After the tech sector, Wall Street is the second-highest source of wealth for American billionaires.
As the deadline to mail checks to the IRS approached, organizers in New York were still protesting, and this time not only about President Donald Trump’s tax returns. Activists with the grassroots organization New York Communities for Change and other progressive groups held a rally on April 18 in front of Goldman Sachs’s headquarters in New York City to confront the world’s most powerful bank for dodging taxes and taking resources away from working people.
In the eight years between 2008 and 2015, Goldman avoided paying $5.5 billion in taxes by using various loopholes, billions that could have been used for public housing, healthcare, education, and many other vital programs and services. That’s around $21.60 per second in tax avoidance. At that rate, Goldman will have dodged about $4,000 in taxes by the time you finish reading this, about half the federal income taxes paid by the average American family.
While Goldman’s tax avoidance wizards worked their magic in the years following the crisis, it wasn’t because the cupboards were bare. In fact profits rose, and its net revenue in 2015 was $33.8 billion.
The fact is, most Americans don’t mind paying taxes. What ticks people off is when rich people don’t pay their fair share. This year, longstanding tax avoidance by the most powerful individuals and corporations got people off their chairs and into the streets in protest.
Saturday’s tax rallies across the country helped refocus America’s outrage at Trump’s refusal to make his tax returns public as every President since Richard Nixon has done. The rally at Goldman Sachs was a reminder that the demand for transparency is only the tip of the iceberg. For the protesters at Goldman Sachs chanting “Stop Looting America!”, the fight for tax justice is every bit as important.
Despite its misconduct and role in the 2008 financial crisis, Goldman Sachs received over $10 billion in bailout money from American taxpayers. Adding insult to injury, Goldman Sachs does not exactly have a clean record when it comes to legal compliance.
Protesters descended upon Goldman Sachs demanding not only that they pay up, but also stop robbing wealth from communities, which they have done by continuously investing in companies that move jobs overseas (they have moved their own jobs, too), playing a major role in the foreclosure crisis, creating the first “social impact” bond that would make the company millions off of the private prison industry, and privatizing water systems across the United States.
Protesters’ concerns with Goldman didn’t end there. They lambasted Trump for filling his cabinet and senior adviser positions with Goldman alumni (six to date), aptly nicknaming his administration “Government Sachs.”
These include Trump’s treasury secretary, long-time Wall Street insider Steve Mnuchin, who aggressively foreclosed on thousands of people during the financial crisis and made millions in the process, and National Economic Council director Gary Cohn, former CEO of Goldman Sachs who received more than $100 million in bonuses and options from Goldman Sachs as a parting gift before assuming a key role in Trump’s administration.
With the two of them as likely architects of Trump’s tax plan, you can be sure Goldman Sachs will get a fantastic return on that “investment.”
Finally, having surrounded himself with Goldman Sachs alums to advise him on economic policy, Trump nominated Wall Street bailout lawyer Jay Clayton to be Wall Street’s top cop as Chair of the Securities and Exchange Commission.
Big banks and Wall Street billionaires have been dodging taxes since long before Trump was President, and Goldman Sachs is hardly alone among financial industry tax dodgers. But Trump’s tax reform plan — for all the tough talk on the campaign trail — would blow existing loopholes wide open. And no one is better situated to help shape and push for this plan than Goldman Sachs. Here’s an overview of how Trump’s plan would be a giveaway to Wall Street:
- Trump’s plan would slash the corporate tax rate from 35 to 15 percent, and House Republicans are considering a 20 percent rate. That would mean that big banks and corporations would pay a lower rate than working people, meaning billions of dollars lost in revenue needed for vital programs.
- Banks that have been stashing huge piles of profits offshore would get a huge tax cut. Fortune 500 companies owe but have not paid about $750 billion in taxes on $2.6 trillion in profits they have stashed offshore, and would be able to bring them back at a tax rate of 10 percent.
- Hedge fund owners could get as much as a two-thirds cut on their individual tax rates. This would be a $1.5 trillion giveaway in 10 years, according to the Tax Policy Center, which would mostly go to Wall Street billionaires and the richest 1 percent — the same people Trump once said were “getting away with murder.”
- Heirs to Wall Street fortunes would enjoy a massive cut in estate taxes, an effective estate tax rate of about 16.6 percent, which would funnel about $81 billion into the pockets of Wall Street titans’ heirs.
Benjamin Franklin once said that “in this world nothing can be said to be certain, except death and taxes.” Unless, of course, you’re a Wall Street bank. Indeed, “death and taxes” is a fitting description for what the Trump administration and Republicans in Congress are cynically trying to serve working people, while aspiring for immunity for the 1 percent.
Goldman Sachs is emblematic of the greed and recklessness that blew up our economy in 2008, and of a system that not only coddles billionaires and big banks, but allows them to set the rules of the game, at the expense of millions of people.
While working people face stagnant wages even as productivity increases, the Trump administration and their billionaire buddies on Wall Street and in Congress continue to contrive ways to squeeze workers in order to fund corporate welfare.
Citizens are not taking this sitting down. Not only are they rejecting this preposterously unfair agenda, they are going a step further: demanding the cheaters and looters pay up — demanding that Wall Street pay its fair share in taxes. Complementing this week’s actions, the Take On Wall Street coalition is rallying around a series of reforms supported by citizens from across the political spectrum that would help ensure Wall Street pays its fair share, and would generate almost $1 trillion over 10 years. When it comes to patriotism, it’s time Trump puts his money where his mouth is and support proposals for the 1 percent to pay its fair share.
Despite Trump’s tweeted dismissal, this week’s marches demonstrated there is real concern out there about his tax returns. It’d be foolish for him to ignore the fact that this concern is not about an isolated case, but rather stems from a deeper outrage over his plans to let banks like Goldman Sachs and billionaires like himself continue to rig the tax code for their benefit.
Luísa Galvão is the advocacy and organizing coordinator for the Take On Wall Street campaign.