Author Topic: Study says most corporations pay no U.S. income taxes  (Read 647 times)

Straw Man

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Study says most corporations pay no U.S. income taxes
« on: October 20, 2008, 08:02:05 PM »
WASHINGTON (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.

http://www.reuters.com/article/newsOne/idUSN1249465620080812

http://www.gao.gov/new.items/d08957.pdf

Bindare_Dundat

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Re: Study says most corporations pay no U.S. income taxes
« Reply #1 on: October 20, 2008, 08:03:40 PM »
Why didnt they name names?

Straw Man

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Re: Study says most corporations pay no U.S. income taxes
« Reply #2 on: October 20, 2008, 08:10:39 PM »
Why didnt they name names?

The report was done by the GAO and it probably went to every extreme to avoid even the appearance of bias. 

CQ

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Re: Study says most corporations pay no U.S. income taxes
« Reply #3 on: October 21, 2008, 11:25:38 AM »


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.

I've been saying this forever.

Its exactly why we are tax free and we are rolling in benefits such as free health, college and more, and not being taxed - no income, sales, capital gains etc. You make money, you keep it all, that simple. Same with the other 20 or so non-oil rich places around the world that have no tax, survive off allowing others to base themself there with far lower tax liability.

Is why I die laughing as I see with my own eyes [literally, tiny tiny place we see all] US politicans here making sure they don't have to pay US taxes, pay another nation instead, all while preaching patriotism ;D

stormshadow

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Re: Study says most corporations pay no U.S. income taxes
« Reply #4 on: October 21, 2008, 11:56:39 AM »
This is not anything surprising to those that have even MINIMUM business knowledge.

Most corporations (C-corps) will Zero out their income because they are taxed at the corporate level, then profits are taxed as dividends.

The Majority of C-corps will either zero out at year end, or not distribute the gain as profit, thus no tax.

Also, the fact that C-corps can have a different year end makes them a great tool to use in zeroing out other portfolio businesses.

WHAT ABOUT ALL THE  BUSINESSES THAT FILE AS AN LLC - LIMITED LIABILITY COMPANY (not a corporation)




Straw Man

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Re: Study says most corporations pay no U.S. income taxes
« Reply #5 on: October 21, 2008, 12:11:21 PM »
This is not anything surprising to those that have even MINIMUM business knowledge.

Most corporations (C-corps) will Zero out their income because they are taxed at the corporate level, then profits are taxed as dividends.

The Majority of C-corps will either zero out at year end, or not distribute the gain as profit, thus no tax.

Also, the fact that C-corps can have a different year end makes them a great tool to use in zeroing out other portfolio businesses.

WHAT ABOUT ALL THE  BUSINESSES THAT FILE AS AN LLC - LIMITED LIABILITY COMPANY (not a corporation)


There were other articles about this study that addressed your point.

http://www.huffingtonpost.com/2008/08/12/representation-without-ta_n_118455.html

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.

Personally, I'd like to take all my income as dividends and be taxed @ 15%



"Half of all business income in the United States now ends up going through the individual tax code," Edwards said.