<div class='quotetop'>QUOTE </div><div class='quotemain'>Most companies in US avoid federal income taxes By JENNIFER C. KERR, Associated Press Writer Tue Aug 12, 6:31 AM ET 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.</div> Link
Outrage! Big oil and union-busting corporations are full of tax cheaters! Just one problem.... <div class='quotetop'>QUOTE </div><div class='quotemain'>AP Makes Serious Error in Story on Corporate Income Tax Last update: 4:18 p.m. EDT Aug. 12, 2008 WASHINGTON, Aug 12, 2008 /PRNewswire-USNewswire via COMTEX/ -- AP's Misreading of GAO Report Repeated Uncritically by Other Media An AP article today on the GAO's new report on corporate tax liabilities contains a serious error that undermines the story's thesis. The AP reported that, according to the GAO study comparing tax liabilities of corporations from 1998-2005, "about 25 percent of the U.S. corporations not paying corporate taxes [in 2005] were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts." Furthermore, this claim was repeated in numerous stories. After careful review of the AP's story, Tax Foundation economist Josh Barro found that the AP significantly overstated the number of large corporations not paying corporate taxes. "The actual report reflects that, of the 1.26 million U.S. corporations with no 2005 tax liability, just 3,565 were large," says Barro. "That's 0.28%, which is 90 times less than the figure reported by the AP. Policymakers and the public should not be deceived by this story that misrepresents the GAO report." While the AP story quoted Sen. Byron Dorgan (D-ND) citing this report in claiming that "it's time for big corporations to pay their fair share," Barro explains that, according to the GAO report, 75% of large corporations did pay corporate income tax in 2005. Furthermore, in the vast majority (85%) of cases where they did not, it was because they had zero or negative net income for 2005. For instance, American Airlines and General Motors avoided income tax for 2005 by losing $862 million and $10.5 billion, respectively, in 2005. "These facts significantly undercut the thrust of the AP's story, which is that significant numbers of corporations, especially large ones, are avoiding tax liability," Barro stated. "In fact, the GAO report shows that large, profitable corporations are paying taxes on their profits."</div> Link
<div class='quotetop'>QUOTE (Real @ Aug 12 2008, 10:52 PM) <{POST_SNAPBACK}></div><div class='quotemain'>Outrage! Big oil and union-busting corporations are full of tax cheaters! Just one problem.... <div class='quotetop'>QUOTE </div><div class='quotemain'>AP Makes Serious Error in Story on Corporate Income Tax Last update: 4:18 p.m. EDT Aug. 12, 2008 WASHINGTON, Aug 12, 2008 /PRNewswire-USNewswire via COMTEX/ -- AP's Misreading of GAO Report Repeated Uncritically by Other Media An AP article today on the GAO's new report on corporate tax liabilities contains a serious error that undermines the story's thesis. The AP reported that, according to the GAO study comparing tax liabilities of corporations from 1998-2005, "about 25 percent of the U.S. corporations not paying corporate taxes [in 2005] were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts." Furthermore, this claim was repeated in numerous stories. After careful review of the AP's story, Tax Foundation economist Josh Barro found that the AP significantly overstated the number of large corporations not paying corporate taxes. "The actual report reflects that, of the 1.26 million U.S. corporations with no 2005 tax liability, just 3,565 were large," says Barro. "That's 0.28%, which is 90 times less than the figure reported by the AP. Policymakers and the public should not be deceived by this story that misrepresents the GAO report." While the AP story quoted Sen. Byron Dorgan (D-ND) citing this report in claiming that "it's time for big corporations to pay their fair share," Barro explains that, according to the GAO report, 75% of large corporations did pay corporate income tax in 2005. Furthermore, in the vast majority (85%) of cases where they did not, it was because they had zero or negative net income for 2005. For instance, American Airlines and General Motors avoided income tax for 2005 by losing $862 million and $10.5 billion, respectively, in 2005. "These facts significantly undercut the thrust of the AP's story, which is that significant numbers of corporations, especially large ones, are avoiding tax liability," Barro stated. "In fact, the GAO report shows that large, profitable corporations are paying taxes on their profits."</div> Link </div> Very surprising, seems like quite an egregious error.
