Bruce Bartlett gives some context to the recent statistic showing that almost 3/4 of all foreign corporations and 2/3 of American corporations had no tax liability in 2000:

[That report] will help pave the way for tax increases on corporations to expand the welfare state and perhaps put Democrats back in control of the White House and Congress. Unfortunately,the GAO report provided little context for its findings. It would have been helpful to know that 45% of all corporations had no net income and nearly 60% 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% 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. [NYSun]

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