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Gibson writes: "The U.S. government patted itself on the back when Bank of America was ordered to pay a recent $17 billion 'historic' settlement. BofA knew the mortgages it packaged and sold to investors were bogus, and the bank agreed to pay the fine in exchange for not having its criminal executives locked up."

(illustration: Occupy Our Homes)
(illustration: Occupy Our Homes)


8 Budget Cuts BofA's $12B Tax Dodge Could Restore

By Carl Gibson, Reader Supported News

26 August 14

 

he U.S. government patted itself on the back when Bank of America was ordered to pay a recent $17 billion “historic” settlement. BofA knew the mortgages it packaged and sold to investors were bogus, and the bank agreed to pay the fine in exchange for not having its criminal executives locked up. The idea of this being an acceptable punishment is laughable, since $17 billion is just a fraction of the $89 billion in revenue BofA took in last year. But the most despicable thing about this settlement is that BofA is allowed to deduct $12 billion of that fine from their taxes. For criminals as heinous as bankers, a settlement like this one is just a cost of doing business. Here’s a list of just a few things Bank of America’s criminal tax deduction could pay for:

1. More Space Exploration

With a budget of only $18 billion, NASA still manages to show us pictures of Mars, launch satellites beyond our solar system, and discover Earth-like planets that may very well support life just a few hundred light years away. Instead of giving Bank of America a tax deduction, the U.S. government could give NASA a $20 billion budget through 2020 to further explore Mars, or even find evidence of life elsewhere.

2. More Early Childhood Education

Head Start currently has an $8 billion budget, with the essential task of providing high-quality early childhood education. A majority of the human brain’s development happens between ages 0 and 5, and much of what kids learn in their earliest years determines how they’ll develop during their years in K-12 schools. The 2013 budget sequester slashed $400 million, which threatened to deny early education to 70,000 kids around the country. Head Start grantees laid off providers of early childhood education and closed some facilities to cover the costs. Bank of America’s tax deduction could not only undo those cuts, but increase the Head Start budget by a billion a year for 12 years.

3. More Food Assistance for Women, Infants, and Children

The budget sequester also impacted the WIC program, which 9 million low-income women and children depend on for help buying food. WIC’s bare-bones budget of $7 billion could be supplemented by $3 billion a year for 4 years solely with Bank of America’s settlement deduction. This means almost 3 million more low-income families could have help feeding their kids all the way to 2019.

4. More Environmental Protection

The EPA has been responsible for providing safe drinking water through infrastructure grants, addressing climate change, cleaning air pollution, mitigating coal mine runoff, and enforcing safety standards for manufacturers of dangerous chemicals – all on a budget of roughly $8 billion. President Obama’s EPA budget recommendation for the following fiscal year is $310 million less than the EPA is used to. Instead of cutting down on environmental protection, Bank of America’s $12 billion tax cut could be used to increase the EPA’s funding to $10 billion a year through 2020. There are likely to be more man-made environmental disasters in the coming years, and the EPA will need all the funding they can get to address them.

5. More Food Assistance for Adults

When signing the recent farm bill, President Obama’s pen also cut the budget for the food stamp program by $8.7 billion. This means 850,000 low-income households will lose $1080 in food assistance each year. With wages stagnating and food costs rising, this cut needlessly punishes hungry people across America. In 2012, 20 percent of kids in 37 states and DC went to bed hungry. In that same year, nearly one-third of kids in New Mexico and Mississippi didn’t have consistent access to food in their homes. Bank of America’s tax deduction could reverse all of those food stamp cuts and provide an extra $4 billion to the food stamp fund on top of that. Which would you choose – hungry kids or big banks?

6. Correcting Damage to Retirees’ Pensions in Mississippi

When financial institutions like Bank of America wrecked the economy with their greed and incompetence several years ago, they did lasting damage to state pension funds. Mississippi’s Public Employee Retirement System (PERS) took a substantial hit due to Bank of America's intentional misleading of the state’s investors about their bogus mortgage-backed securities. BofA paid a paltry $315 million settlement in 2011 for its crimes, but its recent $12 billion tax deduction could instead be used to address 80 percent of PERS’s $15 billion in unfunded liabilities for retirees.

7. Creating 40,000 Good-Paying Jobs for 6 Years

America’s infrastructure has been given a D+ by the American Society of Civil Engineers. Roads, bridges, and public transit in America are vastly underfunded, and there have been many calls for a new WPA-style jobs program to give our infrastructure some badly-needed upgrades. Bank of America could do its part by using its $12 billion tax deduction to create 40,000 new jobs, at $50,000 a year, to repair some of America’s crumbling infrastructure. $12 billion could keep 40,000 people earning a decent salary for 6 years, and would compound into more job growth as those people circulate that new money in their communities. Some of our roads get fixed, and working people earn a living. Everyone wins.

8. Restoring Cuts to Schools in 6 States

Bank of America could spend its $12 billion to reverse recent budget cuts in states where schools have been put on the chopping block. $5.9 billion would restore funding for schools in Texas to pre-recession levels. Kansas’ billion-dollar education shortfall could also be corrected in the same stroke, along with Pennsylvania governor Tom Corbett’s $1 billion in education cuts. New Jersey schools could have Chris Christie's $1 billion in education cuts restored. Another $1.3 billion could help Florida schools recover from Rick Scott’s budget cuts. Since Scott Walker has been governor of Wisconsin, the Badger State’s schools have suffered $2.6 billion in cuts. The U.S. government could, in one fell swoop, correct all of these cuts by simply denying BofA’s settlement tax deduction.

By allowing BofA to skate on its crimes and pay negligible, tax-deductible settlements, our government is enabling future financial crimes. In a just society, these bankers would do the same amount of jail time for their crimes as burglars and car thieves do for theirs. But at the very least, we can demand that our tax dollars go toward things actually deserving of funds, instead of handouts to the crooks that caused this mess.



Carl Gibson, 26, is co-founder of US Uncut, a nationwide creative direct-action movement that mobilized tens of thousands of activists against corporate tax avoidance and budget cuts in the months leading up to the Occupy Wall Street movement. Carl and other US Uncut activists are featured in the documentary "We're Not Broke," which premiered at the 2012 Sundance Film Festival. He currently lives in Madison, Wisconsin. You can contact him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , and follow him on twitter at @uncutCG.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

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