Two quotes. From this article. Which you absolutely should read.
Fourteen million dollars.
That is what [Goldman Sachs] paid in taxes in 2008, an effective tax rate of exactly one, read it, one percent. The bank paid out $10 billion in compensation and benefits that same year and made a profit of more than $2 billion – yet it paid the Treasury less than a third of what it forked over to CEO Lloyd Blankfein, who made $42.9 million last year.
And:
It’s not always easy to accept the reality of what we now routinely allow these people to get away with; there’s a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can’t really register the fact that you’re no longer a citizen of a thriving first-world democracy, that you’re no longer above getting robbed in broad daylight, because like an amputee, you can still sort of feel things that are no longer there.
But this is it. This is the world we live in now.
You might not be able to change it, but you should know it. And it should inform all of your civic choices and votes. I understand how we ended up here. And step by step? It doesn’t seem so ridiculous. But stepping back? Fundamentally fucked up.
tx2vadem
Well, they didn’t pay $14 million. That is their tax expense on their income statement which does not equate to actual taxes paid because of the deferred tax component. If you look at note 14 to their financial statements, they split current and deferred out from the net tax number. Their current Federal Income Tax for their 2008 fiscal year was -$278 million. And their current tax expense for Non-US is 1.9 billion.
Unfortunately, there is not enough information in the note that I see to explain this. When you look at the business segment note, most of their earnings were US related. My stock answer would have been that the US has the peculiarity of taxing your global income. But that doesn’t seem to apply here since they report most of the earnings as domestic. Go figure! All indicative of the fact that they have some really smart people working for them. =)
I don’t buy his argument that they manipulated the commodity markets. It something that is difficult to prove. This evidenced by the fact that CFTC, FERC and the US Attorney could not agree on whether Amaranth actually succeeded in manipulating natural gas prices. It is hard to think that you can overpower market forces more than for a short duration. Before the 2008 collapse, increased demand across the globe and limited supplies were pushing up oil prices naturally. In addition, you had our collective fiscal policies that were devaluing the dollar. They may be superstars at Goldman, but I doubt they can fundamentally alter price for commodities.