DORGAN AND LEVIN RELEASE STUDY SHOWING MAJORITY OF CORPORATIONS PAY NO FEDERAL INCOME TAX
Tuesday, August 12, 2008
(WASHINGTON, D.C.) – Most corporations doing business in the United States pay no federal income tax to the federal government according to a new GAO (Government Accountability Office) study [PDF] requested by U.S. Senators Byron Dorgan (D-N.D) and Carl Levin (D-MI).
The report says that two thirds of both American companies and foreign companies doing business in the United States end up avoiding all income tax obligations to the federal government despite corporate sales totaling $2.5 trillion.
The report discloses that each year from 1998 to 2005, an average of 68% of the foreign companies doing business in the U.S. paid zero federal income taxes. During the same period 66% of U. S. domestic corporations paid no federal income taxes to the federal government.
In 2005, twenty eight percent of large foreign companies (over $250 million in assets or $50 million in sales) doing business in the U.S. paid no taxes even though they reported $372 billion in gross receipts that year. This amounts to 998 companies.
Twenty five percent of the largest U.S. corporations had $1.1 trillion in gross sales in 2005 and yet paid no federal income taxes for the year.
Senator Dorgan called the conclusions “a shocking indictment of the current tax system”. “It’s shameful that so many corporations make big profits and pay nothing to support our country. The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls,” Dorgan said. “It’s time for the big corporations to pay their fair share.”
“This report makes clear that too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States,” said Senator Levin.