Obama takes step toward tax crack down on 'deadbeat companies'

Companies that are delinquent on their taxes may no longer receive government contracts.

Obama issued a memorandum today to direct the Commissioner of Internal Revenue to review which companies are late on their taxes. In 90 days, the government plans to determine which companies are ‘dead-beat’ and draft proposals to “ensure these contractors are not awarded new contracts.”

The Federal government awards over a half trillion dollars worth of projects per year to private contractors. According to the Government Accountability Office (GAO), these companies may owe as much as $5 billion in tax dollars to the government.

Obama admits that “$5 billion might not seem like a lot of money”, but it is “simply wrong for companies to take taxpayer dollars and not be taxpayers themselves.”

In the memo, the President emphasized several points about responsibility. He noted the fundamental tax-paying responsibility of citizenship for contractors, the responsibility of the government to not waste taxpayer money, and the responsibility of the American public to spend money wisely.

Last week, Obama proposed “financial crisis responsibility fee” on banks to recover the full cost to tax payers of the government’s financial system bailout. The fee could bring in as much as $90 billion for the government over the next 10 years.