Goldman Sachs’ Amazingly Low Tax Rate
Goldman got $10 billion in taxpayer cash in 2008, plus loan guarantees. Yet according to Bloomberg, they only paid $14 million taxes on $2.3 billion in profits. Their effective tax rate went from 34% in 2007 to just 1% in 2008. How’d they do it? Tax credits and, here’s the key “Changes in geographic earnings mix“.
I’m not a CPA, but that screams “tax shelter” to me. According to the Bloomberg piece,
The rate decline looks “a little extreme,” said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC. “I was definitely taken aback,” Willens said. “Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions.”
It’s good to know that we’re giving trillions in taxpayer dollars to companies who use offshore tax havens. Let’s keep the bonus money flowing to these guys too. The average Goldman Sachs employee got a bonus of $600,000 in 2007, on top of base salary. That added up to $18 billion, double the average on wall st.
I’m agnostic, but will continue to pray nightly for executive bonus clawbacks. It looks like taxpayers are about to shell out $1-$2 TRILLION to buy the toxic assets of these banks. The least we can ask is a return of their ill-gotten gains.
More reading:
Bailed-Out Firms Have Offshore Tax Havens
GAO: US Firms Use Tax Havens
Hank Paulson’s Ultimate Tax Shelter
Dutch Bank Funded U.S. Tax Shelters
3 Comments
[...] the 4th quarter of last year, Goldman Sachs tax rate dropped from 33% to 1%. They attributed this drop to “geographical changes” and tax credits. [...]
[...] to rescue the sector. On top of everything, Goldman’s income tax rate dropped has from 34.1% to 1%. Robert Willens, president and CEO of a tax and accounting firm, suspects that “they have taken [...]
The most-important (and most-neglected) public policy issue of our time is tax fairness. Goldman Sachs is the poster child for a new form of cannibalistic capitalism that threatens us all.