1.2 million companies with $2.5 trillion in sales paid zero in 2005
Washington (14 Aug. 2008) - Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, says a new report from the U.S. Congress.
The study, completed by the Government Accountability Office (GAO), also finds that 68% of foreign companies doing business in the U.S. avoided corporate taxes over the same period.
In 2005, for example, more than 38,000 foreign corporations had no tax liability at all 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% of U.S. companies not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.
The GAO analysed Internal Revenue Service (IRS) data from sample corporate returns filed between 1998 and 2005. For the year 2005, it reviewed 110,003 returns from more than 1.2 million corporations doing business in the U.S.
"It's shameful that so many corporations make big profits and pay nothing to support our country," said Senator Byron Dorgan, a Democrat from North Dakota. Dorgan asked for the GAO study along with Senator Carl Levin, also a Democrat, from Michigan.
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. The agency speculated that companies may escape paying taxes because of declared operating losses or because of tax credits.
"It's time for the big corporations to pay their fair share," Dorgan said.
NUPGE
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring that our common wealth is used for the common good. NUPGE
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