Obama combats contractor tax evasion


Bill Radke: President Barack Obama is going after government contractors who are cheating on their taxes. Today he ordered federal government agencies to bar companies that are delinquent on their taxes from getting any new government contracts. Marketplace's John Dimsdale joins us live from Washington. Good morning, John.

John Dimsdale: Good morning, Bill.

Radke: So how bad is this commercial tax evasion problem?

Dimsdale: Well the Government Accountability Office estimates that there are thousands of companies that do business with the government and yet owe the IRS $5 billion. The president at a news conference this morning cited the example of a company that recently got a defense contract despite owing more than a million dollars in back taxes. Instead of paying what the company owed the IRS, President Obama said the owner bought a boat, cars and a home overseas.

President Barack Obama: It is simply wrong for companies to take taxpayer dollars and not be taxpayers themselves. So we need to insist on the same sense of responsibility in Washington that so many of you strive to uphold in your own lives, in your own families and in your own businesses.

Obama said the $5 billion these contractor owe would pay for college tuition for more than half a million needy students.

Radke: And why is the president going after these tax-delinquent contractors now?

Dimsdale: Well he's pushing for Congress to approve a bill to give the IRS more powers to go after corporate tax cheats. It would allow the IRS to share information with government contracting offices to make sure that the contractors aren't hiding the fact that they owe back taxes when they apply for a new contract. It's part of a larger White House program to restructure the way contracts are awarded to promote more competition and avoid waste and fraud.

Radke: That's Marketplace's John Dimsdale, live in the nation's capital. Thanks, John.

Dimsdale: You're welcome.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.


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