Obama orders tax crackdown on federal contractors
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President Obama today ordered a crackdown on federal contractors who don’t pay their taxes, hoping to recover as much as $5 billion.
In a televised appearance, Obama signed an executive order telling federal agency chiefs to take steps to bar delinquent companies from receiving new government contracts. The order also directed the IRS to review contractor filings.
“All across this country, there are people who meet their obligations each and every day,” Obama said. “You do your jobs. You support your families. You pay the taxes you owe -- because it’s a fundamental responsibility of citizenship. And yet, somehow, it’s become standard practice in Washington to give contracts to companies that don’t pay their taxes.”
Obama cited studies by the Government Accountability Office that found tens of thousands of such companies, owing more than $5 billion in taxes.
“Now, in Washington, $5 billion might not seem like a lot of money,” Obama said. “But if we were to invest that money in education, it would be enough to cover the cost of annual college tuition for more than half a million students. If we were to invest in healthcare, it would be enough to cover 2.5 million children. If we were to invest it in energy, it would be enough to weatherize more than half a million homes.”
Among the cases Obama cited was one involving a company owner who was paid more than $1 million for a defense contract while owing the government more than $1 million in taxes. Instead of paying his taxes, Obama said, that the individual bought a boat, cars and a home overseas.
-- Michael Muskal
