Most Corporations Pay No U.S. Income Taxes
November 4th, 2008Via: 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.
When I read a comment here where Ron Paul was reported to have said that US corporations are saddled with punitive income taxes, I had a gut-feeling that wasn’t entirely true. Not to mention the fact that corporations get a huge amount of hand-outs in the form of corporate welfare. The justification for that used to be so that the corporations wouldn’t export as many US jobs as they possibly could, but that would appear to be no longer the case.
All federal income taxes are punitive (and unconstitutional). It’s just that some corporations are “more equal” than others, and have friends in high places that make sure their “creative accounting” doesn’t get exposed (or penalized if it does). The little guys, such as your typical small family corporation, don’t bribe their Congresscritter for special favors, aren’t given corporate welfare — those peons get jail time if they are caught trying to withhold taxes from The Man; but the big guys, if exposed at all, are pardoned or get to disappear with their billions … or get hired by the Fed.
In 2001, Ron Paul tried to repeal the 16th Amendment, to eliminate federal income taxes altogether:
“The income tax has given government a claim on our lives,” Paul stated. “It has enabled government to expand far beyond its proper limits, invade our privacy and penalize our every endeavor. The Founding Fathers never intended an income tax, and they certainly would be dismayed to know that Americans today give more than a third of their income to the federal government.”
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