From Crooks and Liars:
By Susie Madrak
Posted: 24 Dec 2010 07:00 AM PST
It’s all about jobs, jobs, jobs, as Obama likes to say. Only they’re going overseas:
Amid all the goodies for ethanol producers, NASCAR racetracks and the like, the tax-cut compromise legislation approved by Congress this month also includes a little-noticed sop for Wall Street banks and major multinationals.
And it only costs U.S. taxpayers $9 billion.
Under the provision, financial services firms and manufacturers can defer U.S. taxes on overseas income from a type of financial transaction known as “active financing.” Boosters say the two-year exemption helps level the playing field with foreign competitors by ensuring that U.S. corporations aren’t taxed twice.
Major business groups and financial companies consider the exemption a key lobbying priority in Congress, which has regularly extended it on a temporary basis for more than a decade. Those lobbying in favor of the policy include dozens of the largest U.S. companies, from General Electric to J.P. Morgan Chase to Caterpillar, records show.
The Active Financing Working Group, a coalition of companies and trade associations focused on the issue, has paid $540,000 in lobbying fees to Elmendorf Strategies since last year, according to Senate disclosure forms.
The exemption ensures “that U.S.-based financial services [businesses] are able to continue to operate competitively and provide the funds needed for investment and economic growth,” the working group wrote in a letter to the Treasury Department.
But the provision has long been opposed by watchdog groups and labor unions as a needless tax break that encourages companies to create jobs overseas instead of within the United States.
Is nothing sacred? Bank of America and hedge fund Fortress Investment Group have spotted a fresh money-making opportunity – collecting the tax debts of regular citizens. The investigation, by reporter Fred Shulte, shows how the bank and hedge fund can add interest charges and fees and bundle the debts as securities for investors. In late May and early June, proxies for the corporate duo quietly bought hundreds of millions of dollars in homeowners’ property tax debts in Florida by bidding at a series of online auctions held by county tax collectors. (Shulte is joining the Center as a result of our merger with the Huffington Post Investigative Fund.)