Why is it that corporations do not pay income tax?
Tax code requires corporations to pay 35 percent of their profits in income taxes. … do it. There are myriad reasons why particular corporations paid don not pay taxes. MOST CORPORATIONS DO NOT PAY INCOME TAXES … They avoid paying income tax by investing their profits other way around. A recent study by the Government Accountability office has determined that from 1998 to 2005 67% of American corporations paid no Federal Income taxes. In addition, the study revealed that 68% of foreign corporations doing business in the US did not pay any Federal Income taxes during the same period. A link to the full article is posted below. Since the corporations play a major role in writing our tax laws it should not come as a surprise that the IRS regulations provide them with many ways to legally avoid or reduce their tax liability. US corporations completely escape taxes on profits earned outside the our country and only have to pay taxes on this income if they “repatriate” the earnings by ac
Most corporations, including the vast majority of foreign companies doing business in the United States, pay no income taxes, according to a Government Accountability Office report released Tuesday. During the eight-year period covered by the report, 72 percent of foreign-owned corporations went at least one year without owing taxes, and the same was true for 55 percent of domestic corporations. Small companies were much more likely to pay no taxes than larger companies. Still, more than 3,500 large domestic corporations – with more than $250 million in assets or $50 million in gross receipts – did not pay taxes in 2005. The report said about 80 percent of the companies studied paid no taxes because they didn’t generate any profit after expenses. Money-losing companies can legitimately owe no tax, and others can use provisions of the tax code to lower or eliminate their liability. But the lawmakers who sought the data seized on the report as proof of corporate gamesmanship. “It’s shame
