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Other Issues Discuss other areas of moral and worldly importance that other forum areas do not cover.

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Old 08-13-2008, 12:10 PM
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Default Most Companies Escape Paying Federal Income Taxes

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Most Companies Escape Paying Federal Income Taxes

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, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.

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.

The GAO study did not investigate why corporations weren't paying federal income taxes or corporate taxes and it did not identify any corporations by name. It said companies may escape paying such taxes due to operating losses or because of tax credits.

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.

The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S.

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.

"It's time for the big corporations to pay their fair share," Dorgan said.
Most Companies Escape Paying Federal Income Taxes - FOXBusiness.com
I posted this article to show how much things are stacked against the average person in this country and how corporations are favored. But since corporations buy our elected representatives with campaign contributions, gifts, promises of lucrative employment after they leave their government jobs, and other perks it is easy to understand how this state of affairs came about.

When I worked at a large corporation, the people who worked as Buyers in the Purchasing department had strict guidelines they had to follow.They weren't allowed to accept gifts from vendors nor even to give the impression that they were receiving any kind of perks. This was due to laws that ALL buyers in ALL companies had to follow.

Why aren't our elected representatives bound by any similar laws? They need to be. Until they are the individual will take a back seat to the corporations.
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Last edited by Lumara : 08-13-2008 at 12:11 PM. Reason: forgot link
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Old 08-13-2008, 12:23 PM
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Yet, everyone whines about the personal income taxes. Gee, ya think they might come down if these corps ponied up?

The way I figure it, everyone has a moral obligation to support their country and contribute their share. Corporations most of all, who wouldn't acheive the astronomical profits without the framework provided and maintained the government and our system. Freeloaders.

There are those that would say that many companies would leave the US if forced to pay their taxes. That's probably true. I think their really should be some laws governing that, against outright mercenaryism. To be an "American" company with all the benefits that entails, and to only have one tiny corner office, with 99% of the company's assets overseas is ridiculous, to me. Whatever. I'm no economist.

Just goes against my sense of fair play.
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Old 08-13-2008, 12:37 PM
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Ah, yes, don't you just love the way the article is spun?! What is being ignored here is all the tax deductions corporations are allowed to take - DEDUCTIONS PASSED BY DEMOCRATS AND REPUBLICANS ALIKE! So, what is really going on here is that the result of taking LEGAL DEDUCTIONS is that these corporations - most of which are small businesses but those damned leftist idiots don't want to recognize that fact - effectively paid no taxes. It's almost like individual taxpayers (you and me) getting a tax refund.

The article is a prime example of why there needs to be a flat tax and a complete elimination of all deductions.
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Old 08-13-2008, 02:05 PM
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Originally Posted by Chan View Post
Ah, yes, don't you just love the way the article is spun?! What is being ignored here is all the tax deductions corporations are allowed to take - DEDUCTIONS PASSED BY DEMOCRATS AND REPUBLICANS ALIKE! So, what is really going on here is that the result of taking LEGAL DEDUCTIONS is that these corporations - most of which are small businesses but those damned leftist idiots don't want to recognize that fact - effectively paid no taxes. It's almost like individual taxpayers (you and me) getting a tax refund.

The article is a prime example of why there needs to be a flat tax and a complete elimination of all deductions.
Aside from your constant, tiresome "damned leftist" rhetoric, I agree.

We need to simplify and close all these loopholes and convoluted escape clauses. It's taken a long, concerted effort by BOTH parties (damned leftists AND damned rightists) working together to wreck the whole point of fair taxation for the sake of political expediency.

I think some sort of legislation addressing outsourcing is in order, too. Maybe not outright protectionism, but the corporations have had it scot-free for far too long. There is a reasonable limit to unfettered capitalism. If corporations squeal that their taxes (or intelligent environmental constraints, etc.) eats into their profits, too bad, so sad.

It always just kills me when I see some corporation claiming it "lost" money. Bull. It merely failed to make as much as it wanted to. Cry me a river. Can't "lose" what you never had! And, if simply paying your fair taxes causes you to actually go bankrupt......maybe you need to re-think how razor-thin your profit margin is?

What did ExxonMobil make last quaarter? Yeah. Pony up, sparky....
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Old 08-13-2008, 02:14 PM
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Quote:
Originally Posted by Skerlnik View Post
Aside from your constant, tiresome "damned leftist" rhetoric, I agree.

We need to simplify and close all these loopholes and convoluted escape clauses. It's taken a long, concerted effort by BOTH parties (damned leftists AND damned rightists) working together to wreck the whole point of fair taxation for the sake of political expediency.

I think some sort of legislation addressing outsourcing is in order, too. Maybe not outright protectionism, but the corporations have had it scot-free for far too long. There is a reasonable limit to unfettered capitalism. If corporations squeal that their taxes (or intelligent environmental constraints, etc.) eats into their profits, too bad, so sad.

It always just kills me when I see some corporation claiming it "lost" money. Bull. It merely failed to make as much as it wanted to. Cry me a river. Can't "lose" what you never had! And, if simply paying your fair taxes causes you to actually go bankrupt......maybe you need to re-think how razor-thin your profit margin is?

What did ExxonMobil make last quaarter? Yeah. Pony up, sparky....
I have been saying that for quite some time. Not the corporations stuff, but the tax stuff.

Our tax system is horrible and corrupt. We have all these exemptions and loopholes. The tax code is so long that no one in their right mind would read it. The great majority of people do not file their taxes correctly because of the absurd complexity. Some tweaking in the code is just not going to do it.

We need to replace our code. We need a clean slate with legal workings in to to prevent new exemptions. I know I support fairtax, but I would support other systems if it came to it. Some change in the right direction is better than none.
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