August 25, 2008
Investment News Editorial Calls for Corporate Tax Reform
"Corporate-Tax System Needs Overhaul"
By Investment News Editorial Staff
According to a report by the Government Accountability Office, 28% of large U.S. corporations paid no income tax in 2005. That's bad, but not for the reason Sen. Byron Dorgan, D-N.D., implied when he declared: "It's time for big corporations to pay their fair share"—that companies are evading the corporate income tax.
It's bad, according to the Washington-based Tax Foundation, because in the vast majority (85%) of cases where they did not [pay taxes], it was because they had zero or negative net income for 2005. For instance, American Airlines Inc. of Fort Worth, Texas, and General Motors Corp. of Detroit avoided income tax for 2005 by losing $862 million and $10.5 billion, respectively, in 2005.
It's not good for the economy when more than 20% of the largest companies suffer losses.
