Most US corporations pay no taxes

[Stalin]

"...A study released Tuesday by the Government Accountability Office (GAO) reveals that the majority of corporations pay no federal taxes on profits accrued through business conducted within the US.

From 1998-2005, the period covered by the survey, about two thirds of both domestic and international businesses paid no federal taxes, while about one quarter of large US corporations, defined as those with over $250 million in assets and at least $50 million in sales, had no tax liability.

While it failed to name the ways specific corporations avoided taxes, the GAO survey, based on Internal Revenue Service records, attributes the failure to three factors: tax credits, operating losses and “transfer pricing,” which means corporations internally shift taxable profits to their own subsidiaries in lower-tax nations.

Both Senators John McCain and Barack Obama have proposed lowering the top-end US corporate tax rate if elected. At least on paper, it is possible for extremely profitable corporations to be taxed as much as 35 percent of their profits in the US, a higher top-end corporate tax rate than prevails in most other advanced industrial OECD (Organization for Economic Cooperation and Development) nations, although the US top-end income tax rate for extremely wealthy individuals is among the lowest.

more corporate welfare at http://www.wsws.org/articles/2008/aug2008/ctax-a15.shtml

from Comrade Stalin - The Original Georgian Politician

 

[Libsmasher]

AP Makes Serious Error in Story on Corporate Income Tax
An AP article today on the GAO's new report on corporate tax liabilities contains a serious error that undermines the story's thesis. The AP reported that, according to the GAO study comparing tax liabilities of corporations from 1998-2005, "about 25 percent of the U.S. corporations not paying corporate taxes [in 2005] were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts." Furthermore, this claim was repeated in numerous stories.

After careful review of the AP's story, Tax Foundation economist Josh Barro found that the AP significantly overstated the number of large corporations not paying corporate taxes.

"The actual report reflects that, of the 1.26 million U.S. corporations with no 2005 tax liability, just 3,565 were large," says Barro. "That's 0.28%, which is 90 times less than the figure reported by the AP. Policymakers and the public should not be deceived by this story that misrepresents the GAO report."

Click here to read the rest. Click here for more on corporate taxes.

(Go to the tax foundation site to click on the expanded report links)

http://www.taxfoundation.org/

 

[PLC1]

A well run corporation should pay no taxes. Think about it:

Any money that the corporation makes should either be used to run the business (tax deductible), or paid to the shareholders (also tax deductible.) There shouldn't be anything left for that non person we call a corporation to keep and pay taxes on. What is the corporation to do with its profits if not pay shareholders and invest in its business?

The shareholders, of course, do pay taxes on the dividends. Were the corporation to also pay taxes on the same money, that would be double taxation.