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Most Companies In US Avoid Federal Income Taxes
WASHINGTON - 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.
On the Net: Government Accountability Office: http://www.gao.gov
© 2008 Associated Press
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34 Comments so far
Show AllNothing new. But hey, we Americans are nothing more than fucking LOSERS for keeping the two-party duopoly intact by voting for these same scumbags who'll either give a bigger tax cut to the uber-wealthy and big business elites or let the tax loopholes expand.
VOTENADER.ORG !!
To me, nothing shows the endemic corruption of our American System of (mis)Government than this. However, this is NOT news - been reading about this for decades. Who's lobbyists wrote the Tax Code?!? Certainly not mine.
Thus, I decided a long time ago that, as long as things are this way - legally piggily - I will not participate in it. Withhold your Taxes to the Feds. I haven't got much money in their banks either, nor do I buy much from these heinous Corporations- just what I can't do without.
We (the people) have to start somewhere - we still have some power - let's use it the best we can as our individual circumstances allow. A small amout of pain now can prevent major illness later. If we don't - and soon - the System will crash around us. Then, what will happen to your assets?
Too bad the PUBLIC is to FEARFUL to understand and grasp and USE this ONE power left to them...the POWER OF THE PURSE..abdicated by congress....and so wholly powerful as to be capable of STOPPING in it's TRACKS the inexhorable march toward FASCISM we are experiencing...YOU ARE PAYING FOR THE WOLESALE DESTRUCION OF YOUR RIGHTS, THE ENVIRONMENT, AND YOUR VERY FUTURES...YOU!..PAYING THE SALLERIES OF THE FEDERAL LOYALIST CLERK ARMY TO SPY ON YOUR EMAILS...TO TAZER YOUR KIDS...YOU PAY FOR IT...TO BAD YO ARE TOO AFRAID TO STOP...IT REALLY IS!
Union of tax payers..for that is what you are..a UNION...STOP PAYING! STRIKE! Collective bargaining for a return to "representative" government, a Constitutional RESET to "default" settings...a CIVIL LIBERTIES RESET...a FEDERAL BALLOT INITIATIVE CONSTITUTIONAL AMENDMENT (Thank you Mike Gravel..brilliant idea..) to put an END to the Social Policies being made by a handful of people corrupted by special interests and 'religious' organizations..simply VOTE on ..Abortion, marijuana, etc...ALL SOCIAL POLICY should be voted into law..not DECIDED into law by one person..duhhh..
It is TIME to impose Economic Sanctions on this government until they GET THE MESSAGE AND COME BACK TO THE PEOPLE FOR THEIR "GUIDANCE" ON LEGISLATION...simple TAX BOYCOT...economic power is the only form left....argue this if you wish..but you are simply AFRAID...and they are counting on that..period...
Signing a tax return is a DIRECT VIOLATION OF YOUR 5th AMENDMENT RIGHTS TO NOT INCRIMINATE YOURSELF..PERIOD! So..do not do it! AND deprive a federal thug-runt of his or her sallery in the process..make em think twice about being a proffessional true believer...
IT IS TIME..MONEY is ALL they understand OR respect...can you say 'telecom immunity" ? that hould be ALL the "proof" anyone requires regarding where the 'loyalty' of our 'representatives' resides...they will choose ONE corporate entity over..OVER an entire NATION of regular "Citizens" if that is what they are TOLD to do by their financial MASTERS..they will do so..have done so..and continue to do so...until and or UNLESS we..WE hold a BIGGER FIST FULL OF REQUIRED CASH THAN THEY DO..and TAX dollars is the way to do that..PERIOD!
wake UP!
Right On, jcrumb ! It is the ONLY non-violent way to bring down these Cosmic in-your-face Crooks
"It's shameful that so many corporations make big profits and pay nothing to support our country"
The American people teach their children to admire the machine that enslaves them, murders their peers, and plunders the earth. Have they no shame?
My employer takes my taxes out of my check. How do I get them to not do that? I didn't file for the past 3 years and the IRS just froze my bank account.
Everyone keeps saying they aren't going to pay for this war, how are they getting around all of this?
How do I incorporate myself?
revolutionary war slogan:
"taxation without representation is tyranny!"
what do we call it when corporations have representation without taxation?
Nader4prez have you heard that the federal income tax is completely unconstitutional and was never passed in a court of law? Is that why you have been against filing your taxes because I have been considering doing that myself. So they just freeze you accounts when you do that? Check out this video there are some compelling interviews with IRS agents saying that you do not have to pay it and it has stood ground in modern court cases. I guess the only way to get around it is in court or with enough money anything can happen. http://www.youtube.com/watch?v=lBZne09Gf5A&feature=related
about 4 minutes in it covers the federal income tax.
This is a travesty. Rich corporations paying no income tax. I say we investigate who they are and go back for 10 years and make them pay what they owe. Then punish them with a 50% income tax from now on. No writeoffs, no deductions.
It's past time to require any company doing business in this country subject to income tax. If they share the commons, they need to pay for it.
So how many of the big corporations are feeding Dorgan, et. al? Nothing significant will ever be done as long as the two (one) party system maintains its control over the government. Obama does not represent real change. Only the name on the door will change; everything else will stay the course. The system indeed will crash around us and not a moment too soon. I'm just sorry that so many people already poverty stricken will find their lives even harder. Imagine the Great Depression but one thousand times worse because there are more people, there is more fake money in the system (credit) and too many people who have been stricken dumb, in the intelligence sense, to avoid the coming crash. Live it up, now, for tomorrow we die. And the day after? Maybe we'll be reborn, but more likely the revolution will be short and bloody and the same types of players will still end up on top of the heap.
And multinationals pay no tax in any country. Are we surprised?
The argument about double taxation is guilty of the straw man fallacy. First of all, all consumers are doubly taxed as they first pay income tax on their income then sales tax on their disposable income used for consumption.
As well, even though corporate tax rates are high in the United States, 2/3 don't not pay taxes according to this report and the 15% rate of taxation on dividends is low compared to the income tax rate schedule where tax payers making more than $78,850 pay at least 25% in taxes. In addition, capital; gains tax is only 15%.
Corporations are also undertaxed when you take into account corporate subsidies. Between 1996 and 2002 an average of $16 billion was given to farmers in one form or another. The government loaned the oil industry $20 billion since 2000.
There are many forms of benefits and gifts enjoyed by corporations in America and double taxation will not send them to the poor house.
http://www.stateofdarkness.com
talltreez86, yes income tax is unconstitutional, but does that mean it SHOULD be? A better question than "Is this the way the framers wanted government run?" is "Is this the way WE want government run?" The so-called founding fathers are no smarter or better people than we, and when you crystallize the constitution, you close the door on change. I for one think it makes a ton of sense to make people more able to afford it bear the brunt of the tax burden, assuming government exists and we pay taxes at all. The founding fathers wanted to avoid that because they were rich landowners who would have had to pay more in income tax were legal. What we need to do is close up all these ridiculous loopholes so that progressive taxation become progressive again, or abolish the system that supports our exploitation altogether.
One of the more sinister exhibits in this museum of corruption is Darth Cheney's moving all of his business assets to Dubai- (Blackwater, etc), while the infrastructure of America disintegrates. Senile McSame will be crowing about the virtues of Corporate person hood and being in bed with lobbyists, while outside the windows, the specter of disintegration hovers nearby in the form of the Minneapolis bridge that collapsed last year, killing 13 people.
McSame doesn't need infrastructure to maintain his Sultan like lifestyle. Everything in his life has been PRIVATIZED! He is Yo-Yo man! You're On Your Own Suckers! Buy your own private jets.
Of course it's way past time for the corporations to pay their fair share of taxes. But it simply will not happen while the two-party system of Democrats and Republicans, who have been bought off by the corporations. It's time to elect true progressives who will speak for We the People.
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Nader will change things.
Nader is our only hope.
Nader is the only choice.
Fight the Two-party system.
VOTE NADER 2008… You'll be glad you did and so will I…
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Even if we did manage to get organized enough to withhold our taxes, the regime will simply borrow more from China.
Representation without Taxation is called a Corporatocracy.
socialist_in_ct sez:
Representation without Taxation is called a Corporatocracy.
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Or Fascism
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Nader/Gonzalez 08
or
McKinney/Clemente 08
or show the Democrats that they can take your vote for granted.
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On Wednesday, August 27, right during the heart of the Democratic National Convention, we will be holding a Super Rally for 5,000-7,000 people at the University of Denver Magness Arena. (Check out our new Nader/Gonzalez video promoting our rallies here.)
http://www.youtube.com/watch?v=EmcIlEIQtcs
And we'll be hosting a second super rally in Minneapolis on September 4th at the Orchestra Hall during the week of the Republican National Convention.
Why?
To protest the corporate control over our political system and to call for opening the presidential debates.
Vote Nader/Gonzalez 2008
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http://www.votenader.org/issues/corporate-crime/
Nader/Gonzalez would crack down on corporate crime and violence with a twelve point program:
Increase Corporate Crime Prosecution Budgets: The Department of Justice's corporate crime division and the Securities and Exchange Commission have been chronically and pitifully under funded and therefore do not have sufficient resources to combat the corporate crime wave in the United States. This results in inadequate investigation, settlement of cases for weak fines and ignoring many corporate crime violators completely. There needs to be a strong corporate law and order will in the White House.
Ban Corporate Criminals from Government Contracts: The US should enact a tough, serious debarment statute that would deny federal business to serious and/or repeat corporate lawbreakers. The federal government spends $265 billion annually on goods and services. These contracts should not support corporate criminals. These standards should also apply to procurement contracts in Iraq.
Crack Down on Corporate Tax Avoidance: The US should punish corporate tax escapees by closing the offshore reincorporation loophole and banning government contracts and subsidies for companies that relocate their headquarters to an offshore tax haven. The IRS should be given more power and more budgetary resources to go after corporate tax avoiders. Publicly-traded corporations should be required to make their tax returns public.
Democratize Corporate Governance: Shareholders should be granted the right to democratically nominate and elect the corporate board of directors by opening up proxy access to minority shareholders and introducing cumulative voting and competitive elections. Shareholders should be given the power to approve all major business decisions, including top executive compensation. Shareholders should be treated as the owners of the corporation – since, in fact, that is what they are.
Expand Corporate Disclosure: Corporate sunshine laws should be enacted that require corporations to provide better information about their records on the environment, human rights, worker safety, and taxes, as well as their criminal and civil litigation records.
Rein in Excessive Executive Pay: Shareholder authorization should be required for top executive compensation packages at each annual shareholder meeting. Stock options, which now account for about half of the executive compensation, should be counted on financial statements as an expense (which they are). Tax deductions for compensation 25 times above the compensation received by the lowest paid worker in a corporation should be eliminated, as recommended by the famous business guru Peter Drucker.
Fix the Pension System: Corporations must be held more responsible for the retirement security of their employees. At a minimum we need to give workers a voice on the pension board; not require workers to stuff their 401(k) plans with company stock; and give workers the right to control their 401(k) plans. In addition, an Office of Participant Advocacy should be created in the Department of Labor to monitor pension plans.
Restore the Rights of Defrauded Investors: Repeal the self-styled securities reform laws that block defrauded investors from seeking private restitution, such as the private Securities Litigation Reform Act of 1995, which allowed the aiders and abettors of massive corporate crime (e.g., accountants, lawyers, and bankers) to escape civil liability.
Regulate Derivatives Trading: All over-the-counter financial instruments, including derivatives, should be subjected to the same or equivalent audit and reporting requirements as other financial instruments traded on stock exchanges. Rules should be enacted regarding collateral-margin, reporting and dealer licensing in order to maintain regulatory parity and ensure that markets are transparent and problems can be detected before they become a crisis.
End Conflicts of Interest on Wall Street: Enact structural reforms that separate commercial and investment banking services and prevent other costly, documented conflicts of interest among financial entities, such as those that have dominated big banks and security firms in recent years. The recent instability, deception and bailouts on Wall Street provide the immediate reasons for such reform.
Track the Extent and Cost of Corporate Crime: The Department of Justice should establish an online corporate crime database. Also, just as the FBI issues an annual street crime report, "Crime in the United States," it should also publish an annual report on corporate and white collar crime with recommendations.
Foster a National Discussion on Corporate Power: Establish a Congressional Commission on Corporate Power to explore various legal and economic proposals that would rein in unaccountable giant corporations. The Commission should seek ways to improve upon the current state corporate chartering system in a world of global corporations and propose ways to correct the inequitable legal status of corporations as "persons." The Commission would be led by congressionally-appointed experts on corporate and constitutional law, and should hold citizen hearings in at least ten cities followed by a public report and recommendations.
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Quality Time August 12th, 2008 3:23 pm said:
"How do I incorporate myself?"
The public would gain total power by incorporating We the People into the largest, richest corporation, against which all others would be forced to compete.
Instead of government of, by and for OTHER corporations, we could have a government of, by and for We the People that provides us dividends from the lease of our public resources.
Each American would get equal shares of non-transferable stock in our airwaves, land, air and water use and dividends in cash, clean water, air, land, universal healthcare, education, safe food, etc.
All with one easy publicly acceptable act of incorporation.
Any lawyers out there?
Why exactly is it that anybody pays income tax if there's no law that requires the collection of it? Employers expend a lot of time and money to collect taxes for the U.S. and I can't believe they would do it if they weren't forced to. Can there actually be any truth to the statement that we don't have to pay, and they don't have to collect? Senior moments aside, I just don't get how can this possibly be??
We should all be so lucky!
This disgraceful fact is another powerful argument for a 28th Amendment: only natural persons are protected by the 14th Amendment, not corporations as well. As long as corporations have the legal protection afforded them through Union Pacific vs. Santa Clara (and approximately 70 other Supreme Court decisions as well), it will be constant game of cat and mouse where the corporations have the advantage because they have more money and generally better lawyers.
As for incorporating one's self, unless the current laws change as I wrote above, it is highly advisable to do such if you operate any sort of business (even part-time). The two most popular US states for this are Nevada and Delaware (you do not have to be headquartered or operate there to be a chartered corporation). To get into the tax avoidance territory requires your corporation having at least seven figures in assets, otherwise the authorities in places like Dubai, the Cayman Islands, the Channel Islands, etc. are not interested.
LambsieDivy, it's not that there isn't a law mandating income tax, it's that there are laws, but they're unconstitutional.
Nannie [August 12th, 2008 7:30 pm], all of those things that Nader and Gonzalez would do if elected are great, but answer me this: How does Nader get elected when he's not on the ballot in enough states to win a majority of the electoral vote? The popular vote counts for nothing in our presidential elections -- just ask Al Gore -- the electoral vote is what's important -- so exactly how does Nader become president if he can't possibly get enough electoral votes to win?
Imagine my shock . . .
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Nader will change things.
Nader is our only hope.
Nader is the only choice.
Fight the Two-party system.
VOTE NADER 2008… You'll be glad you did and so will I…
.
Thanks for answering my question, Nannie. By asking people to vote for someone who has no chance of becoming president, you're basically perpetrating a fraud. So much for the honesty and integrity of the Nader campaign.
ThanK you
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good work. thank you
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