Thursday, April 21, 2011
Obama Motors: Disgraceful Government Boondoggle
"The government plans to sell most of its remaining stake in General Motors in the coming months and lose $11 billion in the process, The Wall Street Journal reports." So says Newsmax, in a story attributed to Money News. So much for Obama's lies about getting our money back. The article says the government bailed out GM with $50 billion, and needs to sell its (our) shares at $53 a share in order to recoup its (our) money. What is Government Motors selling for now? Thirty bucks. I wonder if our brilliant bureaucrats can do addition and subtraction here. Who will defend this idiotic boondoggle, except the unions who were the ones really getting bailed out here? This company should've been allowed to go out of business, like any other failing company. More efficient firms would have bought up some of its assets, if any of them were willing to stake their own money (not yours and mine), and this manufacturing capacity would've appeared in a different incarnation, provided that were profitable. That's the way it works in a free-market (as distinct from Soviet) economy. It's called "creative destruction," and it's a fact of life. Leftists decry free-market capitalism, but they love this disgusting type of crony capitalism because they have their incompetent fingers all over it.
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7 comments:
Baseball, hot dogs, apple pie, and Chevrolet--the All-American quartet. What follows is from an article in today's Seattle Times describing the tax status of GM, this not-so-great American institution that's in bed with the Obama regime: OUTRAGE and envy still ripple from a report in The New York Times that General Electric, the nation's largest corporation, paid no U.S. corporate taxes in 2010. Zero. Zip. Nada. Indeed, the company, with $14.2 billion in worldwide profits, claimed a tax benefit of $3.2 billion from Uncle Sam.
GE did not break the law, but the bill it successfully avoided was picked up by the rest of us, or put on the national credit card.
The top U.S. corporate rate is 35 percent, but virtually no one pays that. GE's tax rate is about a third of what other companies pay, and that the company is vulnerable to pay any taxes is hypothetical. GE would have to return profits to these shores from places it set up to avoid taxes.
Policymakers in Washington, D.C., need to reassess rates to bring them into line with the financial realities of the nation and basic equity. Set lower, unavoidable rates that do not complicate job creation, and have a statutory imperative to collect them. As it is now, the higher the rate, the more creative the credits, shelters and loopholes to avoid compliance.
GE has a team of 975 gilded tax-avoidance professionals in a department working to ensure that the rest of America picks up its tab. Oh, and that default jobs-creation rationale? The Times report also noted that since 2002, GE has eliminated a fifth of its work force in the U.S.
Good for you, GM. Let the tax-payers pay your tax bill while you knock off one in every five American employees.
When did GM become GE? But that's ok, because I doubt GM paid any taxes either. Doubt most of the big banks paid much either. I read somewhere that Bank of America didn't pay any this year or last.
Isn't that a good thing? Gives them more money to invest and create jobs doesn't it?
Oops. My mistake. Nevertheless, I read elsewhere that GM will pay no taxes for several years.
I believe the case could be made for doing away with corporate income taxes completely. But since we presently have them, why is it that these giant corporations that get all kinds of assistance from the taxpayers get to slide by. It's not the fact that they pay no taxes; it's that they are so intertwined with and supported by the federal government. This is the seed bed of fascism, which in a classical sense is domination of the large corporations by a strong central government. Let's just all play by the same rules. If we are going to tax income, then everyone should pay. If are going to tax corporations, then let them all pay...and let them all stand or fall based on their ability to succeed or fail as a business.
My goodness, you sound like a liberal. I think you can probably ad Exxon Mobil to the list of not paying any or very little US income tax.
I read that in mid 80's Reagan went ballistic when he discovered how many loopholes were in the corporate tax laws. He demanded and succeeded in getting many of them closed. Some of them were again opened up during the last decade.
I think this says it all.
Corporate income taxes are also at their 60 year low, having fallen 80 percent of their GDP share since the 1950s.
Corporate lobbyists rule the congress. They have for a long time, dems and republicans. You and I do not have anyone to lobby for us. Now that the Supreme Court has ruled that corporations have no limit in spending for federal elections, it sure ain't gonna get any better.
Go to http://www.cbpp.org
Good stuff on that site. Especially this one.
http://www.cbpp.org/cms/index.cfm?fa=view&id=3441
U.S. corporate tax rates are very high relative to the rest of the world.
There should be no "corporate income tax." Corporate profits are already taxed to corporate shareholders. Adding a separate tax on "the corporation" (absurd because the people with the ownership stake essentially are the corporation) amounts to "double taxation," which, incidentally, Tom, Ronald Reagan hated. (Let's not try to turn the Gipper into some kind of crazed tax collector--that's not factual.) Corporate taxes are nothing but a progressive, big-government, ham-handed money grab. They should be abolished tomorrow, and you can quote me on that. Insert supply-side benefits arguments HERE.
Brian, you are entitled to your opinion, but not your own set of facts.
By Zaid Jilani (ThinkProgress) In the middle of his presidency, then-president Ronald Reagan learned that a number of big corporations, including his former employer, General Electric, were completely escaping paying federal corpo- rate income taxes. “I didn’t realize things had gotten that far out of line,” Reagan told his Treasury secretary, Donald T. Regan, according to his 1988 memoir.
So Reagan under took a comprehensive tax reform effort that actually raised the corporate taxes and closed numerous loop holes that allowed big firms to dodge their tax responsi- bilities. As part of these reforms, Reagan passed the 1986 Tax Reform Act. This law “raised corporate taxes by $120 billion over five years and closed corporate tax loopholes worth about $300 billion over that same period.”
During the signing ceremony for the speech, Reagan explained that his goal in pursuing these reforms was to make sure “that every body and every corporation pay their fair share”:
REAGAN: "We’re going to make it economical to raise children again. Flatter rates will mean more reward for that extra effort, and vanish ing loop holes and a minimum tax will mean that every body and every corporation pay their fair share."
I suggest you review the gippers presidency some.
You have a point on the double taxation that occurs when we get a dividend check, but there are many corporations that do not pay dividends. You do not have to raise rates in order to raise revenue. Dave is correct in that we the citizen, rich or poor, are supporting a corporate welfare system.
By the way, in 2005 the effective corp. tax rate in this country was 13% while in the rest of the developed world the average was 16%. At least that's what Bush's treasury dept. said.
Wow! Thanks for setting me straight on that Reagan guy, Tom. Here I was, revering him all these years, and it turns out he was some tax collector for the welfare state. That's reprehensible. See you at the SEIU rally!
I don't accept your unattributed corporate rate percentages. I'll trust the Wall Street Journal over you and your kooky left-wing blogger pals every time. For all I know, you or they are making this up out of thin air. You're just like Obama and the mainstream media: make something up out of thin air (as you did with the infamous ObamaCare bill) and then just count on the fact that normal people don't have the time to track down the lie. You've been busted for this before. You're a repeat offender. That makes your credibility with all your citations just shy of nil. I won't make an avocation of matching your fact-checking your assertions. I have a life.
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