Wall St
Some Wall Street companies might not resume paying New York City taxes for “a number of years” because they can offset future profits with the losses they are currently suffering, Mayor Michael Bloomberg said on Monday.
“I think it will be a number of years before they start paying taxes again,” the mayor told a news conference. “Look at those losses. They can carry them forward for a number of years.”
New York City relies heavily on its hometown financial industry for its tax revenues. The mayor added that some banks and brokerages already were asking the city to return some quarterly tax payments because they had overpaid.
Many companies rely on safe harbor rules, basing their estimated quarterly tax payments on what they paid in the previous year. This saves them from any penalties if their profits — and their tax bills — unexpectedly zoom higher.
But this time around, with many Wall Street companies still wandering in the subprime mortgage swamp, their earnings likely will fall below last year’s results.
Bloomberg was responding to questions about New York Gov David Paterson’s decision to ask the Legislature to slice aid for counties, cities and towns as part of a $1 billion menu of budget cuts that the Democratic governor wants them to enact in a special session paydayloans.
FEELING THE PAIN
New York state must close an estimated $26 billion deficit over the next three years, thanks to Wall Street’s sinking profits and the government’s years of overspending.
Filed under: money by TheDoor