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Discussion Starter · #1 ·
Bulk of U.S. corporations pay no taxes: GAO
Operating losses, transfer pricing help businesses escape IRS; 'shocking indictment'


October 15, 2008 7:54 AM ET

(Reuters)—Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

The Government Accountability Office said 72% of all foreign corporations and about 57% of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005. Financial Week
 

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But how can this be. How could the Bush administration give all these corps tax breaks if noone was paying taxes.

The left is confusing, or maybe just confused.
 

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Bulk of U.S. corporations pay no taxes: GAO
Operating losses, transfer pricing help businesses escape IRS; 'shocking indictment'

October 15, 2008 7:54 AM ET

(Reuters)-Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

The Government Accountability Office said 72% of all foreign corporations and about 57% of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005. Financial Week
Depending if it is an S-Corp, C-Corp or LLC, it is passed onto the shareholders to be paid by a sister corp or individually. That is just an old class warfare trick.
 

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Discussion Starter · #4 · (Edited)
But how can this be. How could the Bush administration give all these corps tax breaks if noone was paying taxes.

The left is confusing, or maybe just confused.
The report is found in Financial Weekly, hardly a left wing publication. The information comes from the Government Accounting Office of the US government. I think the information is solid.
Corporate tax breaks are one of the factors in zeroing out the tax debt of some corporations. I have on another thread delineated how congress has cut the costs of corporations by giving them a huge break on such things as grazing land, timber and farm subsidies.
If it is leftist to wish to eliminate these corporate tax dodges then so be it.

The LLC is not a corporation but is a Limited Liability Company.First, there are no tax advantages (or disadvantages) to forming an LLC. In fact, forming an LLC won't change a thing for Federal income tax purposes. Single-owner LLCs are taxed just like sole proprietorships, and multiple-owner LLCs are taxed just like partnerships.
S-Corps are generally for very small corporations eg my company was a S-corp.

S-Corporations have the ability to provide some tax savings as a result of the fact that profits from an S-Corp are not subject to Self-Employment Tax. However, before you're allowed to distribute any profits, you are required to pay any owner-employees a "reasonable salary." This salary will be subject to social security and Medicare taxes (which total the same amount as the Self-Employment Tax). As such, the tax savings only take effect once the business has a pretty sizable income.

Also, you should be aware that S-corporations are significantly more complicated from a tax and legal standpoint than LLCs. So if you form an S-corp, know that you're going to be spending a great many more billable hours with your accountant/attorney.

C-Corp
Unlike most other business structures, C-corporations are taxable entities. This means that the corporation itself is taxed on its income (as opposed to other structures which simply pass the income along to the owner(s), who are then taxed on it).

If you don't plan to distribute all of the profits from your business, you might benefit from forming a C-corp and utilizing a strategy known as "income splitting." The idea is to split the business's income so that part of it is taxable to the corporation and part of it is taxable to the corporation's owner(s), thus putting them each in a lower tax bracket than they'd be in if either one was earning all of the income.

The big disadvantage to C-corp taxation is that distributions of profits (known as "dividends") are subject to double taxation. In other words, the corporation is taxed once on its income, and then the shareholders are taxed upon any dividends they receive.

Also, like S-corporations, C-corporations are more complicated from an accounting/tax/legal standpoint than sole proprietorships, partnerships, or LLCs. As such, C-corp owners tend to incur fairly high legal and accounting costs.
 

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Has the wacky old fart been posting wall to wall propaganda everyday?

Don't you get tired of it?

GEEEEEEEEEEEEEEEEEEEZ lets all chip in a few bucks and hire a nurse!
 

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RF that's the moonbats claim to fame.
 

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I've said it before he has no thought of his own! his song. He don't want to work, He just wants to cut and paste all day! :D:clap::clap::wacko:
 

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Just a guess here but.... I would imagine that at least 57% of corporations operated at a loss at least one year between 1998 and 2005. Corporations pay taxes on net income (think profit) and not revenue (which is really how the American citizen is taxed), if a corporation doesn't turn a profit no taxes are paid.
 

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Just a guess here but.... I would imagine that at least 57% of corporations operated at a loss at least one year between 1998 and 2005. Corporations pay taxes on net income (think profit) and not revenue (which is really how the American citizen is taxed), if a corporation doesn't turn a profit no taxes are paid.
I know you don't post here much, Dalton, so you probably didn't get the scoop. Factual and level-headed posts are highly frowned upon in these parts.
 

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Just a guess here but.... I would imagine that at least 57% of corporations operated at a loss at least one year between 1998 and 2005. Corporations pay taxes on net income (think profit) and not revenue (which is really how the American citizen is taxed), if a corporation doesn't turn a profit no taxes are paid.
Dalton... try as you might they won't get it.

Now if I owned a company, Id try to keep every dime of profit in there just so I could pay even more taxes.... No way I'd give bonuses or perks out to myself and employees to reduce the profit... That would be stupid. If only......:D
 

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Depending if it is an S-Corp, C-Corp or LLC, it is passed onto the shareholders to be paid by a sister corp or individually. That is just an old class warfare trick.
So the taxes were, at the end of the day, paid "by shareholders or sister corp or individually" on behalf of the company that owed them. :rolleyes:
 

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I know you don't post here much, Dalton, so you probably didn't get the scoop. Factual and level-headed posts are highly frowned upon in these parts.
So why did you post this numb nuts.:wacko:
 

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Discussion Starter · #15 ·
The LLC is not a corporation.:wacko: The rest of the story (note the kind of corporation is not mentioned but the way the corporations (hardly little mom and pops) are avoiding taxes.
Reuther
More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.

The report did not name any companies. The GAO said corporations escaped paying federal income taxes for a variety of reasons including operating losses, tax credits and an ability to use transactions within the company to shift income to low tax countries.

With the U.S. budget deficit this year running close to the record $413 billion that was set in 2004 and projected to hit a record $486 billion next year, lawmakers are looking to plug holes in the U.S. tax code and generate more revenues.

Dorgan in a statement called the report "a shocking indictment of the current tax system." Levin said it made clear that "too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."

The study showed about 28 percent of large foreign corporations, those with more than $250 million in assets, doing business in the United States paid no federal income taxes in 2005 despite $372 billion in gross receipts, the senators said. About 25 percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year, they said.
 

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Dalton... try as you might they won't get it.

Now if I owned a company, Id try to keep every dime of profit in there just so I could pay even more taxes.... No way I'd give bonuses or perks out to myself and employees to reduce the profit... That would be stupid. If only......:D
You have a profound grasp of the obvious slug. Now that you have it and have been beating it for YEARS how about giving it a breather?:D
 
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