circus and gone
marika
By Alexander Bolton
Posted: 03/23/09 08:09 PM [ET]
President Obama and Senate Democrats have buried a bill passed last week by
the House that would have heavily taxed executive bonuses at bailed-out
firms.
Despite the public outcry over $165 million in bonuses awarded at troubled
insurer AIG, Senate Majority Leader Harry Reid (D-Nev.) showed little
inclination Monday to bring the explosive issue to the floor this week or
next. Instead, Reid is likely to delay action on executive compensation
until late April, after the Senate returns from a two-week recess starting
April 4.
The lack of enthusiasm to expedite the bonus legislation comes after Obama
said over the weekend that he didn't think it was a good idea for Congress
to target individuals with tax proposals.
marika
bailout to create massive write offs to get better tax advantages
well here it is
Banks reap big tax breaks atop bailout billions
By STEPHEN OHLEMACHER -
WASHINGTON (AP) - Some of the nation's biggest banks are in for a
windfall - on top of the $700 billion government bailout - thanks to a
new tax policy quietly issued by the Treasury Department.
The notice gives big tax breaks to companies that acquire struggling
banks hit hard by the mortgage crisis. In some cases, the tax breaks
could exceed the cost of acquiring the banks, according to analyses by
private tax experts.
The change could cost the Treasury as much as $140 billion by enabling
firms that acquire struggling banks to use more losses incurred by
those banks to offset their own taxable profits.
Wells Fargo & Co., which made a bid to acquire Wachovia Corp., just
days after the notice was issued, stands to reap about $20 billion in
additional tax savings because of the change, according to the
analyses. Wells Fargo paid $14.8 billion in a stock deal to buy
Wachovia.
The notice was issued Sept. 30 as Congress debated the $700 billion
bailout plan. Some members of Congress are upset that such a sweeping
tax change was issued with no public hearings or congressional input.
"I am concerned that the notice, which was never debated by Congress,
could end up costing taxpayers tens of billions of more dollars on top
of the hundreds of billions of dollars already approved by Congress in
the financial rescue plan," Sen. Charles Schumer, D-N.Y., said in a
letter last week to Treasury Secretary Henry Paulson.
Treasury Department spokesman Andrew DeSouza said the notice was
issued to provide tax guidance to firms involved in bank takeovers at
a time when numerous financial institutions are struggling and their
value can be difficult to determine. He said it wasn't aimed at any
one specific taxpayer or transaction.
"Treasury has worked very hard at expediting tax guidance to provide
clarity regarding uncertain tax issues relating to the financial
markets," DeSouza said. "This guidance was developed over many weeks
by Treasury and the IRS and was not requested by any outside
institution. This was broad guidance."
Some tax lawyers on Monday questioned the legality of the notice, but
DeSouza said it is authorized under the department's regulatory
authority.
When one bank acquires another, it is allowed under tax law to use
some of the unrecognized losses of the bank it acquires to offset its
own revenues for tax purposes. That lowers the tax liability of the
merged bank.
Before the notice was issued, the merged bank could write off only a
limited amount of the losses. The notice removed those restrictions,
enabling the acquiring banks to make huge reductions in their tax
liabilities.
In some cases, banks can qualify for refunds of taxes paid in previous
years through writing off losses of the banks they acquire, said
Robert Willens, a corporate tax lawyer in New York.
DeSouza said the Treasury Department did not issue a formal estimate
on the cost to taxpayers.
However, a widely circulated commentary by the law firm of Jones Day
estimates that banks could reap tax savings of up to $140 billion by
acquiring banks with large losses related to the housing market
downturn.
Willens estimates the change will cost taxpayers $105 billion to $110
billion. He calculated that it will reduce Pittsburgh-based PNC
Financial Services Group Inc.'s taxes by about $5.1 billion through
its takeover of National City Corp. Spain-based Banco Santander could
cut its tax liability by an additional $2 billion with its takeover of
Philadelphia-based Sovereign Bancorp, he said.
Willens is one of the tax lawyers who doubts the legality of the
notice. But, he said, repealing it could be disastrous for the banking
industry and for financial markets.
"marika" <marik...@gmail.com> wrote in message
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marika
> the change of administration. I did not think it would be good either
> way, and now I know I was right. Mayor Nutter announced some drastic
> cuts the day after the election, and, just like predicted, the wage tax,
> business privilege, etc. is/are going up. He is cutting * million in
> overtime for the police, closing about six firehouses (or shutting down
> their engines), combining independent agencies over which he has control
> (like Register of Wills and Comptroller - thank goodness he doesn't have
> control over any federal agencies). He even wants parking meters up to
> $3, pay cuts for some city workers, lay offs of 220 of them. renegotiating
> union contracts, encouraging some companies to stop paying for health
> insurance (I believe that is what I read), no snow removal from side
> streets, only one leaf pick up this year, 11 libraries closed, most public
> swimming pools (not that I ever used them), pulling financial support from
> the mummers (each band will have to pay $7.500), I couldn't believe some
> of the stuff.
>
> When I saw my projected income for this year, everything really hit home.
> It is worse than last year. I will definitely have to cut down on
> consumer spendig., and it is really my only extravagance. J (I saw a
> really scary story on the season finale of "Raising the Bar." One of the
> defender's client was an 82-year-old woman being prosecuted for 10.000
> worth of home shopping she didn't pay for. She died with a gift for the
> defender in her hand. He said he found her body after going to her
> apartment when she didn't show up for court. He said it looked like a
> warehouse with unopened boxes. It started sounding all too familiar.) Yes,
> I will tighten the belt. I am also thinking of buying a couple of
> Sheriff Sale properties when I get my own lot situation straightened out -
> to fix and rent out. (I am going to do it fast, too, because Nutter is
> speeding up tax collections.)
>
> . It will be back to the grind tomorrow, and I don't know how much time I
> will have between now and the end of next week (So I will just say. "Good
> Luck" for now, and, if I take a break I'll write.
"marika" <marik...@gmail.com> wrote in message
news:juGdncAIgKLLUUvU...@rcn.net...
marika
> repaired now or ever
>
> i said as much a year ago before it all toppled.
>
> I said as much on 9/11 but I wasn't sure how the stack of bricks would
> topple
>
> this all reminds me of 1990 when Philly fell appart last time and that
> is what motivated me to get out of the city.
>
>
> The state of California announced one day a week furloughs for their state
> employees,
>
> Ohio fell apart, will lose 9000 jobs and more because DHL a
> german company that joined forces with UPS is pulling out
>
> GM - fucked
> all other car manufacturers - fucked
>
> Before the bailout happened, I said that the banks would use the
> buyout scam to write off stuff on their taxes to avoid paying
> corporate taxes thus raiding the treasury even more.
> Was I right - yes, they just suspended a tax law of 2o years running
> that now allows them to fuck the individual taxpayer by pulling the
> stops out. I think article 382 of the tax code.
>
> worse yet, when it was suspended , congress said that they
> thought they had not given proper publication that they were going to
> pull it, but they didn't want to speak up because they were afraid
> that it would panic the market
>
> do you see bank swallowing up banks? This is what happened in 85. Do
> you recognize any banks from your childhood. At least back then they
> suspended the tax write off laws only on an ad hoc basis. this time
> it is suspended for ALL.
>
> so of course all the bailout money will be used to buy up other banks,
> instead of fixing what was broke. I railed against the bailout bill
> and nowi it is turning out I as right.
>
> So since now it's lucrative to be a bank in order to take advantage of
> this new loophole by buying other banks with these bad debts, everyone
> wants to be a bank.
> As of a few months ago AMERICAN EXPRESS IS A BANK> WTF?????
>
> I had my worst tax year ever as well. I have yet to see a stimulus
> check. They still haven't corrected by tax return and are still
> holding 900 dollars they are not entitled to.
>
> I don't own a cell phone because I lose and break things too easily.
> I can afford the phone, I can't afford to replace it weekly
> I do however support Pat Paulson for President in 2012,
"marika" <marik...@gmail.com> wrote in message
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