So, what do you all think about this?

WASHINGTON (AP) -- Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.

An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called "S" corporations pay taxes under individual tax codes.

"Half of all business income in the United States now ends up going through the individual tax code," Edwards said.

The GAO study did not investigate why corporations weren't paying federal income taxes or corporate taxes and it did not identify any corporations by name. It said companies may escape paying such taxes due to operating losses or because of tax credits.

More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.

The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S.

Dorgan and Levin have complained about companies abusing transfer prices - amounts charged on transactions between companies in a group, such as a parent and subsidiary. In some cases, multinational companies can manipulate transfer prices to shift income from higher to lower tax jurisdictions, cutting their tax liabilities. The GAO did not suggest which companies might be doing this.

"It's time for the big corporations to pay their fair share," Dorgan said.

that article is a misrepresentation of both fact and truth. It is a fabrication. If this author wants corporations to pay their fair share, then he is asking that he pays more in the form of prices. All corporations pass their taxes onto their consumers in the form of higher prices. This author is misinformed and an invalid.

They cut their taxes, many times to Zero, to draw them here.
Its been happening not just at the Federal level but also at the State level. Then their profits are carried home. Its part of globalization.
First the lifted the trade tariffs, making it impossible for US companies to compete, at home, in America.
Then when they shut down or moved overseas they gave tax breaks to draw foreign companies here and provide replacement jobs for the unemployed Americans.
This also helped to weaken Unions here, that and Fed legislation designed to do just that(Reagan). The jobs coming in were, as a result, at far lower pay grades with less benefits than the ones they replaced.
On top of all that they brainwashed, through indoctrination at the earliest ages, (schools, etc.) a whole generation of Americans to think it was American laziness, lack of education, and poor product quality that caused the change.
In truth none of that is true. (We work more hours a week and provide a better quality product than any where in the world.)

Corporate executives benefited and the American workers lost!
Of course you can never get anyone born after 1978-80 to see it!

Correct, but also happens at county and city levels too to draw in more business. Prime example = Wal-Mart. Check your local taxes on them.

Obviously, whoever wrote this piece failed microeconomics. If corporations could get away with not paying federal income taxes, the word "outsourcing" would not even be in the American vocabulary.

And no one should be paying income taxes anyways, not corporations or individuals, as the very concept is legalized theft.

It amazes me when people who know ABSOLUTELY NOTHING about a subject read an article and poof! they are professors of the subject. Here is a basic description of a C Corp. and an S Corp. This will get boring for some of you but here goes:

General Corporation aka “C” corp.
This is the most common corporate structure. The corporation is a separate legal entity that is owned by stockholders. A general corporation may have an unlimited number of stockholders that, due to the separate legal nature of the corporation, are protected from the creditors of the business. A stockholder's personal liability is usually limited to the amount of investment in the corporation and no more.
Disadvantages
• More expensive to form than proprietorship or partnerships
• More legal formality
• More state and federal rules and regulation

S Corporation
With the Tax Reform Act of 1986, the S Corporation became a highly desirable entity for corporate tax purposes. An S Corporation is not really a different type of corporation. It is a special tax designation applied for and granted by the IRS to corporations that have already been formed. Many entrepreneurs and small business owners are partial to the S Corporation because it combines many of the advantages of a sole proprietorship, partnership and the corporate forms of business structure.
S Corporations have the same basic advantages and disadvantages of general or close corporation with the added benefit of the S Corporation special tax provisions. When a standard corporation (general, close or professional) makes a profit, it pays a federal corporate income tax on the profit. If the company declares a dividend, the shareholders must report the dividend as personal income and pay more taxes.
S Corporations avoid this "double taxation" (once at the corporate level and again at the personal level) because all income or loss is reported only once on the personal tax returns of the shareholders. However, like standard corporations (and unlike some partnerships), the S Corporation shareholders are exempt from personal liability for business debt.
S Corporation Restrictions
To elect S Corporation status, your corporation must meet specific guidelines. As a result of the 1996 Tax Law, which became effective January 1, 1997, many of these qualifying guidelines have been changed. A few of these changes are noted below:
• Prior to the 1996 Tax Law, the maximum number of shareholders was 35. The maximum number of shareholders for an S Corporation has been increased to 75.
• Previously, S Corporation ownership was limited to individuals, estates, and certain trusts. Under the new law, stock of an S Corporation may be held by a new "electing small business trust." All beneficiaries of the trust must be individuals or estates, except that charitable organizations may hold limited interests. Interests in the trust must be acquired by gift or bequest -- not by purchase. Each potential current beneficiary of the trust is counted towards the 75 shareholder limit on S Corporation shareholders.
• S Corporations are now allowed to own 80 percent or more of the stock of a regular C corporation, which may elect to file a consolidated return with other affiliated regular C corporations. The S Corporation itself may not join in that election. In addition, an S Corporation is now allowed to own a "qualified subchapter S subsidiary." The parent S Corporation must own 100 percent of the stock of the subsidiary.
• Qualified retirement plans or Section 501(c)(3) charitable organizations may now be shareholders in S Corporations.
• All S Corporations must have shareholders who are citizens or residents of the United States. Nonresident aliens cannot be shareholders.
• S Corporations may only issue one class of stock.
• No more than 25 percent of the gross corporate income may be derived from passive income.
• An S Corporation can generally provide employee benefits and deferred compensation plans.
• Not all domestic general business corporations are eligible for S Corporation status. These exclusions include:
o A financial institution that is a bank;
o An insurance company taxed under Subchapter L;
o A Domestic International Sales Corporation (DISC); or
o Certain affiliated groups of corporations.
Keep in mind, these lists of qualifying S Corporation aspects are not all-inclusive. In addition, there are specific circumstances in which an S Corporation may owe income tax. For more detailed information about these changes and other aspects regarding S Corporation status, contact your accountant, attorney or local IRS office.

Soooooo basically a subchapter “S” corporation election is given by the Infernal Revenue Service to help small businesses grow mainly by avoiding the double taxation that hampers owners of larger “C” corps. Hope this helps.

The article is vague and is lumping foreign corporations with domestic corporations. Apples and oranges.The MAJORITY of corporations are the little guys and are domestic corporations. The socialist anti-business fanatics make me sick. Who do they think provides the paychecks for most Americans? Here is something for all of you to think about: Most people do not go into business to get rich. If they do they are in a sad state soon enough. Most of us work 16 hour days and often 7 days a week. I should be finishing this estimate on my desk instead of wasting time here. We do it because we love what we do and want to grow our businesses to provide what we feel is a needed service or product. We are the last to be paid and often go home without a check but our employees MUST be paid, even if we have to borrow the money to make it happen. With that being said it is going on 7pm so I gotta get back to it.

You are very intimidating with those breast.

I opened my repost of an AP article with, "what do you think about this"? Thanks for the input all.

Grr someone said the W-word.

Walmart...I hate those bastards. The small town nearest me once had a thriving downtown area. Several pharmacies, hardware stores and grocery stores where they had actual butchers. Ah small towns...I love them when they work like ours did. Once Walmart priced those folks out Walmart prices began to rise. Choice is gone, variety is gone, and the downtown isn't the same.

Yes I know, we only have ourselves to blame for shopping there right? I don't need to be told that...I am just venting.

My breasts scare you? I assure you they don't bite.

Reminds me of a joke but on second thought I don't think I can post it here.

I'm scared outta my ti.... I mean I am quivering in my boo... aw heck! You could take an eye out!

A ren fair corset makes the girls hard to miss. haha

Were you part of the Renaissance Fair? I have a niece that works for them traveling all over.