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From the NewsMax.com Staff
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For the story behind the story...
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Wednesday, April 14, 2004 3:42 p.m. EDT
Sen. Dorgan's Report on Corporate Taxes Misleading
When news reports picked up Sen. Byron Dorgan's (D-N.D.) report that corporations were not paying their fair share of taxes, we knew that there had to be another side.
Bruce Bartlett of the National Center for Policy Analysis reveals that Dorgan has become the point man for liberals looking to make hay on tax day.
Back in 1993, Dorgan had the U.S. General Accounting Office look at taxes
paid by U.S.- and foreign-based corporations.
The report found that a significant percentage of foreign-controlled corporations as well as domestic corporations paid no federal income taxes in the United States.
This year's report was completed Feb. 27. Rather than
release it then, when few would be paying attention, Sen. Dorgan
got the GAO to release it on April 2, in the middle of tax
season, says Bruce Bartlett.
With the data showing almost three-fourths of foreign
corporations and two-thirds of U.S. corporations with no tax
liability in 2000, many individuals with large tax liabilities no
doubt felt some anger and resentment.
Unfortunately, the GAO
report provides little context for its findings. According to
Bartlett:
It would be nice to know that some 45 percent of all corporations had no net income and nearly 60 percent had assets of less than $100,000 in 2000, according to the Internal Revenue Service.
It is hardly surprising that a company pays no taxes when it has no income and virtually no assets; after all, about 40 percent of individual income tax returns report no tax liability, according to the Joint Committee on Taxation.
Another point worth mentioning is that all of this alleged tax avoidance came during the Clinton administration, yet because the data have been released now, many casual readers are probably left thinking that the Bush administration is responsible.
In the battle of the press releases, Sen. Dorgan probably won
this year. By the time analysts are able to explain why his data are misleading, tax season will be over.
Source: Bruce Bartlett is a senior fellow with the National
Center for Policy Analysis, April 14, 2004.
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