Thursday, April 10, 2008

Walz and Ellison Fighting Shell Games

Good News !

Legislation that I strongly support (background here), has past its first hurdle. As happens quite often, bills are combined or segments incorporated from one bill to another. In this instance, H. R. 5719, which is also known as The Taxpayer Assistance and Simplification Act was introduced on April 8th with Minnesota Congressmen Tim Walz (D-01) and Keith Ellison (D-05) as co-sponsors. The House Ways and Means Committee has moved quickly on this legislation passing it on April 9th. Included in this legislation is that US companies that employ workers through foreign shell companies be required to pay Social Security and Medicare taxes if their work was performed under a federal government contract.

Last month, it was reported that companies such as Kellogg, Brown and Root have avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in the Cayman Islands. As a result, these workers cannot receive unemployment assistance should they lose their jobs. While the use of the shell companies saves workers their half of their Social Security and Medicare taxes, it deprives them of future retirement benefits.

The funding of Social Security and Medicare benefits are predicated on participation by everyone. It is un-American that these US firms obtain federal contracts and then establish shell companies to avoid participating.

If you have contacted Congressmen Walz or Ellison as a result of my efforts to promote HR 5602, please let them know that we appreciate their sponsorship of HR 5719.
So often we hear about being fiscally responsible, well, as a fiscal conservative, I believe that everyone paying their share is fiscally responsible.
The Joint Committee on Taxation estimates (see report JCX-30-08) that this will add $480 million dollars to the funds over the next five years.
THANKS Congressmen for being fiscally responsible !

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