Most corporations skirt federal tax

About two-thirds of American and foreign corporations that do business in the United States did not pay federal income taxes between 1998 and 2005, according to a report released by the Government Accountability Office, the investigative arm of Congress. The study found that about 66% of U.S. corporations didn't pay any federal income tax. In 2005, 25% of the largest U.S. companies, with a total of $1.1 trillion in gross sales, paid no federal income taxes. To be considered a large company, a firm must have more than $250 million in assets or $50 million in sales. Meanwhile, 68% of foreign companies doing business in the U.S. during those years paid no federal income taxes. Among the 998 large foreign companies, 28% didn't pay taxes but reported $372 billion in gross receipts that year. The study covers 1.3 million corporations of all sizes, with a collective $2.5 trillion in sales. The report’s findings are a “shocking indictment of the current tax system,” Sen. Byron L. Dorgan, D-N.D., said in a statement. “The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hard-working Americans who pay their fair share of taxes.”