Team Infidel
Forum Spin Doctor
Boston Globe
April 16, 2008 Shell company hirings targeted
By Farah Stockman, Globe Staff
WASHINGTON -- The House of Representatives yesterday passed a bill that would stop federal contractors from avoiding payroll taxes by hiring American employees through offshore shell companies.
The bill was filed after The Boston Globe reported that KBR, a former Halliburton subsidiary, had avoided paying hundreds of millions of dollars in Social Security and Medicare taxes for American employees working in Iraq by hiring them through Cayman Island shell companies.
The bill amends the Internal Revenue Code and the Social Security Act to treat foreign subsidiaries of US contractors as American employers for the purpose of payroll taxes.
The measure, backed by Representatives Rahm Emanuel of Illinois and Brad Ellsworth of Indiana, both Democrats, passed last night by a vote of 238 to 197. It was part of the Taxpayer Assistance and Simplification Act of 2008, which also revokes the authority of the IRS to use private contractors to collect back taxes from delinquent taxpayers.
During the debate on the bill, Emanuel recited the post office box address of the Cayman Island company. "The only purpose they are there for is to avoid paying their fair share of taxes," he said.
A similar provision is being sponsored in the Senate by Senators John F. Kerry, Democrat of Massachusetts, and Barack Obama, Democrat of Illinois.
"We've got Americans struggling to pay their bills and fill their gas tanks, and they should know that at a minimum Washington is doing something to stop defense contractors from profiting through tax loopholes you could drive a truck through," Kerry said in a statement.
But several Republicans complained that the bill increases the tax burden on businesses and their workers and makes the tax code even more complex.
"The tax code is 67,000 pages long," said Representative Dave Camp, a Michigan Republican.
The bill has caught the attention of national citizen and consumer advocacy organizations. On Monday, US Public Interest Research Group, Common Cause, Public Citizen, and OBM Watch sent a joint letter supporting the bill to members of Congress.
"It's tax time," said John Krieger, a tax and budget attorney with US Public Interest Research Group. His organization had sent 150,000 e-mails to galvanize support for the measure, he added.
"Americans are paying their taxes, and we believe that corporations that bring in millions should pay their taxes, too."
On Monday, the House also passed a bill that aims to prevent companies that owe back taxes to the federal government from receiving additional federal contracts.
April 16, 2008 Shell company hirings targeted
By Farah Stockman, Globe Staff
WASHINGTON -- The House of Representatives yesterday passed a bill that would stop federal contractors from avoiding payroll taxes by hiring American employees through offshore shell companies.
The bill was filed after The Boston Globe reported that KBR, a former Halliburton subsidiary, had avoided paying hundreds of millions of dollars in Social Security and Medicare taxes for American employees working in Iraq by hiring them through Cayman Island shell companies.
The bill amends the Internal Revenue Code and the Social Security Act to treat foreign subsidiaries of US contractors as American employers for the purpose of payroll taxes.
The measure, backed by Representatives Rahm Emanuel of Illinois and Brad Ellsworth of Indiana, both Democrats, passed last night by a vote of 238 to 197. It was part of the Taxpayer Assistance and Simplification Act of 2008, which also revokes the authority of the IRS to use private contractors to collect back taxes from delinquent taxpayers.
During the debate on the bill, Emanuel recited the post office box address of the Cayman Island company. "The only purpose they are there for is to avoid paying their fair share of taxes," he said.
A similar provision is being sponsored in the Senate by Senators John F. Kerry, Democrat of Massachusetts, and Barack Obama, Democrat of Illinois.
"We've got Americans struggling to pay their bills and fill their gas tanks, and they should know that at a minimum Washington is doing something to stop defense contractors from profiting through tax loopholes you could drive a truck through," Kerry said in a statement.
But several Republicans complained that the bill increases the tax burden on businesses and their workers and makes the tax code even more complex.
"The tax code is 67,000 pages long," said Representative Dave Camp, a Michigan Republican.
The bill has caught the attention of national citizen and consumer advocacy organizations. On Monday, US Public Interest Research Group, Common Cause, Public Citizen, and OBM Watch sent a joint letter supporting the bill to members of Congress.
"It's tax time," said John Krieger, a tax and budget attorney with US Public Interest Research Group. His organization had sent 150,000 e-mails to galvanize support for the measure, he added.
"Americans are paying their taxes, and we believe that corporations that bring in millions should pay their taxes, too."
On Monday, the House also passed a bill that aims to prevent companies that owe back taxes to the federal government from receiving additional federal contracts.