To: Eric Holder, U.S. Attorney General
No $3 Billion Tax Break for JPMorgan's Wrongdoing
Victory! The creator of this petition declared the campaign a success. You can still sign the petition to show support.
As you negotiate what is likely to be the largest bank settlement for wrongdoing in U.S. history, please don't let JPMorgan deduct the settlement from their taxes. If they are allowed to do so, it could stick American taxpayers with a $3 billion tab.
Why is this important?
VICTORY UPDATE: We saw a partial victory on this campaign. The DOJ made a $2 billion portion of the settlement - the portion that is explicitly considered to be a "fine" - non-deductible for JPMorgan. This is excellent news and will save taxpayers $700 million. This is an exciting step in the right direction, though it's still far too little - we still have a long way to go to permanently end these tax breaks for corporate misdeeds.
JPMorgan is negotiating $13 billion in settlements with the Department of Justice for mortgage lending abuses they allegedly committed during the housing crisis. However, taxpayers could end up underwriting more than $3 billion of those settlements.
That's because JPMorgan is likely to claim the settlements as tax deductions. Even though settlements like these are thought of as punishment for corporate wrongdoing, companies claim their settlement costs as tax write-offs all the time. They treat it as just another business expense.
We can’t let that happen. The financial crisis caused by banks’ irresponsible practices landed us in a recession that we’re still struggling to recover from. Taxpayers shouldn’t have to pay any more for JPMorgan’s bad actions.
Just last week, the Federal Housing Finance Agency, which houses Fannie Mae and Freddie Mac, made a separate $5.1 billion settlement with JPMorgan. And, sadly, the FHFA let JPMorgan take that settlement as a write-off - effectively handing JPMorgan a $1.5 billion tax deduction.
We need the Department of Justice to do better. The DOJ has the power to include a provision in JPMorgan's settlement that prohibits them from taking the settlement as a tax write-off. We just need to convince the DOJ to do the right thing. They've done it before, including with one of BP's settlements for the Gulf oil spill.