Banks Say “Thanks for the Bailout,” Now We’ll Park our Profits in Overseas Tax Havens

Monday, March 16, 2015
(photo: Justin Tallis, AFP/Getty Images)

Giant financial institutions that benefitted from federal bailouts during the depths of the recession have repaid the American people’s largesse by hiding profits overseas to avoid paying their fair share of taxes.


According to a report (pdf) commissioned by Senator Bernie Sanders (I-Vermont), four big banks—Citigroup, Goldman Sachs, Bank of America and JPMorgan Chase—which received massive amounts of money and loan guarantees to keep them afloat in the wake of the financial crisis, park large amounts of money in tax haven nations.


Citigroup got the most help of the four in the bailout, $2.5 trillion. That company has at least 427 offshore divisions where it squirrels away profits out of reach of the American people. Those funds, as of early 2014, totaled $43.8 billion, which would mean $11.7 billion in tax revenue for the United States if they were brought to this country. Citigroup CEO Michael Corbat was rewarded with $1.5 million in salary, $4.5 million in bonuses and $8 million in stock for his work in 2014.


Bank of America received a $1.3 trillion bailout from the American people. In 2014, it had $17 billion in profits stashed offshore, which would bring $4.3 billion in funding for education, infrastructure and other badly needed projects in the United States. Bank of America CEO Brian Moynihan made $1.5 million in salary, $13 million in bonuses and $11.5 million in stock in 2014.


JPMorgan Chase got a $416 billion bailout from American taxpayers. That bank has hidden $28.5 billion overseas which would bring in $6.4 billion to the U.S. Treasury. Chase CEO Jamie Dimon was paid $1.5 million in salary, $7.4 million in bonuses and $11.1 million in company stock in 2014.


Goldman Sachs was the recipient of $814 billion in virtually zero-interest loans, as well as $10 billion from the government. It’s holding $22.5 billion offshore that would bring $4.1 billion back to the American people. Goldman CEO Lloyd Blankfein made $2 million in salary, $7.33 million in bonuses and $7.33 million in stock in 2014.


Of course, banks aren’t the only companies taking advantage of tax havens. Apple, for instance, famously worked it out so two of its subsidiaries have no home country to which to pay taxes. But then Apple didn’t come hat-in-hand begging the American people not to let it go under.

-Steve Straehley


To Learn More:

Legalized Tax Fraud: How Top U.S. Corporations Continue to Profit Through Offshore Tax Havens (by Senator Bernie Sanders, U.S. Senate) (pdf)

Offshore Shell Games (U.S. PIRG) (pdf)

The Bailouts 4 Years Later: Were They Worthwhile Investments?  (by Matt Bewig, AllGov)


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matthieu 9 years ago
to fight tax avoidance, sign the European Citizen's Initiative against shell companies (used by tax havens)!
Christian 9 years ago
Michael, you troll, you don't speak for everyone. In fact, I agree with his post much more than yours. All Jim did was ask 2 questions then stated two facts. One of which was wrong, we're actually 3rd highest in corporate tax rates. The second, we are one of 2 countries that tries to tax worldwide profits. You can't fault a bank, or any other organization or person, for wanting to keep what is theirs! Taxation is theft. The only difference between a tax collector and a thief is a tax collector calls his buddies to come rob you, whereas the thief has the stones to do it himself.
John 9 years ago
The numbers in this article are bad. The total bailout to 4 major banks is listed in the article as totalling $5 trillion. That is 30% of the US's GDP. For reference, the total Federal budget is currently only $3.9 trillion.
Michael 9 years ago
Jim, You're what's wrong with this country. Sincerely, Everyone
Jim 9 years ago
How did you calculate the tax deferral? Did the companies not assert APB23 and record one related to unrepatriated earnings? If not, that seems like a pretty high tax rate, after foreign tax credits. If it is accurate, it paints a pretty bad picture of how high our corporate tax rates are (highest in the world), not to mention being one of only a few that tax worldwide profits.

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