The Sovereign Society’s legal expert Bob Bauman says claims that U.S. corporations do not pay any tax are overblown and misleading. Many are not paying taxes in a certain year because they had no taxable profits in that year. And with one of the higest corporate tax rates in the industrialised world, it should be expected that companies are moving their business operations offshore. More from Bob…

Throughout my long lifetime American politicians have used class warfare as a tool in their efforts to stir up class envy and gain votes.

The formula is always the same: Create a hated straw man, attack it, then promise to right the mythical wrong. The theme is always “rich vs. poor,” “corporations vs. the people,” “them vs. us,” and so forth, ad nauseam.

No better example of this crass demagoguery can be found than the reaction of some of the Democrat Party’s “leaders” to a recent Government Accountability Office study.

According to IRS figures, 72% of all foreign corporations doing business in America and 55% of all U.S. corporations paid no U.S. federal income taxes in at least one year between 1998 and 2005.

During that same time period, 57% of foreign corporations and 42% of U.S. corporations paid no federal income taxes for two or more years, the GAO found. That led to an Associated Press story with the startling headline, “Most Companies in U.S. Avoid Federal Income Taxes,” and it also inspired leading Democrats to launch into a round of business bashing.

Eh gad! Corporations paying no taxes! What’s this? Is it another nefarious plot by those greedy capitalists? While average, hard working taxpayers are left to foot the bill? Quick Congress - do something!

Of course, U.S. Senators Carl Levin (D-MI) and Bryon Dorgan (D-ND) threw their own cries in when this GAO report hit the papers. Like Claude Rains’ gambling Inspector Renau in Casablanca, Senator Dorgan was shocked! Shocked! He called the GAO conclusions “a shocking indictment of the current tax system.”

The Wicked Liberal of the West, House Speaker Nancy Pelosi (D-CA), piled on too and called for reform. “When two-thirds of corporations pay no taxes,” Pelosi intoned, “American workers are forced to pay too much in taxes even as they cope with rising prices and falling wages.”

This is nonsense. If the GAO study had done a little more research, it might have commented on why so many corporations pay no U.S. taxes. The Tax Foundation found that among those companies, 85% of them also made no profits that year, so they didn’t owe any taxes. When all major U.S. airlines and General Motors (NYSE:GM), among many others, are losing billions, they don’t have to pay taxes. Duh!

Also, the United States continues to impose the second highest combined federal-state corporate tax rate among industrialized countries at 39.3%. So is it any wonder that American businesses go offshore where they can save on taxes?

Source: Eh Gad! Do the Politicians Spot Another Mythical Scandal?