1) The article references "DoD contracting databases" whatever they may be. No data source identified.
2) Data described is old.
3) The scenarios given are as I described above, major weapon systems. They complain about buying a Raytheon missile from Raytheon without a competitive contract. The government did not pay for data rights so that anyone could build the missile as a build to print. If you want to throw a Tomahawk at Libya, you have to buy it from Raytheon, because Raytheon makes it. Sole Source. There is nothing stopping you from making a better/less expensive cruise missile and offering it to the military. If you had a better/less expensive missile the military would buy it from you, but you don't have a better/less expensive missile. So the military buys Raytheon. The article cited uses the Faux method of riling up the populace with half truths.
4) One point raised that is harder to refute is the small/disadvantaged business scam imposed upon DoD by Congress. A guy can give his wife a title and paper ownership and suddenly runs a disadvantaged business, with preference in being awarded contracts. Small business set asides? There is a good reason for them. The easiest thing for the military to do is award one contract that covers everything, what are known as "omnibus" contracts. A set aside insures that there will be little guys that can grow up to be competition to the big guys.
Welcome to the world of real research. I had to make numerous phone calls to DoD when I was writing my articles, and they had to send me Excel and PDF files that were not available online. But they have to make them available.
This stuff isn't trivial. Sometimes getting an answer takes some work.
As I said, that was 2004. I doubt if anything has changed. I don't know what John's basis is for saying this, but he says nothing has changed.
This has been going on for a half-century. I don't think you'll find much difference in 2011 versus 2004, but you can check it out if you're really interested. It might even be online, if you know how to track those things down. It can take hours, or even days. But it's available one way or another.
As I said to Dan (and to John), my point is not to argue about whether sole-sourcing is justified. The point is simply that it's a FACT, which impinges directly on their willingness to pay taxes. That was the subject.
Not if you're interested enough to read it critically. That's true with most such studies.
The entire defense procurement business is seriously f**ked, and always has been. It was the basis of Eisenhower's warning about the Military Industrial Complex. Like the health care industry and several others, it has a fine logic when viewed from the inside, deductively, but it looks like corruption personified if you're on the outside looking in.
It IS corruption personified. But it's not what we usually think of as corruption. It's not individuals trying to enrich themselves. It's individuals charged with the responsibilities of getting things made, and mixing together practices that would be normal to private business with the oddity of having one overwhelmingly dominant consumer, which is driven by regional interests and politics, and no-bid, sole-source deals that inherently corrupt the whole process, from the point of view of efficiently serving the country's needs.
Just look at how you and Dan reacted to this thread. The subject was the fact that the taxes paid by Lockheed Martin are essentially meaningless, and are so much higher than those paid by typical corporations in America. But both of you immediately got defensive about the justifications for sole-source and no-bid deals. They have an internal logic that looks sensible to people on the inside. And that's how things go to hell, when an inherently foul system, which has few of the normal competitive checks that keep private business in check, begin to look like they make perfect sense.
When corruption of the competitive business model looks good, even necessary, we're screwed. Just like Eisenhower warned us.
There's plenty to complain about. The tax situation we've been discussing is just one misleading facet of the multi-faceted business.
Wrong again. The original subject was TMT's remark that the defense industry is very good at avoiding taxes. I posted some facts that showed he had no idea of reality. Then you jumped in and said that Lockheed did not care about income taxes because it was a defense contractor. And I pointed out that every company passes tax cost on to who ever buys their product. And you keep trying to say it is because they are a defense contractor. That makes no sense. For every dollar of taxes that they can avoid, they make that much more profit. Exactly the same as any other company. So they are just as concerned about avoiding taxes as other companies. However they are unable to get a Energy Star rating for the products that they build. So they are not able to avoid as much taxes as some companies. Do note that they paid %29 percent of their profit in taxes. If they did not care, that number would be 34% or at least closer to it. Boeing for example flies its commercial planes to Idaho and sell them there to avoid Washington State sales tax.
Yes indeed, what i was actually trying to say is that i suspect the government and wallstreet are in cahoots to get savers to move thier money from a savings account into stocks and bonds. It seems that has been the policy since the 80's and its a loose loose deal for the people. You can loose money by saving thru inflation or you can invest and loose everything in one fell swoop like GM shareholders did. Its also great that the banks can use your savings for free and then lend it to credit card holders for 30% interest.
=========== part 2 ==== If this resonates, you will probably find the following article of interest.
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1) The Federal Reserve is Buying 70% of U.S. Treasuries.
2) The Private Sector Has Stopped Purchasing U.S. Treasuries.
4) Japan to Begin Dumping U.S. Treasuries.
surpass $2.67 trillion within the next several years.
9) High Budget Deficit as Percentage of Expenditures. The projected U.S. budget deficit for fiscal year 2011 of $1.645 trillion is 43% of total projected government expenditures in 2011 of $3.819 trillion. That is almost exactly the same level of Brazil's budget deficit as a percentage of expenditures right before they experienced hyperinflation in
1993 and it is higher than Bolivia's budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1985.
12) U.S. Faces Largest Ever Interest Payment Increases. With U.S. inflation beginning to spiral out of control, NIA believes it is 100% guaranteed that we will soon see a large spike in long-term bond yields.
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
========== While many of the con men, corner cutters, and angle players appear to be blowing more asset bubbles, precious metals may be an option. Relatively inflation proof, and while the value may drop, it won't go to zero, ala Enron or GM stock. It is also easy to hide.
I only wish that I had invested far more of my IRA funds in precious metals over the years, although TIAA/CREF has not done that badly.
Gold seems to be priced about right, but silver appears to have a way to go yet. Also silver is more affordable.
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
================= News item on America's tin cup / tax evading / no-load corporations that should be of interest:
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?I?m tired of people calling for shared sacrifice and it?s all coming from the workers and nothing?s coming from the top,? says protester Dave Sonenberg. ?I?m sick of companies like Bank of America not paying their taxes.??I?m tired of people calling for shared sacrifice and it?s all coming from the workers and nothing?s coming from the top,? says protester Dave Sonenberg. ?I?m sick of companies like Bank of America not paying their taxes.?
Bank of America hasn?t paid a nickel in federal income taxes for the past two years, and in fact raked in an additional $1 billion in tax ?benefits.? The bank is enjoying these profits after accepting $45 billion from taxpayers, which the company then got to count as a deduction when they paid back the money.
Big corporations get to play by a whole different set of rules, says tax expert Bob Willens of New York-based Robert Willens LLC:
It's also not unusual for a company to pay no federal taxes, while still paying state and local taxes, Willens said. Items that can be deducted for federal purposes aren't always deductible for state and local returns, he said. State taxes can also be based on the amount of capital deployed in a state, not pre-tax income.
This is why two-thirds of corporations in America pay no federal income taxes. If they were forced to, we're told, the whole country would suffer. Jobs would be lost, salaries slashed. Thank heavens we?ve avoided such calamity by allowing corporations to shape legislation in their favor.
In 2010, Bank of America handed out $2.2 million in campaign contributions to congressional representatives and PACs (36 percent went to Democrats, 64 percent to Republicans). By throwing around that much cash, huge companies like BoA have a big say when it comes to crafting legislation that permits them to escape paying taxes, according to US Uncut organizer J.A. Myerson.
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
I totaly agree that people should have some tanagible assets like gold and silver in thier IRA accounts. At this point in time even rental property can be a good investment if you pay cash up front.
Your suspicion is more or less correct. There is no secret about it. The Fed has spent more than a trillion dollars trying to induce people to not save. The Fed doesn't care if you put your money in the stock market they just don't want you to put it in a saving account or worse keep it in your wallet or under your mattress. They want you to spend your money as fast or faster than you receive it.
First off, sellers in Washington State don't "pay" sales tax--rather, they are required under statute to collect it from the buyer and hold in escrow on behalf of the state, generally forwarding the it to the State on a quarterly basis.
Second, sales tax is only due on sales made by residents of and by businesses who operate within Washington State. For instance, in-state sales to residents of Oregon, Idaho or any other state for that matter, are exempt.
Third, and more importantly, it does not matter where the "sale" took place--even if the sale takes place in Egypt, a Wa. seller is required to collect sales tax from a buyer if the buyer is a Wa. resident or if the buyer is a business that has a physical presence in the State.
Lastly, commercial aircraft are exempt from the State Sales Tax.
Your comments back and forth here relect a cultural issue, Ed. You want to rely on a factual analysis and when you do that, you ignore the value this part of the economy places on itself as an industry. Get a flag, wrap yourself in it, and you'll understand. LOL
Well, since commercial aircraft are specifically listed the applicable statue as being exempt...
But since I have you on the wire here, it's important to realize that military contractors "charge" income taxes... think we can agree that the result is a zero net gain to the contractor because the money goes back to the government, when the contractor pays his taxes...
However, following the money trail, this money...which is originally sourced from the defense budget, Boeing simply "collects it".....then later, Boeing remits it to the IRS wherein it ends up going into the general funds--in essence, "re-distributed", if you will....
IOW these dollars tax dollars end up back in the hands of government and are subsequently used to help fund the entire gamut of federal programs.
Yes. However, it is possible that the amount could be an issue in bidding, as Dan suggests. But it appears not to be. DoD rules for judging bids do consider taxes as a cost issue, but then they turn around and say that taxes are handled as an expense, and are not a part of the bid.
I'd have to dig into this further but it appears that DoD considers whether taxes are reasonable and justifiable. In other words, if you bid with the full amount of federal income taxes in your bid, that would be reasonable and justifiable to the federal government. And it's not treated as a competitive issue.
Of course, as always, the federal rules would fill a small book. But the part about taxes being a separate expense is clear.
Sorry, I must not be up to date. I believe this was true some years back. I do not suppose you know when commercial aircraft were made exempt from sales tax. Could it be that the exemption was made because the state was not collecting any sales tax on commercial aircraft because Boeing was making the sales outside of the state?
If you really want to get a flap going on military and aerospace trade, get into offsets and counter trade. When I found out about that stuff I nearly blew a gasket.
Aerospace is the brightest spot in our trade in goods, except that it isn't. We actually lose money on it, as well as jobs. But I don't want to get into it. It raises my blood pressure just to talk about it.
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