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erpowers

(9,350 posts)
Fri Mar 18, 2016, 09:28 PM Mar 2016

Subsidization of Wall Street

First, can anyone give me information on how Wall Street is subsidized by the U.S. government? Second, can anyone tell me how, aside from electing Bernie Sanders President, the subsidization of Wall Street can be ended? I mentioned Bernie Sanders because I thought that if I just asked the question how to we end the subsidization of Wall Street people would answer Bernie Sanders. I am looking for policies that need to be put into place in order to end the subsidization of Wall Street.

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Subsidization of Wall Street (Original Post) erpowers Mar 2016 OP
Where to begin? forest444 Mar 2016 #1
What is the stock options loophole? Travis_0004 Mar 2016 #2

forest444

(5,902 posts)
1. Where to begin?
Fri Mar 18, 2016, 09:38 PM
Mar 2016

There are direct taxpayer subsidies, of course, notably their many write-offs and loopholes such as:

*the executive pay deduction: $10 billion
*the stock options loophole: $2.5 billion annual cost to taxpayers
*carried interest: $2.1 billion annually - plus $2 trillion in deposits hidden in the Caymans and such.
*and of course deduction for fines and penalties paid: roughly $8 billion a year, depending.

Not to mention the infamous TARP bailout fund of $700 billion or so.

But then there are indirect subsidies such as those on their discount interest rates, which are estimated to cost the Fed $83 billion a year in profits it would have otherwise made by charging Wall Street banks just 0.8% more a year (the subsidy).

http://www.bloombergview.com/articles/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-

Of course, all that pales to the estimated $20 trillion in Fed subsidies since 2008 - mostly in the form of undisclosed sweetheart or signature loans (many of them likely never to be repaid) and the $4 trillion or so in Quantitative Easing (bulk Fed purchases of junk bonds and other garbage the banks don't want on their balance sheet).

http://www.wanttoknow.info/10/12_fed_lending_wikileaks_releases_cia_experiments
http://www.theblaze.com/stories/2014/10/29/quantitative-easing-is-over-for-now-take-a-look-at-how-many-trillions-of-dollars-it-cost/

Those are just a few of the ways they bilk Uncle Sam. I'm sure someone more knowledgeable could really fill you in on the whole bag of horrors.

 

Travis_0004

(5,417 posts)
2. What is the stock options loophole?
Fri Mar 18, 2016, 10:22 PM
Mar 2016

I realize executives can be given stock options for pennies, and the company writes it off based on the value of the stock.

Thats not really a loophole, just how the law was written. And the executive who buys the stock treats the full amount as ordinary income and pays taxes on it.

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