Wall Street Rises as Main Street Falls

Floor Speech

Ms. KAPTUR. Mr. Speaker, almost one in four homeowners in our country is underwater, meaning they owe more on their mortgages than their homes are worth, and all of this misery is due to Wall Street's rigging of our economy.

But on Wall Street, they're popping champagne corks. The Nation's biggest banks--Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, Goldman Sachs, and Morgan Stanley--have been raking in huge profits, all at the expense of the American people. In fact, these institutions have doubled in size through predatory mergers since the fall of 2007, and these six banks now control two-thirds of the banking system in our country.

They cleaned up with profits in 2010--$51.6 billion in profits, more profits than they made before the American people bailed them out. Main Street is underwater, yet Wall Street is going on a pleasure cruise. It doesn't take a mental giant to figure who got our money.

According to a recent report, the economic crisis that Wall Street precipitated has now caused massive tax revenue shortfalls for the Federal Government and our State governments totaling nearly $300 billion. This is why people are at one another's throats in Wisconsin, in Ohio, and other places. Yes, ordinary Americans--teachers, police, firemen--are being pink-slipped, and the American people are being forced to accept cuts in government services while Wall Street keeps winning, and winning big.

They know well how to win for themselves. This year, Bank of America is receiving an income tax refund of--are you ready for this, America?--$666 million for 2010. Now, that followed $3.5 billion in refunds that Bank of America reported in 2009. Bank of America's Federal income tax benefit this year is roughly two times the Obama administration's proposed cuts to the Community Development Block Grant program, which is a lifeline to communities such as I represent where unemployment is still over 9 percent.

Six banks--Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, Goldman Sachs, and Morgan Stanley--together paid income tax at an approximate rate of 11 percent--oh, those poor companies--of their pretax U.S. tax earnings in 2009 and 2010. Had they paid 35 percent like every other honest business in this country, the Federal Government would have received an additional $13 billion in tax revenue. Do you know how much that is? That's enough to cover the salaries of 132,000 teachers whose jobs have been lost since 2008. Who do you think has caused all the layoffs?

Wells Fargo reportedly received a $4 billion Federal income tax refund on $18 billion in pretax income in 2009 and only paid 7.5 percent of its pretax income of $19 billion in 2010. Its net Federal income tax benefit for 2009 and 2010 combined is $2.5 billion, which equals the Obama administration's cuts to the low-income energy assistance program that is vital in cold weather to senior citizens, particularly women over the age of 80 years in districts like I represent.

So who took their money? Pretty clear to me.

Banks use a variety of mechanisms to avoid corporate income taxes, including offshore tax shelters. Fifty percent of these six big banks have 1,871 foreign subsidiaries incorporated in jurisdictions we know as off-shore tax havens, like the Cayman Islands.

The Bank of America operates 371 tax-sheltered subsidiaries, and 204 in the Cayman Islands alone.

For Goldman Sachs, 75 percent of its foreign subsidiaries are incorporated in offshore tax havens.

So who's paying their freight? You are--the American people.

Closing tax loopholes for the financial sector, making them pay their fair share of taxes, and I would support imposing a financial speculation tax, could generate more than $150 billion in Federal tax revenue. And what could be more fair to those who cause such harm to the American people?

Something is really out of kilter in America, and it's not the State budgets. It's the balance of power in our political system. Everywhere you go, Big Money and Wall Street win, and the American people pay.

Mr. Speaker, I just say to the American people, think about who's hurt our Republic--and it's not the American working people.

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