|OPINION By Bob Weaver|
Consider this for free market tax breaks, while the federal government issues bailout money with few conditions.
This is in a world of multi-million dollar salaries and multi-million dollar perks and golden parachutes, while some congressmen rail against blue-collar wages.
Bloomberg is reporting this week that Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007.
The company's effective income tax rate dropped to 1 percent from 34.1 percent, according to Goldman Sachs.
The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.
Goldman Sachs just reported its first quarterly loss since going public in 1999, lowered its rate with more tax credits as a percentage of earnings and because of "changes in geographic earnings mix."
Essentially that means that the company is shifting financial operations to other countries that don't hound them for taxes.
U.S. Representative Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern.
The rate decline looks "a little extreme," said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC.
"I was definitely taken aback," Willens said. "Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions."
"This problem is larger than Goldman Sachs," Doggett said.
With their right hand out begging for bailout money, the left is hiding it offshore while you were sleeping.