http://www.boston.com/news/world/article..._offshore/
Top Iraq contractor skirts US taxes offshore
Shell companies in Cayman Islands allow KBR to avoid Medicare, Social Security deductions
By Farah Stockman Globe Staff / March 6, 2008
CAYMAN ISLANDS - Kellogg Brown & Root, the nation's top Iraq war contractor and until last year a subsidiary of Halliburton Corp., has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven.
When Texas pipe-fitter Danny Langford applied for unemployment compensation after being let go by Service Employers International Inc., he was rejected, he was told, because he worked for a foreign company.
More than 21,000 people working for KBR in Iraq - including about 10,500 Americans - are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean. Neither company has an office or phone number in the Cayman Islands.
***more, click link***
The bottom line is that what the company did was perfectly legal. Was is completely ethical? Maybe not. But the way our tax code is laid out it is in the interest of corporations to do business offshore. Why do you think jobs get outsourced? Because of the tax structure in this country. If we lived under the FairTax, there would be no reason for the company to do this because neither the employer nor the employee would have to pay payroll taxes. A corporation's only obligation is to the shareholders, so they are going to do what is necessary to make money and pay a dividend. If that means incorporating in another country to avoid tax liabilities, more power to them. But if we were to create an environment in the country where corporations WANT to do business here because the tax structure benefits them to do so, we will see an explosion in the number of jobs stateside. Our income tax can't do that, but the FairTax can.
http://www.fairtax.org
YEAH!!!! Another Fair tax proponent! I love it! Of course I would pay nothing since I live overseas. Right now I pay 15% in Mexico!
I think when a US company takes a contract from the US government paid by US taxpayer dollars and then evades paying legitimate US taxes on the money, it stinks. Used to be people that gouged and profiteered the USG, especially from the military in time of war were held up to public scorn and ridicule.
I guess anything's ok now as long as you can make a buck.
Morality in business is a function of socialism, not capitalism. Under Adam Smith's setup, the only thing in capitalism that approaches morality is "Will it hurt business?". If a behavior, when discovered, damages business relations with its customers and causes them to go elsewhere, then it is incumbent on the businessman to behave better. As it was pointed out, "It's LEGAL"(NOT "IT"S MORALLY RIGHT") is the mantra of capitalism. They also like "CAVEAT EMPTOR" which translates "BUYER BEWARE", but could also be read as "BLAME THE VICTIM".
BAMANBLAZERFAN Wrote:Morality in business is a function of socialism, not capitalism.
Too bad "efficiency" and "prosperity" aren't functions of socialism, too.
BAMANBLAZERFAN Wrote:Morality in business is a function of socialism, not capitalism. Under Adam Smith's setup, the only thing in capitalism that approaches morality is "Will it hurt business?". If a behavior, when discovered, damages business relations with its customers and causes them to go elsewhere, then it is incumbent on the businessman to behave better. As it was pointed out, "It's LEGAL"(NOT "IT"S MORALLY RIGHT") is the mantra of capitalism. They also like "CAVEAT EMPTOR" which translates "BUYER BEWARE", but could also be read as "BLAME THE VICTIM".
Cavaet emptor is a theory of English common law, not economics. Besides, isn't it liberals like yourself that go on and on about how government should not get involved morality? If government shouldn't be involved in morality, why in the world should business?
Actually, if I were to speak in general terms:
Liberals believe in government intervention into economic issues and the lack of government intervention into social issues.
Socialists believe in government intervention in both economic and social issues.
Conservatives believe in government intervention in social issues, but no government intervention in economic issues.
Libertarians believe in no government intervention in either social or economic issues.
RBB Wrote:Actually, if I were to speak in general terms:
Liberals believe in government intervention into economic issues and the lack of government intervention into social issues.
Socialists believe in government intervention in both economic and social issues.
Conservatives believe in government intervention in social issues, but no government intervention in economic issues.
Libertarians believe in no government intervention in either social or economic issues.
Unfortunately a lot of social issues are blurred with economic issues and people fail to separate the two.
That is an interesting post considering the topic. This government has married economics and social issues through it's abuse of the tax code. Taxes are supposed to exist for the sole reason of raising revenue for the government. Instead, we use taxes in our country to impose our idea of how society should be on the taxpayer. Example: We should raise tax on gas to lower demand, thus lessening our dependence on oil and helping the environment. That is using a tax to achieve an outcome that has nothing to do with raising revenue for the government.
Libertarians, keeping the government out of your wallet and your bedroom!
Every time business has been "turned loose" by the U.S. government it has resulted in running itself "out of business" through unbridled excesses beginning in the 19th century and, with minor Progressive Movement encumbrances under T.R. and Taft, through to the 1930s. In our lifetime we have seen the deregulation of the Savings and Loans. Where are they today? The airlines were deregulated. How many airlines are there left of those flying at that time?