A new GAO report reveals 2/3 of US corporations pay zero income taxes. Is that fair to ordinary US taxpayers?

http://www.kctv5.com/money/17166381/detail.html?rss=kan%26amp;psp=news#-|||Part of this is using statistics to make an irrelevant point.





A lot of corporations are "Sub-chapter S" corporations. These corporations do not have taxable income because their profits flow directly through to the stockholders where it is taxed on their 1040s. Others are personal service corporations (John Smith, MD Inc) that have no income because they have to pay out their income as salaries to the professional that owns them or they get taxed at a very high rate. Still others are small corporation with a few owners that are money losers or have start up deficits and haven't turned a profit yet.





If you limited the report to corporations that most people would think ought to be paying income tax, the numbers would be very different.|||Do I think it's fair that people who are smart enough to have good tax planning thus pay less tax? Yes -- heck yes.





They are not doing anything illegal. Alot of those tax advantages are as a result of creating jobs, for which people make money, and then pay tax. If corporations lost this tax advantage, they might be less likely to start companies that require skilled workers, and then where would you work?





You have 2 choices:


1. Lobby the government for tax reform


2. Form your own corporation and benefit from the tax advantages.





There are tonnes of tax advantages even for someone with a small homebased business. I pay very little tax because of how I choose to live my life. There's nothing illegal about it.





I'm not saying the tax systems is perfect -- I don't think there would be a way to have a perfect tax system. Is it fair that people that work hard in order to get a good job have to subsidize the living for those who don't work hard? Reversely, would it be fair that the rich live in an area with well-maintained roads, nicer schools and hospitals while the poor live like a 3rd world country? There's no easy way to divvy up who should pay for what. Give the government guys a break -- it's tough trying to keep an entire country happy.





|||The report, at least as presented in the media, was amazingly short on detail. Gave no indication of how many of these corporations had losses, for example. And it did mention that many of the corporations taxes (S corps and LLCs) go through the personal tax system, but didn't really explain what that meant - that the corp doesn't pay the tax, the owner does on his/her personal return - or gave any clue as to how many corps are S or LLC..





So should we cheer that Exxon paid $30 billion? (See http://seekingalpha.com/article/63131-ex鈥?/a> )|||No, it's a form of corporate welfare. However, Congress is bought and paid for.