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Defense Contractors Reap the Benefits of a Growing Military Budget

FinancialBuzz.com News Commentary

NEW YORK, Oct. 8, 2020 /PRNewswire/ — According to data compiled by Strategic Defence Intelligence, the U.S. spent over USD 639 Billion in 2018 for its defense budget. By 2023, the U.S. defense expenditure is expected to reach approximately USD 742 Billion while growing at a CAGR of 1.98% during the forecast period. The current presidential administration is friendly to the military and defense contractors and promotes the stance on increasing military defense spending. Additionally, the Department of Defense spending is set to grow by 9% in 2018 from the year prior, Blackrock said in a blog post. “The 2019 National Defense Authorization Act was passed at its swiftest pace in 20 years, up to USD 717 Billion (a 12% increase from 2017). Even after the 13% quarter-to-date decline in the Dow Jones U.S. Aerospace & Defense Index (as of October 29th), the industry group is still up 46% since 2016 Election Day and remains the purest way to play any change in defense spending outlook,” Blackrock said. Defense Metals Corp. (OTC:  DFMTF) (TSX-V: DEFN), Lockheed Martin Corp. (NYSE: LMT), Raytheon Technologies Corporation (NYSE: RTN), The Boeing Company (NYSE: BA), General Dynamics Corp. (NYSE: GD).

As a percentage of GDP, the U.S.’s defense expenditure is expected to be approximately 3.1% during the same period. While the United States holds the largest budget for defense technology, it is also the largest exporter of defense equipment in the world. The U.S. are also expected to continue to remain the largest importers, due to increased defense budgets in allied countries such as Saudi Arabia, UAE, Turkey, India, South Korea, Singapore, the U.K. and Japan. “What changes are likely in military technology over the next 20 years? This question is fascinating on its

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How to Toe the Line When Hiring Independent Contractors and Reap Big Dividends

All you’re required to do is inform the IRS if you paid this worker more than $600 in one year.

The phrase Toe the Line is an Americanism first recorded in the early nineteenth century. The main meaning of this phrase is ‘to conform strictly to a rule, command, etc… For example, “Anyone who doesn’t toe the line can expect to meet the mayor in court, where, as it turns out, he has never lost a suit.” (U.S. News & World Report, 1996).

And…

An Independent Contractor is a person hired to work for others without having the legal status of an employee.

Hiring someone who qualifies as an Independent Contractor can provide an employer with some very BIG dividends…

Dividend #1: You don’t have to pay the employers share of the workers Social Security and Medicare taxes.

Dividend #2: You don’t have to withhold income taxes (federal or state) on his/her earnings.

Dividend #3: Not only do you reduce your bookkeeping and financial obligations, you’re not bound by many of the federal and state laws that normally govern the employer – employee relationship.

Dividend #4: You don’t have to provide office or other work space for the worker.

Dividend #5: You don’t have to provide fringe benefits (vacation, personal or sick time).

Dividend #6: You don’t have to provide health insurance or retirement benefits.

Dividend #7: If you become unhappy with the person’s work, you can fire him/her without going through the trauma often associated with firing an employee. Plus you don’t get stuck paying unemployment benefits.

All you’re required to do is inform the IRS if you paid this worker more than $600 in one year.

You’re responsible for filing a Form 1099-MISC at the end of the year …

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