporations Do Not Pay Federal Income Taxes

[Djehuty-M]

WASHINGTON | Tue Aug 12, 2008 12:54pm EDT

(Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.

The report did not name any companies. The GAO said corporations escaped paying federal income taxes for a variety of reasons including operating losses, tax credits and an ability to use transactions within the company to shift income to low tax countries.

With the U.S. budget deficit this year running close to the record $413 billion that was set in 2004 and projected to hit a record $486 billion next year, lawmakers are looking to plug holes in the U.S. tax code and generate more revenues.

Dorgan in a statement called the report "a shocking indictment of the current tax system." Levin said it made clear that "too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."

The study showed about 28 percent of large foreign corporations, those with more than $250 million in assets, doing business in the United States paid no federal income taxes in 2005 despite $372 billion in gross receipts, the senators said. About 25 percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year, they said.

(Reporting by Donna Smith, Editing by David Wiessler)

[El Negro]

Not surprising at all! I think the income tax is aimed at employees. Why should corporations pay income taxes when their employees are going to?

[Djehuty-M]

Corporations give (jobs) and employees take! So why not tax employees? Corporations help the economy! They provide work which helps government.

This whole thing is a scheme and it is based upon the haves vs. the have nots. You got be somebody and you gotta have major snaps to ball in this game. You cannot be average or mediocre to play this game!

[El Negro]

Its funny because I was just reading a book on this it states:

"While a 1983 Internal Revenue Service study found that general taxpayers reported 94 percent of their true income, only 47 percent of income was reported by the self-employed, by professionals,  and by small-business owners..."

"Tax fraud is said to be the most popular crime in America. Not even drug abuse is as popular or as profitable."

"Perjury is probably the most under-prosecuted of all crimes. The offense itself is rampant, occurring during the course of most investigations and trials. But prosecutors rarely seek indictments"

"In 1981, for instance, a year closely studied, it was estimated that American taxpayers did no report $260 billion in income.....losing $75 billion in revenue that year."


Really people are lucky that the government agencies does not go harder on that ass. In Medieval Europe serfdom they went even harder, pushing people to the limits. I still feel that many of us don't deserve to be tax free anyways, as most will not contribute the money to anything of use. Look at what's done with the after tax income!

[Djehuty-M]

Our current system is as it should be and I've been on BOTH sides, so I know what I'm saying.

Tax. verb. "To stroke gently (with no Vaseline)."

[Brandon]

No society has a right to tax someone's hard earned money. If they put the money to good use or not it doesn't matter, its their money.