Illegal tax scheme gives $140 billion to biggest US banks

Dandelion Salad

By Bill Van Auken
13 November 2008

An extra-legal measure quietly enacted by the Treasury Department in the shadow of the $700 billion Wall Street bailout package will hand the country’s biggest banks another $140 billion windfall, the Washington Post reported this week.

In a five-sentence memo issued on September 30, on the eve of the first House vote on the bailout bill, the Treasury Department unilaterally overturned a two-decade-old tax law passed by Congress. The measure denied profitable companies the ability to shield their profits from taxation by buying up bankrupt firms as shell companies and using their losses as a tax dodge.

The law, section 382 of the tax code, was enacted by Congress in 1986. It was aimed at curtailing what was seen as an egregious corporate scamming of the tax system. The Republican right and corporate lobbyists have been pushing for the measure’s repeal or amendment ever since.

Treasury Department spokesman Andrew DeSouza defended the action, telling the Post that the administration had the power to overturn a law passed by Congress as part of its mandate to interpret the tax code. He further insisted that the action was a necessary means of rescuing the banks from the financial meltdown.

“This is part of our overall effort to provide relief,” he said.


via Illegal tax scheme gives $140 billion to biggest US banks

FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.


Bailouts for banks: Layoffs for workers

A Credit Crisis or a Collapsing Ponzi Scheme?

Paulson the Bungler By Mike Whitney

Crisis Is Beyond The Reach of Traditional Solutions By Paul Craig Roberts

Towards a Common Standard Benchmark for evaluating all Monetary Reform Proposals

Why The Bailout Isn’t Working by Josh Sidman

The New World Order Monetary System

Sign Petition for a Monetary System That Puts People First – Open Letter to G-20

The Economy Sucks and or Collapse