Military contractors pay far lower effective tax rates than other large U.S. companies

Evidence

While the contractors have enjoyed billions in taxpayer funds, many have sought to use both legal and illegal means to minimize U.S. taxes paid on their profits. Across the entire aerospace and military industry, the effective tax rate as of 2010 was just 10.6 percent, compared to the top federal statutory corporate tax rate of 35 percent and an average effective tax rate for large profitable U.S. companies of 12.6 percent. — David Vine, Base Nation_ How U.S. Military Bases…, 724

Categorization

• QUESTION: How exactly do these contractors legally reach a 10.6 percent effective rate while others stay near 12.6 percent? What loopholes are specific to this industry?