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Bank Notes

Adam Rust's picture

Posted February 22, 2012

A few interesting facts that I have gleaned from recent news reports:

Taxes for Wells Fargo: Less than zero. According to a report from Citizens for Tax Justice, Wells Fargo earned 49.3 billion from 2008 to 2010. During that

period of time, they paid no net taxes. In fact, they were able to generate refunds of $681 million. I doubt that they benefited from those losses immediately. Most, if not all, probably has landed on their balance sheet as protection against future tax obligations.

Goldman Sachs, Wells, and Capital One each benefited from one tax year in that period where their tax obligation was less than zero.

I can't help but notice that plenty of the small guys in the unbanked sector are paying effective tax rates of 35 percent.

Corporate taxes may dominate the near-term news cycle. President Obama announced a proposal to lower corporate tax rates to 28 percent, but eliminate some of the loopholes that enable tax rates to drop to virtually nothing for a few. Given the effective tax rates of some of the big banks, this would be a huge boon for our nation's books. Some of the changes could be done by merely changing how costs are recorded - ending the use of LIFO, for instance.

Bank of America losing friends in high places: Tom Brown, once a rising star at Tiger Asset Management and a regular writer for, is pillorying Bank of America. He doesn't like their strategy, which in his view has consisted solely of serial buying sprees, and he cannot imagine how their executives managed to reward themselves with hundreds of millions in bonus pay during a a 17-year period when their stock lost forty percent of its value.