Under Obama, those rich and evil 1% corporations should be paying their fair share...except when they aren't, courtesy of the Obama Administration. The Detroit News: GM rakes in big profits, avoids U.S. income tax
But the Detroit automaker, which reported $1 billion in profits for the first three months of the year, has legally avoided paying U.S. federal income taxes since exiting bankruptcy. And GM likely will pay no income taxes for many more years. A series of Treasury Department rulings since 2008 let GM use $18 billion in losses — from the "old GM" that was left behind in bankruptcy — to offset any profits.
You'll note that using losses from a prior bankrupt corporation is not a typically permitted tax dodge:
But some experts have criticized the U.S. Treasury's decision as part of its $49.5 billion bailout of GM to allow the company to retain the losses of its predecessor General Motors Corp. Under the 1986 law, a change in control of a company typically limits the use of tax losses by the company. That's to prevent "trafficking in tax losses," where big profitable companies could buy money-losing firms to reduce their tax bills. The Treasury has allowed many companies that received big government bailouts to retain tax losses estimated to cost the Treasury more than $100 billion in tax revenue. That includes companies like AIG, Citibank and other banks. Since the government owned 61 percent of GM after it exited bankruptcy, the credits should not have transferred, some say.Crony capitalism at its finest. That's $100 billion with a B in an additional funds giveaway as a bailout to these same too-big-to-fail corporations
"It was basically just ignoring the law," said J. Mark Ramseyer, a Harvard law school professor who wrote a 2011 paper on the Treasury's decision to exempt GM.Well yes, when convenient, the Obama administration seems to be quite flexible on the whole concept of the law when it gets in the way of things.
"Had the president tried to give GM $18 billion forthrightly, voters might have complained. By hiding the gift in an obscure tax section, he reduced that electoral scrutiny," Ramseyer and Indiana University business professor Eric Rasmusen wrote.The bailout that keeps on giving.
"GM Alive" sounds better than "GM on perpetual taxpayer life support" as a campaign slogan, and fits better on a bumper sticker.
It is no wonder that Obama proceeded as he did with hiding this additional bailout-that-is-not-a-bailout-on-top-of-the-original-bailout.