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post #1 of 4 (permalink) Old 05-09-2008, 04:42 PM Thread Starter
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"The Lucrative Art of War"

Yet another thing to be outraged about:
Gee, what would happen to us if we didn't pay our fair share of taxes, hmmmm? [Oh, silly me, who really cares, we're just one of the teeming "little guys", SNARK!]

The Lucrative Art of War
Published: May 9, 2008

Congress is finally moving to shut one of the more egregious forms of Iraq war profiteering: defense contractors using offshore shell companies to avoid paying their fair share of payroll taxes. The practice is widespread and Congressional investigators have been dispatched to one of the prime tax refuges, the Cayman Islands, to seek a firsthand estimate of how much the Treasury is being shorted.

No one will be surprised to hear that one of the suspected prime offenders is KBR, the Texas-based defense contractor, formerly a part of the Halliburton conglomerate allied with Vice President Dick Cheney. According to a report in The Boston Globe, KBR, which has landed billions in Iraq contracts, has used two Cayman shell companies to avoid paying hundreds of millions in payroll, Medicare and unemployment taxes.

Unfortunately right now there is nothing illegal about this. The House has approved legislation to plug the dodge by treating foreign subsidiaries of defense contractors as what they are — American employers required to pay taxes. The Senate must quickly follow suit and not buy the contractors’ line that listing American workers at offshore companies is a cost saving passed on patriotically to the war effort. No less insulting, the Cayman dodge has been blocking Americans from the protection of labor and anti-discrimination laws.

The House has taken on another shamefully common abuse: voting to deny future government contracts to any company that fails to pay its corporate taxes, including an estimated 25,000 defense contractors keeping billions due the Treasury. The Senate should approve that legislation as well. Companies enriched by taxpayers in the war boom should not be able to compound their profits by not paying their fair share of taxes. Congress must do far more to bring them to a full accounting.

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post #2 of 4 (permalink) Old 05-09-2008, 05:19 PM
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.....Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. ....
This might sound like an anti-Bush, anti-Iraqi war speech, but to those who don't recognize it, it is President Dwight D. Eisenhower's (formerly General Dwight D. Eisenhower ) fairwell address, a warning to the American people to be on guard against the military-industrial complex. President Eisenhower was a Republican, of course.

http://coursesa.matrix.msu.edu/~hst306/ ... ndust.html

Emphasis mine


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post #3 of 4 (permalink) Old 05-09-2008, 05:39 PM
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The basic cause of the problem Judy vents about in the OP is our tax code. Our tax code, over the years, due to fiddling and tweaking trying to address problems produced by the tax code in the first place, like the offshore havens, has resulted in a gargantuan mass of tax code that nobody really understands, that smart and savvy lawyers and unethical companies can manipulate to their advantage, and that is basically, well, preposterous and ridiculous.

The only real solution to address problems like the offshore tax havens is to throw out the entire tax code and the IRS, and replace it with a revenue-raising scheme so simple that even a third-grader could figure it out. In fact, many other countries have simplified and revamped their tax codes to their economic benefit. The US, like in healthcare, is behind the times and on its way to a place of some embarrassment in the world community.

There are two solutions that are workable and meet the goal of vaporizing the tax code and the IRS: the flat tax, national sales (or value-added tax.) The flat tax is an income tax of a fixed percentage on all income above a certain level. No deductions, exemptions, incentives, exclusions. The tax code could consist of one line in the Federal Register: "All individuals, employed or self-employed, and all business entities, shall be taxed at a rate of nn% on all net income above $nn,nnn (for individuals) and on all net income (for business entities.)"

The VAT would be a little more complicated. Some allowances would have to be made so that it doesn't adversely impact low-income people. Perhaps some basic necessity-of-life items could be exempted from the tax. Personally, I think the VAT would be good for the country in the long run, as it would encourage us to be better at saving our money rather than spending it.

Of course, it'll never happen. Even with tax reform, our stellar legislators will find some way to put in provisions for their special interest groups and supportive industries, and the end result will be even more unfairness and confusion. And if they implement the VAT, they'll probably do it as an add-on, keeping the income tax and the IRS, and thereby not solving the basic problem.

And that's my rant for the day.....
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post #4 of 4 (permalink) Old 05-09-2008, 06:01 PM
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I was referring to KBR and Cheney.

Sometimes I wonder if this miserable tax code will ever be changed. I have my doubts.


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