Being a U.S. Corporation is a Privileged Position } responsibility counts for nothing and self-interest is a fine art

By DJ Pangburn   DeathAndTaxesMag.com

  

Here are five corporations who owe the American people thanks for bailouts and tax dodges.

Forming a corporation means never having to say you’re sorry. It’s very structure is built around the idea that no one is culpable for wrong action. However, since Citizens United vs. FEC dictated to every American citizen that corporations are people (in their totality), we think that like any good person, they should give thanks where required.

Here are five corporations and banks who were either bailed out in recent years or who pay next to nothing in federal taxes.

General Electric

In 2010, General Electric (GE) made $14.2 billion in revenue,  $5.1 billion of which came from its operations in the United States.

The corporate tax rate is 35% but GE’s rate does not even come close to that percentage. In fact, they pay nothing at all. The New York Times reported that GE’s tax burden is 7.4%. A conditional number. Conditional in that it is dependent on whether GE brings its overseas profits back to the United States, instead of hiding them in a labyrinth of tax shelters; which, of course, they won’t.

“[GE's] 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,” writes NYT.

Even more absurd is that GE claimed a $3.2 billion tax benefit for 2010.

GE is the poster boy for tax dodging and is one of the prime examples of how these tactics place an inordinate burden on the middle class. For that, GE owes the American people thanks.

General Motors 

General Motors should be viewed as the model for a government saving corporations from bankruptcy. The reality is that GM would not exist if not for taxpayer dollars.

The U.S. Treasury floated GM $49.5 billion to buoy the automaker through its 2009 bankruptcy reorganization, giving the U.S. government a 61% stake in the company. The Treasury made $11.8 billion by selling 75% of GM’s common shares in its November 18, 2010 initial public offering.

U.S. taxpayers are still out approximately $25.5 billion. Indeed, GM owes a debt of thanks to the American people—for everything.

AIG

AIG was right in the thick of the sub-prime mortgage and collateralized debt obligation (CDO) disaster of 2008.

In brief, various banks such as Goldman Sachs and Lehman Brothers sold sub-prime mortgages as securities, then bought insurance (credit default swaps) on those loans with AIG, essentially betting against the stocks they sold to investors. When homeowners started defaulting on their mortgages, banks came calling to AIG to receive their insurance money. This caused a liquidity crisis in AIG in which it couldn’t meet its obligations.

In order to funnel money to the banks who helped cause the crisis, the U.S. government and the Federal Reserve bailed out AIG.

According to Pro Publica, “the Treasury and the Fed have actually lent or invested a total of at least $140 billion to bail out AIG.” The Treasury committed $69.84 billion but AIG has only returned $18.22 billion. In March 2009, AIG announced that it was paying $165 million in executive bonuses with bailout money.

For the bailouts and executive bonuses, AIG owes the American people thanks on this Thanksgiving Day 2011.

Bank of America

On August 22, 2011, Bloomberg reported that the Federal Reserve had loaned $1.2 trillion in public money to Wall Street banks. Of that number, Bank of America received “$91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.”

Bank of America’s lust for money is legendary. The last year has been a study in the various ways in which BofA attempts to bleed its customers through fees and penalties, all in an effort to recoup revenues lost from the halcyon days of overdraft fees.

For the bailout money, Bank of America owes the American people gratitude. Of course, they will likely show it by implementing some new fee scheme.

Pepco Holdings

Pepco Holdings is an energy corporation that rivals General Electric in its corporate tax dodging prowess.

A report by Citizens for Tax Justice notes that Pepco Holdings was amongst 30 corporations that paid less than nothing in aggregate federal income taxes over the entire 2008-2010 period (which was studied for the report). Pepco Holdings tax rate? A nice -57.6%.

Pepco Holdings, no doubt, owes thanks to the American people for its inspirational degree of tax dodging.