NY state loses tax revs on skipped Goldman bonuses($178m)

Reuters ^ | 12/19/08 | Joan Gralla

[TigerLikesRooster]

NY state loses tax revs on skipped Goldman bonuses

By Joan Gralla Fri Dec 19, 5:50 pm ET

NEW YORK (Reuters) – New York lost $178 million in tax revenues because six top Goldman Sachs executives decided to skip bonuses, New York Gov. David Paterson said on Friday, underscoring the budget pain inflicted by Wall Street's troubles.

The financial sector is the bedrock of New York's economy and it usually pays the state 30 percent of all its tax revenues in the January to March quarter, Paterson said in a telephone call with reporters.

The heavy share of taxes paid in the first quarter of each year occurs because this is when the companies often pay their employees the lion's share of generous bonuses.

In mid-November, Goldman Sachs Chief Executive Lloyd Blankfein and six other top corporate officers said they would forego their 2008 bonuses.

"We are in recession-ville," Paterson said, adding he did not think the economic crisis was fully appreciated by legislators who have criticized his array of proposed education and health care cuts and fee and tax increases but have failed to come up with other options.

[TigerLikesRooster]

Golum S*cks falters and New York State is about to die. Time for Bloomberg to bail out NY State. /sarc

[TigerLikesRooster]

Ping!

[poobear]

But I though trickle down economics didn’t work.

[SubMareener]

So the Libs are learning what happens when the rich get poorer! And they haven’t even raised the tax rates on them, yet!

[TigerLikesRooster]

Not to UAW goons.:-)

[pnh102]

That’s funny. I thought the Democrat party was all for executives not getting these types of “obscene” bonuses.

[Doogle]

...now you know why the gubment told three banks they had to take the bailout money, even though they didn't want it.
The CEO of Wells Fargo told them he didn't want it, but was told, “sign the papers”

[Brilliant]

I don’t feel too sorry for them. Their Senator, Charles Schumer, played an instrumental role in causing this financial crisis. Let him bail them out.

[pnh102]

The CEO of Wells Fargo told them he didn't want it, but was told, “sign the papers”

I find this very hard to believe. What was Paulson going to do to guy, shoot him? Imprison him?

Personally I think this CEO is trying badly to pull some sort of face-saving copout. But for me, this doesn't pass the smell test.

[TigerLikesRooster]

Would you elaborate? Somehow I can't connect the dots.

[HereInTheHeartland]

“I find this very hard to believe.”

It happened just that way.

[mouser]

DAMD CEO'S

first they take the money robbing the common workers

now they refuse it robbing the state

[poobear]

The great rape of America, right under our noses.

When there is nothing left but debt at least “they got theirs”.

[Don Corleone]

Built on a house of cards!

[CPOSharky]

Why dosen’t the governor just make them pay the tax on what the bonus would have been.

[wgflyer]

Doggone those rich people. Can’t stand em, can’t live without em. What’s a lib to do?

[ProtectOurFreedom]

I like your idea — pay taxes on an “imputed bonus”. After all, they did earn it. It’s just their employers are reneging on paying it.

That would be just like the fake gains you sometimes get in stock option sales when you have to pay tax on an unrealized gain.

[Vaquero]

and my dopey dooooosh bag governor will charge a tax on Soda and McDonalds to help keep me safe from bad fast foods and in the process put more money in the states coffers.

In the words of planned parenthood @$$holes, “Keep your laws off of my body”

[jwparkerjr]

This can't be correct. We all know the rich don't pay their fair share and in most cases pay no taxes at all, or at least less than their hired help. If that's the case then it shouldn't matter that some of the richest folk in America didn't take their bonuses. Something is wrong, Dems. You can't have it both ways.

[Doogle]

...we're told the bailout money will give the US taxpayer returns in the future. Don't bank on it. What sort of return did the American taxpayer get from the Savings and Loan debacle?. All Congress did, was to insure THEY have a more concealed slush fund. GM is 54 billion in debt, their 14 billion slice is nothing to compare with what they owe now....they didn't seem to worry about the 3 million people they were going to put out of work when they were running up their debt..this all should have been chapter 11 from the start...not taking from the American taxpayer.
People losing jobs, people losing on 401k’s and IRA’s, and their worried about people have “confidence” in GM. How about worrying how people can afford to purchase a new car with 40% of their savings gone?. How about getting after the banks to LOAN the money...the 350 billion they got with no oversight, no “conditions”...anyone remember what the conditions were for the Savings and Loan bailout?. So now we have another problem the states can go to the government seeking their “bailout” lost tax revenue on bonuses...I guess their too big to fail too.

[Blacksheep]

If they don't pay bonuses the only tax NY state should lose is the SS, Medicare and unemployment taxes.

The money not paid out gets taxed as profit.

If the company pays bonuses it reduces the taxable income of the business. Should be a wash.

Unless of course there is no profit! And so far a business does not pay taxes on losses....so far!

[org.whodat]

Paying out bonuses for incompetence, some said they just renamed them to retention payments.

[all the best]

For years the left has been trying to kill the goose that lays the golden eggs. Now that the goose is all but dead they are whining that their much needed/coveted eggs are disappearing. Go figure.

[Arguendo]

I heard the same thing from someone very high up at Bank of America. It’s pretty well known that Paulson pushed the strong banks to take the money so there wouldn’t be a stigma attached to it when weaker banks (who really needed it) chose to take it, the way there has traditionally been to borrowing money at he Fed’s discount window.

[javachip]

There is no public transcript of the meeting between Treasury, the Fed and the first nine banks that got TARP money, so no one except the people there know what was said or what happened.

Based on interviews after the meeting, the Wall St. Journal reported that Wells Fargo’s chairman was strongly opposed to the deal. Paulson reportedly made the offer one that couldn’t be refused.

Since it was all done behind closed doors, we don’t know if that’s what really happened or whether the WFC chairman was serious in his opposition to the program or his reasons.

For a bank that had the ability to raise capital in the markets (WFC definitely fit that category), TARP was an ok deal at best.

[pnh102]

Since it was all done behind closed doors, we don’t know if that’s what really happened or whether the WFC chairman was serious in his opposition to the program or his reasons.

Except that we do know what happened. Wells Fargo became a welfare queen.

[jupiterbob]

I believe deductions are limited to $1M for exec comp so the portion above $1M (a lot I think) was never shielded from tax.

[theymakemesick]

New York lost $178 million in tax revenues because six top Goldman Sachs executives decided to skip bonuses

I'm no accountant but I can do my own 1040 long form, interact with the accounting deptartment at my job and understand how write-offs work. It seems to me that had the exec's taken the bonuses, GS could write off the expense and not pay tax on the dollars that would have resulted in taxes of $178m. The exec's would have paid tax on that income.

Since the exec's elected to skip the bonuses, GS would have to report that as profit and pay tax on those dollars since it wasn't written off as an expense.

It seems to me that the tax is just being shifted from the exec's to GS. Big deal, who is the Reuters/DBM trying to make look bad here, the exec's, for NOT getting bonuses?

[JerseyHighlander]

 It seems to me that the tax is just being shifted from the exec's to GS. Big deal, who is the Reuters/DBM trying to make look bad here, the exec's, for NOT getting bonuses?

Goldman Sachs effectively corporate tax rate for 2008 is approximately 1%.

The NY State personal income tax top bracket is high, i'm not sure offhand.

 

Bloomberg.com: Worldwide

Dec 16, 2008 ... 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. ...
www.bloomberg.com/apps/news?pid=20601087&sid=aznONFlyupOI&refer=home -

 

[DeaconBenjamin]

The CEO of Wells Fargo told them he didn't want it, but was told, “sign the papers”

I find this very hard to believe. What was Paulson going to do to guy, shoot him? Imprison him?

On NPR, the word was that Paulson said, in essence, "You don't need this money now. If you refuse to participate, you'd better hope and pray that you won't need our assistance ever."

[M. Espinola]

Goldman Sachs top CEOs, of which Paulson himself was at the highest level, are like a massive leach draining the American economy, in addition to being on the receiving end of Paulson's free billions.

Out of those uncountable billions in tax funds, it's a safe bet Goldman's crooked elite, Citibank, Morgan etc., have 'transferred' millions overseas, converted to Euros, hidden in newly opened Swiss & E.U. bank accounts.

Whose going to demand credible proof concerning where the bailout-billions have disappeared -- bought and paid for Congress?