5 ms·

> They aren't getting paid a subsidy, they are paying less tax because of higher expenses. They broke the law, but get to claim it on their taxes as an expense

> They aren't getting paid a subsidy, they are paying less tax because of higher expenses. They broke the law, but get to claim it on their taxes as an expense. That's like deducting my speeding ticket payments as an expense on my tax return.

jandrese 11y ago
I'm sure you wouldn't be the first person to try that, especially if he tries to justify the speeding as a business need. The difference of course is that you would get audited and maybe go to jail. Goldman Sachs's friends in government have written the law such that it's not even illegal for them.
- karmelapple 11y ago
  As the other replies indicate, it's less about them writing the law in this instance, but rather having the government prosecution be complicit in boosting the dollar number they can publicize in exchange for a lower overall cost to the company. Both sides win in this arrangement, even though I'd argue most Americans do not want Goldman Sachs to do any kind of winning as a result of this very necessary legal action against them.
jonknee 11y ago
It would be more similar to having the option of paying a higher total fine, but with a portion of it in the form of a charitable donation (which is deductible). Higher total dollar amount, but the same as an overall lower fine that wasn't deductible. The government gets a big juicy number which is apparently what they wanted (in addition to being able to control where the money goes without having Congress involved).
- karmelapple 11y ago
  I - and I think many others - feel that these companies should get negative consequences from their behavior. If the government is just inflating the number artificially, and actually resulting in something that benefits the group that did bad things... seems like most people would be pretty unhappy knowing that. Who do I talk to about getting that angle on this story out there? :)
CPLX 11y ago
It's actually not quite like that. Payments of fines to governments are not deductible, neither for you or Goldman. Payments of compensation and restitution are. For what it's worth there is some vague consistency on this issue.
- karmelapple 11y ago
  Interesting - I didn't know that, and I think the penalty levied here should have been levied as a fine, rather than compensations or restitution. Where did the legal precedent or IRS rule be set that restitution should be a deductible business expense? If you need to pay compensation or restitution, it means you did something you should not have done as decided by a judge/jury, so having it be treated more like a "penalty" seems prudent to me.

jandrese 11y ago

I'm sure you wouldn't be the first person to try that, especially if he tries to justify the speeding as a business need. The difference of course is that you would get audited and maybe go to jail. Goldman Sachs's friends in government have written the law such that it's not even illegal for them.

karmelapple 11y ago
As the other replies indicate, it's less about them writing the law in this instance, but rather having the government prosecution be complicit in boosting the dollar number they can publicize in exchange for a lower overall cost to the company. Both sides win in this arrangement, even though I'd argue most Americans do not want Goldman Sachs to do any kind of winning as a result of this very necessary legal action against them.

jonknee 11y ago

It would be more similar to having the option of paying a higher total fine, but with a portion of it in the form of a charitable donation (which is deductible). Higher total dollar amount, but the same as an overall lower fine that wasn't deductible. The government gets a big juicy number which is apparently what they wanted (in addition to being able to control where the money goes without having Congress involved).

karmelapple 11y ago
I - and I think many others - feel that these companies should get negative consequences from their behavior. If the government is just inflating the number artificially, and actually resulting in something that benefits the group that did bad things... seems like most people would be pretty unhappy knowing that. Who do I talk to about getting that angle on this story out there? :)

CPLX 11y ago

It's actually not quite like that. Payments of fines to governments are not deductible, neither for you or Goldman. Payments of compensation and restitution are. For what it's worth there is some vague consistency on this issue.

karmelapple 11y ago
Interesting - I didn't know that, and I think the penalty levied here should have been levied as a fine, rather than compensations or restitution. Where did the legal precedent or IRS rule be set that restitution should be a deductible business expense? If you need to pay compensation or restitution, it means you did something you should not have done as decided by a judge/jury, so having it be treated more like a "penalty" seems prudent to me.