Most companies in US avoid federal income taxes

Most companies in US avoid federal income taxes

biz.yahoo.com

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.

(visit the link for the full news article)

More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.

Dorgan and Levin have complained about companies abusing transfer prices -- amounts charged on transactions between companies in a group, such as a parent and subsidiary. In some cases, multinational companies can manipulate transfer prices to shift income from higher to lower tax jurisdictions, cutting their tax liabilities. The GAO did not suggest which companies might be doing this.

So basically the system is set up so that corporations can find numerous loopholes through which they can jump, wiggle, swagger, or stagger leaving them free and clear of paying taxes like the rest of us 'citizens'.

So often on this site those who tend to support corporate interests often talk about how these corporations are not evil because they money they make feeds the US economy and their taxes pay for a large portion of government services. Well I guess this helps dispel that myth.



biz.yahoo.com
(visit the link for the full news article)

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Most companies in US avoid federal income taxes

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