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TAX DODGES

CitiGroup 'Paid No Federal Income Tax' and Got '$2.5 Trillion' from Government

Bernie Sanders op-ed protests tax havens and corporate welfare

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by Mary Noble

Senior Editor t +

Image: Occupy Together

Big banks are making expert use of loopholes to avoid staggering sums in federal taxes, writes Senator Bernie Sanders (I-VT). Thanks to havens in the Cayman Islands, in 2010 "Bank of America [paid] nothing in federal income taxes, but it received a rebate from the IRS worth $1.9 billion." JP Morgan Chase avoided $4.9 billion in taxes. Goldman Sachs avoided $3.3 billion. And CitiGroup "paid no federal income taxes for the last four years after receiving a total of $2.5 trillion from the Federal Reserve" in low-interest loans, Sanders alleges.

Citi has admitted paying no federal income taxes in 2011 (and by implication, in 2008-09), though as they say, it was all perfectly legal. They defend themselves by pointing out they paid income tax in 2000-06.

The big banks aren't the only culprits. Tax havens and offshoring are used by virtually all big companies, from Apple to Pfizer.

As a solution, Sanders has drafted the Corporate Tax Dodging Prevention Act (S.250), co-sponsored by Rep. Jan Schakowsky (D-IL). It's designed to increase tax revenue by $590 billion by restricting the use of tax havens.

Via the Huffington Post.
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Should the use of tax havens be restricted or banned?

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112 Comments (view in Forum)

  • Yank
    !
    A few misleading points. The TARP loans were mostly paid off and the US government made ~$22 billion off the loans to the banks. The parts which cost us money were the FM and GM bailouts. Also the $2.5 trillion was not "given" to City Bank.

    P.S. Why not ask why GM is not paying taxes after their last few record profit years?
  • jessejaymes
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    I don't care if they got NO money from the Feds. They should pay taxes like citizens have to do. There goes your theory about "The USA taxes corporations higher than any nation in the world.". There is NOTHING lower than ZERO. And we paid them money back for ZERO. A monkey could see what's wrong with this picture.
  • Yank
    !
    @jessejaymes we did not pay them money back, they received low interest loans. I am merely pointing out that we did not give the banks free TARP money or loans, and the US government made money on both. I am also wondering why they used the low interest loan number (which is not a lax rebate) instead of City Bank’s tax liability (which they did for the other banks). I am thinking that if the bank needed a $2.5 trillion in loans that they didn’t make that much of a profit.

    P.S. A few large, international, mega corps does not make up all of US companies. Most US companies are small businesses which pay some of the highest taxes in the world, especially when you add in local, state, and federal taxes.
  • jessejaymes
    !
    @Yank It's people like you who are causing the destruction of the middle class while the rich get richer by doing nothing more than stealing from the working class. You are an enabler to the destruction of the middle class. You ARE the enemy.

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  • OhWiseOne
    !
    Stuff likes this makes my blood boil. I think taxes are too high myself but I pay them because I have to. If I didn't I would have my assets seized and probably serve some time in jail. Yet, the very affluent hire lawyers to establish tax havens overseas to avoid paying taxes. I think it's just another form of treason and they should be punished severely.
  • marine1
    !
    I agree with you 100% but i also think it is wrong for people who live on welfare to get get a tax return when they paid nothing in. Abuse, no matter where should be stopped.

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  • MadAmerican
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    They are part of the problem but you I would like to know what politicians have ties through stocks to these companies, and have recieved election campaign funds. They didn't pay but got millions back? How is that possible? That is wrong!!!!
  • harold_lloyd
    !
    When people speak of 'corporate welfare', this is what they mean.

    Why is it that Republicans are happy to cut money going to poor people, but are blind to this?

    Doesn't it make you wonder whose side they are really on?
  • mimi57
    !
    I am a Republican and am outraged by this!!! However, I am still outraged at the amount of entitlement fraud also... They are both an outrage.
  • mimi57
    !
    @AceLuby That may be true, and it is unbelievable how they can get away with
    it...however, until you see the amount of people who claim 'poverty', but are capable of working and the various types of benefits they get, it also does not
    help the economy. My friend who also works as social worker, just shakes her
    head and says "and we wonder why this country is in the shape it's in". I agree,
    2.5 trillion $ is staggering, but it is not fair to accuse Reps. for being mean or petty
    for condemning welfare fraud that is also staggering, as the amount of them is
    growing by the day.
  • AceLuby
    !
    @mimi57 Actually, you aren't being fair. Welfare fraud costs as much as individual million dollar per year income earners who pay zero tax. Sure, there are fewer of them, but they have the same drain on society.
  • mimi57
    !
    @AceLuby I think I am being fair...this country will soon be paying out more than it's taking in...Of course big business should pay taxes, but the vast amount of those who continue to have more baby's to get more government money is a drain on the economy. I am on the side of the working people who try to do things
    the right way, only to get 'scammed' by those who choose to do it the wrong way,
    or can not control themselves from having one baby after another expecting the
    taxpayers to pay for them!

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  • Clarke12
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    @AceLuby corps would use the billions out of their pockets as reason to get "lean". happens all the time. you don't have to agree with it, it is reality.
  • AceLuby
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    @Clarke12 It's not reality. If they needed the workers to make that untaxed profit, they would need those workers for taxed profit. If they do lay off people it's because they weren't necessary in the first place, or they do it at the cost of less profit, both of which point to bad management.
  • Clarke12
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    @AceLuby not saying I agree with it, just saying it is reality. after the market tanked in 2008 basically every financial services company cut workers, despite the fact that there was more servicing needs. corps are not going to just sit back and say "okay, here is your tax money", and absorb the hit.

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  • Heavy-Fed
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    Alright people... it's time for a tax revolt!!! An economic tax revolt!!! Quit buying crap... and quit paying taxes!!! Save your cash, buy silver... trade silver... save silver!
  • jessejaymes
    !
    These companies constantly claim that the USA has "the highest corporate tax rate in the world". How do you get a lower rate than ZERO? They get away with this because our Congress allows this. BOTH PARTIES.

    It's time to save America people. RE-ELECT NOBODY 2014
  • DARSB
    !
    This is crazy - a corporation is a "person" that can enjoy free speech rights by donating as much money as it cares to for political campaigns but can equally easily avoid paying the income taxes real meat persons cannot avoid. I'm of the opinion ("gee, you have opinions, DARSB"? "Why yes, I do!") that we need a "No Representation Without Taxation" movement.
  • LGRepublican
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    Do you think it's only the GOP that has donors that benefit from loopholes? You don't think the democrats have a vested interest in keeping these loopholes available for their donors as well? You can't place all the blame on one party for this one....
  • martydotcom
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    @LGRepublican When the HR has a rule tacitly in effect, no bill, unless approved by a majority of the majority will reach the floor for a vote this is all mental masturbation.
    All that's happened is legislation has been drafted, never to to heard from or seen again, DOA. Yawn
  • LGRepublican
    !
    @martydotcom While true, it still doesn't change the fact that not all of these loopholes were passed while the GOP held the house. Like I said, the blame goes to both parties.
  • martydotcom
    !
    @LGRepublican I think both of us would like to see them changed and that's impossible with the crazies in the HR now. In case you haven't noticed even the GOP Is fed up with their Tea Party cohorts
  • Yank
    !
    @LGRepublican the Dems held the house for 4 out of the last 6 years, and for 2 of those years held the house, senate, and presidency. Still let's blame republicans and ignore the dems.

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  • Kellso
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    Lets seee here! If an individual citizen should happen to 'skip' paying taxes, the IRS would come down on that individual for ONE DOLLAR in taxes. So why cant the IRS and the feds CHARGE THE BIG COMPANIES NOW! NOW! NOW! if they didnt pay taxes???
  • AceLuby
    !
    Don't think for a second that an individual who is wealthy enough can't do the exact same thing. There are thousands of people who make over a million a year who don't pay taxes. The game is rigged for the rich.
  • Realthinker
    !
    Just who created all these tax loopholes? It was the Senate and the House and no, it was NOT exclusively Republicans. These are the very people who give very large donations to Democrats as well as Republicans. All of our politicians have been taking very good care of their big donors for a very long time. So go ahead and make enough noise that those politicians pretend to fix the situation. Unless we get rid of all of them, nothing will change.
  • jaybebo84
    !
    I agree this is ridiculous for a corporation not to pay some from of federal income tax. However, these corporations are basically an "individual" and are able to take advantage of tax loopholes available to them. Is it morally right? No. Is it legal? Yes. I would venture to say if we had the same ability and capital to take advantage of these loopholes, we would in a heartbeat...

    We may say this is treasonous for not paying, but I believe it is treasonous for the Federal government to tax me on my income...
  • LGRepublican
    !
    Thanks for speaking the truth, and that truth is anyone on this board would do the EXACT SAME THING given the opportunity. There's an old saying, "Don't hate the player, hate the game."
  • DerivePI
    !
    If only there was enough room on my 1040 form to explain why I don't have to pay taxes.

    Step 1 - invent/patent something.
    ---
    Step 2 - Claim that the owner of the patent is my other self in Ireland, McSelf. McSelf is owed royalties equal to my income (sorry IRS, I didn't make any money because McSelf took it all).
    ---
    Step 3 - McSelf is managed by my alter ego in the Netherlands, Ned.
    ---
    Step 4 - Ned funnels the profits through my Carribean law firm and bank in the Cayman
    ---
    Step 5 - I order drinks and snorkeling lessons in the Caymans while all you suckers are buried in 2 feet of snow, Ha!

    Not sure if I can get all that on my Schedule D, but if Google can do it, why can't I?
  • mtkopf
    !
    I think you need to hire an official alcoholic beverage taster to ensure your drinks are served at the proper temperature. I have extensive experience in the adult libation department.
  • NTBFW
    !
    I would like a across the board flat tax. Everyone pays the same rate. No loop holes no exemptions Say 10%. If you make a dollar you owe a dime. It doesn't get any more fair than that.
    And the article IS misleading. Getting a loan is not a tax rebate. It also said they broke no law. So it seems they made a good business move. If the law should be changed fine. Like I said make it fair. Everyone should pay the same rate.
  • Knightkore
    !
    First, it was both Democrats AND Republicans that allow this kind of stuff to happen....a reminder GE....now going forward....yes....these tax loopholes that do nothing to further our economy should be closed....the only way these businesses....if any businesses get tax breaks it should be for directly keeping jobs here in America and for the ability to innovate....and make our economy and infrastructure stronger....otherwise....no more bribes....for and/or from either side....
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