Citigroup hasn’t paid taxes in 4 years, got $2.5 trillion from feds

Chris has gone on at length about the corporate “welfare queens” on Wall Street and the right (they’re almost always Republican) who took billions in federal bail out money in late 2008 and early 2009, and now turn around and tell the rest of us that we need to tighten our belts by cutting Medicare and Social Security, and increasing the age of eligibility for each program.

Just like the Republican wars, there’s always money to be found when corporations need a bailout.  But when American citizens need the support of their government, such as when they reach 65 and (hopefully) are able to retire, suddenly the money’s all gone (until the next war).

Citigroup is a perfect example.  Remember how shortly after the bailout Citi wanted to raise salaries as the entire country was losing jobs?  And how Citi wanted to pay one energy trader $100 million in 2009, in the midst of the crisis? And how later in 2009, Citigroup increased the salaries of its executives?  At the same time Citigroup just couldn’t say “no” to its employees, it jacked up interest rates exorbitantly on its own credit card customers.  See, it’s never a problem asking you to pay more.

From Senator Bernie Sanders, writing in the Huffington Post, we learn that Citigroup hasn’t paid federal taxes in four years.

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.

I love the Senator’s next point about these companies being American in name only:

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.

It’s a point we’ve raised before.  If these companies, like Mitt Romney, want to pay foreign taxes – which often are no taxes at all – then why turn to the US government when they’re in trouble and need to be bailed out? Are they American or aren’t they?

Reuters notes that in 2011, Citigroup didn’t get any less generous with its own senior employees as it was in 2009 and 2010.   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.

It Mitt Romney is correct that corporations are people.  Then they’re clearly very greedy people.

And now we get to the fun stuff. 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:

220px-Jacob_LewSurprise! 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.


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Google+. John Aravosis is the editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown (1989); and worked in the US Senate, World Bank, Children's Defense Fund, and as a stringer for the Economist. Frequent TV pundit: O'Reilly Factor, Hardball, World News Tonight, Nightline & Reliable Sources. Bio, .

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  • sharonsj

    The law probably requires me to pay more than those corporations. And if I don’t pay, the IRS visits me. If a corporation doesn’t pay, it’s because Congress gave them a free pass. Patriotism has nothing to do with it, but corruption has everything to do with it.

  • IMHO

    The answer to the ever increasing problem is to follow the accounting rules (GAAP) and treat all affiliate companies, regardless of location as a single entity for tax purposes. Once income is determined on a worldwide basis, allocate income to the US based on an activity factor, such as sales.

  • http://www.facebook.com/jeanmarie.todd Jeanmarie Todd

    Could you provide back up for this statement? A financial reporter I know from Bloomberg just told me it’s bollocks: “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.”

  • http://www.facebook.com/profile.php?id=100000590516901 Rusty Eleby

    On opposing financial reforms, bank responsibility fee: “In a way I’m conflicted because I’m invested in Citigroup but at the more global picture, I’m a big supporter of the United States. I believe taxing the banks right now is not the right thing at all. It’s like you have a patient coming out of an ICU.” Alwaleed owns a $4.3 billion dollars stake in Citigroup, a massive bank that spent millions lobbying against financial reform last year.
    This is who is running that CORPORATION! SEND them all to jail and get this out of our country!http://thinkprogress.org/media/2010/02/10/81482/right-rebels-foxnews/

  • http://www.facebook.com/people/Jerry-Soriano/100000478631375 Jerry Soriano

    Great article which should be shared with anyone interested in rip offs.

  • vonlmo

    While seeking to diminish your Soc Sec benefits & deny the prospect of pensions for working Americans, these same politicians will be collecting their monthly check as a Federal Pension when they retire from Goverment Service. Perhaps something should be done about Fed Pension benefits for elected pols, ya think?,

  • pappyvet

    “Here’s the simple truth. You can’t be an American company only when you want a massive bailout from the American people.’

    Well, apparently,yes they can. Who is stopping them? Who wants to stop them? Who will stop them?
    The answer to all three is nobody. I fear that only an American Spring could make any headway. But with divide and conquer working so well, its going to be a hard fight . And a long one. The last battle of the American Revolution has yet to be fought and the new Dukes and Barons are running roughshod over our country with the same arrogance as the originals.

    “A State divided into a small number of rich and a large number of poor will always develop a government manipulated by the rich to protect the amenities represented by their property.” Harold Laski

  • TiredOfThisCrap

    I agree, however, most of the people responsible for writing and voting for any such legislation or action to take against these banksters have had their paws in the cookie jar. Follow the money and you will see how corrupt our country is and how close we are to an Orwellian state. The laws decrease for the elite and increase for the rest of us. Our civil liberties are being trampled upon while the elite use every scare tactic in the book to corral us like sheep.

  • caphillprof

    res ipsa loquitur
    Subject: [americablog] Re: Citigroup hasn’ t paid taxes in 4 years, got $2.5 trillion from feds

  • Dave K

    Anyone who thinks that voting for someone with an R or D after their name will fix this is a danger to themselves and others.

  • http://adgitadiaries.com/ karmanot

    ppppffffft

  • http://adgitadiaries.com/ karmanot

    Has anybody mentioned that what is now know as CitiBank also caused the last depression?

  • perljammer

    “It’s the law’s fault”?? Surely you must mean that it’s the fault of lawmakers who cater to the appetites of their corporate sponsors rather than looking out for the welfare of the country at large.

    As for the rest of your post — you should pause for a few moments and reflect on the differences in what tax-avoidance mechanisms are available to the average (or even above average) working person, as opposed to those available to multi billion dollar corporations. With that in mind, I think the outrage on the part of those you disparagingly refer to as “loyal patriots” is completely understandable.

  • b l

    Don’t ya need an actual crime for that?

  • b l

    Bingo. It’s legal, and it saves money. I’m sure all of the loyal patriots complaining about Citigroup, would also use every legal means to cut their tax bills. Heck, the City of Newark (Corey Booker’s place) provides free advisers for people looking to do that!
    “Oh no, I meant it’s wrong for OTHER people, I’m entitled to as big a refund as I can get!”
    Nothing wrong with obeying tax law. If it becomes a problem its the law’s fault, not the person obeying it.

  • b l

    And YOU pay more than the law requires you to pay, because you are loyal patriot, right?

  • Owen Johnson

    Didn’t I read somewhere that the Caymans were considering joining a treaty that would have them disclosing who has accounts there and how much they have? Thanks to a whistle blower, some of the scams in Swiss banks were exposed – we need more of that. Ah, but the DOJ prosecuted the whistle blower and put him in jail, while letting the perpetrators go free.

    Maybe we could declare war on the Cayman Islands and a couple targeted drone strikes would take care of the problem. After all, our President who loves Wall Street also likes drone strikes. (Being sarcastic here – it would never happen.)

  • perljammer

    The only way to stop this sort of thing, is to pass legislation making it illegal. Corporate officers are open to shareholder lawsuits if they fail to exercise every legal means to maximize profits. It’s really as simple as that.

  • http://www.rebeccamorn.com/mind BeccaM

    Meanwhile, we — the 99% — pay our taxes. The programs funded by us directly, Social Security and Medicare, are labeled ‘entitlements’ as if that’s something bad, and we’re told we can’t even get what we were promised for a lifetime of contributions in the form of payroll taxes.

    Why? Because the 1%, which has reaped nearly all of the gains in GDP and productivity over the last forty years, cannot be asked to give back anything to the society and the economy that helped make them rich beyond measure or reason.

    Then again, they now own our government. That’s why it continues.

  • http://www.rebeccamorn.com/mind BeccaM

    Bingo. That, and taking away all of their plundered riches.

  • http://www.rebeccamorn.com/mind BeccaM

    Non-binding online petitions really don’t accomplish anything other than to make the people signing them feel like they’re doing something useful.

    Get on the phone. Call your Representative and Senators. Write your local paper and TV stations. Run for elected office, even if it’s your local school board or county commission.

    In other words, do something real.

  • p.mhaag

    Bullets for their filthy heads!

  • caphillprof

    It starts by putting actual human beings in jail.

  • LanceThruster

    Baulk of America is more accurately named Cayman and Sons.

  • Guest

    Can someone please submit a petition making this matter illegal already?!

  • UncleBill from the UK

    Everyone is open to being corrupt, it is just that some have the propensity to be more corrupt than others and 99.9% of bankers, most financiers and many tax officers seem to have the ability to use the system to benefit them, not their shareholders or the Inland Revenue or US tax department; you will never beat them till the loopholes are sealed, and that is a long way off, basically until every corrupt official now having found them uses them sufficiently for their own purpose.

  • lynchie

    Our Congress continues to profess its loyalty to the corporations and can’t do enough to make it easy for them to pay no taxes

  • samizdat

    Well, I think it’s pretty obvious which country we need to bomb back into the stone age: the Caymans. /s

    This is why I have been referring to most companies as ‘SUPRAnationals’. They possess no loyalty to their fellow citizens or their country. They pledge allegiance to their own kind, and the Almighty, the dollar. The corporation today is no more American–or German, or British, or Chinese, or Indian–than it is the Man in the Moon.

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