Do Most Companies Really Pay No Taxes?
According to the Associated Press's interpretation of a new Government Accountability Office report, "Two thirds of U.S. corporations paid no federal income taxes between 1998 and 2005." Really, the guys over at the Tax Foundation beg to differ. They note that the actual report tells a different story.
In fact, what the report shows is that only 25% of large U.S. corporations paid no corporate income tax in 2005. In 85% of those cases, the large corporation paid no income tax because it had zero or negative net income for 2005. No income, no income tax. For example, in a "clever tax dodge," American Airlines avoided income tax for 2005 by losing $862 million. General Motors lost $10.5 billion in 2005; I bet those greedy fat cats didn't pay any corporate income tax, either.
At least the AP story did manage to quote Chris Edwards of the Cato Institute, who offered this additional explanation:
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.
"Half of all business income in the United States now ends up going through the individual tax code," Edwards said.
Me: This isn't even a conservative/liberal issue, really. Plenty of folks on the left, at least economists, understand that U.S. companies have too high a tax rate and think it should be lowered for competitiveness reasons.
Tags: taxes | corporate taxes
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Reader Comments
There is no left right paradigm on taxes, only what is fair and unfair.
Until these people are willing to honestly and openly discuss the issues of taxes that any intelligent person knows to be true they wont be taken seriously. As we've seen by this latest election you can only rile up so many unintelligent people to your cause so they're fighting a losing battle.
Until we hear 'real tax rates' in a discussion on tax you can be sure they're not interested in tax fairness.
Come to the table with honesty and truthfulness and you will be taken seriously. Until then you're just another shill desperate to game the system in the favor of those you represent.
The days of this working is over. The middle class knows they're getting the raw end of the deal. Their wages are going down, they're getting less services, and their dollar is not going as far. All the while the rich get richer.
Everytime entries like this are posted it just weakens the position the poster seeks to strengthen. You can fool some of the people some of the time but you cant fool all the people all the time.
In the eyes of most you people are transparent to the point of unintended humor.
Chris of AZ
What you fail to account for is that with corporations paying a corporate tax, the money is subject to DOUBLE TAXATION< thereby sending more of the money to DC. The reason they file as S Corps is because they're saving money.
Then again, I'm sure you're brighter than all those MBAs in Finance advising these corporations, right?
Corporate taxes
Ssssshhhhh...or next thing you know, Congress will tax corporate losses too!
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