Majority of U.S. Companies Paying No Federal Income Tax, GAO Says

So much for the big business canard that American corporations pay some of the highest taxes in the world. A report this week from the government itself shows that two-thirds of all U.S. businesses paid no federal income taxes between 1998 and 2005. A slightly higher percentage of foreign corporations doing business here paid no taxes either.

The Government Accountability Office report said that collectively the corporations reported trillions of dollars in sales.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan (D-N.D), who asked for the GAO study with Sen. Carl Levin (D-Mich.).

The GAO didn't identify companies by name but said that more than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies, or 66.7 percent, paid no income tax, the Associated Press reported.