That was then …

In the Center for Public Integrity’s 2001 book The Cheating of America, Charles Lewis and Bill Allison showed how superrich individuals and corporations avoid paying their share of income tax and how it is costing the country billions. The book documented how the rich take advantage of dubious tax shelters and move taxable profits offshore beyond the reach of the Internal Revenue Service while the rest of us pay our share.

As Lewis and Allison wrote in 2001:

“After all, if the most powerful economic interests can substantially
dictate national public policy decisions such as tax rates, and
also occasionally choose not to pay their fair share of taxes, then we
may no longer have a government of the people, by the people, and for
the people. We may have crossed the line between a democracy and a
plutocracy.”

And this is now …

Almost two-thirds of foreign corporations and more than half of U.S. corporations paid no federal income taxes for at least one year between 1998 an 2005, according to a Government Accountability Office study released Tuesday. In addition, about 57 percent of foreign corporations and 42 percent of U.S. corporations paid no federal taxes for two or more years. About 34 percent of foreign corporations and 24 percent of U.S. corporations paid no taxes for four or more years, according to the report.

Corporations may not report U.S income taxes for a variety of reasons including current-year operating losses, tax credits, and transfer pricing abuses, according to a previous GAO report. Transfer prices are the amounts related companies charge each other for goods and services. By manipulating transfer prices, multinational companies can shift income from higher to lower tax jurisdictions to reduce the companies’ overall tax liability, according to the GAO.

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