Moral Low Ground

Economy

600 Demonstrators Occupy & Shut Down D.C. Bank of America Branch over Bank’s Shocking Tax Dodge

A group of 600 activists and protesters, many of them homeowners, held a day of action in Washington, DC yesterday. They occupied and shut down a Bank of America branch and the offices of  Senator Mitch McConnell (R-Kentucky) and House Speaker John Boehner (R-Ohio) and picketed the offices of the National Association of Attorneys General (NAAG) over banks’ illegal foreclosures and tax dodging.

According to Truthout, the NAAG has been investigating banks like Bank of America and JP Morgan Chase which have signed foreclosure documents without accuracy verification– a practice known as “robo-signing”— since last October. But no legal action has yet been taken against these criminal banks. Many thousands of Americans have lost their homes via illegal foreclosures as a result of robo-signing and other fraudulent practices.

The protesters, many from the community organizing group National People’s Action,  also successfully forced the temporary closure of a Bank of America branch before continuing on and doing the same thing at Mitch McConnell and John Boehner’s offices.

The day of action coincided with the launch of the Make Wall Street Pay campaign, which released a damning report detailing how the big banks avoid paying their fair share of taxes. This has led to a $300 billion revenue shortfall for federal and state governments, money that could have been spent helping our nation’s people during these trying economic times. According to Truthout, the report’s findings include:

  • Bank of America operates 371 tax-sheltered subsidiaries, more than any other big bank studied, and 204 subsidiaries in the Cayman Islands alone, according to its latest regulatory filings. Seventy-five percent of Goldman Sachs’s foreign subsidiaries are incorporated in offshore tax havens.
  • This year, Bank of America is receiving the “income tax refund from hell” – $666 million for 2010, according to its annual report filed in late February 2011. This is following a $3.5 billion refund reported in 2009. Bank of America’s federal income tax benefit this year is roughly two times the Obama administration’s proposed cuts to the Community Development Block Grant program ($299 million).
  • Wells Fargo reportedly received a $4 billion federal income tax refund on $18 billion in pre-tax income in 2009, and paid 7.5 percent of its pre-tax income of $19 billion in 2010 in federal taxes. Its net federal income tax benefit for 2009 and 2010 combined, $2.5 billion, is equal to the Obama administration’s proposed cuts of 50 percent to the Low-Income Home Energy Assistance Program.
  • Six banks – Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, Goldman Sachs and Morgan Stanley together paid income tax at an approximate rate of 11 percent of their pre-tax US earnings in 2009 and 2010. Had they paid at 35 percent, what they are legally mandated to pay, the federal government would have received an additional $13 billion in tax revenue. This would cover more than two years of salaries for the 132,000 teacher jobs lost since the economic crisis began in 2008.
  • The banks’ private banking arms protect the wealth of rich clients from taxation through offshore investment strategies. Bank of America’s wealth management arm encourages clients to register their yachts in foreign jurisdictions for tax reasons.
  • Closing special tax loopholes on the financial sector and implementing sensible revenue-raising initiatives such as the Financial Speculation Tax could generate over $150 billion in federal tax revenue each year.

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