Zero Tax Is Normal For Many Corporations

0 Shares

WASHINGTON, Jan. 10 (UPI) — Nearly 70 percent of U.S. corporations were organized as non-taxable businesses as of 2008, IRS records show.

The percentage jumped significantly since 1986 when 24 percent of corporations used the “pass-through” tax structure, The Wall Street Journal reported Tuesday.

By 2008, 69 percent of businesses were set up to pass profits to shareholders to the point that it reduced their tax burden to zero. The law assumes that individuals will pay tax on the profits, rather than the corporations themselves.

But the growing popularity of a pass-through tax set up is why even some Republican legislators are calling for a tax system overhaul, the newspaper said.

It is also why tax revenues from corporations dropped to 1.3 percent of the gross domestic product, down from 2.7 percent in 2006 and from 6.1 percent in 1952, the Journal said.

UPI - United Press International, Inc.

Since 1907, United Press International (UPI) has been a leading provider of critical information to media outlets, businesses, governments and researchers worldwide.

Join the Discussion

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.