Corporations Really Pay No Taxes?

scourge99 · 08-20-08, 12:56 PM

http://www.realclearmarkets.com/arti...ly_pay_no.html

Quote:

Do Corporations Really Pay No Taxes?

By Steven Malanga

By most accounts, 2005 was a good year for the U.S. economy. The nation added more than 2 million jobs and the unemployment rate averaged less than 5 percent. Gross Domestic Product grew robustly, and corporate profits soared nearly 18 percent. But few people, including many in the media who regularly report on the economy, understand what happened below the surface to produce those surprisingly good results.

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A number of more rational commentators have pointed out some of the ways that the pols have led the media astray on this one. Kevin Hassett, in a Bloomberg commentary, explained that most small businesses are now organized in such a way that many prefer to take their profits as an owner’s salary and pay taxes on the wages. It’s not that they aren’t paying taxes, as the headline incorrectly says, but rather that the money is not flowing to the government through the corporate levy.Still, the report leaves open the question of larger businesses that paid nothing. The impression one gets from corporate critics is that many are prospering but exploiting loopholes in the tax code and leaving the rest of us to pick up the tab. But that criticism is based on the mistaken notion that in robust years, such as 2005, virtually all businesses do well. Nothing could be further from the truth.

. The media is always so useful .