The big banks don’t use your deposits to invest in your community; they spend it on lobbyists to influence Washington legislators, to fund risky trading activities and to give their executives huge bonuses. But there’s another way that they avoid helping out your community: they also establish offshore tax havens to prevent their profits from being taxed by the federal government. The New Rules Project’s Stacy Mitchell:
Consider the case of Wainwright Bank, a small community bank in Boston. Wainwright has won numerous accolades for financing affordable housing, small businesses, and social service organizations. In 2009, Wainwright had a federal effective tax rate of 11.8 percent.
Wainwright’s biggest competitor is Bank of America, which is the largest bank in the country and has a 21 percent market share in the Boston metro. Bank of America has been one of the leaders in using offshore tax havens, maintaining more than 100 subsidiaries in tax haven countries. In 2009, Bank of America actually received a tax refund of $3.5 billion, even though it reported $4.3 billion in profits.
[...]Big banks have been especially active in establishing subsidiaries in tax havens. Goldman Sachs, for example, has 29 subsidiaries located in offshore tax havens. In 2008, Goldman reported profits of over $2 billion, but paid federal taxes of $14 million, an effective tax rate of just one percent.
All this, of course, after taking billions of bailout dollars from US taxpayers.
A new coalition is shaping up to combat the major corporations and institutions that abuse offshore tax havens to prevent their profits from being taxed. Learn more about Business and Investors Against Tax Haven Abuse.
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