Demand Progress

Fox News just lost a massive defamation lawsuit over their 2020 election lies. The case revealed the full extent of Fox’s election falsehoods, and the company is now required to pay a $787 million settlement, the largest ever media defamation payout in U.S. history

But there’s a bizarre silver lining for Fox: the company plans to use the settlement to save hundreds of millions of dollars on taxes.¹

You read that right. Our tax laws are so stacked in favor of giant corporations that even when companies like Fox News are forced to pay for their wrongdoing, they can simply write off the cost as a business expense. In this case, the business was lying to Americans that Donald Trump won the 2020 election. Democratic Rep. Brandan Boyle is considering new legislation to fix this loophole, and we need to urge all of Congress to get on board.²

According to tax experts, Fox could use the defamation settlement to save as much as $213 million on taxes.¹

Fox isn’t the only giant corporation to exploit this tax loophole. When JPMorgan settled with the federal government in 2013 over charges that the bank lied about the quality of mortgages it underwrote, $11 billion of the $13 billion settlement was tax deductible. The big pharma companies that paid $26 billion to settle a case over their roles in the opioid crisis intend to recoup more than $4.5 billion in tax deductions.³

While big corporations can write off settlement payouts, the victims of these corporate crimes must pay full taxes on any settlement money they receive.

This ridiculous loophole needs to be closed. Companies like Fox News must be held fully accountable for the crimes they commit, not rewarded with massive tax savings.

Sources:

1. The Lever, “Fox Can Claim Tax Writeoff For Defamation Settlement,” April 19, 2023.
2. US Representative Brandan Boyle, April 19, 2023.
3. Washington Post, “Drug companies seek billion-dollar deductions from opioid settlement,” February 12, 2021.