Maybe you heard the news: last week, Bank of America signed a $16.6 billion settlement with the Justice Department in order to avoid prosecution for their part of the fraud and deception that helped cause the mortgage meltdown at the heart of 2008’s economic crash. But what you might not have heard is that Bank of America could get a multi-billion dollar tax break out of the deal. Thanks to a loophole, big banks and others that have harmed the public can deduct most settlement payments from their taxes, unless their settlement specifically prohibits it. Since the Justice Department failed to prohibit Bank of America from doing so, it’s likely that the bank will use a large portion of the settlement as a tax write-off -- creating a $4 billion tax burden for the rest of us. For every dollar that Bank of America avoids paying through this loophole, ordinary taxpayers will end up paying the difference through cuts to public programs, higher taxes, or more national debt. When big corporations pay to atone for harming the public, they shouldn’t get a tax write-off out of it. Federal agencies need to be held accountable by showing when they give these settlement tax breaks, and corporations should disclose when they deduct settlements. webaction.org/site/R?i=zRj5AXVmSc39yy7PH6EmeQ
Posted on: Thu, 28 Aug 2014 13:42:54 +0000
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