American Taxpayers pay $5 Billion to Bank of America – tax loopholes makes corporate America shine with free money from middle class
Alan Hershey
Jun. 25, 2008

Bank of America made a very calculated move. They will gain $5 billion from American tax payers for buying Countrywide – the failed and alleged fraudulent mortgage company who is the root cause of sub prime debacle.

Bank of America Corp.'s $3 billion takeover of Countrywide Financial Corp. will be financed by 138 million tax-paying Americans.

Bank of America, led by Chief Executive Officer Kenneth Lewis, can use tax write-offs to pay for Countrywide, the country's biggest mortgage lender.

Washington Governor Christine Gregoire will announce fines against Countrywide today for alleged discrimination against minority borrowers and ask that the company's license to lend in the state be revoked, according to an e-mailed news release.

Countrywide was the biggest U.S. subprime lender in 2006 and 2007, according to Inside Mortgage Finance, a Bethesda, Maryland- based industry newsletter. Subprime mortgages were available to borrowers with bad or incomplete credit histories.

Tax law limits for five years the deductions an acquiring company can take on the losses from the company it purchases.. The amount Charlotte, North Carolina-based Bank of America can write off each year is based on its equity in Countrywide --the $3 billion purchase price plus $2 billion the bank invested last August -- multiplied by what's called the long- term tax-exempt rate, which changes daily and currently is about 4.5 percent.

American Taxpayers pay $5 Billion to Bank of America – tax loopholes makes corporate America shine with free money from middle class
Alan Hershey
Bank of America made a very calculated move. They will gain $5 billion from American tax payers for buying Countrywide...
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