Report: Large Companies Aren’t Paying Federal Taxes

According to a new report from the Government Accountability Office (GAO), most U.S. corporations and foreign companies doing business in the U.S. pay no federal income tax, MSNBC reports. 

The study said two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, and about 68% 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.

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% 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.   ~