Most corporations pay no tax on their profits

Apr 19, 2004

Just ten days before the April 15 tax deadline, the General Accounting Office of the Congress released a study detailing taxes corporations avoid. Almost two-thirds of companies paid no taxes between 1996 and 2000, years during which their profits were increasing. Colgate-Palmolive, for example, paid no taxes, with 1.6 billion dollars in profits from 1996 to 2000; Microsoft, with a profit of 12.3 billion dollars in 1999, paid no taxes. The official tax on corporate profits was almost 40%, but the vast majority of the big corporations paid less than 5% of their profits in taxes in those years. This is less than every worker pays in federal taxes, as we know too well.

Today John Kerry says he wants to change the law to prohibit the use of tax havens, but in turn he proposes to lower the overall tax rate on corporate profits. This would continue still more to lower the share that taxes on profits make up of all U.S. tax revenues. Corporate taxes were 23% of the taxes in the mid 1960s and down to only 7% in 2002.

While taxes fall on profits, the politicians find new ways to get money out of us. There are all kinds of new excise taxes and fees. Anyone who has a cell phone, an automobile or a home can testify to this. While the majority of corporations making profits pay nothing, we are being overwhelmed with taxes and fees to not only make up the difference, but also to hand over more money to them in the form of subsidies.

This is truly government of the rich, by the rich and for the rich.