Most companies in US avoid federal income taxes

Report says most corporations pay no federal income taxes; lawmakers blame loopholes

WASHINGTON (AP) — Unlike the rest of us, most U.S. corporations and foreign companies doing business in the United States pay no federal income tax, according to a new report from Congress.

The study by the Government Accountability Office, expected to be released Tuesday, said two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, and 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.

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– Hat tip to Cryptogon for this story 

One Response to “Most companies in US avoid federal income taxes”

  1. auntiegrav says:

    One more reason for a comprehensive consumption tax as the only way to tax people. We need government because we buy stuff. Government should be paid for, directly proportional to what we buy, not based on our monetary value, which they determine through bribes and schemes. All monetary purchases put a demand for resources on the ecosystem.
    Not to mention the anonymity of sales taxes….
    Corporations get away with this stuff because the system is designed by them. Obfuscation is the rule. Imagine what it would be like to work at a company where the engineers really got to decide something at the top level, instead of tax fraud specialists (accountants) always making the calls. How much profit is eaten up in recalls and ‘creating markets’ that never materialize, just because advertising is a deductible expense? How many insurance companies would be building $500,000 flagpoles (search “sheboygan acuity flag”) if they didn’t get to claim it was a ‘business’ expense? How about lobbying and PAC’s? How many ‘non’-profit agencies that pay exhorbitant salaries sucking up grant money to ‘study’ the effects of sex education would still exist without an income-tax scheme?
    Transparency is the key: in other words, honesty.