Looks like Odumba and his fat cat corporate friends arn't payng their fair share!! Where's the outrage Liberals/Press???
A “skyrocketing number” of American companies are paying no corporate income taxes, according to a recent Wall Street Journal report.
That’s right—not “a dime in income taxes to the federal government,” according to “shocked” MSNBC. What’s more, some of these companies are publicly traded.
The percentage of companies organized as tax-free operations, referred to as “pass-throughs,” has risen from about 24 percent in 1986 to close to 69 percent as of 2008, according to IRS data. As many as 60 percent of companies earning more than $1 million may be paying no corporate income tax—the highest in the developed world, reports the Wall Street Journal.
“So it’s no surprise that federal corporate tax collections have plunged from 6.1 [percent] of GDP in 1952 to just 1.3 [percent] in 2010,” writes Mary Papenfuss of Newser
How do some of these companies get away with this? Surely, this is tax evasion…isn’t it?
“More and more companies are organizing themselves as pass-throughs, which means the firms pass along profits to investors, who pay taxes on that money through their individual returns,” explains Papenfuss. “Millions of small businesses have organized this way, but so have some giants like the Blackstone Group, the construction firm Bechtel, and the pipeline company Kinder Morgan.”
So, while MSNBC and the Journal report that these companies don’t pay anything in corporate income tax, investors are still paying taxes on their individual returns.
However, as Washington is slowly realizing it’s “missing out” on tax revues because of this legal method for avoiding government controls, many Democrats and even some Republicans are figuring out ways that they can tax the largest of the “pass-throughs.”
The reasoning behind Washington’s sudden desire to tax a business structure they legalized?
Congress knew these laws would encourage businesses to become “pass-throughs” (that’s why they passed them). However, “there were a hell of a lot more pass-throughs created than I think we expected,” said a former Reagan Treasury official, according to Newser.
Really? Congress didn’t expect many businesses would be interested in avoiding the corporate income tax?
Given the fact that the U.S. corporate tax rate is currently 35 percent, the highest in the developed world, and organizing a business as a “pass-though” is a cost-cutting measure, should it come as a surprise that so many businesses structured themselves around this model?
Furthermore, before anyone bemoans the decline in federal corporate tax collections from 6.1 percent of GDP in 1952 to just 1.3 percent in 2010, it might be important to note that the corporate tax rate itself has declined since 1952 from 52 percent to 35 percent. It would therefore seem disingenuous to imply that the decline in corporate tax revenues is due solely to the existence of “pass throughs.”
Tags: Some, Businesses, Pay, No, Corporate, Income, Tax
Location: New York, New York, United States (load item map)
Marked as: approved
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