Posted on 03/09/2008 11:24:47 AM PDT by BGHater
Shell companies in Cayman Islands allow KBR to avoid Medicare, Social Security deductions
CAYMAN ISLANDS - Kellogg Brown & Root, the nation's top Iraq war contractor and until last year a subsidiary of Halliburton Corp., has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven.
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. Neither company has an office or phone number in the Cayman Islands.
The Defense Department has known since at least 2004 that KBR was avoiding taxes by declaring its American workers as employees of Cayman Islands shell companies, and officials said the move allowed KBR to perform the work more cheaply, saving Defense dollars.
But the use of the loophole results in a significantly greater loss of revenue to the government as a whole, particularly to the Social Security and Medicare trust funds. And the creation of shell companies in places such as the Cayman Islands to avoid taxes has long been attacked by members of Congress.
A Globe survey found that the practice is unusual enough that only one other ma jor contractor in Iraq said it does something similar.
"Failing to contribute to Social Security and Medicare thousands of times over isn't shielding the taxpayers they claim to protect, it's costing our citizens in the name of short-term corporate greed," said Senator John F. Kerry, a Massachusetts Democrat on the Senate Finance Committee who has introduced legislation to close loopholes for companies registering overseas.
(Excerpt) Read more at boston.com ...
What do they expect when this country has one the highest corporate tax rates in the world.
Maybe they learned this technique from John Edwards.
Exactly. My wife works for KBR and got a huge foreign income exclusion. I aint complainin.’
Translation:
"If they circumvent paying taxes into medicare and social security this way they save a lot of money but make it impossible for us to steal that extra amount from the Medicare and Social Security Trust Funds as we have been doing for years."Stealing taxpayer's money is government's job, not private corporation's."
Save the DoD money, and stop funding Medicare and Social Security?
Sounds like a plan to me!
Translation:
"If they circumvent paying taxes into medicare and social security this way they save a lot of money but make it impossible for us to steal that extra amount from the Medicare and Social Security Trust Funds as we have been doing for years."Stealing taxpayer's money is government's job, not private corporation's."
Let’s launch an investigation to see how much of the personal wealth of Kerry, Kennedy, Soros etc. is stashed in offshore, tax-free vehicles.
I’m sure they have nothing of that kind. </sarc>
I have a feeling that collecting enough taxes is going to be an absolute nightmare for the feds in 2020. Especially as more capital and wealth flees the grip of the nation.
Only need to ask one question:
Is it illegal?
If not, then Kerry, Kennedy, and the Left in general just needs to shut up. Wealth is relocating overseas because the Left has made it too difficult to keep here.
Yeah, they had to get that in there. LOL
I worked for KBR all of 2004 and the early part of 2005. Didn't pay any Social Security in that time.
Naturally, if a reporter from the Globe calls a defense contractor and asks them if they use Cayman subsidiaries to avoid US taxes they're bound to answer the question happily.
When I worked overseas the company deducted SS and Medicare.
If they had not, I would have been liable for the whole amounts.
Maybe ti is the employees who are getting the short straw here.
I have been out of the loop since the 70’s, but I seem to recall KBR was a Canadian company specializing in building power plants and related installations. Am I hinking of some other compamy??
When does the investigation begin into the cruise ship industry? How many of those cruise ships are actually registered as American..2?
Isn’t that just another wonderful aspect of globalism?
Surprised liberals bookmark for later.
Brown and Root and Kellogg were both Houston-based companies.
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