Most US Companies Pay No Federal Income Tax

We like to read the non-US newspapers to get a better idea of what is happening in North America.

It does appear that change might be in the wind. But we're not optimistic.

Most people are still thinking in slogans, headlines, and cartoons of reality, shaped by what is given by the media, the professional story-tellers, and character assassins. One has to only look at the chain emails they receive, uncritically passed around from person to person, to see how pathetically misinformed the majority seem to be.

So many Americans say "Good!" when they hear that many corporations and the abundantly wealthy few are paying less taxes, without realizing that they and their children are paying for this instead, since government spending is increasing dramatically. They are paying for the billions being created by the Treasury and Fed to subsidize the reckless banks and the huge war profits of the corporations.

We are no better nor different than any other people that have been deluded and misled by propaganda, no matter how ridiculous it might have sounded to others. We asked, "How could they have believed that nonsense, right up to the point of their own destruction?" Now we know.

Its not that we are any less intelligent than others. We are more complacent, self-absorbed, conceited and naive, with our senses dulled by excess. And before you smile too smugly about the Americans, it is a high probability that your own country and central bank have deeply involved you in this financial scheme. Its just that their propaganda has a different tone and flavor.

"It also gives us a special, secret pleasure to see how unaware the people are around us of what is really happening to them." Adolf Hitler


Most Companies in US avoid Federal income taxes
12 Aug, 2008, 0955 hrs IST
The Economic Times (India)

WASHINGTON: Unlike the typical American citizen, most U.S. corporations and foreign companies doing business in the United States pay no federal income tax, according to a new report from Congress.

The study by the Government Accountability Office, expected to be released Tuesday, said two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, and 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, who asked for the GAO study with fellow Democratic Sen. Carl Levin.

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 were not 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.