|February 11, 2013
Source: America Blog
In 2010, Bank of America set up more than 200 subsidiaries in the Cayman Islands (which has a corporate tax rate of 0.0 percent) to avoid paying U.S. taxes. It worked. Not only did Bank of America pay nothing in federal income taxes, but it received a rebate from the IRS worth $1.9 billion that year. They are not alone. In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens to avoid paying some $4.9 billion in U.S. taxes. That same year Goldman Sachs operated 39 subsidiaries in offshore tax havens to avoid an estimated $3.3 billion in U.S. taxes. Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis.On and on it goes. Wall Street banks and large companies love America when they need corporate welfare. But when it comes to paying American taxes or American wages, they want nothing to do with this country. That has got to change.
Here’s the simple truth. You can’t be an American company only when you want a massive bailout from the American people. You have also got to be an American company, and pay your fair share of taxes, as we struggle with the deficit and adequate funding for the needs of the American people. If Wall Street and corporate America don’t agree, the next time they need a bailout let them go to the Cayman Islands, let them go to Bermuda, let them go to the Bahamas and let them ask those countries for corporate welfare.
As Reuters notes, Citigroup was one of 26 companies that paid its CEO more in 2011 than it paid in taxes that year:
* Citigroup, the financial services giant, with a tax refund of $144 million based on prior losses, paid CEO Vikram Pandit $14.9 million in 2011, despite an advisory vote against it by 55 percent of shareholders.
* Telecoms group AT&T paid CEO Randall Stephenson $18.7 million, but was entitled to a $420 million tax refund thanks to billions in tax savings from recent rules accelerating depreciation of assets.
* Drugmaker Abbott Laboratories paid CEO Miles White $19 million, while garnering a $586 million refund. Abbott has 64 subsidiaries in 16 countries considered by authorities to be tax havens, the institute said.
And who used to work at Citigroup? Treasury Secretary nominee Jack Lew. And what did he do to avoid taxes? Lew had up to $100,000 invested in the Cayman Islands, in order to save on taxes. From Chris writing the other day:
Surprise! President Obama’s new Treasury Secretary nominee, Jack Lew, had up to $100,000 in investment in an offshore tax haven in the Cayman Islands. The investment fund “home” was a PO Box.
As I said when President Obama first nominated Jack Lew for Treasury Secretary, Lew is part of the banking problem, not the solution. Jack Lew may not have dumped as much money into offshore locations as, say, Mitt Romney, but like many others from the banking world, he was using the tax-avoidance tools mostly available to only 1% types.
Lew didn’t create the offshore fund, but you have to love thatonce again, Citi – the bank that loves taxpayer money so much it’s practically addicted to it – offers easy ways for employees to once again avoid paying their fair share to the country that kept them alive to the tune of $336.1 billion.
Who did have to pay taxes the past four years? You and me. Who didn’t get a bailout? You and me.