Big Business Pays No Taxes, GAO Finds

Even with thousands of pages of tax laws, two-thirds of all large U.S.- and foreign-controlled business operating in the U.S. managed to pay no (zero) federal income tax on a combined $2.5 trillion in sales from 1998 to 2005, according to a new report (.pdf) from the Government Accountability Office (GAO).

The corporations succeeded in paying zero taxes, according to the GAO, by reporting no net income or overall losses during the years studied. Others claimed extensive tax credits and losses from previous years to avoid paying taxes.

In 2005, GAO found that 28 percent of large foreign companies operating in the U.S. and 25 percent of large U.S. corporations paid no taxes.

"This report makes clear that too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States," said Sen. Carl Levin (D-Michigan) who, along with Sen. Byron Dorgan (D-North Dakota), requested the GAO study.

Also See: GAO Finds Federal Contractors Abusing Tax System