Titanic Post

by James Parks, Aug 12, 2008
AFL-CIO NOW

Most corporations, including a large majority of foreign companies doing business in the United States, pay no income taxes, according to a report released today.

The Government Accountability Office (GAO) reported that two-thirds of both American and foreign companies doing business here end up avoiding all income tax obligations to the federal government, despite corporate sales totaling $2.5 trillion.

According to the GAO, each year from 1998 to 2005, an average of 68 percent of the foreign companies operating in the United States paid zero federal income taxes. During the same period, 66 percent of U.S. domestic corporations paid no federal income taxes to the government.

In 2005, 28 percent of large foreign companies (over $250 million in assets or $50 million in sales) doing business here paid no taxes, even though they reported $372 billion in gross receipts that year.

Twenty five percent of the largest U.S. corporations had $1.1 trillion in gross sales in 2005 and yet paid no federal income taxes for the year. Click here to read the report.

Sen. Byron Dorgan (D-N.D.) says the report is a “shocking indictment of the current tax system.”

It’s shameful that so many corporations make big profits and pay nothing to support our country. The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls. It’s time for the big corporations to pay their fair share.

Says Sen. Carl Levin (D-Mich.):

This report makes clear that too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States.

Levin and Dorgan requested the GAO study.

Despite the fact that many corporations pay no taxes, Sen. John McCain is proposing to cut the corporate tax rate.