Corporations Are OK For Not Paying Some Taxes

The Boston Globe reports today that a large number of Massachusetts companies paid no federal corporate income tax in 2010, and some got refunds despite making money in 2010.

http://www.boston.com/business/taxes/articles/2011/05/01/millions_in_profits_and_a_tax_bill_0_to_envy_in_massachusetts/

In most cases this is the results of losses in previous years, which under federal tax law can be used to offset future income for tax purposes.

Now the Dismal Political Economist is a strong fan of having corporations pay taxes, particularly since the Supreme Court declared them “persons” with rights under the Constitution.  However, using tax losses in prior years to offset past or future taxable income seems like an acceptable practice.  It is fair and gives struggling corporations a boost when they turnaround their finances.