A couple days ago, when Citigroup reached its deal to pay back $20 billion of TARP funds, CEO Vikram Pandit sounded like a man who was pretty pleased with himself. “By any measure of financial strength, Citi is among the strongest banks in the industry,” he said in a statement.
Last night we found out part of the reason why he feels so good. Turns out the IRS issued an enormous tax exemption to Citigroup allowing it to retain $38 billion in tax breaks that would have declined in value. It’s a move that the Washington Post says could “easily outstrip [the] profits” taxpayers make from the sale of the government’s Citigroup shares. Time to rage, populists.
Citigroup gains massive tax break in deal with IRS [Washington Post]
A Tax Break for Citigroup With Payback of Bailout [NYT]