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.
(Reporting by Donna Smith, Editing by David Wiessler)
http://www.reuters.com/article/newsO...080812?sp=true
Yep, that's because we have the 2nd highest corporate income tax rates in the world. Corporations that can, move their base of operation elsewhere because they can find better tax laws outside the USA.
The more you liberals want to tax them, the more they will take capital elsewhere. We need to severly reduce corporate tax rates if we want that money here.
How is that going to stop them from what they're doing right now? I mean, the US cannot possibly reduce the corporate tax to the levels of a country like Luxemburg.
What needs to be done is make them pay what they owe. I'm actually pretty pissed that we have to wait untilthe GAO comes out with a report like this in order to shed some light on the matter. Are the law makers unaware of these loopholes?
We don't need to. If we just reduce the tax rates to less than the places US corporations are moving to, they will come back.
They do, don't they?
Seems to me they do the best they can to follow the laws passed by congress.
This is not new news. It has been discussed on talk radio for as long as I have listened to talk radio. Fourteen years now.
Of course they are. They put them in for their friends and family. That's why Teresa Heinz Kerry only paid like 12% on her 2003 income of how many million?
Let me get this straight. Most companies don't pay any federal taxes. You say let's lower the tax rate on what they don't already pay. You then make the leap by blaming liberals because they don't pay federal taxes. What?
You can't. A tax heaven like Luxembourg requires very little money to run compared to the US. You simply cannot compete with them. What needs to happen is the loopholes need to be closed, and companies need to pay their share.
I think they actually do the best they can to go around the laws passed by Congress. Exactly what the report says: They're gaming the system.
Giving them a tax cut won't stop the gaming, it will just make them more money.
Of course it's not new. I also been hearing it forever. But as a taxpayer it bothers me to no end every time I hear it, especially coming from a government study.
There's no place for your partisan bitterness on this. They both do it, democrats and republicans alike.
Yes, they both do. However, it's the democrats that always say the rich don't pay enough. This was a sore point during the 2004 elections, it's election season now, I had to make the reminder.
Partisan, yes. Guilty as charged.
Why do you think they include these loopholes?
I'veeee got friendssssssssssss in high placesssssssssssssssssss
pitch fork forum
Too bad Bush never followed through on his promise to remove loopholes from the tax code beyond what he did with the 2003 tax cuts.
BTW, le is very misleading compared to the data. The data said most corps didn't pay any tax in at least one year, not an average yearly thing.
Big companies can always get out of paying taxes. Even if they made them pay taxes...guess who pays for it?
This is a very misleading article...
1) They state that the companies combined had $372 billion in sales. What were the companies combined expenses? What was the companies actual INCOME?
2) Many large corporations have parent/child relationships and report federal taxes at the parent level. For example if Parent company A has child companies 1,2, and 3, the combined taxes for 1,2, and 3 can be paid by company A. That is 75% of companies not paying taxes according to this study, but in reality all of the taxes are paid by one company.
In the end though, companies are going to do everything they can in order to pay as little taxes as legally required in a country with one of the highest corporate tax rates. Sadly for us Americans, this normally means shipping jobs overseas so they can allocate more income outside of the US.
They can try to close all of the loopholes that they want, but there will ALWAYS be ways to move income overseas LEGALLY. There will always be people getting paid very well to find the new loophole once one is sewn up.
You're blind if you think lowering taxes on large corporations is going to bring them back. They don't want to give Americans benefits and decent pay. It's as simple as that. As long as they can get away with slave labor in other countries they will. The only way to bring companies and jobs back to America is to tax the out of them bringing their products back to the US. F 'em. In return, small businesses will flourish because they won't have to compete with Target paying Sandeep and Kalpesh $1/hr, when small business have pay Joe six pack $10/hr.
ratm...I'm not blind, I see it everyday. Corporate tax is what I do for a living.
I wasn't talking to you, Ken. I didn't see you say anything about lowering taxes for corporations. You had a good post. I just think they should make it harder for companies to outsource or move overseas by penalizing them to the point where it's cheaper to just stay here. The US is a big market, so it's not like we don't have leverage to make these companies come back.
Cool.
The us market is only about 25-35% of the global market...and it's shrinking.
That's 25-35% of their profit. Let them try and make it up in Thailand.
"this normally means shipping jobs overseas so they can allocate more income outside of the US."
bull . Jobs are lost in America not because the corps pay high taxes (they DON'T pay the high rate anyway) but because jobs overseas, or just buying the products from overseas contractors (China, India), are cheaper than making the stuff in USA.
Corps NEVER put "country first", they don't, they can't give a about America or Americans. They only care about profits, which is, by fiduciary definition, their priority.
And corps have learned that the return on capital is hardwork that pays on average a 7-8% return over the decades. They make a higher return on taking their capital and playing money games in the financial sector, not in investing in bricks/mortar/making stuff or providing "service".
Do you put country first and claim no deductions/exemptions on your tax returns?
What's your point dude? Are you telling me that the largest corporations in the US don't make money even after expenses? You think they're not liable for that money? The government study clearly says some of them have NOT paid income taxes At ALL at various times. How you explain that?
Uhh. His point was that the corporations take the deductions and exemptions they are allowed to, just like most people.
If my deductions were enough that I had zero tax liability, would you expect me to pay taxes anyway? If you had deductions to eliminate your tax liability, would you not claim them and pay taxes anyway? It was a comment on boutons complaining about corporations never putting country first.
And I'm betting corps show a lot less profit than you think after they handle their expense. Regulations on expenses are fun and easily manipulated.
Couldn't have said it better myself...
There is a big difference between gross receipts (sales) and income. Many companies can operate at a net loss in a given year. So these companies should pay taxes when they didn't make any money for that year?
Which corporation do you work for? I'm sure they are glad to see that you are on their side. Corporations don't give a about the working people, and the working people could give a about corporations. It's just that simple. All we are is walking cash cows. They want your money, but they don't want to give anything back. But what happens when we run out of money?... hmm... interesting....
You're getting owned in this thread. Quit posting.
If you are so against corporations, it's rather simple. Don't buy ANYTHING!!! Get rid of the computer you are typing on and the car that you drive to work.
The funny thing is that most of the people who about the corporations that ship jobs overseas are the same people who aren't willing to pay 30% more for something made entirely in the US (if there is such a thing anymore).
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