Thursday, November 04, 2010
Just a little tidbit I stumbled across...
GM, AKA Obama Motors plans to be heading back to the stock exchange next week with an initial public offering (IPO) to try an real in fresh investors to pay back the government 'loans' that purchased the company during the Obama bail out.
And guess what? They're getting a major tax break as a sweetener that could keep GM tax free for years.
Usually, companies that undergoes a major change in ownership as GM did when the government took a 61% stake in the company sees major limits put on their tax benefits.
But in a nifty little move that passed under the radar last year, the Obama administration ruled that companies that received U.S. bailout money will not have to have any major restrictions put on their tax benefits. That will end up giving GM - and the unions, who actually own the company now- a $45.4 billion dollar tax credit against future profits at the American taxpayer's expense.
This accounting scam has significant benefits for Obama. First, it makes GM more attractive to investors when Wall Street starts pushing the IPO, and gives the president an excuse to thump his chest and claim that the bailout worked as the so-called 'loans' get 'paid back'. I say so-called because there were no 'loans', merely a government takeover that gifted GM to the unions and screwed over the private bond and equity holders . And the 'repayment' will simply be the government repaying itself with its own money. Or rather, our money.
Second, it's a nice little Chicago-style payback to the unions for all their hard work last Tuesday in the elections.
And finally, it's yet another source for Democrat Party campaign contributions courtesy of the taxpayers as the unions kick back a piece of the action to the Democrat's campaign coffers in 2012.
Hope n' change!
Sorry to be so negative, but this kind of blatant theft simply infuriates me.