Bank of America, GE Pay Zero Federal Taxes

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Large U.S. Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Jurisdictions

An excerpt from a 2008 GAO report on corporate tax evasion listing Bank of America and General Electric as having numerous subsidiaries in offshore tax havens.

No federal tax expense for BofA (Charlotte Observer):

After another money-losing year, Bank of America Corp. got the upper hand with Uncle Sam in 2010.

The Charlotte-based bank had no federal income tax expense for a second straight year and actually reported a tax “benefit” of nearly $1 billion. Also, the bank’s billions in accumulated losses could reduce its taxes in future years, a tax expert said.

The bank says the reason is simple: Corporations pay taxes on their profits, and Bank of America posted a pre-tax loss of $5.4 billion in the U.S. in 2010.

“Bank of America takes its role as a corporate citizen very seriously, and pays taxes in accordance with all applicable laws and regulations,” bank spokesman Jerry Dubrowski said.

That doesn’t satisfy a group that has been staging protests at Bank of America branches around the country and crashed the bank’s New York investor conference this month. The bank is an “aggressive tax dodger,” said Ryan Clayton, a Washington-based organizer of U.S. Uncut. “We pay our taxes. Why don’t they?”

Clayton’s group suggests Bank of America and other large U.S. companies are using subsidiaries in offshore tax havens to eliminate their taxes.

Bank of America and other companies do avoid paying taxes on profits they make in overseas operations by reinvesting these proceeds overseas, instead of bringing them back home. Some business leaders recently have called for a lower tax rate on these earnings, a move they contend would encourage companies to bring these profits to the U.S.

G.E.’s Strategies Let It Avoid Taxes Altogether (New York Times):

General Electric, the nation’s largest corporation, had a very good year in 2010.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.

In a regulatory filing just a week before the Japanese disaster put a spotlight on the company’s nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back.

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

The assortment of tax breaks G.E. has won in Washington has provided a significant short-term gain for the company’s executives and shareholders. While the financial crisis led G.E. to post a loss in the United States in 2009, regulatory filings show that in the last five years, G.E. has accumulated $26 billion in American profits, and received a net tax benefit from the I.R.S. of $4.1 billion.

But critics say the use of so many shelters amounts to corporate welfare, allowing G.E. not just to avoid taxes on profitable overseas lending but also to amass tax credits and write-offs that can be used to reduce taxes on billions of dollars of profit from domestic manufacturing. They say that the assertive tax avoidance of multinationals like G.E. not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States.

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11 comments for “Bank of America, GE Pay Zero Federal Taxes

  1. Don Barksdale
    March 25, 2011 at 4:33 pm

    This is a result of “The best government money can buy”. A large portion of GE revenues is also defense contracts, so the taxpayers get a double dose. Look at it this way: will the IRS give you a tax break? No, you and I are the fodder they feed on. Corporations buy tax code changes with political donations. At the same time these corporations scream for “Government to get out of our business” when really, they thrive with the help of these crooked fucks. We should be rioting over stuff like this. When they take away Medicare and Social Security because they can’t afford it, there will be anarchy.

  2. Fred DeFelice
    March 27, 2011 at 1:22 am

    It’s amazing, with those ears he has that are like Dumbo’s and he can still manage to get his head up his ass so far. The man is a total jack ass.

  3. March 28, 2011 at 1:21 pm

    this is bullshit!!! thats half the reason why we are failing as a nation…those greedy corporate thugs are engaged in soo much corporate tax evasion….just take a look at the british and you will figure out why they are suffering soo bad….why is boeing, raytheon, att etc tax exempt? i mean they are the people that have tons of money to pay taxes…but noooo they have to keep fukking the the system and and the citizens….they will get theirs one day when the people strike back!!!

  4. Charles LaGreca
    April 17, 2011 at 5:39 am

    That’s as it should be. No corporation should pay any taxes. Do you think they just reduce their profit by the amount of taxes they pay? Don’t you all realize that they just add their tax bill to their overhead and increase the price of what they sell? Don’t you see that it’s the consumer that is really paying those taxes? If the government wants more of our money, let them try to look us in the eye and tax us directly and not get to us through a back door called corporate taxes.
    The government is the problem, not the solution.

    • a virgin tomorrow
      October 31, 2011 at 9:29 pm

      This would be all well and good, Charles if it weren’t for the fact that they’ve lobbied for and WON the right for Corporate Personhood. You’re arguing in favor of them having their cake AND eating it too? Funny, the rest of us have always been told that wasn’t possible.

      The other point is that our society is not a government construct, it is a corporate construct. The basis for the long-held belief that a democratic government has an ironclad responsibility to the people governed therein is that they are viewed as the builders and maintainers of the social infrastructure that we all live our lives precariously within. But the truth is the social infrastructure is corporate designed, maintained and controlled and the fact that they have gained ownership of mass media and are now controlling the political dialogue, has led people like you to accept a belief that they shouldn’t have any responsibility to the people whose lives are deeply embedded in a corporate-control societal infrastructure. People like you keep complaining about BIG GOVERNMENT as a battle cry for an ideology, yet you conversely continue to require the government to be held responsible for what corporations are doing to damage the American way of life. It’s because we’ve been conditioned to think ideologically, not analytically. We’re being lied to. We need to wake up.

      • James
        October 6, 2013 at 7:21 am

        Do you work for BofA or are you just a complete jackass? BofA was BAILED OUT by the tax payer! It is absolutely no secret that they funnel the majority of their profits overseas in order to increase their bottom line! Can you honestly say that you don’t see a problem? Why are 2 of the most profitable businesses in the US tax exempted?? I’m not tax exempted… 300 million other citizens are not tax exempted!! Not only is BofA exempted, but they recorded a 3 billion dollar tax profit??? There is absolutely no excuse for this! It’s disgusting!

  5. April 20, 2011 at 2:22 am

    So you are basically saying that corporations should pay taxes even if they have losses? Since taxes are based on income (that’s why they are called “income” taxes), are you saying we need another system of taxation? If so, why not just say so instead of demonizing Bank of America?

    If a corporation complies with the existing tax laws (and undoubtedly B of A does), then why the intense animosity?

  6. Mike
    October 11, 2011 at 5:23 pm

    A flat tax for EVERYBODY including corporations will eliminate this un-sustainable mess. Along with a balanced budget ammendmment to the Consitiution. No more tax lobbiests, no more IRS. A simple flat tax on ALL earnings in the USA.

  7. July 12, 2012 at 12:34 am

    My brother suggested I would possibly like this website. He used to be entirely right. This post actually made my day. You cann’t imagine just how so much time I had spent for this info! Thanks!

  8. James Wyre
    May 31, 2013 at 2:12 pm

    Corporations that don’t pay taxes get an unfair advantage against others. The endless mantra that they pass on taxes to consumers is a Hitlerian ‘big lie’. My corporation gets no tax breaks (as an S-corp, while I don’t pay taxes on the corp other than local and excise which are large enough but I pay full taxes AND SS tax on my earnings and my 20% plus all of the local taxes I pay on all the money I spend which makes it 35% hurts badly compared to their 0%) and I have to compete with places like GE and Bank of America who have the built-in advantage of being massive. Undertaxed corporations are a taxpayer subsidy to the businesses who need and deserve it the least and only a liar or an ignoramus can say otherwise.

  9. Smithd808
    April 3, 2014 at 6:35 am

    Wynn documented revenue before last number of quartersit could possibly preserve stagnating, or maybe counterpicking. edebedcced

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