Taxpayers Screwed In Bank of America Buyout Of Countrywide
Yesterday, I wrote about greedy mortgage lenders, like Angelo Mozilo of Countrywide Financial getting a golden bailout after screwing borrowers. Well, guess who is helping Bank of America finance the buyout of Countrywide? The American taxpayers! Yes, siree, isn't that a great honor for taxpayers? Just what they've been waiting for.
Courtesy of Chris in Paris at AmericanBlog comes a report from Allan Sloan about Bank of America's huge tax break which helps finance it's $4 billion buyout of Countrywide Financial. Sloan writes, ".....Bank of America (BAC, Fortune 500), which is solidly profitable, will be able to use some of Countrywide's losses to offset its own taxable income. The tax break could total about half a billion dollars over the first five years, according to an estimate by tax guru Robert Willens, who left Lehman Brothers Friday after a 20-year run and will be in business as Robert Willens LLC starting next week.
"A $270 million annual deduction would save Bank of America something more than $100 million a year in federal and state income taxes....
"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."
The corporate rich are certainly different from you and me. They stay wealthy by screwing the middle class with the government's assistance.
Courtesy of Chris in Paris at AmericanBlog comes a report from Allan Sloan about Bank of America's huge tax break which helps finance it's $4 billion buyout of Countrywide Financial. Sloan writes, ".....Bank of America (BAC, Fortune 500), which is solidly profitable, will be able to use some of Countrywide's losses to offset its own taxable income. The tax break could total about half a billion dollars over the first five years, according to an estimate by tax guru Robert Willens, who left Lehman Brothers Friday after a 20-year run and will be in business as Robert Willens LLC starting next week.
"A $270 million annual deduction would save Bank of America something more than $100 million a year in federal and state income taxes....
"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."
The corporate rich are certainly different from you and me. They stay wealthy by screwing the middle class with the government's assistance.
Posted by Kaz at 1/13/2008 6:54 PM 
Categories: Media, Politics, Ethics, Economy, greed, Housing Crisis
Categories: Media, Politics, Ethics, Economy, greed, Housing Crisis
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