Many Big, Profitable Corporations Pay No Federal Income Taxes

It seems that some U.S. corporations, including large and profitable ones, have it really easy when it comes to paying federal income taxes, much easier than U.S. individuals overall.

In fact, in each year from 2006 to 2012, at least two-thirds of all active corporations had no federal income tax liability, according to a Government Accountability Office study released on Wednesday.
Larger corporations were more likely to owe tax. Nonetheless, 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, the GAO reported.
Of those large corporations whose financial statements reported a profit, 19.5 percent paid no federal income tax that year.
Large, profitable American corporations paid just 14 percent of their profits in federal income taxes on average from 2008 through 2012.
“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,” the GAO says.
Corporations that did have a federal corporate income tax liability for tax year 2012 owed $267.5 billion.
Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) had requested the GAO report. Sanders sharply criticized the findings. He also touted legislation he has co-sponsored to curb corporate tax avoidance.
“There is something profoundly wrong in America when one out of five profitable corporations pay nothing in federal income taxes,” Sanders said in a statement. “Large corporations cannot continue to get more tax breaks when children in America go hungry. We need real tax reform to ensure that the most profitable corporations in America pay their fair share in taxes. That means closing corporate tax loopholes to raise the revenue necessary to rebuild America and create millions of jobs.”

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