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.