Corporations Avoid High U.S. Taxes

WASHINGTON (AP) - 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.

Well that's what happens when you have the highest corporate tax rate (35%) in the industrialized world other than Japan. Tack on state taxes and it's remarkable that anyone incorporates here.

"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.

No, what's shameful is that you two idiots are in any position of power. Does it ever occur to you that corporations wouldn't try so hard to avoid taxes if they were more reasonable? Since individuals end up paying all taxes at the end of the day and are ultimately the ones who own and work for corporations, they really mean that it's shameful that you aren't paying more.

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.

That's the most popular tax avoidance strategy there is, especially for the small businesses that employ 70% of the workforce. No doubt Levin and Dorgan will try to kill some businesses and jobs by targeting them.

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.

There's that "fair share" nonsense again. Why doesn't the government pay back its fair share and stop wasting our money! It's no coincidence that the only entity with a monopoly on the use of force to get its way, is the only one that will never consider doing with less.

"Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master." George Washington