GM won't have to pay taxes on $45 Billion in future profits

[XDCX]

The Wall Street Journal is reporting General Motors will not have to pay taxes on their next $45 Billion in profits because a provision of the TARP loans allow them to use losses incurred before they filed bankruptcy to offset profits they derived after bankruptcy.

Assuming an effective income tax rate of 30% - that's a $13.5 Billion gift handed to GM compliments of the taxpayers.

[SHACOS]

Now the question is will that $13.5 billion translate into jobs or bonuses for the execs. I'm thinking bonuses. Horrible!

[steve_biegler]

If they are a "NEW COMPANY" why do they get to carry forward losses?

[steve_biegler]

Originally Posted by SHACOS

Now the question is will that $13.5 billion translate into jobs or bonuses for the execs. I'm thinking bonuses. Horrible!

How about this........13.5 billion devided by 1500 effected dealers = 9,000,000.00 per dealer!

[possum]

UAW = Votes

The only goal of any politician is to get re-elected.

[Txflyer]

Wow, wish we had that option due to the losses WE incurred being a GM wind-down dealer. Just another reason I can't stand GM. While I wish no ill will on my friends who still are associated with GM, I'll pedal to work on a beat up 10-speed bicycle before I'll sit my butt inside another GM product.

[The StraightShooter]

Boy... that TARP was the deal of the century if you were a bankrupt Bank, Insurance Company or a Failed Auto Manufacturer. They can never go bust no matter how bad they run their business, if they do manage to turn a profit they don't have to pay taxes on it, and the best part, they can use the same money...er shall I say- OUR money to lobby the government for whatever they feel like. This is some EPIC b.s.

[SHACOS]

Originally Posted by steve_biegler

How about this........13.5 billion devided by 1500 effected dealers = 9,000,000.00 per dealer!

I am perfectly OK with that plan.

[DealerEx]

Originally Posted by steve_biegler

If they are a "NEW COMPANY" why do they get to carry forward losses?

When your largest stockholder also controls the Bankruptcy court it's amazing what can happen. They already demonstrated that they could throw out all the Federal BK Code in 2009, when they took away the bondholder's rights and gifted the UAW with majority ownership of Chrysler and a big chunk of GM. Given that, it's not such a big surprise that GM now gets to do something no one else has ever been allowed to do...have all their debts discharged via BK , but still get to keep the losses for tax credits...SWEEET!

[srt]

And Obama is surprised by the severity of the election change........go figure.

[possum]

2 more years, and he'll see a bigger change.

[XDCX]

Originally Posted by steve_biegler

How about this........13.5 billion devided by 1500 effected dealers = 9,000,000.00 per dealer!

That's a sobering statistic - that's $9 Million dollars per impacted dealer.

[XDCX]

Originally Posted by DealerEx

When your largest stockholder also controls the Bankruptcy court it's amazing what can happen. They already demonstrated that they could throw out all the Federal BK Code in 2009, when they took away the bondholder's rights and gifted the UAW with majority ownership of Chrysler and a big chunk of GM. Given that, it's not such a big surprise that GM now gets to do something no one else has ever been allowed to do...have all their debts discharged via BK , but still get to keep the losses for tax credits...SWEEET!

The whole bailout mess is so un-American it's sickening.

To be clear, I didn't want to see GM or Chrysler fail but I remain very critical of the bailout process and the government's roll in picking the winners and losers.

In my opinion the tax benefit crafted into the TARP legislation was clearly aimed at increasing GM's odds of success and shortening the time before the Treasury's equity could be sold off. How is this fair to Ford who never needed a bailout?

[srt]

The insanity continues like the duracell bunny.

[DealerEx]

Originally Posted by XDCX

The whole bailout mess is so un-American it's sickening.

To be clear, I didn't want to see GM or Chrysler fail but I remain very critical of the bailout process and the government's roll in picking the winners and losers.

In my opinion the tax benefit crafted into the TARP legislation was clearly aimed at increasing GM's odds of success and shortening the time before the Treasury's equity could be sold off. How is this fair to Ford who never needed a bailout?

Of course it was! The whole process was crafted by GM and Government attorneys from Treasury...these guys are experts in tax law, corporate mergers and antitrust laws, federal bankruptcy law...not a bunch of dummies. Look at some of the things that occurred after the bankruptcy process: GMAC is allowed to use TARP funds to spin off ALLY bank and move whatever loans they wanted into that entity. As a seperate bank, ALLY has much more freedom to use the funds as they wish, rather than under the guidlines of TARP and they can use the funds to make many different types of loans rather than just captive financing. 6 months ago GM runs TV ads touting that they are doing GREAT, and they are profitable once more...in fact, they are doing so well that they are PAYING BACK $5 billion to the government already! (don't mention that they paid it back with bailout money that they had never even used) Joe Taxpayer sees those spots and says: "WOW, it looks like the feds really did step in and do a good job. I wasn't in favor of it, but I guess they knew what they were doing." Now, we find out they are going to get to operate taxfree for awhile...they just happen to make this public right at the same time they announce they will post a $2.6 billion second qtr. profit...and right at the same time they are announcing details of the IPO which will allow the Treasury to recover billions. Gee...that just might make make investors look at the IPO more favorably, huh? All just purely coincidental...ya' think?