Corporate taxes are so high, that many corporations don’t even pay them

When you have members of Congress, from both sides of the aisle ask for reducing the corporate tax rate from 35%, more than half of the corporations have not paid taxes in at least one year of the past eight years, as the Congressional Quarterly reported on a new report by the GAO.

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.

Those aren’t exactly small mom and pops not paying taxes.

But what is more troubling is the tax gap,

In addition, Levin, Finance Chairman Max Baucus , D-Mont., and other senators have been trying to close the “tax gap,” the difference between taxes owed and taxes collected.

In a statement, Baucus said, “I’m committed to finding ways to improve compliance and reduce taxpayer burden so that we begin to bridge the tax gap, which accounts for $345 billion in legally owed but uncollected federal revenues each year.”

I don’t know about you, but I think we could get a real great return on investment if we put some money into enforcement.  I mean $345 billion each year is not chump change, in fact is a bit smaller than our annual deficit.

On a slightly brighter note, the deficit for the 2008 budget year ending Sept. 30 will actually drop from an earlier projection of $410 billion to $389 billion, the report said.

So lets collect that money from those that actually owe it and bring that annual deficit to about $44 billion this year.  It really sounds like we have a collecting problem, not a spending problem!

-Josh

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1 Comment

  1. August 13, 2008 at 7:27 am

    Nice post.Keep up with the good information!

    http://www.finance-investment.co.cc


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