Revenue from Fair Share
Provision Will Pay for Tax Benefits for Military
Personnel
Press Statement of CALPIRG Federal Staff
Attorney John Krieger
"Tonight, the
US Senate approved the Heroes Earnings Assistance and
Relief Tax Act, which had passed the House of Representatives unanimously on
Tuesday. The HEART ACT provides permanent tax relief for military families and
it is partially paid for by a provision, championed by Senators Kerry and Obama
and Reps. Emmanuel and Ellsworth, that closes the tax loophole that has allowed
private contractors, including Kellogg, Brown, and Root (KBR) to avoid paying
almost $100 million a year in payroll taxes for its U.S. employees by setting up
foreign subsidiaries.
“By reining in tax-dodging private contractors who use
gimmicks to avoid their basic responsibilities, this Congress chose good
governance and accountability over cronyism and favoritism. We applaud Congress
and the bill’s sponsors for having the good sense to pay for this reward for
military families by closing sham tax havens for private military
contractors.
"This practice of using shell companies in the Caymans to
hide from basic federal responsibilities is so purely disgraceful that when the
public was informed, they were outraged. A coalition of consumer, labor, church
and taxpayer groups, including AARP and the American Federation of State and
Municipal Employees, sent a letter to the Senate Finance Committee last week in
support of this provision.
"Americans
are working hard this summer and paying their fair share, and we expect private
contractors that receive billions from the federal government will do the same.
We know full well, though, that some federal contractors will do anything it
takes to avoid paying back into the system, and Congress and the public have to
anticipate the next gimmick that they will use to avoid their
responsibilities.”
