Susan Luzzaro 6:30 p.m., July 31
Wall Street's Goldman Sachs, Which Got $10 Billion Government Handout, Paid Only 1% in Taxes
Here's one that should start a revolution. In October, Wall Street's Goldman Sachs, supposedly the best-managed investment firm (calling itself a bank) on the Street, got $10 billion and debt guarantees from the U.S. government, according to Bloomberg.com. But this year, Goldman will pay a mere $14 million in taxes, compared with $6 billion in 2007. The company's effective income tax rate plunged to 1 percent from 34.1 percent, Goldman admitted. Goldman lost money in its fourth quarter, but nonetheless raked in a profit of $2.3 billion in 2008. It passed out $10.9 billion in employee compensation and benefits. A tax and advisory firm called the 1 percent tax rate "a little extreme." U.S. Representative Lloyd Doggett, Democrat of Texas, said that, "This problem is larger than Goldman Sachs. With the right hand out begging for bailout money, the left is hiding it offshore." On another front, the banks getting a bailout were supposed to be forced to restrain ridiculously high topside compensation. But, using loopholes, those banks got out of that requirement.