Wells Gets a Gold Mine, Oregon Gets the Shaft | The Wandering Eye
The Source Weekly’s reporting is made possible by the power of your support. Be a part of it!
Search
Settings

Tuesday, November 11, 2008

Wells Gets a Gold Mine, Oregon Gets the Shaft

While the eyes of Congress and the public were focused on the $700 billion Wall Street bailout in September, the Bush administration slipped through a

Posted By on Tue, Nov 11, 2008 at 8:46 AM

While the eyes of Congress and the public were focused on the $700 billion Wall Street bailout in September, the Bush administration slipped through a tax break for banks that could cost the federal treasury $140 billion - and cost the state of Oregon a bundle too.


As succinctly explained by Citizens for Tax Justice: "Generally, corporations that report tax losses in a given year are allowed to apply these losses against profits in future years. But this ability to 'carry over' losses from one year to reduce taxes in future years has limits. For example, when one company buys another company that has tax losses, the law prevents the acquiring company from using the purchased company's tax losses. There's a very sensible reason for this rule: to ensure that companies don't purchase other companies simply as a tax dodge.

"But a little-noticed September IRS administrative ruling creates a specific, temporary exemption from this rule for banks acquiring other banks whose tax losses are attributable to bad loans. The rule is apparently retroactive."

The biggest winner under the rule change will be Wells Fargo, "which by one estimate will see a federal tax cut of $19 billion from its purchase of Wachovia."

Why will this hurt Oregon and other states where Wells Fargo does business?

"Because states with corporate income taxes almost universally base their corporate taxes on federal rules, federal tax cuts for corporations generally result in state tax cuts as well," Citizens for Tax Justice explains. "When affected states have rules making it difficult to enact tax increases ... state governments find themselves practically unable to avoid costly corporate tax cuts they never wanted."

How much Oregon stands to lose hasn't been worked out yet.

Tip of the hat to Chuck Sheketoff on the BlueOregon blog for pointing this angle out.

Pin It
Favorite

Comments (2)

Showing 1-2 of 2

Add a comment

 
Subscribe to this thread:
Showing 1-2 of 2

Add a comment

Newsletter Signup

Get Central Oregon daily news
directly in your inbox

More by The Source Staff

  • Water Issue 2021

    Water Issue 2021

    From droughts to dams to glaciers and canoeing, there's lots to explore with water in Central Oregon
    • Jun 9, 2021
  • 2021 Summer Music Guide

    2021 Summer Music Guide

    Get your dancing shoes out from the back of the closet. These are all the shows we know about in Central Oregon this summer.
    • May 26, 2021
  • May 2021 Election Results

    May 2021 Election Results

    The latest election returns see conservative school board candidates in Bend-La Pine trounced by a 2-1 margin
    • May 18, 2021
  • More »

Latest in The Wandering Eye

  • Moonshine Magic in Bend Still on the Down Low

    • Aug 9, 2012
    Get ready for our great close-up on the home distilling community out next week in our "Best of" issue. We interviewed a mixed bag of legal and anarchist distillers in Bend to find out why distilling is so very, very against the law in one's home. More »
  • The Eye Wanders Off Into the Sunset

    • Dec 26, 2010
    I’m really sorry to break the bad news to them during this season of peace and goodwill, but after this week the right-wingers in Bend and vicinity won’t have The Wandering Eye to kick around anymore. The decision to stop writing this blog was my own, and it was prompted by several factors. More »
  • DADT, Gay-Bashing and the "Icky-ness" Factor

    • Dec 19, 2010
    For the past week or so, “Zeo” of the NW Republican blog has had his jock strap in a knot over the prospect of Congress repealing the military’s “Don’t Ask Don’t Tell” rule. To hear Zeo tell it, if DADT is repealed and gays are allowed to serve openly in the US military it will mean the end not only of our armed forces but of America, its economic system and civilization in general. More »
  • More »

© 2021 LAY IT OUT INC | 704 NW GEORGIA AVE, BEND, OREGON 97703  |   Privacy Policy

Website powered by Foundation