GE (General Electric) has filed a 24,000 page tax return the past two years. That's an 8-foot high stack of 8.5x11" paper. That's triple the physical size of the tax code itself (about 7,500 pages).
KBR (formerly Kellogg Brown Root and before that a Haliburton subsidiary) is the largest Iraq contractor and is using Cayman Island subsidiaries to "avoid paying Social Security and Medicare taxes for thousands of American workers."
In March, the Boston Globe reported that KBR employs shell companies -- with no office or phone number -- in the Caymen Islands to circumvent tax law:
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. (emphasis added)
The Pentagon has known since 2004.
Don't beat yourself up if this is "news" to you ... it wasn't widely reported at the time. Chalk it up to war fatigue. Or laziness. Or something.
In response, a week later Rep. Brad Ellsworth (D-IN) introduced H.R. 5602 and Sen. John Kerry (D-MA) introduced S. 2775 -- companion bills each known as the "Fair Share Act of 2008." The bill would "amend the Internal Revenue Code of 1986 and the Social Security Act to treat certain domestically controlled foreign persons performing services under contract with the United States Government as American employers for purposes of certain employment taxes and benefits." (Neither bill has moved out of committee.)
We are past the days of adding yet-another amendment which introduces unintended consequences and which too often makes it so very easy to insert favored corporation clauses.
We are past the days of adding yet-another amendment, when the existing law is so complex that no one person (maybe not even the courts) can truly understand it.
By almost any measure, the current system does not conform with principles designed to judge whether a tax system is "good."
It's time to SCRAP the 7,500 page tax code and Start Over. All those folks pushing "flat tax" rhetoric for individuals? Why not flat tax for corporations?
Imagine how much money GE will save when it doesn't have to create a 24,000 page tax return? Imagine how many lawyers will have to find jobs that actually contribute to society instead of filling jobs designed to minimize corporate taxes and/or influence legislation designed to minimize corporate taxes? Imagine how many former Congress critters (elected and staff) will no longer find a beckoning revolving door leading to the life of a well-heeled tax lobbyist?
Imagine.
Related: Issue Overview : Taxes
Comments
Hi Kathy,
You will probably be interested in the efforts made in Europe and in France to achieve simplification in the fields of Law and Taxation. Though we are doing nothing as radical as what you are proposing, there are currently official efforts being made both at EU level and national level to simplify the system by erasing laws that are not applicable anymore or made redundant or simply contradictory. There are also efforts to reduce or cancel altogether what we call fiscal niches. Maybe the USA could get some inspiration from the “old countries” as Dick Cheney would say. Being old often means having extremely old legal and fiscal texts that are not reviewed often enough and that create unneeded complexity, ending up in contradicting one of the basis of the rule of law: None is supposed to ignore the law.
As my children have grown and I move towards an early retirement I am absolutely amazed at the powerlessness of the US citizen. I am grateful to be one but I don’t feel the need to compare myself to being a citizen in any other country. Why can’t we change the tax code? Why are dunces in charge of the government? The bright, the learned and the industriousness are busy running the economy and the infrastructure–being engineers, scientists, leaders of companies, managers, selling goods, building cars…politians–I have yet to meet one who has taken my voice to heart or represented what I believe in. It’s hopeless.
Hi, Alphast — I did not realize that the EU had such a movement. Thanks.
Trying to fix old laws with edits is as cumbersome as trying to fix evolving software with another patch. Ask Microsoft – or try Vista. :-/
I know my proposal is radical — I couched it this way on purpose. And not simply because of your point — None is supposed to ignore the law — but also because the law is supposed to treat people (and entities) “equally”, ie, not favor one over another. It’s clear from this chart ((In)equalit In America) that one group of Americans (1%) is favored over everyone else (99%).
I’m not optimistic. :-/
Hi, Karen – thanks for posting.
I’m not convinced the situation is hopeless, but I agree with you that there seem to be a feeling of powerlessness among parts of the citizenry.
I’ll chalk some of that up to lack of good civics education (ie, responsibilities of citizens in a republic).
I’ll chalk a little more of that to a problem with scale: I think that our form of government does not scale with population growth. And I think the federal government bureaucracy has expanded into the region of *diseconomies* of scale.
The one thing that gives me hope this election cycle is the number of “new” voices that seem to be energized by both Ron Paul and Barack Obama. As I’ve mentioned to some of the Ron Paul folks, I hope that they continue to be engaged in the political process after November.
I hope you stay engaged, too. And congratulations on early retirement!