Posted on 08/13/2008 10:53:57 AM PDT by newbie2008
At least one liberal reports this as proof we need to keep corporate taxes high:
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.
It might be worth noting, though, that a majority of these firms had no taxable income. For U.S. corporations, 9% had no gross profits (sales minus cost of goods sold), another 7% had no total income (gross profit plus dividend, interest, rent, royalties and capital gains or losses, and other losses.), and a clear 58% more had no taxable income before any net operating loss deductions or special deductions. 69% of that last number comes from deducting things like salaries, interest, depreciation, advertising and the like. (Source: GAO study.)
The Tax Foundation notes that 99.7% of the corporations in the study that paid no income tax in 2005 were large. Why did they not pay taxes?
For example, in a "clever tax dodge", American Airlines avoided income tax for 2005 by losing $862 million. General Motors lost $10.5 billion in 2005; I bet those greedy fat cats didn't pay any corporate income tax, either.
Good theory, but in some states like West Virginia there
is a thing called a business and occupation tax.
A business is taxed on its gross revenue rather than its
income after expenses. Of course WV is not really a state but rather it is a condition!
[Losing that sort of money is simply creative accounting. ]
Corporations pay NO taxes, EVER. Their customers do! Learn it...live it...love it!
:)
I understand business quite well thank you. You are preaching to the choir, in case you didnt read my tagline.
I love it. I have been told that we cant keep this up forever, but as good as it feels I think I’ll keep it up till I need glasses.
It is all in how you structure, S-Corp, C-Corp or LLC, and just how good your accountant is. Definitions are everything. Everything is a business expense. Even the new guns and ammo are pest control. They then become a part of cost of goods sold.
Anyone who has an accountant that believes you should pay taxes needs to find a new one.
Corporations never pay income taxes. They pass the cost of those taxes onto the consumer in the form of higher prices.
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