SOMEbody is living the Libertarian dream…
via Kerim at Keywords
GAO Says Pentagon Pays Corporate Tax Evaders
About 27,100 Department of Defense (DoD) contractors owe the federal government $3 billion in unpaid taxes, but the Pentagon continues to hire and pay them with taxpayers' money, a congressional investigation has found.
The government has the power to garnish checks cut to scofflaw contractors but has not done so in a significant way, forfeiting an estimated $100 million a year for the U.S. treasury, the study found.
"It's more than irritating. It's outrageous that individuals who have obligations to pay taxes and are earning big money, don't pay taxes," said Norm Coleman (R-Minn.), chairman of the Senate Permanent subcommittee on Investigations, in a meeting with reporters Wednesday.
In one case, the Pentagon paid $3.5 million in 2002 to a company that owes nearly $10 million in back taxes. It provided dining, trash-hauling security and other services at military bases. The owner of the unnamed company allegedly borrowed nearly $1 million from the company, bought a home and a boat in the Caribbean and dissolved the business in 2003. The company transferred its employees to a relative's business and continued to submit invoices and receive payments from the DoD through August 2003, according to the General Accounting Office (GAO).
Another unnamed company that manufactures parts for DoD aircraft owed the government nearly $2 million, and has been paid that much by the DoD in 30 contracts issued from 1997-2002.
Most of the DoD contractors owe primarily unpaid payroll taxes -- meaning they have withheld money from employees' paychecks for Social Security and Medicare but have never passed that money on to the government.
Posted by P6 at February 18, 2004 09:41 PM
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Comments
Buwahahahahaha!!!
"We want our taxes!"
"We'll have to raise our prices to pay them."
"So?"
"So you are the one we are going to be raising prices on."
"MUST PAY TAXES!!! HULK SMASH!!!"
Posted by Phelps at February 19, 2004 11:31 AM"We want our taxes!"
"We'll have to raise our prices to pay them."
Yes, in the imaginary world of perfectly competitive firms, where there are no monopoly rents. But even then, public goods cost money.
Look and see. These firms expropriate monopoly rents and enjoy external economies of scale. This is an inevitable outcome of competition. These firms require state agency to exist--all firms do. So taxing their rents, by the definition of "rent", doesn't change the position of the supply curve. Most of the costs of government go to maintaining property rights in various ways, so IMO they have little grounds for complaint.