The Halliburton move
By Michael J.W. Stickings
So Halliburton is planning on moving its corporate headquarters (and its CEO, Dave Lesar) from Texas to Dubai. Interesting.
At the announcement yesterday, Lesar claimed that the move would "bring more balance to Halliburton's overall portfolio," allowing it to expand its operations throughout the Middle East, but, needless to say, questions arise, not least with respect to taxes. As one lobbyist put it: "If there's a huge tax shift, then it's taking money from U.S. taxpayers while they're taking no-bid contracts." It may make good business sense to move overseas, but, given the company's image and reputation as a Cheney-friendly war profiteer, this doesn't look good at all.
Some of the company's critics are not amused -- and rightly so. For example, Sen. Leahy: "This is an insult to the U.S. soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges for all these years. At the same time they'll be avoiding U.S. taxes, I'm sure they won't stop insisting on taking their profits in cold hard U.S. cash."
And here's Time's Karen Tumulty, at Swampland, who asks the right questions: "Is this about tax breaks? Getting beyond the reach of congressional subpoenas? And what about all that sensitive information that Halliburton has had access to? At a minimum, reincorporating in Dubai would mean that Halliburton will be paying less taxes to the U.S. Treasury, even as it collects billions from government contracts." Halliburton may not reincorporate, but it looks like the House will investigate.
The whole thing stinks.
So Halliburton is planning on moving its corporate headquarters (and its CEO, Dave Lesar) from Texas to Dubai. Interesting.
At the announcement yesterday, Lesar claimed that the move would "bring more balance to Halliburton's overall portfolio," allowing it to expand its operations throughout the Middle East, but, needless to say, questions arise, not least with respect to taxes. As one lobbyist put it: "If there's a huge tax shift, then it's taking money from U.S. taxpayers while they're taking no-bid contracts." It may make good business sense to move overseas, but, given the company's image and reputation as a Cheney-friendly war profiteer, this doesn't look good at all.
Some of the company's critics are not amused -- and rightly so. For example, Sen. Leahy: "This is an insult to the U.S. soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges for all these years. At the same time they'll be avoiding U.S. taxes, I'm sure they won't stop insisting on taking their profits in cold hard U.S. cash."
And here's Time's Karen Tumulty, at Swampland, who asks the right questions: "Is this about tax breaks? Getting beyond the reach of congressional subpoenas? And what about all that sensitive information that Halliburton has had access to? At a minimum, reincorporating in Dubai would mean that Halliburton will be paying less taxes to the U.S. Treasury, even as it collects billions from government contracts." Halliburton may not reincorporate, but it looks like the House will investigate.
The whole thing stinks.
Labels: business, Middle East, oil
posted by Michael J.W. Stickings at
6:19 AM
7 Comments:
How can a company located in Dubai, still claim to be a US company?
Here's what I think. They should have all there US security clearences revoced (as they are no longer a true US company). And second, they should not be allowed to bid on Goverment contracts at all.
By
Anonymous, at 9:36 AM
As I understand it, they're not reincorporating, just relocating their corporate office. They're still subject to US taxes and laws.
By
Max, at 12:19 PM
I don't know tax law but I expect there is likely to be tax advantages to being hq'ed in Dubai. They'll still be subject to US laws but no doubt in a different category.
By
Libby Spencer, at 1:34 PM
The executive's salary and general operation expenses for their offices won't be subject to American taxes, but I think that the corporate taxes paid by the company will remain the same.
They seem relatively aware that reincorporating in Dubai would damage their continued work with the US government.
They may be preparing to do so after the Bush administration, depending upon the next presidential victor.
By
Max, at 2:13 PM
The WaPo reports their tax situation this way:
"The bottom line seems to be that the only change in status is in respect to tax consequences," said Gregory Craig, a partner at the firm of Williams and Connolly. Income earned abroad and paid to a company based abroad would not be subject to U.S. taxes, Craig said.
"It's an example of corporate greed at its worst," said Sen. Patrick J. Leahy (D-Vt.). "This is an insult to the U.S. soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges for all these years. At the same time they'll be avoiding U.S. taxes, I'm sure they won't stop insisting on taking their profits in cold, hard U.S. cash."
I agree with anonymous - they shouldn't be allowed to bid on gov't contracts. In fact, I'd like to see all their present contracts revoked as soon as reasonably possible.
By
Kathy, at 11:11 AM
But they won't be based abroad. They're maintaining their incorporation in Delaware (has the lowest corporate taxes in country, many large companies incorporate there).
Senator Schumer said, rightly so I'd guess, that this may presage a larger move of the company at some future time.
By
Max, at 11:57 AM
If corporations move to foreign soil does this mean they won't have the support of the U.S government? Part of the role of the U.S government is to protect its people and businesses, and we pay taxes to keep the government running.
Could parties attack that corporation and the US Government won't have to do crap? Would we see 21st century pirates? Compare the UAE military with the US.
By
Anonymous, at 10:10 PM
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