If you’re like me, you didn’t clear $2 billion this year. I know, I know, it was a terrible year for all of us. I’m sure that next year will be better. Especially for A.I.G., which won’t be paying any taxes this year, and probably not for the next several years, either!
Apparently, despite A.I.G.’s sizable $1.6 billion in profits (they declared more than $17 billion, but $1.6 reflects reality), they will be taking this year off from income tax preparation because of a fancy loophole our delightful government arranged for them. Sorry, H&R Block! Insert populist-leaning rabble-rousing here:
This rule-twisting could deprive the government of tens of billions of dollars, assuming the firm remains profitable. The tax dodge, and let’s be honest, that’s what it is, also will most likely help goose the bonuses of A.I.G.’s employees, some who helped create many of the problems that led to its role in the financial crisis.
You see, when A.I.G. suffered catastrophic losses and required a taxpayer bailout, they also were able to declare those losses in some sort of ridiculous tax avoidance scheme (something called “net operating losses”); moreover, because of our ridiculously unfair tax code, they are able to spread those losses over several years, thus eliminating the need for a 1040 for the next decade. Also, A.I.G.’s executives will be able to use such NOL’s to pad their bonuses:
The tax break for A.I.G. also perversely benefits employees who are paid based on the company’s performance and usually in stock, which is being lifted by this backdoor handout. The biggest beneficiary is Robert H. Benmosche, A.I.G.’s chief executive since 2009, who has been granted tens of thousands of shares.
Congrats, Bob! I can imagine that replacing all those worn-out bootstraps really adds up.