Two-thirds of U.S. corporations paid no
federal income taxes between 1998 and 2005, according to a new report from
Congress.
The study by the Government Accountability Office, said about 68%of foreign
companies doing business in the U.S. avoided corporate taxes.
"It’s shameful that so many corporations make big profits and pay nothing
to support our country," said Senator Byron Dorgan.
An outside tax expert, Chris Edwards of the Cato Institute in Washington, said increasing
numbers of limited liability corporations and so-called "S"
corporations use the fiddle of paying 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.
More than 38,000 foreign corporations had no tax liability in 2005 and 1.2
million U.S. companies paidno 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 has 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.
All capitalist firms operating in the USA
are completely dependent on public provision of roads and communications, power
generation and other infrastructure. Why should the workers pay their taxes in effect to subsidise their profits?
