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WASHINGTON—Four former members of the Congressional Oversight Panel for the Troubled Asset Relief Program are calling for an end to tax breaks favoring New York-based American International Group Inc.
Former Chair Elizabeth Warren and former panel members Damon Silvers, Mark McWatters and Kenneth Troske, issued a joint statement Monday asking that the tax exemptions granted to AIG at the height of the 2008 financial crisis be revoked. Specifically, the exemptions override long-standing tax laws limiting the extent to which a company can offset future taxes with past losses.
Citing AIG's recently reported fourth-quarter profits as well as the $182 billion bailout the company has already received, the four said continuing the exemptions was unnecessary and unfair.
“Exempting AIG from the normal corporate tax rules is harmful to the public interest,” Mr. Silvers said. “This corporate tax break transfers public money to AIG's private shareholders and inflates executive pay at AIG—both at the public's expense.”
Moreover, the ongoing tax treatment exacerbates the “too-big-to-fail” problem and also grants AIG an unfair advantage over its competitors, the members charged.
“This tax break only adds to the benefits received by the executives, shareholders and creditors of AIG, all of whom profited from the taxpayer-financed bailout,” Mr. McWatters and Mr. Troske added in a joint statement. “More important, this benefit exacerbates the distortions produced by Treasury's bailout of too-big-to-fail firms while also allowing Treasury to further mask the true cost of the TARP.”
An AIG spokesman said the company disputes the watchdogs' contentions.
“AIG is adhering to well-settled tax law that a company can use losses to offset its income,” Mr. Herr said in a statement. “More important, AIG has repaid the American taxpayer more than $45 billion to date and is committed to taking all possible steps so that American taxpayers can continue to recoup their investment in AIG at a profit.”
NEW YORK (Reuters)—The Federal Reserve Bank of New York on Tuesday sold the remaining portion of mortgage-backed securities acquired in the 2008 rescue of American International Group Inc.