In a tough economy, the income tax burden on individuals becomes more of a weight. Add the payments to higher gas prices, mortgages that are being reset at lofty levels and rising food costs and the results can be awful.
But at least corporations are paying income taxes to carry part of the burden of running the federal government, right? Too bad that it turns out that this assumption is wrong. As The New York Times writes, "Two out of every three United States corporations paid no federal income taxes from 1998 through 2005, according to a report released Tuesday by the Government Accountability Office, the investigative arm of Congress"
How sweet a deal is that?
Part of the trick is that many companies move money to countries outside the U.S. where the tax burden is lower.
In a period where the federal deficit is at nose bleed levels and individual tax payers are being crushed, Congress will probably be upset enough to pass bills to correct the inequity.
How the companies got away with it for so long is a question that is pretty disturbing.
Douglas A. McIntyre is an editor at 247wallst.com.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
Reader Comments (Page 1 of 1)
8-13-2008 @ 1:38PM
required said...
this land is their land - albeit artificial entities, they have a lot more power than one would naturally presume - multinationals the most
8-13-2008 @ 1:41PM
R. Kevin Smith said...
Doug:
As usual, you are an idiot. Of course all corporations pay tons of taxes. They withhold money from every employee for federal income tax (unconstitutional), medicare tax, social security tax (unconstitutional).
The government spends the money sent in like a drunken sailor who has only one day to live. Then, simpletons like you write an inane article to try to stir up the like-minded ignorant masses to think that not enough taxes are paid. Over 50 percent of all government spending is unnecessary and harmful to people. You are a pure socialist.
8-14-2008 @ 9:23PM
winslow said...
R Kevin Smith
You are citing employee taxes. What Doug is stating is that as a corporate entity, the regulations state that any service or production will also be taxed.
8-13-2008 @ 5:12PM
bandit said...
S Corps which many US companies are distribute profits to shareholders who pay tax on it on their individual income tax.
If you are not going to tell the whole story, don't bother posting this dribble.
8-13-2008 @ 4:40PM
william lindblad said...
It is a question of tax evasion/tax avoidance and the latter is legal. Both situations have been going on since biblical times. If you think this is bad you should do a business history on 100+ years ago, back in laissez faire.
8-14-2008 @ 9:24PM
winslow said...
The firm I worked for had 2 sets of accounting books, one for internal use and one for the government. The company never paid taxes. The company was making huge profits every year.