New In the Public Interest column today on The Huffington Post from Phineas Baxandall
U.S. Public Interest Research Group (U.S. PIRG) Senior Analyst on Tax and Budget Policy explains the hidden tax subsidy likely to be in a settlement unless it’s prohibited.
“The true BP settlement amount will be substantially less than the headlines proclaim unless it prohibits a tax write off.
“When the SEC negotiated a $535 million civil penalty agreement with Goldman Sachs in 2010, they made sure the penalty would not be deducted. The same could happen with BP.
“When the government offers a company a tax-deductible settlement for its misdeeds, the public loses four times over. First, the public suffers the direct impact of corporate wrongdoing. Second, taxpayers must shoulder part of the penalty by covering the lost revenue in the form of higher tax rates or cuts to public programs. Third, future deterrence of corporate wrongdoing is weakened. And fourth, the absence of a trial eliminates opportunities for a public airing of evidence about corporate misdeeds.”
Click here to read the full version.