JPMorgan should get no tax deduction in settlement deal

While the Justice Department should be commended for coming down hard on JPMorgan Chase & Co. for mortgage lending abuses during the housing crisis, the agency should also ensure that JPMorgan not be allowed to deduct the settlement from its taxes.

The tentative deal’s $13 billion settlement, the largest such deal in US history, would certainly send a strong message to all corporate wrongdoers, but contrary to your Oct. 29 editorial, “JPMorgan deal should be model for future settlements,” this settlement model must be amended to protect the American taxpayer.


As currently written, taxpayers could end up underwriting as much as $4.5 billion of the settlement. That’s because JPMorgan is likely to deduct the cost of the settlement from its taxes as a business expense.

The Justice Department has the power to deny the deduction, and that should be part of the model. Last year, after a public outcry, the department made one of BP’s Gulf oil spill settlements nondeductible, saving taxpayers $1.7 billion.

Get Arguable with Jeff Jacoby in your inbox:
Our conservative columnist offers a weekly take on everything from politics to pet peeves.
Thank you for signing up! Sign up for more newsletters here

The financial crisis caused by banks’ irresponsible practices landed us in a recession that we’re still struggling to escape. Taxpayers shouldn’t have to pay any more for JPMorgan’s bad actions.

Deirdre Cummings

Tax and budget

program director



Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.
We hope you've enjoyed your free articles.
Continue reading by subscribing to Globe.com for just 99¢.
 Already a member? Log in Home
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com