Was federal income tax paid by Amazon in 2017?
Amid national debates about income inequality and tax cuts for the ultra-rich, one talking point is frequently highlighted in online memes and by political figures such as Bernie Sanders is that online retailing giant Amazon.com, despite taking in $5.6 billion in profit in 2017, paid no federal corporate income taxes for that year: Bernie Sanders   (With respect to the claim about Amazon employees on welfare, see our fact check on that topic here.) here In regards to U.S. federal income taxes, the claim that Amazon paid none in 2017 is almost certainly factual. While Amazons tax filings are not public, their SEC filing for the year 2017 illustrates that the company used the tax code expertly (and legally) to their advantage, so well that the company anticipated a $137 million tax refund from the federal government (numbers are in millions of dollars): SEC filing   Amazon did pay taxes to individual U.S. states ($211 million) and to international jurisdictions ($724 million), but their federal income tax burden was (less than) zero. The filings indicate that two factors provided the lion share of Amazons reduced federal tax liability: $220 million worth of tax credits, and $917 million in tax-deductible executive pay derived from the sale of stocks:   The third negative item in the SEC filing, $789 million in reduced tax burden as a result of the 2017 Tax Act, will be applied to future tax years, according to a report from the Institute on Taxation and Economic Policy. report SEC filings do not require a company to list the specific credits they utilize, but there are several avenues Amazon would likely have pursued. Annette Nellen, a professor and director of the Master of Science in Taxation program at San Jose University, said that Amazons write-offs likely include credits for research and development, domestic production, and equipment depreciation. And according to a report from the Economic Policy Institute, Amazon receives myriad tax incentives from state and local governments as well: said report The expansion of Amazons physical distribution network has coincided with a strategic business plan of negotiating millions in tax abatements, credits, exemptions, and infrastructure assistance from state and local governments in the name of regional economic development. By the end of 2016, Amazon had likely received over $1 billion in state and local subsidies for its facilities, which would include not only fulfillment centers but sortation centers that only sort packages, mailing centers, and other facilities. Publicly-traded corporations can list the stock options they grant to employees as a business cost in their accounting, and if an option-receiving employee makes over $1 million a year in salary, the profits from the sale of those stocks can be then counted as a federal income tax deduction for the corporation (primarily due to a Clinton-era compromise over how to cap executive pay). Stock options allow an employee to purchase stock in their employers company at a set price, regardless of its current market value: list Options give executives and investors the right to buy shares of a company at a later date and at specific prices. For example, if a chief executive joins a media company when its stock is trading at $55 a share, but years later, the share price has skyrocketed to $100, that chief executive can still buy the shares at $55, pocketing the massive difference. In the cases of their highest paid employees, Amazon and other companies are able to deduct the massive difference employees make when they sell that stock at a profit. According to the Center for Tax Justice, because companies typically low-ball the estimated values, they usually end up with much bigger tax write-offs than the amounts they deduct as a 'cost' in computing the profits they report to shareholders. The $917 million in stock-based compensation listed in Amazon's SEC filing likely stems from their top employees' cashing in on their stock options for a large profit. deduct While it is impossible to know the exact amount of money Amazon did or did not pay to the federal government in 2017, their own accounting suggests that they expected their federal corporate income tax burden to be negative that year.  U.S. Securities and Exchange Commission.  Amazon.com Inc. Form 10-K"
  2 February 2018.
 Gardner, Mathew.  "Amazon Inc. Paid Zero in Federal Taxes in 2017, Gets $789 Million Windfall from New Tax Law."
  Institute on Taxation and Economic Policy.  13 February 2018.
 Tobias, Manuela.  "Bernie Sanders Says Amazon Paid No Federal Income Tax in 2017. He's Right."
  Politifact.  3 May 2018. 
 Jones, Janell and Ben Zipperer.  "Unfulfilled Promises."
  Economic Policy Institute.  1 February 2018. 
 Gunjan, Banerji.  "Potential Loser in Tax Overhaul: Executive Stock Options."
  The Wall Street Journal.  19 December 2017.
 Citizens for Tax Justice.  Fortune 500 Corporations Used Stock Option Loophole to Avoid $64.6 Billion in Taxes Over the Past Five Years."
  9 June 2016.
Readers responded with bemusement and skepticism in June 2019 after an "Official 2020 Trump vs Democrat Poll" emerged online and on social media, appearing to pose questions framed in a heavily anti-Democrat way. For example, one survey question asked, "Who would you rather see fix our Nation's shattered immigration policies? President Trump // A MS-13 loving Democrat," while another somewhat tautological question asked: "Who would you trust to NOT raise your taxes? President Trump // A High Tax Democrat." Such bias in the questions, as well as some clear nods to Trump's go-to insults against his political opponents (the poll referenced "a Lyin' Democrat" and "a Low IQ Democrat"), prompted inquiries from Snopes readers who were uncertain whether they were reading a parody or hoax or an official Trump 2020 campaign poll. One reader asked, "Oh my gosh, is this really from the Trump campaign? Or some satire site?" while another wrote, "Is this for real? It sounds too crazy ..." The survey was indeed published by Trump's official re-election campaign committee, on that campaign's official website. An archived version can be read here. The site on which it appeared, donaldjtrump.com, is run by two formally registered, pro-Trump committees and the Republican National Committee (RNC). The website contains the following disclaimer, which makes clear the official nature of the June 2019 survey and all other content featured on the site: here "Paid for by the Trump Make America Great Again Committee, a joint fundraising committee authorized by and composed of Donald J. Trump for President, Inc. and the Republican National Committee." Committee Inc Committee The poll's true purpose may not have been to create a set of results that reflected in a misleadingly positive way on the president but rather to harvest contact information  respondents were required to enter their name, zip code and email address in order to submit their answers.  The full list of questions was as follows: The "Trump vs Democrat" poll bore similarities to another survey on the subject of "mainstream media accountability," which Trump's website published in February 2017, and that included heavily slanted questions such as. "Do you feel that the media is too eager to slur conservatives with baseless accusations of racism and sexism?"  accountability DonaldJTrump.com. "Official 2020 Trump vs Democrat Poll."
 June 2019. DonaldJTrump.com. "Mainstream Media Accountability Survey."
 February 2017. Pop superstar Taylor Swift is known for being generous to her fans. But is she charitable enough to help Washington pay interest on the national debt? The#squadat the Republican Party of Florida asked (and answered) the question with a viral image on theirFacebook page on Oct. 29, 2015, the same week Swift was in the Sunshine State for concerts in Miami and Tampa. How many concerts would Taylor Swift have to perform to pay off one day of interest on our national debt? She would have to perform every day for three years, the post read. We just couldntshake it off. We wondered, would it take three years or more for the biggest pop star in the country to pay off the interest on the national debt, playing a concert every single night? We checked to see if it would be possible, even in ourwildest dreams. Because theres no telling just how much Swift is personally raking in these days (beyond, you know, a lot), theres going to be a lot of estimating here, possibly ablank spaceor two. But we do know the national debt is up over the $18 trillion mark these days, so shes got her work cut out for her. Just so we didnt cause anybad blood, we reached out to the state GOP and asked them how they were figuring Swifts tour schedule through 2019. They credited the stat to the conservative think tank the Heritage Foundation. We notedthe original version was slightly different: How long would it take Taylor Swift to pay off our debt? Forbes estimates that T. Swift earned around $80 million in 2015 and performed 55 concerts. She would have to perform every day for three years to pay for one day of interest that accrued on our debt. They also point out how hard other big names would have to work, like boxer Floyd Mayweather having to fight for every night for 331 years or Bill Gates having to fork over 229 lifetimes worth of personal income to pay the same bill. The foundation told us they figured out Swifts workload by calculating that she took home 28.6 percent of the gross receipts from her March 2013-June 2014 Red Tour, then stretched it out as if she played for 365 nights straight. That ends up being $526,000 per show, or $192 million for a whole year of Swift concerts (and a whole lot ofInstagrams). So how much is the daily interest on our national debt? Heritage used the 2015 estimate for interest from the Office of Management and Budget, which was$229.2 billionfor the year. One day of that is $628 million. Break that down and Swift would have to play every night for just more than 3 years to pay for one measly day of interest on an $18 trillion debt. Now, the Heritage Foundation told us they used the Red Tour because it has a full net estimate. But we here at PolitiFact Florida always like to note wheneverything has changed. Swift is a megawatt star these days, and she has been practically printing money since this years1989 World Tourbegan. The tour topped$185 millionbetween May and mid October. Thats about about 60 shows, give or take, with 20-plus to go until Swift can take a breather. ForbesandBillboarddo generally usea third of gross receiptsas a rough guideline  remember, those tours have to pay for all sorts of things besides the artist, like sets and costumes and roadies. The$80 millionForbesestimatefor June 2014-June 2015 is hard to parse, because it includes all income, which could range fromt-shirts to albums to streaming royalties. Well note its really not possible to say what she makes from any given show, because every venue is different. The tour stood to make $2.75 million from herHalloween show in Tampa, with a $928,000 bonus if the show sold out. (We cant confirm whether it did, butreports make it soundlike it came close.) In any case, we figure these days it's fair to say Tay Tay is worth closer to a very rough average of $1 million per show, especially when she's playing bigger arenas. That would really help her put a dent in the nations outstanding bills. We could also cheat with some creative bookkeeping and use data from theFederal Reserve Bank of St. Louis, which puts 2015 debt interest at a slightly lower $223.3 billion. That works out to $612 million per day. Do the simple math and our estimate knocks Swifts theoretical slate of shows down to about 612 nights. Thats a little over 1 years of concerts. But theres always the chance she wouldnt want to fork over all her earnings for the interest payments. She could use a little walking around money, you know? Also, she needs a little time to go home to catsMeredith GreyandOlivia Benson. Our ruling The Republican Party of Florida asked, How many concerts would Taylor Swift have to perform to pay off one day of interest on our national debt? She would have to perform every day for three years. This viral image was inspired by the Heritage Foundation, and while their math is based on old estimates, it stands up to scrutiny. Well note that Swift likely makes a lot more money these days, so she could probably pay the bill faster. But the point that it would take an inordinate amount of time to pay just a single days interest on the $18 trillion-plus national debt stands. We rate the statement Mostly True. Ohio Senate President Keith Faber and other members of the GOP majority caucus stood in front of placards that said job creation and workforce development to talk with reporters about their priorities for the 130th General Assembly. Faber said the first bills introduced by Senate Republicans would include legislation focused on job training and placement to maintain the strength of the state economy. Ohio companies, he said, export more goods and services globally than 41 other states. That aroused the curiosity of PolitiFact Ohio. We wanted to know more, partly because the ranking means Ohio would trail less populous states. The Ohio Department of Development said in its latest report on state exports that Ohio was the 9th largest exporting state, confirming what he said. The Development Department is an affiliate of the U.S. Census Bureau. With the U.S. Commerce Department, it is the official source for U.S. export and import statistics. We followed our curiosity further into its data from 2011, the most recent available: In global exports, Ohio trails Texas, California, New York, Washington, Illinois, Florida, Louisiana and Michigan. The state's largest export market is Canada, followed by Mexico, China, France and Brazil. The state's largest merchandise export category is transportation equipment. And export-supported jobs linked to manufacturing account for an estimated 7.1 percent of Ohio's total private-sector employment. Faber's statement rates True on the Truth-O-Meter. Claim: A Facebook coupon offering 50% off at Target stores is real.  Example: [Collected via Facebook, November2015]I saw this on Facebook this afternoon. Similar to the Kohl's hoax coupon going around in the last week or so.   Origins: InNovember 2015, a survey scam began circulating on Facebook which promised users 50% off at Target stores in exchange for liking, commenting, and sharing the scam with their friends:    The scam circulated via a variety of images and directed people toseveral different URLs (such as holidayschristmas.com and Coupon-Christmas.com), none of which were associated with Target stores:   Once users commented, shared and liked the coupon  ensuring that the scam reached a wider audience  they were directed to a survey site where they were required to provide personal information, fill out surveys, and make a purchase before they could retrieve their coupons. Even then, however, a 50% off Target coupon was unlikely to materialize, as this promotion wasnotconnected with the store: not   These survey scams are quite popular on Facebook. The customers of Target (previously)Costco,Home Depot, Lowe's, Kroger, Best Buy, Macy's, Olive Garden, Publix, and Walmarthave all been targeted by similar scams. Costco Home Depot Lowe's Kroger Best Buy Macy's Olive Garden Publix Walmart These ruses are so prevalent that theBetter Business Bureauissued a warning about them in 2014:Don't believe what you see. It's easy to steal the colors, logos and header of an established organization. Scammers can also make links look like they lead to legitimate websites and emails appear to come from a different sender. Better Business Bureau Legitimate businesses do not ask for credit card numbers or banking information on customer surveys. If they do ask for personal information, like an address or email, be sure there's a link to their privacy policy. When in doubt, do a quick web search. If the survey is a scam, you may find alerts or complaints from other consumers. The organization's real website may have further information. Watch out for a reward that's too good to be true. If the survey is real, you may be entered in a drawing to win a gift card or receive a small discount off your next purchase. Few businesses can afford to give away $50 gift cards for completing a few questions.    Last updated: 25 November 2015 Originally published: 25 November 2015 In July 2020, an advertisement for U.S. President Donald Trump's 2020 reelection campaign started appearing on Trump's official Facebook page showing a comparison of two images entitled "Public Safety" and "Chaos and Violence." The "Public Safety" image showed Trump surrounded presumably by various members of law enforcement, while the "Chaos and Violence" image supposedly showed protesters beating up an American police officer: started appearing Shortly after this ad started running, media outlets such as the BBC noticed that the image on the right was not taken in 2020, and that it didn't show an incident from the United States. This image was actually taken in 2014, and shows a clash between police and protesters in Ukraine.   BBC The BBC reported: A post by Donald Trump's official Facebook account purports to show violence in the US but is in fact of an event in another country. The advert shows one image of Mr Trump in a calm setting talking to police officers beside another of a security official being surrounded by protesters, saying: "Public safety vs chaos and violence". However, the image is a photo from a pro-democracy protest in Ukraine in 2014. This photograph was taken by photographer Mstyslav Chernov in February 2014 during a protest in Kyiv, Ukraine. The image is available via Wikipedia under a "Creative Commons" license. The terms for this photograph state that it is free to use  as long as the photographer is given proper credit. But the advertisement on Trump's Facebook page offered no mention of the photographer.  Wikipedia Creative Commons Here's an uncropped version of Chernov's photograph:   Chernov confirmed to Business Insider that the Trump ad did indeed use his photograph from Ukraine in 2014. Chernov went on to say that the only way to combat this sort of deception is through "education and media literacy." Business Insider Chernov said: "Photography has always been used to manipulate public opinion. And with the rise of social media and the rise of populism, this is happening even more," he said. "The only way to combat this is through education and media literacy. When people learn to independently distinguish truth from lies, then the number of manipulations will decrease." Giles, Christopher.  "Facebook: Trump Posts Misleading Ad Using Ukraine Photo."
  BBC.  22 July 2020. Jankowicz, Mia.  "A New Trump Campaign Ad Depicting a Police Officer Being Attacked by Protesters is Actually a 2014 Photo of Pro-Democracy Protests in Ukraine."
  Business Insider.  22 July 2020. Among the many vexing problems with which the world continues to grapple is the issue of child marriage, a matter that predominantly affects girls in less developed countries. As the United Nations Population Fund (UNFPA) notes, 20 percent of girls worldwide are married before reaching the age of 18, and in some parts of the globe the rate is twice as high: UNFPA Child marriage denies girls the right to choose whom and when to marry -- one of lifes most important decisions. Choosing one's partner is a major decision, one that should be made freely and without fear or coercion. On this, virtually all countries agree. Child marriage is a human rights violation. Despite laws against it, the practice remains widespread: Globally, one in every five girls is married, or in union, before reaching age 18. In the least developed countries, that number doubles  40 per cent of girls are married before age 18, and 12 per cent of girls are married before age 15. Child marriage directly threatens girls health and well-being. Marriage is often followed by pregnancy, even if a girl is not yet physically or mentally ready. In developing countries, nine out of 10 births to adolescent girls occur within a marriage or a union. In these countries, complications from pregnancy and childbirth are the leading cause of death among adolescent girls aged 15 to 19. Girls who are married may also be exposed to sexually transmitted infections, including HIV. When girls marry, they are often forced to drop out of school so they can assume household responsibilities. This is a denial of their right to an education. Girls who leave school have worse health and economic outcomes than those who stay in school, and eventually their children fare worse as well. Unfortunately, social media platforms are full of inaccurate postings on the subject from persons who are not seeking to raise awareness of the child marriage issue, but simply to demonize other religions and cultures. The following is one such example of this phenomenon:  To all you misguided, uninformed liberal women demonstrating in favor of embracing Islam, this young lady is being sold into sexual slavery as a child bride. She is a Christian. She watched her father beheaded and her mother raped. Where is her safe place? the meme asks. However, the blonde girl pictured here was not being sold into sexual slavery as a child bride by Muslims (or anyone else), and no credible reports (outside of the inflammatory meme itself) suggested she was a Christian who had seen her "father beheaded and her mother raped." The image used in the meme originated with a (no longer available) video from 2013 that captured a 7-year-old girl participating in a Quran recital competition, as noted in a Morocco World News article: article The picture shows an ISIS member, seemingly in his thirties, with a seven-year-old, crying girl, who had been interpreted as his bride. The photo sparked widespread condemnation on social media before a video on YouTube proved it to be a hoax. The picture generated several theories. The most popular theory [was] that the young girl had been converted to Islam before being forced to marry the ISIS member appearing in the picture .. The website Arabic Canada solved the mystery surrounding the outrageous picture, by sharing a video of what seems to be a Quran recital competition -- from which the picture was taken -- organized by ISIS in Klassa, a neighborhood in Aleppo, in 2013. The video shows the ISIS member, who was misleadingly presented as the young girls groom, having a small chat with her before she recites verses of the Quran. Feeling embarrassed for making several mistakes during her recitation, Ghada, the young girl, starts crying before the man returns. He then clearly tries to comfort her and boost her spirits. The referenced Arabic Canada website (now defunct) wrote of this picture as follows (roughly translated from Arabic): wrote A seven-year-old girl looks very frightened, while the man standing next to her looks smiling and happy. The text accompanying the photograph claims that the man in the picture forced the girl to marry him. Some versions even went so far as to identify the girl as a Christian who had been forced to convert to Islam and read the Quran. Of course, the picture produced a feeling of disgust in everyone who saw it. Some newspapers wrote articles denouncing the phenomenon of child marriage in Islam. One newspaper of course took the opportunity to refer to the marriage of six-year-old Aisha [the third wife of the prophet Muhammad] and claimed that Islam permitted and encouraged child marriage. third wife The photo is actually a screenshot from a video of a children's recitation contest held in Aleppo in September 2013, and although the organizers of the contest certainly belong to ISIS, the video includes no reference to marriage. The dismay on the girl's face was apparently triggered by her having made a mistake in reciting the Quran. Other screenshots from the video captured the girl looking considerably less distraught:    This isn't to say that child marriage isn't a real problem, or that it and other depredations  such as beheadings and rape  haven't been perpetrated by those associated with ISIS, but the image used in this meme isn't representative of any of those issues. Morocco World News.  "Truth Behind Alleged Marriage of ISIS Member with 7-Year-Old Girl."
  18 August 2014. United Nations Population Fund.  "Child Marriage."
  Accessed 18 March 2019. Arabic Canada.  " :       7 ."
  13 August 2014. In late July 2020, Snopes readers asked for verification of numerous social media posts that stated Target had canceled its annual "Shop with a Cop" program, which is officially known as "Heroes & Helpers," in an effort to "distance themselves from Police Officers." Here is an example of one such post circulating on Facebook:   Similar posts also made the rounds on Twitter, and to add to the confusion, a website called The Courier Daily only reported that people were talking about the rumor on Twitter but didn't offer any evidence for the claim. posts website We reached out to the source itself, asking Target Corporate whether it had ended the long-standing program that pairs children from low-income backgrounds with local law enforcement officers for holiday shopping trips funded by charitable donations. A spokesperson for Target told us that the program will continue, although details about how it will move forward amid the COVID-19 pandemic are still pending. In response to our question asking whether the program had been canceled, the company sent the following statement: We plan to continue to support children with Heroes & Helpers events across the country this holiday season. Like many of our holiday programs, were carefully considering how to manage these events during the COVID-19 environment in a way that ensures the health and safety of our team and guests. We will have additional details to share as we approach the holiday season. The program was launched in 2009 and takes place in stores nationwide. To date, $5 million in grants has been used to support the shopping trips, and more than 100,000 children and 60,000 police officers have participated, per Target. program The false social media rumors may have been inspired by the fact that since the May 25, 2020, death of George Floyd in Minneapolis police custody, there have been ongoing protests against and conversation about police violence and racism in America, spurring calls to reform policing practices and even some activists calling for police departments to be defunded. George Floyd However, Target, as of this writing, doesn't plan to cancel the program as a result of the racial justice protests. With the information currently available, we rate this claim  A Bullseye View.  "Target Teams Up with Donnie Wahlberg to Celebrate 10 Years of Heroes & Helpers."
  4 December 2019. Trujillo, Damian.  "Shop With a Cop Foundation Considers Name Change to Reconnect with Community."
  KNTV.  2 July 2020. Hill, Evan, et al.  "How George Floyd Was Killed in Police Custody."
  The New York Times.  31 May 2020. If theres one issue that binds Republicans, its a preference for low taxes. So its no surprise that in the first debate of the 2012 presidential campaign -- held May 5, 2011, in Greenville, S.C. -- the topic came up.At one point, Fox News commentator Juan Williams asked Gary Johnson -- the former Republican governor of New Mexico and a strong libertarian -- about corporate taxation.Gov. Johnson, Williams said, the nation's unemployment rate is 8.8 percent and this week, jobless claims rose to their highest level in eight months. Among your proposals for getting the private sector to start hiring are eliminating corporate income tax, doing away with the federal minimum wage law and to stop extending unemployment benefits. Isn't that just a windfall for big business?Johnson responded, Well, absolutely not. I think that repealing, or doing away with the corporate income tax is simply getting us back to where we were. And we need to understand that the corporate income tax is a double tax -- that we all own the corporations, and when income gets distributed to us, we pay the tax on that. So, we have the highest corporate income tax in the world right now. Let's abolish it.We have looked at the question of whether the United States has the highest corporate income tax in the world inpreviousitems, so we thought wed revisit it now.There are two primary ways to compare corporate tax burdens. One is to compare statutory corporate tax rate -- the rate thats actually on the books.The Organization for Economic Cooperation and Development, a group of more than two-dozen large, industrialized democracies, publishes the rates of its member countries. The most recent data shows Japan on top at39.54 percent, vs. 39.21 percentfor the United States. Japan had been scheduled to cut its corporate tax rate to a level below the United States, but the earthquake, tsunami and nuclear disaster that crippled portions of the country earlier this yearhas left thatin doubt.The other way to look at it is to gauge what firms actually pay, once exclusions and other adjustments are taken into account. This is called the effective tax rate.The World Bank hasassembled datafrom 183 nations and made a series of statistical adjustments to produce a full international comparison of effective tax rates. By this measurement, the U.S. rate is considerably lower than the published rate -- 27.6 percent. But in a comparative sense, that's still pretty high: Among larger international economies, only Japan, New Zealand and Thailand imposed a higher effective rate, according to the World Bank study.The World Bank also produces another -- and broader -- statistic. It factors in not only the corporate profit tax but also a range of other taxes paid by businesses, including the cost of employee taxes borne by the employer. When the World Bank ranked countries from the lowest level of taxes to the highest, the U.S. ranked 124th out of 183 -- meaning corporate taxes were relatively high. A number of other large and/or democratic countries were higher, including Austria, Belgium, Brazil, China, France, Hungary, India, Italy, Spain and Sweden.This last measure provides a wider snapshot of U.S. tax policy toward businesses, but it also introduces some complications. Factoring in the employer-paid portion of labor taxes makes the corporate tax rate seem higher in countries that provide higher benefits such as pensions or health care through business taxes, while making the rate seem lower for countries that provide less generous benefits through the tax code. So making apples-to-apples comparisons can be tricky.There's also broader context that Johnson doesn't get into.In a previous item, we noted that when all taxes, including those such as personal income taxes and property taxes -- not just corporate taxes -- are taken into account and compared to gross domestic product, the U.S. doesn't rank near the top of the OECD table in total tax burden.Still, Johnsons claim was more limited, addressing only corporate taxation.To be more accurate, Johnson should have said the United States has the highest corporate tax rate rather than the highest corporate taxes. By using the term corporate taxes, Johnson opens the door to the broader World Bank figure, which would put a number of other major countries above the U.S. in the rankings.That way of looking at it would undercut Johnsons argument. On the other hand, he is close to correct when using the two more common benchmarks -- statutory tax rates (in which the U.S. trails only Japan, for now) and effective rates (where the U.S. trails only Japan, New Zealand and Thailand). On balance, we rate Johnsons statement Mostly True. Claim:  E-mail reproduces a 1999 newspaper article warning about potential troubles with Fannie Mae. Status:  True. Example:  [Collected via e-mail, September 2008] Right out of the pages of the NY Times!!!And look at the date..!!!  September 30, 1999Fannie Mae Eases Credit To Aid Mortgage Lending  In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets  including the New York metropolitan region  will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.  [Rest of article here.] here Origins:  In any crisis, one of the most common reactions is to ponder the question, "How did we get into this mess?"  People begin to search for explanations about who was responsible for bringing about the current state of  affairs, who had the ability to head it off (but failed to act or was thwarted), and who foresaw the looming danger (but declined to speak up or was ignored).  With the United States currently in the throes of an economic crisis, of which one symptom was the September 2008 government takeover of the foundering Federal National Mortgage Association (commonly known as Fannie Mae), a nine-year-old warning about the home mortgage underwriter's being vulnerable to economic problems that could require government rescue was bound to pique public interest. On 30 September 1999, the New York Times published an article entitled "Fannie Mae Eases Credit to Aid Mortgage Lending" by Steven A. Holmes.  The complete text of the article is available online, but in a nutshell the Times reported that Fannie Mae was easing its credit requirements for home mortgage loans in response to increasing pressure from a variety of groups: text  Clinton administration officials who wanted Fannie Mae "to expand mortgage loans among low and moderate income people" (particularly minority groups).  Stockholders who wanted Fannie Mae "to maintain its phenomenal growth in profits."  Banks, thrift institutions and mortgage companies (from whom Fannie Mae purchases loans) who wanted the company to facilitate  "more loans to subprime borrowers." In light of recent events, what caught the attention of most readers was a couple of paragraphs in the middle of the article cautioning about the possible consequences of Fannie Mae's loosening its credit requirements: In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.  "From the perspective of many people, including me, this is another thrift industry growing up around us," said Peter Wallison a resident fellow at the American Enterprise Institute. "If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry." Another New York Times article that has attained a significant amount retrospective interest is an 11 September 2003 article entitled "New Agency Proposed to Oversee Freddie Mac and Fannie Mae" by Stephen Labaton, which reported on the efforts of the Bush administration to create a new regulatory agency to assume oversight of those mortgage lenders: article The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios. The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac  which together have issued more than $1.5 trillion in outstanding debt  is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates. Of especial interest to current readers were the following paragraphs about Congressional resistance to the Bush administration's regulatory proposal: Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing. "These two entities  Fannie Mae and Freddie Mac  are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Last updated:  2 October 2008    Sources:   Holmes, Steven A.  "Fannie Mae Eases Credit to Aid Mortgage Lending."   The New York Times.  30 September 1999.    Labaton, Stephen.  "New Agency Proposed to Oversee Freddie Mac and Fannie Mae."   The New York Times.  11 September 2003. Gov. John Kasichs wish to sell off six state prisons has become yet another partisan political hot potato in Columbus. Then again, what isnt during budget season.But state Rep. Matt Lundy, an Elyria Democrat, kicked it up a notch with comments during a May 2 news conference called for the purpose of throwing cold water on the Republican governors plan to sell off five adult prison facilities and one youth detention center.Kasich has said the transaction could net Ohio a profit of $200 million.Lundy disagrees. He argues that there still will be bonds and improvement debts to be serviced and that will cut into the profit.He likened the proposal to an insane yard sale and questioned the logic of selling state assets during a down economic period when they may fetch low bids.He also accused Republicans in control of the House of helping Kasich to lure buyers.The substitute budget now adds in tax breaks and tax deductions for those who buy these prisons, Lundy said. The House passed its version of the budget on May 5.Politifact Ohio decided to take a closer look.The House did propose a sales tax exemption, income tax deduction and commercial tax exclusion for any buyer that strikes a deal with Ohio to take over the prisons offered for sale. Lundy said such friendly trinkets will eat away at the states expect profits on the deal.So, why was it included? Kasichs proposal didnt offer the tax breaks but the House Republicans did.House Finance Chairman Ron Amstutz, a Wooster Republican, said the tax provisions were added to assure that the private buyer of the prisons would be treated like any other state entity since they will essentially be performing a state function by housing inmates.Typically state entities dont pay taxes on their functions and that is true of local governments, as well, Amstutz said. And I think the desire is to maintain that status in order to provide for services at the lowest cost that we can.If the private entities were to pay these particular taxes, which go back to supporting the local communities where the facilities are located, then basically the state taxpayers would be subsidizing the local taxpayers at that point for a state function and typically we dont do that, Amstutz explained.State prisons spokesman Carlo LoParo noted, however, that any buyer of the state prisons would be expected to pay property taxes each year, which would net a huge amount of cash for the local governments where there facilities are located.Thats pretty substantial, LoParo said. He added that the Ohio Department of Rehabilitation and Corrections had closely monitored the House negotiations to make sure that a carve out for property taxes was not stuck in.We took pains to make sure there were no loopholes, he said. We fully expect them to pay property taxes to those communities where the prisons are located.The impact for local governments could be substantial.For example, there are two facilities offered for sale that are in Marion -- the North Central Correctional Institution that houses adults and the Marion Juvenile Correctional Facility, which is currently closed.Combined, the two properties are valued at $100 million, which would result in about $1.5 million annually in property tax collections for that small city. LoParo said that should be enough money help Marions police force pick up criminal investigations at the two facilities, which would fall to the city and not state highway patrol, as is currently the case.So where does Lundy land on the Truth-O-Meter.Lundy is correct that the the substitute budget includes tax breaks and tax deductions for those who buy the prisons. There would be no sales tax on the purchase and there are other exclusions for income and commercial taxes.The administration is demanding that local property taxes absolutely be paid, which could yield significant revenue to local governments and schools.And Lundy is correct that the tax breaks and deductions in the budget bill were added in by the House.On the Truth-O-Meter, we rate Lundys comment as True.