Goldman Sachs’ Tax Rate Drops To 1%?
By Justin Gardner | Related entries in Bad Decisions, Business, Money, Taxes
Looks like the folks at Goldman Sachs will get those hefty bonuses after all.
Still think paying taxes isn’t patriotic?
Dec. 16 (Bloomberg) — Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007.The company’s effective income tax rate dropped to 1 percent from 34.1 percent, New York-based Goldman Sachs said today in a statement. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.
Goldman Sachs, which today reported its first quarterly loss since going public in 1999, lowered its rate with more tax credits as a percentage of earnings and because of “changes in geographic earnings mix,†the company said.
The rate decline looks “a little extreme,†said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC.
“I was definitely taken aback,†Willens said. “Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions.â€
So what will be done about this?
(sounds of crickets chirping)
But the question now: how exactly does the normal American taxpayer get in on this sweet action? Shouldn’t we all be able to shift our earning potential to the Caymans? Come on, let’s all game the system so we can get a $5.86 billion tax break!
More as it develops…
This entry was posted on Wednesday, December 17th, 2008 and is filed under Bad Decisions, Business, Money, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
December 17th, 2008 at 12:27 pm
Not to nitpick Justin, but its actually a $5.986 billion tax break. $5.86 billion from $6 billion leaves $140 million (or $0.14 billion), and as you say, GS is only paying $14 million in taxes this year. Otherwise thanks for the info; I have yet to hear of this ongoing nonsense on other sites!
December 18th, 2008 at 10:51 am
Actually, I hate to nitpick more, but it isn’t a $5.86 billion NOR a $5.986 billion tax break. You would have to start the tax based upon this years profit, which is only $2.3 billion total.
I’m not saying that $14 million sounds right either. But I’m certain we cannot expect them to pay a tax that is twice of their total profits (which as written is what this story says.)