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:
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.