In something that can only be classified as bizarre, the US government is actually favoring companies that have transferred their headquarters to countries where their profit is not taxable.
A tax haven is a country that does not tax companies that move their headquarters to that country. Because the company is no longer headquartered in America, they become tax exempt. These companies can bid lower for a federal contract than their US based competitors, and win the contract.
The tax advantage gives all the incentives for companies to move to tax haven countries and gives the company higher profits.
"The GAO has documented what many of us suspected, that there is an unfair playing field" for bidding on government contracts between U.S. companies and those that establish themselves abroad to avoid federal taxes, said Sen. Susan Collins, R-Maine, who requested the study as chairman of the Senate Governmental Affairs Committee.
"American companies should not suffer a competitive disadvantage because tax haven contractors have inverted ownership to gain an unfair edge by avoiding paying corporate tax," she said.
This reporter asks the question why did it take a GAO study to confirm that which was already known. Congress created the loop-hole and provided a means for big business to increase their profits and undermine the American tax base.
Congress and the Bush administration have given no indications that they are going to close the loop-hole. A headquarters moved off shore can be something as simple as a post office box – with the operational end still residing in America.
Bush’s tax cut only applies to the upper 1% of America who controls 40% of the wealth.
Overtime pay is now a thing of the past, thanks to the current administration.
Greenspan is calling for dramatic cuts in social security benefits.
This reporter asks if the American population is the real target of the Bush wars.