Catching a Break

Submitted by Katie Schlieper on Mon, 01/14/2008 - 5:07pm.

Bank of America has announced it's buying out Countrywide Financial for a cool $4.1 billion and taking a huge tax break by writing off the losses that Countrywide brings to the table from the collapse of the subprime mortgage market, and shifting the tax burden right on over to the taxpayers (many of whom were bitten by the subprime crisis and are now without homes). That's a nice bit of tax policy the commercial banking sector bought with its hundreds of millions in campaign contributions to federal candidates.

The commercial banking sector has dumped $191,424,027 into federal campaigns since 1990. Bank of America is responsible for $14,374,220 of that (figures courtesy of the Center for Responsive Politics). How much do we think Average Homeowner whose lost her home in the subprime crash is giving to federal candidates? Not enough to let her make a profit off her loss, that's for sure. Bank of America, however, will enjoy millions in perks:

So over the first five years, Bank of America can use a total of $1.35 billion of Countrywide's losses to shelter its income. (That's five years of $270 million annual losses.) If Countrywide's embedded losses when Bank of America buys it exceed $1.35 billion, Willens says, the bank will be able to deduct the rest of the losses, without limit, starting in the sixth year.

This is certainly not the first instance we've seen of entities with a chunk of campaign contributions to their credit taking but a rap on the knuckles for their part in the subprime disaster, while ordinary people bear the brunt of the collapse.

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7 comments

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Submitted by Clean Elections Friend (not verified) on Sat, 01/03/2009 - 2:20pm.

Comercial Banking

So! When you go into a bank and rob it,
You get a long prison term!

When a bank, who has given huge political
donations, robs you! They are rewarded
handsomely with huge tax breaks!

What's wrong with this picture? I guess equal
protection under the law only applies if you're
wealthy!

This corrupt administration is just like the
corrupt corporations, who are ripping off
everyone, and bankrupting the country!

GOODBY AMERICA

Submitted by ChingarraSan (not verified) on Fri, 01/25/2008 - 7:40pm.

You're right. The

You're right. The constitution should be changed from "of the people, for the people, and by the people," to "of the corporations, for the corporations, and by the corporations!"

Submitted by Clean Elections Friend (not verified) on Fri, 01/25/2008 - 9:53pm.

I wonder how anyone could

I wonder how anyone could have expected something different. I defy anyone to name a for profit industry or service in the United States that is not a racket. All answers welcome.

Submitted by Clean Elections Friend (not verified) on Fri, 01/25/2008 - 3:38pm.

I'm with you...

This is nothing more than Capitalism at it's finest. You know, the system that thrives on getting the BEST return on a TINY investment, using mind games, illusion, intimidation, etc. on the target audience. And these people don't spend money on anything unless there is a gaurantee of a return. So where does that leave us? Exactly where they want us. Eating out of their hands. Capitalism is NOT divine. It's just another one of those evil "isms." The one that America happened to adopt as its own. The words that we really need to start focusing on are Democracy, Justice,and possibly Sanity and Intelligence. Let's all use our collective common sense and not trust our televisions, and the illusions that come from them, as fact. Because every actor is paid to make you believe something that is NOT true. Deal with it!

Submitted by Alan Grout (not verified) on Sun, 01/27/2008 - 10:17am.

Money spent on getting elected. I think it is a SHAM or SCAM...

I feel there should not be any corporate funding. Only registered individual voters should donate.
Let the Campaigners go to the trains or busses or just walk down a street and try to get elected.

So much money spent, when there are starving children not only in the world but also here in the
USA.

Submitted by Clean Elections Friend (not verified) on Sat, 01/26/2008 - 11:50am.