The Government Accountability Office (GAO) issued a report earlier this week comparing the tax liability of foreign-controlled corporations operating in the United States with U.S.-controlled corporations between 1998 and 2005. It compares tax liability in a number of ways, including the percentage with no tax liability, the number of years with no tax liability, and tax liability as a percentage of gross receipts or assets… The study was requested by Senators Carl Levin (D-MI) and Byron Dorgan (D-ND), out of concern that foreign-controlled corporations are able to manipulate transfer pricing to avoid U.S. taxes… A 2004 study from Citizens for Tax Justice examined tax liability for a period of years (2001-2003) contained within the window covered by the GAO report. CTJ’s report found that the average effective tax rate for these corporations had fallen to less than half the statutory rate of 35 percent. The average rate fell from 21.4 percent in 2001 to 17.2 percent in 2002-2003. Nearly a third of the corporations paid no taxes in at least one of the three years.