The vast majority (2/3 to 3/4) of BIG US corporations DO pay taxes, contrary to 'glass half-empty' impressions given by recent media headlines. ("Most Corporations Don't Pay Income Taxes: GAO" Congressional Quarterly CQPolitics CQ Today Online News Richard Rubin 8/12/08)
The United States Government Accountability Office (GAO) released Tax Administration: Comparison of the Reported Tax Liabilities of Foreign- and U.S.-Controlled Corporations, 1998-2005, GAO-08-957, July 24, 2008.
GAO graph Figure 1 shows that most large US-controlled corporations (USCC) did report tax liabilities.
Remember that a corporation might not have a profit every year. Note the graph's correlation to the 2001 recession.
45.1% of large USCC reported tax liabilities in all of the 8 years studied 1998-2005.
97.3% of large USCC reported tax liabilities at some time during the 8 years studied 1998-2005.
Remember that "corporations" include "pass-through" corporations such as "S corporations," Real Estate Investment Trusts (REIT), and Regulated Investment Companies (RIC). These pass-through corporations are not supposed to pay "corporate" taxes because they usually end with zero "corporate" profits because the profits pass through to the owners' individual income taxes. Taxes are paid on profits but the taxes on the profits show up on "individual" taxes rather than "corporate" taxes. "No corporate tax liability reported" might be misleading if the corporation owner paid the taxes as individual income.
Remember that Section 501(c)(3) corporations are non-profit. These non-profit corporations are not supposed to pay taxes because they are not supposed to have taxable profits. The government created the explosion of these no-tax corporations by requiring/encouraging people to create them to comply with government regulations and/or qualify for government grants.
Every "loophole" is there because a Congressperson put it there.
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