It's Time To Scrap The US Tax Code
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