Quick, somebody find a way for Hillary to blame this on Obama.

Where there's a will, there's a way...

Just when you start thinking that American, or former American, companies had lost their creative edge they prove you wrong.

For ordinary Americans, you pay taxes whether you can avoid them or not.

For corporations, taxes are just another expense that cuts into profits, which therefore must be minimized.

Er, "Whether you can afford them or not."

wow...now that's simply a fucking disgrace to the nation--but we don't comment, because it's also just business as usual...

If you read the complete Boston Globe article link, you will see that Carl Levin, Barack Obama and Norm Coleman have sponsored something called the Stop Tax Haven Abuse bill that will allow Treasury to go after this stuff. The article goes on to say that while this sort of stuff doesn't seem to break any Defense Dept rules for defense contractors, it is an open question whether the IRS CAN go after them. I suppose the better question is whether the IRS WILL go after them.

Another reason to pass the Fair Tax.

War profiteering has never been more exciting!

"...in his undisclosed location, Dick Cheney paused a moment, smiled into his single malt Scots whiskey, then resumed petting the white Angora cat purring softly on his lap."

Actually, this is a good experiment to answer a question that's always bugged me- SS privatizers always say that reducing SS taxes and letting people invest them would benefit employees because they would see their pay raised by the amount of the employer's portion of the tax. (The employer portion of the tax is always included in various analyses of tax burdens.)
So, since KBR isn't paying SS taxes, do its workers see that entire 15.3% as an increase in their salaries? Since KBR is doing this whole thing to cut the cost of paying those taxes, apparently not. The whole, "The employer's portion of the payroll tax is really a hidden 7.65% tax on employees," is obviously crap.

If the next President is a Dem, s/he ought to insist that KBR pay into the Social Security and Medicare systems on behalf of these employees if they ever want another dollar from a Federal contract.

low-tech: "If the next President is a Dem, s/he ought to insist that KBR pay into the Social Security and Medicare systems on behalf of these employees if they ever want another dollar from a Federal contract."

Pay back taxes with any and all IRS penalties.

Normally, I'd be among the first to pile on Haliburton/KBR. But is this significantly different than what other companies do with their foreign workers? I'm not saying it's right, but it sounds as if it's more of a moral issue than a legal/ethical issue.

Again, not to defend KBR, but if we want corporations to gleefully pay every possible tax, we need to change the entire nation's collective attitude. Whining about taxes is as American as apple pie; it's part of every late night comedian's shtick. In fact, the late Supreme Court Justice Learned Hand said something to the effect of it was every American's duty to pay the lowest taxes possible.

Now I'm all for paying my fair share (and I do). And I realize that I pay more than my share when someone else doesn't pay theirs. But if we as a nation are going to continue complaining about our tax burden, we shouldn't be offended when someone does something about it. And if we see fit to close the loophole, then fine.

Dave Brown:

Maybe it just seems more like they were directly defrauding their employees directly and being devious as to who those folks were actually working for. According to the full article, some of those employees (some of them accountants and engineers--not exactly stupid people) were fully under the impression that they were KBR employees until they got in country in Iraq. Apparently, they claimed their ID papers and such listed them as KBR employees. And KBR claimed some of them as employees when an issue arose having to do with potential liability for KBR.

So, they were trying hard to have it both ways.

One could make the argument that they didn't cheat the American people (bad enough) with their loophole scheme skipping out on taxes but directly cheated their employees. That is the yuck factor for me.

Now if the employees are aware of the fact they are not apart of the Social Security system, and invested the saved income for retirement, they will certainly do better than being apart of the social security system, because anybody retiring pretty much from now on (and even going back a few years) will never get a decent return on Social Security. But, one of the arguments in favor of the Social Security system is that people are too stupid to save and invest, so we have to do it for them.

"But, one of the arguments in favor of the Social Security system is that people are too stupid to save and invest, so we have to do it for them."

What is your complaint here, Daniel? Apparently the employees involved ARE too stupid to handle their own lives. Didn't they freaking notice that their paychecks no longer included a section detailing the SS and medicare deductions.

Call it stupidity. Call it ignorance. Call it lack of time. The bottom line is that, I'd say, this whole incident is a pretty powerful justification for continuing SS exactly the way it is right now.

This is an example of Capitalism at its best.

It's funny that Americans love the idea of freedom but then turn around and complain when people use it.

This is like the Dubai ports deal. Why are we outsourcing vital defense work to a foreign company?

What's wrong with what KBR did?

Isn't avoiding taxes at all costs and cutting them whenever possible the American Way?

ReThuglicans certainly seem to think so.

And P.S., since these folks are out of country, I don't think the Fair Tax would be paid by them at ALL.

It really amazes me when the companies pull this crap (Accenture also did something along these lines by incorporating in Bermuda). I think the way to solve this problem is simple. You pull this crap you are not elgible for gov't contracts. Simple heh. You don't want to pay taxes that is your choice, but that sub is not able to bid on govie contracts ( and the sucessful contractor can't subcontract employment to offshore firms). That should fix the issue.

This stuff never holds up in court. It just takes one on-the-ball AG to fix this.

You can bet McCain's chief economic advisor, Phil Gramm - loves this kind of stuff. He is more extreme than Bush on economics.

"Now if the employees are aware of the fact they are not apart of the Social Security system, and invested the saved income for retirement, they will certainly do better than being apart of the social security system"

Dude, you DO realize that just because your employer decides you are a freelance contractor, and THEY don't pay your Social Security taxes, that you as a self-employed contractor MOST CERTAINLY have to pay it at tax time - and you have to pay both portions of it (employer and employee). Wheeeee! Do you actually believe that if someone is self-employed, they're not part of the Social Security system?? I'd love for you to try that argument with the IRS - in fact, if you could convince them of this before April 15, you'd be doing me a huge favor.

You are a perfect example of the problem with our public discourse on Social Security. You don't have a clue what you're talking about, but you spread your privatization bullshit anyway.

Gypsy,

Yep. Even if SS was dismantled and an employee could opt out of it the idea that private investment will always do better than the US government is a fantasy.

People endorsing privatization forget that there is a reason why, for example, bank deposits are ensured by the US government. Banks have failed. So far the US government has not.

I can see why some people who came of age in the nineties might imagine that the stock market will always go up, inevitably, like it is an act of God or something by why do they still believe that BS today? Yes, I know that we hear the 'fact' of an always rising stock market repeatedly so it is easy to go along and think it is as inevitable as the sun rising tomorrow but come on people!

This myth plus the ignorance of what the transition costs would be (assuming you don't want to totally screw the people who paid in their whole life with the assurance they would get their rewards later) is inexcusable really.

The quickest wa to end this abuse is to ban a company that does this from getting a government contracts. Why should American taxpayers deny Social Security and Medicare benefits to Americans working in Iraq. Tell the contractor, before they get the money that American employees have to have these taxes taken out.

The quickest way to ban this abuse is to have a COMPLETE and UTTER REMOVAL of the so called off shore banks in the Cayman's, and just use them as a vacation spot, which God intended it to be.