Tell the Department of Justice: American taxpayers have already paid enough for Wall Street’s fraud | CREDO Action

25 Oct

Tell the Department of Justice: American taxpayers have already paid enough for Wall Street's fraud

It’s bad enough that Attorney General Eric Holder’s Department of Justice has all but given “get out of jail free” cards to the Wall Street crooks who drove our economy off a cliff.

But now the Department of Justice under Holder appears poised to let JPMorgan Chase, a giant Wall Street bank, settle two lawsuits about fraudulent behavior leading up to the financial crisis in a way that would force American taxpayers to heavily subsidize the payments the bank would make to settle the charges.

That the bank will not be prosecuted and nobody will go to jail is outrageous. But it simply defies any notion of justice to let the bank off the hook and stick the American taxpayers with part of the bill.

Tell the Department of Justice: American taxpayers have already paid enough for Wall Street’s fraud.

Reuters neatly explains the crux of the issue:

JPMorgan is negotiating the settlement with a group of government agencies led by the Justice Department, and the deal is expected to include a $2 billion penalty, one source said.

But another $4 billion of the deal, which will go toward aid for struggling mortgage borrowers, is tax deductible, another person familiar with the negotiations said.

How the remaining $7 billion will be addressed remains unclear, but most, if not all, is likely to be deductible.

[…]

Those payments would usually be deductible as a normal business expense … said tax expert Robert Willens.

If $11 billion is tax deductible, and assuming a 38 percent tax rate, the tax deduction could save JPMorgan as much as $4.18 billion, Willens said.

The government, however, could negotiate an exception and require that JPMorgan agree not to deduct some of those expenses from its taxable income, he said.1

It would be an incredible abdication of responsibility for the Department of Justice to give Wall Street banks tax breaks for the money they’re paying to clean up the mess they caused with their fraudulent behavior.

Tell the Department of Justice: American taxpayers have already paid enough for Wall Street’s fraud.

Since Wall Street tanked our economy, we’ve paid in the form of bailouts, a crashed economy, millions of avoidable foreclosures, and trillions of dollars in lost household wealth. We also paid in the form of all the things we couldn’t do because we were too busy cleaning up the mess that Wall Street created.

We need to speak out and make sure the Department of Justice doesn’t make American taxpayers pay billions more to help let JPMorgan Chase off the hook.

via Tell the Department of Justice: American taxpayers have already paid enough for Wall Street’s fraud | CREDO Action.

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