Bailout Bonanza at State Street Bank

Everybody remembers two years ago, when State Street Bank was bailed out with $2 billion of our tax dollars. Taxpayers were furious – and rightfully so – that our hard-earned money was being used to get banks out of a crisis they created.

Fast forward to now. Families are still struggling to get out from under the bank-fueled crisis, but the banks themselves are doing better than ever. Today’s Boston Globe is reporting that State Street bank reported a huge profit for 2010 – $1.6 billion. So, you’d think State Street is back to paying its fair share, right? Think again:

Two years after receiving a $2 billion taxpayer-funded bailout, State Street Corp. expects to receive a federal tax refund of $885 million for 2010, the company confirmed, after taking losses on risky investments.

It’s not that times were tough: Boston-based State Street reported a $1.6 billion profit last year. The company manages money for pensions and handles accounting for hedge funds and mutual funds, and its revenues were up amid strong markets. But, like many other banks and companies, State Street was able to offset its tax bill with big losses sustained during the financial crisis.

Just to recap: State Street takes $2 billion in taxpayer funds. State Street uses that money to get to $1.6 billion in pure profits for 2010. State Street continues to receive federal tax breaks of nearly $900 million dollars.

But, what about the bank’s top execs? Surely they’re paying for the all the risky mistakes the bank has made, right? Not quite. According to the Globe, State Street CEO Joseph Hooley raked in $12.9 million and the chairman, Ronald Logue, took home $594,000 (not counting his other perks like a car and driver worth $74,000).

The worst part is that as I write this, politicians are arguing about which public services we need to cut to balance the budget. Here’s a crazy idea: What if we cut off the billions in tax breaks to profitable corporations like State Street bank instead?