GAO report finds most companies get around fed income tax; Good for them…

Author: Jared Fallon

In a recent report conducted by the General Accountability Office (GAO) it was found that roughly two thirds of US corporations found ways to avoid paying federal income taxes between the years 1998 and 2005. Additionally, it was found that 68 percent of foreign companies doing business in the United States partook in the same exercise. The report was initially requested by Senators Byron L. Dorgan (D-ND) and Carl Levin (D-MI). Many people believe that it is unfair for these corporations to avoid such a tax but considering the complexities and time spent on complying, why wouldn’t they?

Despite the fact that the United States is home to one of the friendliest business climates in the world, it also is known to have one of the most complex federal tax codes that can, at times, encourage corporations to spend large sums of money to discover methods of tax evasion, rather than encourage innovation. The US increasingly causes both individuals and corporations to bare this monolithic burden that can, and should be made easier. Amidst the developments and changes that are matched with the newest waves of globalization, the US needs to figure out ways to help it become more welcoming not only for US entrepreneurs but foreign corporations as well. A simplified federal income tax code would help accomplish this and in turn, create more competitive benefits for America.