Ever wonder how large corporations avoid paying income tax?

Most of America’s largest publicly traded corporations — including several that are receiving billions of dollars from U.S. taxpayers to finance their recovery — have set up offshore operations that could help them avoid paying U.S. taxes on their profits, a government study released yesterday found.

American International Group, Bank of America, Citigroup, and Morgan Stanley are among the companies that are getting bailed out by U.S. taxpayers while having subsidiaries in locations where they can avoid paying U.S. taxes, according to the Government Accountability Office.

Read the full story here.

It’s not a new thing for companies to try to lower their tax burden in order to maximize profits.  That has occurred since the beginning of taxing coporations.

However, what is relatively new in capitalist economies is for government to bail out these institutions when they begin to fail.  So, I’m still curious as to exactly how these guys will ever be allowed to fail…  What will it take for GM or Citigroup to actually declare bankruptcy and shut down entirely?

Perhaps they could invest all of the bailout money into toxic toys for children.  Would that be enough to outrage the public and make the politicians fear giving away more taxpayer money to these greedy bastards?

What if they decided to publicly burn all of the cash on their front lawns?  Besides that being a federal offense, I bet Nancy Pelosi and George W. Bush (and soon to be Barack Obama) would still stand up and shout, “We can’t allow these companies to fail!  It would bring about dire consequences for the economy!”

How about if they fired all of their workers and made a public display of clothing the executives in golden underwear?  Perhaps that would entice the politicians to disavow support for the corrupt practice of gambling with the public’s money.

I’ve lost all faith.