20 Percent Of US Corporations Pay No Income Tax according to a new study by the GAO which looked at the fiscal year of 2012 among large companies that reported a profit. For all large companies (those with e assets of $10 million or more) 42 percent paid no income taxes for 2012. The reason? The GAO says the it was mainly due to 1. negative net tax income 2. NOLDs From 2006 through 2012, the GAO notes that two thirds of companies (including smaller corporations) paid no income tax. Additionally, when taxes were paid they were far less than 35 percent rate but closer to 16.1 percent in 2012, according to the study. The report is likely to ignite further debate over taxes, recent moves to block inversions and make its way into the political arena. Already, one politician is citing the study, Bernie Sanders tweeted:
When this country has a $19 trillion national debt it’s absurd that major profitable corporations pay nothing in federal income taxes.
— Bernie Sanders (@SenSanders) April 13, 2016
When this country has a $19 trillion national debt it’s absurd that major profitable corporations pay nothing in federal income taxes.
— Bernie Sanders (@SenSanders) April 13, 2016
In-fact, the report was commissioned at the behest of the Senator.
See the full study below.
What GAO Found In each year from 2006 to 2012, at least two-thirds of all active corporations had no federal income tax liability. Larger corporations were more likely to owe tax. Among large corporations (generally those with at least $10 million in assets) less than half—42.3 percent—paid no federal income tax in 2012. Of those large corporations whose financial statements reported a profit, 19.5 percent paid no federal income tax that year. Reasons why even profitable corporations may have paid no federal tax in a given year include the use of tax deductions for losses carried forward from prior years and tax incentives, such as depreciation allowances that are more generous in the federal tax code than those allowed for financial accounting purposes. Corporations that did have a federal corporate income tax liability for tax year 2012 owed $267.5 billion.
Corporate tax evasion GAO study
