Monday, April 17, 2017

Taxing the big banks

They don't pay much. Nine of the largest and most profitable US banks paid an average federal tax rate of only 18.6 percent between 2008 and 2015. That led to a credit of about $80 billion on their financial statements and a good bonus for the executives. 

I find this hard to believe but the six largest US banks (Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley and Wells Fargo) have set up more than 2,300 subsidiaries in tax havens like Bermuda and the Cayman Islands. How they can keep track of all these companies I know not. But, in 2016, these companies were holding nearly $150 billion in profits offshore. 

Another gimmick benefiting the banks is the fact that there is no tax on short term trading. Wall Street traders buy millions of dollars in stocks or derivatives and sell them a split second later with no tax consequences.

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