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View Full Version : The regime is cooking the books ... again.



LWW
04-02-2011, 02:48 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Barack Obama has some 'splaining to do about taxpayers' profitable "investment" in General Motors. It turns out the president is imagining things.

Though Democrats tout the auto bailout as a success, recent reports illustrate the taxpayer cost of the GM auto bailout was substantially larger than the Obama administration and a Congressional Oversight report has owned up to.

<span style='font-size: 11pt'>"American taxpayers are now positioned to recover more than my administration invested in GM,”</span> President Obama said, according to a piece in USA Today last November. Steven Rattner, former head of the Treasury's auto task force agreed, telling CNN in November: “Recent progress at GM gives reason for optimism that it may be possible for taxpayers to get every penny back.”

In fact, Investor's Business Daily reported that even the White House’s Director of the National Economic Council remarked that the Treasury Department Department had a good chance in "recovering most, if not all, of its investment in" GM.

<span style='font-size: 14pt'>However, a March 16 Congressional Oversight report, tells a different story. It estimates taxpayers will be out of $25 billion. Additionally, the report points out that “full repayment will not be possible unless the government is able to sell its remaining shares at a far higher price.” </span>

That's only the beginning. Both the White House and the Congressional Oversight report omit the fact that <span style='font-size: 11pt'>during its bankruptcy, GM got a $45 billion tax break</span>, courtesy of the American people.

GM is driving “away from its U.S.-government-financed restructuring with a final gift in its trunk: a tax break that could be worth as much as $45 billion,” reported The Wall Street Journal last November.

Over one year after the promises President Obama and his administration made about the auto bailout, a February piece on AutoBlog also confirms that <span style='font-size: 14pt'>GM will also get a $14 billion dollar domestic tax break</span>:

GM will be able to skip its tax tab due to years of massive losses. Companies are typically forgiven a portion of future taxes due to their past losses, but that benefit is typically stripped after an organization goes through bankruptcy.

However, the Obama administration and its allies presently continue to celebrate the success of the auto bailout, regardless of the facts. "I don’t think there’s any doubt that this was a success," said (H/T Detroit News) acting assistant secretary at the Treasury Department Tim Massad, who oversees the TARP program at Treasury, to a House panel on Wednesday.

<span style='font-size: 17pt'>In Obama's world, success mean taxpayers only lost as much as $84 billion.</span></div></div>

OH DEAR! (http://www.washingtontimes.com/blog/watercooler/2011/mar/31/barack-obama-losing-84-billion-big-success/)

I especially like the last line, and it is proven true as we have already seen the O-cult regurgitate dear leader's pontifications on Gubmint Motors.

pooltchr
04-02-2011, 06:23 AM
So, will the lefties on here speak out about the outrageous tax breaks for the evil corporation known as GM?
They sure have no problem screaming about BP or Exxon, or others on their collective black lists.

Oh wait! GM is owned by the unions now, so I guess that's ok.

Steve

LWW
04-02-2011, 07:22 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: pooltchr</div><div class="ubbcode-body">So, will the lefties on here speak out about the outrageous tax breaks for the evil corporation known as GM?
They sure have no problem screaming about BP or Exxon, or others on their collective black lists.

Oh wait! GM is owned by the unions now, so I guess that's ok.

Steve </div></div>

<span style='font-size: 26pt'>*DING - DING - DING - DING*</span>

We have a winner.

Soflasnapper
04-02-2011, 01:14 PM
That last line is arrived at by incompetent math, and is wholly false.

If GM can shelter $45 billion in profits, it gains a tax break of the corporate tax rate of 35% of it, or about the $14 billion mentioned. The false number you like so much given as the final line is based on claiming that GM gets all that $45 billion as a tax break, which is not the case.

And then there are these points:

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Of course it’s a bit of a double edged sword as well…These tax breaks make the company worth more if an IPO ever happens, thus yielding more cash money to the gubment.

In fact, if GM would be 100% gubment owned (which it isn’t, but still) and you believe in a perfect market without transaction costs etc…I’m thinking the gubment would exactly gain the amount of cash at the IPO that they loose in lost tax revenue.

As for now I think they’re transferring some of that wealth to the other entities that now hold stock, but on the plus side, they do get money in the bank at the time of the IPO, instead of some future tax payment that may or may not actually happen that they now miss out on.

t’s definitely not $45 billion of lost money…Not even close. Since GM is now state owned this is for a good part a story of whether to decide to take money out of your left pocket to put it in your right pocket, or just leave it in your left pocket.

Every amount of money the gubment decides to take out of GM will decrease the value of GM and will be reflected in a drop of the share price and therefore the value that the gubments stake in GM is worth.

Simply put, IF these tax cuts would have a value of 45bn and the government would retract them (and claim their taxes) they would decrease the value of GM by 45bn and their own share by 60%*45bn.

So yes, it’s gonna cost the taxpayer money, but not $45bn like the article tries to make out.</div></div>

LWW
04-02-2011, 01:22 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">That last line is arrived at by incompetent math, and is wholly false.

If GM can shelter $45 billion in profits, it gains a tax break of the corporate tax rate of 35% of it, or about the $14 billion mentioned. The false number you like so much given as the final line is based on claiming that GM gets all that $45 billion as a tax break, which is not the case.

And then there are these points:

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Of course it’s a bit of a double edged sword as well…These tax breaks make the company worth more if an IPO ever happens, thus yielding more cash money to the gubment.

In fact, if GM would be 100% gubment owned (which it isn’t, but still) and you believe in a perfect market without transaction costs etc…I’m thinking the gubment would exactly gain the amount of cash at the IPO that they loose in lost tax revenue.

As for now I think they’re transferring some of that wealth to the other entities that now hold stock, but on the plus side, they do get money in the bank at the time of the IPO, instead of some future tax payment that may or may not actually happen that they now miss out on.

t’s definitely not $45 billion of lost money…Not even close. Since GM is now state owned this is for a good part a story of whether to decide to take money out of your left pocket to put it in your right pocket, or just leave it in your left pocket.

Every amount of money the gubment decides to take out of GM will decrease the value of GM and will be reflected in a drop of the share price and therefore the value that the gubments stake in GM is worth.

Simply put, IF these tax cuts would have a value of 45bn and the government would retract them (and claim their taxes) they would decrease the value of GM by 45bn and their own share by 60%*45bn.

So yes, it’s gonna cost the taxpayer money, but not $45bn like the article tries to make out.</div></div>

</div></div>

You obviously have little, if any, knowledge of accounting ... much less the shell game that is being played by the regime.

There are 2 possibilities if the books are not cooked:

1 - GM sheds the debt in bankruptcy, and thereby cannot write it off tax wise.

2 - GM keeps the write, and keeps the debt.

What the regime is doing is shedding the debt from GM and allowing them the tax credit for the prior losses/debt.

That accounting would get you or I hauled before the tax courts in leg irons.

This is where you insist that since dear leader say's it's cool then it must be cool.

LWW
04-02-2011, 01:26 PM
FWIW, THIS (http://money.cnn.com/2011/02/23/news/companies/gm_bailout/index.htm) from the reich wing nut CNN explains it it a perhaps more palatable form.

GM even warned investors it would lose these write offs because of the bankruptcy.

The regime, knowing it had the nutty 25% of the population in their corner, is giving GM a $14,000,000,000.00 bit of preferential tax treatment so that stock prices are propped up so that the regime and the UAW can sell it's shares at a higher price than the stock should command.

Again, if you or I tried this we would be making gravel out of boulders for many years.

LWW
04-02-2011, 01:32 PM
HERE (http://www.moneynews.com/Economy/GM-Increases-IPO-Size/2010/11/17/id/377286) is evidence that the UAW is dumping it's GM stocks.

So, here's the deal.

The UAW extorts dues from members to give to the Obama campaign.

The regime then shreds US law and gives the union ... not a secured creditor ... preference over secured creditors in the bankruptcy.

The union sells 20,700,000 shares ... which it paid the princely sum of $0.00 to own ... for $33.00 per share.

This nets the UAW $683,100,000.00.

pooltchr
04-02-2011, 01:46 PM
Nice work, if you can get it!

Steve

LWW
04-02-2011, 01:55 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: pooltchr</div><div class="ubbcode-body">Nice work, if you can get it!

Steve </div></div>

On a related note ... the local GM plants were originally Frigidaire plans that were incorporated into GM when GM bought Frigidaire years ago. Due to this, these plants were always e Union of Electrical Workers (IUE) plants in spite of repeated efforts by the UAW to get IUE decertified.

As part of the GM bankruptcy all of the IUE plants were closed, even those which were profitable and with extremely high quality ratings such as the Moraine Truck and Bus Assembly plant, and the IUE received not a single share of GM stock.

Oh, did I mention that they endorsed Hillary over dear leader as well as not being UAW plants?

Sev
04-02-2011, 03:33 PM
The silence is deafening.

pooltchr
04-02-2011, 03:36 PM
That's because everything the unions do is good, Sev!

Steve

Sev
04-02-2011, 03:48 PM
Yes like bullying grandmothers.

LWW
04-02-2011, 04:17 PM
And beating blacks who dare to leave the plantation.

Sev
04-02-2011, 04:32 PM
Indeed. They hate people like Star Parker, JC Watts, Herman Cain and Walter Williams.

LWW
04-02-2011, 10:57 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Sev</div><div class="ubbcode-body">Indeed. They hate people like Star Parker, JC Watts, Herman Cain and Walter Williams. </div></div>

And Alan Keyes, Bill Cosby, Colin Powell, Condoleeza Rice, Clarence Paige, Clarence Thomas and any others who dare step off the plantation.