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Why don't they fix THESE loopholes?

Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said. 

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

 

More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

 

During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.

 

The report did not name any companies. The GAO said corporations escaped paying federal income taxes for a variety of reasons including operating losses, tax credits and an ability to use transactions within the company to shift income to low tax countries.

 

With the U.S. budget deficit this year running close to the record $413 billion that was set in 2004 and projected to hit a record $486 billion next year, lawmakers are looking to plug holes in the U.S. tax code and generate more revenues.

 

Dorgan in a statement called the report "a shocking indictment of the current tax system." Levin said it made clear that "too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."

 

The study showed about 28 percent of large foreign corporations, those with more than $250 million in assets, doing business in the United States paid no federal income taxes in 2005 despite $372 billion in gross receipts, the senators said. About 25 percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year, they said.

Answer Question
 
sweet-a-kins

Asked by sweet-a-kins at 1:23 PM on Feb. 21, 2011 in Politics & Current Events

Level 34 (67,502 Credits)
Answers (26)
  • That's an excellent question. One that isn't put out there very often. It's much easier to vilify the poor  than to take on the real power brokers.

    adnilm

    Answer by adnilm at 1:25 PM on Feb. 21, 2011

  • corporations do not pay taxes. People do.
    Carpy

    Answer by Carpy at 1:32 PM on Feb. 21, 2011

  • The GAO said corporations escaped paying federal income taxes for a variety of reasons including operating losses, tax credits and an ability to use transactions within the company to shift income to low tax countries


    The study showed about 28 percent of large foreign corporations, those with more than $250 million in assets, doing business in the United States paid no federal income taxes in 2005 despite $372 billion in gross receipts, the senators said. About 25 percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year, they said.

    sweet-a-kins

    Comment by sweet-a-kins (original poster) at 1:34 PM on Feb. 21, 2011

  • "72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

    Oh my, for at LEAST ONE YEAR?? Do you remember the .com bust when many companies disappeared, or nearly went bankrupt during that time? How many private citizens didn't pay federal tax during that time? How many private citizens haven't paid federal tax in the last few years?
    Carpy

    Answer by Carpy at 1:40 PM on Feb. 21, 2011

  • Oh my, for at LEAST ONE YEAR?? Do you remember the .com bust when many companies disappeared, or nearly went bankrupt during that time? How many private citizens didn't pay federal tax during that time? How many private citizens haven't paid federal tax in the last few years?


    What is the impact?

    sweet-a-kins

    Comment by sweet-a-kins (original poster) at 1:43 PM on Feb. 21, 2011

  • corporations do not pay taxes. People do.


    Of course corporations pay taxes, a corporation, because it is not owned by an individual, pays its own taxes on profits.  A sole proprietorship, partnerships and llc's do not pay taxes, those taxes are passed on through to their owners. 

    adnilm

    Answer by adnilm at 1:54 PM on Feb. 21, 2011

  • And. Please do some reseach.people pay taxes
    Carpy

    Answer by Carpy at 2:43 PM on Feb. 21, 2011

  • There are loopholes EVERYWHERE that need to be fixed. I suppose if they were forced to pay taxes they would do their business elsewhere?
    Raine2001

    Answer by Raine2001 at 2:44 PM on Feb. 21, 2011

  • Not that I agree, or that it excuses them. Everyone, all business should pay taxes. Except churches and some organizations, but ya know. Money makes the world go round.
    Things need to change before this country goes down in flames.
    Raine2001

    Answer by Raine2001 at 2:46 PM on Feb. 21, 2011

  • Sole proprietorships pay TONS of different taxes. I know...I write checks all the time.

    IMO, companies that manufacture products overseas should face a 25% tariff to bring their good into the country. This would make it a lot less profitable to do business overseas.
    yourspecialkid

    Answer by yourspecialkid at 3:00 PM on Feb. 21, 2011

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