From the Family Economic Self Sufficiency Project of Wider Opportunities for Women.
According to a Government Accountability Office (GAO) report released on Tuesday, most corporations, including a majority of foreign companies doing business in the United States, pay no income taxes. During the eight-year period covered by the report, 72 percent of foreign-owned corporations went at least one year without owing taxes; the same was true for 55 percent of domestic corporations. The report covered the period from 1998 through 2005. During that time, corporate income taxes as a share of gross domestic product dipped, from 2.2 percent in 1998 to 1.2 percent in 2003, the lowest share since 1983. But receipts jumped after that, hitting 2.7 percent in 2006 and 2007, according to the Office of Management and Budget. That was the highest share since the late 1970s. Senators Byron Dorgan (D, ND) and Carl Levin (D, MI) requested the report, which may be found at http://www.gao.gov/new.items/d08957.pdf. In commenting on the report’s finding, Senator Dorgan said “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.”
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What a stupid set of comments. The US has a primarily income-based tax system. Those "72%" would have been paying sales, use, real estate, and other taxes, but the reference presumably is to a year not owing income taxes. In other words, in those 7 years, 72% of the foreign businesses did not turn a profit. Not stated, but likely these are recent years during which there has been a marked increase in foreign investment, due in part to the weak dollar. So are we surprised that start-up businesses do not turn a profit in their first year, or two? As I said, stupid comments.
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