View Full Version : U.S. Issues You Have More Money In Your Wallet Than Bank Of America Pays In Federal Taxes

02-28-2011, 03:22 PM
Today, hundreds of thousands of people comprising a Main Street Movement — a coalition of students, the retired, union workers, public employees, and other middle class Americans — are in the streets, demonstrating against brutal cuts to public services and crackdowns on organized labor being pushed by conservative politicians. These lawmakers that are attacking collective bargaining and cutting necessary services like college tuition aid and health benefits for public workers claim that they have no choice but than to take these actions because both state and federal governments are in debt.

But it wasn’t teachers, fire fighters, policemen, and college students that caused the economic recession that has devastated government budgets — it was Wall Street. And as middle class workers are being asked to sacrifice, the rich continue to rig the system, dodging taxes and avoiding paying their fair share.
In an interview with In These Times, Carl Gibson, the founder of US Uncut, which is organizing some of today’s UK-inspired massive demonstrations against tax dodgers, explains that while ordinary Americans are being asked to sacrifice, major corporations continue to use the rigged tax code to avoid paying any federal taxes at all. As he says, if you have “one dollar” in your wallet, you’re paying more than the “combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America“:

[Gibson] explains, “I have one dollar in my wallet. That’s more than the combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America. That means somebody is gaming the system.”

Indeed, as politicians are asking ordinary Americans to sacrifice their education, their health, their labor rights, and their wellbeing to tackle budget deficits, some of the world’s richest multinational corporations are getting away with shirking their responsibility and paying nothing. ThinkProgress has assembled a short but far from comprehensive list of these tax dodgers — corporations which have rigged the tax system to their advantage so they can reap huge profits and avoid paying taxes:

- BANK OF AMERICA: In 2009, Bank of America didn’t pay a single penny in federal income taxes, exploiting the tax code so as to avoid paying its fair share. “Oh, yeah, this happens all the time,” said Robert Willens, a tax accounting expert interviewed by McClatchy. “If you go out and try to make money and you don’t do it, why should the government pay you for your losses?” asked Bob McIntyre of Citizens for Tax Justice. The same year, the mega-bank’s top executives received pay “ranging from $6 million to nearly $30 million.”

- BOEING: Despite receiving billions of dollars from the federal government every single year in taxpayer subsidies from the U.S. government, Boeing didn’t “pay a dime of U.S. federal corporate income taxes” between 2008 and 2010.
- CITIGROUP: Citigroup’s deferred income taxes for the third quarter of 2010 amounted to a grand total of $0.00. At the same time, Citigroup has continued to pay its staff lavishly. “John Havens, the head of Citigroup’s investment bank, is expected to be the bank’s highest paid executive for the second year in a row, with a compensation package worth $9.5 million.”

- EXXON-MOBIL: The oil giant uses offshore subsidiaries in the Caribbean to avoid paying taxes in the United States. Although Exxon-Mobil paid $15 billion in taxes in 2009, not a penny of those taxes went to the American Treasury. This was the same year that the company overtook Wal-Mart in the Fortune 500. Meanwhile the total compensation of Exxon-Mobil’s CEO the same year was over $29,000,000.
- GENERAL ELECTRIC: In 2009, General Electric — the world’s largest corporation — filed more than 7,000 tax returns and still paid nothing to U.S. government. They managed to do this by a tax code that essentially subsidizes companies for losing profits and allows them to set up tax havens overseas. That same year GE CEO Jeffery Immelt — who recently scored a spot on a White House economic advisory board — “earned total compensation of $9.89 million.” In 2002, Immelt displayed his lack of economic patriotism, saying, “When I am talking to GE managers, I talk China, China, China, China, China….I am a nut on China. Outsourcing from China is going to grow to 5 billion.”

- WELLS FARGO: Despite being the fourth largest bank in the country, Wells Fargo was able to escape paying federal taxes by writing all of its losses off after its acquisition of Wachovia. Yet in 2009 the chief executive of Wells Fargo also saw his compensation “more than double” as he earned “a salary of $5.6 million paid in cash and stock and stock awards of more than $13 million.”

In the coming months, politicians across the country are going to tell Americans that the only way to stave off huge deficit and balance the budgets is by gutting programs for the poor, eviscerating support for the middle class, eliminating labor rights, and decimating the government’s ability to serve the public interest. This is a lie. The United States is the richest country in the history of the world, and income inequality is higher now than it has been at any time since the 1920′s, with the top “top 1 percentile of households [taking] home 23.5 percent of income in 2007.”

It is simply unfair for Main Street Americans who’ve already been battered by one of the worst economic crises in our history to have to continue to sacrifice while the rich and well-connected continue to rip off taxpayers and avoid paying their fair share. That’s why a Main Street Movement consisting of Americans who are fed up with the status quo is rocking the nation, and one of its first targets should be tax dodgers like Bank of America and Boeing.

Update All across the country, Main Street Americans are protesting tax dodgers like Bank of America. A picture from one such demonstration.


Update On its Twitter account, US Uncut notes that protesters outraged at Bank of America's tax avoidance shut down a major branch in Washington, D.C. today.
Update Hundreds of demonstrators descended on a Bank of America branch in San Francisco, some carrying signs mocking the bank's logo as "Bankrupting America"


Update One Uncut US demonstrator carried a sign that read: "I pay almost 1/3 of my measly income, Bank of America pays NOTHING?!!!"


Update This art school dropout in Maine was outraged at having to pay more taxes than Bank of America



02-28-2011, 03:24 PM
Something like 60% of all wage earners pay zero income tax.

F***ing tax dodgers and their special deals.

02-28-2011, 03:36 PM
Thom Hartmann: So...who is paid too much? Teachers or Banksters?

<iframe title="YouTube video player" width="480" height="390" src="http://www.youtube.com/embed/hAy2-SAun4k" frameborder="0" allowfullscreen></iframe>

Thom Hartmann asks - Which one of these people can the American people no longer afford to support with their tax dollars? The Wall Street executives and major Republican donors who gambled with OUR money and swindled our nation into a depression? Or the teachers in Wisconsin - minor but not irrelevant Democratic donors - who educate thousands of our children and prep them for jobs in the future?

02-28-2011, 03:42 PM
Pissed Off Irishman Talks Bankster Bailouts: "Greed, Greed, Cheap Money, And More F***ing Greed"

<iframe title="YouTube video player" width="480" height="390" src="http://www.youtube.com/embed/koY6kXhQDQo" frameborder="0" allowfullscreen></iframe>

02-28-2011, 03:49 PM
Thom Hartmann: So...who is paid too much? Teachers or Banksters?

If bankers can be replaced at a savings to the corporation, they're being overpaid. If teachers can be replaced at a savings to the taxpayer, they're being overpaid.

02-28-2011, 03:53 PM
$1.4 MILLION PER PAGE: How Ireland Paid Merrill Lynch For "Advice" That Bankrupted A Nation


Ireland's Finance Minister, Brian Lenihan learned banking and finance at the kitchen table, two days after Lehman failed. All he knew when he first sat down was that Alan Greenspan was God.

The incompetence of central bankers and finance ministers over the past few years has been breath-taking, but Ireland's Minister for Finance, Brian Lenihan, takes the golden biscuit for sheer ineptitude.

From David McWilliams' recent book, Follow The Money: The Tale of the Merchant of Ennis, we learn that Lenihan, a lawyer by training, received his first lessons in banking and finance at McWilliams' kitchen table - on the 17th of September 2008.

Before that, McWilliams tells us, Lenihan had learned everything he knew about finance from a biography of Alan Greenspan(!) that he had picked up over the summer. We learn that Lenihan had no idea that Irish banks were in trouble until after the failure of Lehman Brothers just two days before.

Less than two weeks after that late-night cram session at McWilliams' kitchen table, Ireland announced to the world that it would fully guarantee its banks liabilities -- for both depositors and bondholders.

We now know that this hasty decision would lead to national bankruptcy and the specter of sovereign default. But at the time, Lenihan -- not unlike a number of other clueless politicians scattered throughout the formerly industrialized world -- was only following the advice being offered by the "experts" who surrounded him. Shockingly, among those "experts" were none other than a team of advisors from Merrill Lynch.

Turns out that a week after the Finance Minister's introduction to basic finance, the Irish government paid Merrill Lynch $10M for a seven-page report that told them:

* "All of the Irish banks are profitable and well capitalised.”

No wonder Irish eyes are crying - what was billed as a costless way to avoid a banking panic ended up bankrupting the nation.

Here's more detail...

The strange case of the disappearing Merrill Lynch research note

Source - UK Guardian

US investment bank Merrill Lynch had a critical role in the banking collapse in Ireland and censored an analyst's report that predicted the crash back in 2008, it was claimed today.

The US bank retracted a report by one of its research analysts in March 2008 that was negative about the banks after the Irish banks called Merrill Lynch and threatened to take their business elsewhere. It toned the research note down and months later its author, Philip Ingram, left the bank, according to a much-anticipated cover-story in the new edition of Vanity Fair.


DJ's left nut
02-28-2011, 03:54 PM
These gentlemen probably make a good point and somewhere, somehow, a salient one.

However, quotes like this one tend to strain your credibility.

- BANK OF AMERICA: ... “Oh, yeah, this happens all the time,” said Robert Willens, a tax accounting expert interviewed by McClatchy. “If you go out and try to make money and you don’t do it, why should the government pay you for your losses?”

Uh...because there's no income? If I go out and try to get a job to make money, yet fail to actually earn anything - how can I have an income to tax again? The government isn't paying for your losses, it's simply allowing you to offset your losses against gains. So if I made $100 in computers and lost $100 in microwaves, I really didn't make any money at all.

And for the record, individuals are absolutely allowed to offset gians and losses. Its convoluted so I won't try to explain it (I'll butcher it), but you can offset business losses against capital gains, etc...

I understand that businesses have gotten pretty damn good at hiding income (generally via paying a 'salary' to owners, etc...); but when you say stuff like that, you just kinda sound like an idiot.

02-28-2011, 04:00 PM
A few things to note: no corporation pays tax, so getting pissed off about it is dumb. Pay attention to how much tax their employees and shareholders pay....

Sweetheart tax deals, so many people/companies/unions whatever that pay nothing, are all good reasons why a "progressive" taxation system is retarded. Switch to a flat tax or a VAT of some sort and you've eliminated this issue. Personally I like the Fair Tax, but don't see a day where a politician will give up so much power.

02-28-2011, 04:01 PM
Market cap (2/28/11):

BAC: $143B
GE: $223B
Citigroup: $136B

Let's pretend each CEO got a total compensation of $30M

Effective tax rate if the CEO got nothing and that $30M was paid to the government:

BAC: 0.02%
GE: 0.01%
Citigroup: 0.02%

This tax is (relevant/irrelevant)?: completely irrelevant

Profit, tax, and effective rate each company paid in 2004 when, you know, they actually MADE money.


BAC: $15.9B, paid about $5B, 31.8%
GE: $19.9B, paid about $4.3B, 21.7%
Citigroup: $26.3B, paid about $8.2B, 31.1%

This tax is (relevant/irrelevant)?: Freaking enormous
The people (felt sorry for them/didn't care)?: Didn't give a rat's ass
This tax is (high/low) compared to the rest of the world?: A hell of a lot higher, except for GE which wisely took advantage of their ability to make money outside the US.
Should we (understand/condemn) GE?: Not just understand, but take a hard look at our own corporate tax rates and wonder how much longer will we put up with being uncompetitive to the point where international companies opt to play accounting games so they don't have to re-patriot profit back into the US.

This article is unbelievably stupid. You do not tax a company that is unprofitable, that is one of the basic fundamental concepts of a just tax law. This executive compensation nonsense that a bunch of people are whining about is irrelevant compared to the size of the company and the amount of tax they do usually pay, it would be like whining that a grocery store owner who worked his ass off took $150k out of his business as salary even though his store posted a big loss. Its his business. If anything, he's doing us a favor because now that 150k is taxable.

If these rich executives made less, thats just money gone, swallowed up in the tax-free black hole of these company losses. We take in more tax money because they got paid, not less.

The Mad Crapper
02-28-2011, 04:08 PM
Something like 60% of all wage earners pay zero income tax..

And the amazing thing is when a democrat wins an election it's by a slimmer margin than 60%.