Imagine a company that, for 85 years, polluted the environment by dumping harmful uranium, wood creosote, and rocket fuel waste (including on Native American land). That waste contaminated and sickened over 7,000 people. That company then paid $5.1 billion to resolve charges by the federal government. Then that very same government gave that company $550 million back in tax benefits, because the company was able to write their payment off as a “business expense.”
Sadly, this isn’t fiction, but a reality. Just last Thursday, Anadarko Petroleum paid the largest sum ever to resolve environmental charges. But on that very same day, the company announced it expected to receive a $550 million tax benefit due to this “business expense.” In fact, investors reacted favorably to the payment.
And this is the norm, rather than the exception for these kinds of payments. JPMorgan was able to write off part of a $13 billion payment for its role in the housing crisis that lead to the worst economic downturn in decades. A pharmaceutical company was able to write off its payment after it was fined for unlawfully advertising drugs.
We have standards and safeguards in place to protect the public and the environment, when they are violated people are hurt, and reckless companies shouldn’t get off the hook.
The problem is that corporations usually can write off most parts of their payments to resolve charges. And there is no clear clarification on the definition of penalties for tax purposes.
After already being victimized by these corporations which led to settlements and fines in the first place, taxpayers are then literally forced into paying for corporate wrongdoing in the form of tax breaks.
There is a solution to this problem, in the form of a bipartisan bill by Senators Jack Reed and Charles Grassley, the Government Settlement Transparency and Reform Act. The bill would end this ridiculous loophole, making sure that corporate wrongdoers don’t benefit from a tax break after they break the law.
Companies like Anadarko and JPMorgan must pay their full debt to society. Corporations shouldn’t get huge tax benefits from damaging the environment and sickening thousands of people, and their officers should be held responsible when they fail to inform and warn consumers about safety problems. When corporate wrongdoing threatens our well-being and safety, we need to stand up and say enough is enough, and stop letting corporations get away with their crimes.