Chrysler wouldn't have "gone under".
In addition to the more than $50 billion given to General Motors in the bailout, the Obama administration quietly snuck in a special tax break for GM, which allows the company to write off approximately $45 billion in post-bankruptcy losses against post-bankruptcy profits.
The result? In 2011, GM paid nothing in federal income taxes despite claiming record profits of $7.6 billion, the “highest profits in the 100 year history of that company” according to President Obama.
In fact, that’s not quite right. GM paid a tax rate of negative 1.5% on its record profits – LESS than nothing.
That’s right, while you were paying your income taxes last month, the IRS was sending General Motors a check for $110 million. And GM’s tax break is a gift that will keep on giving every year at tax time.
It’s good for twenty years.
Now, read this part carefully:
GM’s tax break arises from the Obama administration’s distortion of legitimate tax provisions which allow companies to use prior-year losses – of which the Old GM had plenty – and certain other costs to reduce their current-year federal income taxes. In Section 382 of the tax code, Congress limited these "net operating loss" (NOL) carry-forwards to discourage the buying and selling of tax deductions.
As a result, New GM could not have written off the Old GM losses that were discharged in the bankruptcy. However, as Harvard Law School Professor J. Mark Ramseyer and Indiana University’s Dalton Professor of Business Eric Rasmusen explain, the Obama Treasury Department “‘solved’ this problem by issuing a series of ‘Notices’ in which it announced that [Sec. 382] did not apply [here].”
Hey Howie - LOOK! "Fat cats" who don't pay taxes!!!
If GM’s tax gift were counted, the official cost of the bailout would double from $22 billion to $40 billion.
BTW, that's *just* GM. We're not even counting Chrysler (which SHOULD have gone under).
p.s. Don't shoot the messenger. The aforementioned info is courtesy of Curt Levey, the Executive Director of the Committee for Justice in Washington, DC. He can be reached at @Curt_Levey on Twitter.
Why people would think that this inexperienced bozo could POSSIBLY pull off such a heroic salvation of an economy, much less a corporation, is beyond me. THINK about it - if he could, don't you think he'd be jet-setting with Bransons and Gates's, not making $700K getting picked on by people a lot smarter than him?
C'mon.
Only an idiot would ascribe that level of importance, and impressiveness, to this man.
EDIT: Oh, here - Didn't BO go to Harvard? Here's THEIR take on the shenanigans:
http://blogs.law.harvard.edu/corpgov/20 ... ryforward/
