If you Haven't Paid Your Taxes, Should you be Banned from Getting Federal Contracts and Grants? (H.R. 1562)
Do you support or oppose this bill?
What is H.R. 1562?
(Updated May 6, 2020)
This bill hopes to incentivize people to pay their taxes by banning corporations and people with outstanding taxes from receiving government contracts and grants.
If passed, the bill would set up an additional step for corporations and people applying for government contracts and grants. They would have to submit a form when they are applying with an agency that says they don't have unpaid taxes — the Treasury Department would then be authorized to verify that claim. Corporations and people with outstanding taxes would not be able to receive grants or offer contracted work. However, if U.S. interests were at stake, the grant or contract could be awarded.
What’s a government contractor? A lot of things. The government signs contracts with people to do all sorts of stuff — Boeing, who makes airplanes, and Lockheed Martin, who makes pretty much anything that has to do with the military, are numbers two and one, respectively, when it comes to government dollars received. But the people who clean buildings in the Capitol are also contractors—it’s a wide-reaching term.
According to a memo by the Government Accountability Office, contractors used by the government owe a total of $5 billion in unpaid taxes to the government. It’s not much compared to the federal budget — $4 trillion for 2016 — but it’s enough to keep the Forest Service running for almost a year.
Argument in favor
This bill would ban people and organizations that owe the government money from receiving government work. It makes sense: if you don’t pay what you owe, don’t expect the government to support you or your business.
Argument opposed
While it's fine to ban low level tax dodgers from getting government contracts and grants, what about the large scale companies that help the government run? It’s a good idea, but it’s not worth losing big sections of government functionality.
Impact
Taxpayers, government contractors, companies that want government contracts, people and businesses that would otherwise receive government grants, federal agencies, and the Treasury Department.
Cost of H.R. 1562
The CBO estimates that this bill would not have a significant impact on the federal budget.
Additional Info
Of Note:
This bill adds a new, if not super-significant, dimension to the corporate personhood debate: If a majority shareholder in a corporation owed the government taxes, the corporation would be treated like that person. Does that mean people are corporations?
In Depth:
Sponsoring Rep. Jason Chaffetz (R-UT) has introduced this bill twice before — once in 2011, again in 2013, and now. This time, however, the bill has bipartisan support. President Obama endorsed the Senate version of this bill, sponsored by Senator Claire McCaskill (D-MO).
Media:
Sponsoring Rep. Jason Chaffetz (R-UT) Press Release (Previous Bill Version)
House Republicans (Previous Bill Version)Summary by James Helmsworth
(Photo Credit: Flickr user RangerRick)
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