Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Report shines a light on defense firms’ low tax rates

Pentagon Notebook  The Hill  November 6, 2011

A new report has branded U.S. defense firms with a label that has become a political target, charging that they pay too little in taxes.

American defense manufacturers pay an average annual tax rate of 17.5 percent, placing them in a class with some of the nation’s least-taxed sectors like information technology, telecommunications, financial services and energy, Citizens for Tax Justice and the Institute on Taxation and Economic Policy concluded.

In the joint report, which features data spanning 2008-2010, the groups note the U.S. defense sector “is not exactly an industry, but it is a group that paid notably low tax rates.”

Many defense firms paid less than the mandated 35 percent corporate tax rate, the report found.

“Not only was the 2008-10 effective tax rate on the top 10 defense contractors less than half of the 35 percent official corporate tax rate,” the report states, “but the effective rate fell steadily from 2008 to 2010, from an already paltry 19.3 percent in 2008 to a tiny 10.6 percent by 2010.”

The report comes at a time when Democrats are criticizing some firms for paying low taxes despite raking in big profits, as unemployment remains high and the economy continues to sputter

Please read the entire article here

November 6, 2011 - Posted by | Civilian Contractors, Contractor Oversight, Department of Defense, Government Contractor, Taxes | , , ,

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