Ben Hallman, Huffington Post
James Gorman, Morgan Stanley’s chief executive, wrote a note to his 16,000 employees this week to urge them to pressure their elected congressional representatives to pursue a compromise to avert the looming financial budgetary crisis known as the “fiscal cliff.”
But even as he called for a “balanced solution,” lobbyists who represent Gorman’s bank were fighting to preserve an exemption that allows the company to enjoy a lucrative tax break unavailable to most Americans.
Morgan Stanley is one of about two dozen companies — mostly banks, but also large U.S.-based multinational companies with financing arms such as Ford Motor Co. and General Electric — that support a little-noticed tax exemption that allows businesses that earn interest on overseas lending to defer paying U.S. taxes on that income indefinitely. This “active financing” exemption technically expired at the end of 2011, but Congress, at the urging of bank lobbyists, is expected to extend it once again. The two-year cost of extending the tax break is an estimated $11.2 billion, according to the Joint Committee on Taxation.